---

|As filed with the Securties and Exchange Commission on June 28, 2004  
|----------------------------------------------------------------------
|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, 2003    
|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
|----------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------
|(Address 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                                                         | New York Stock Exchange                    
|Unibanco Preferred Shares, without par value                                                                                                                                                                        | New York Stock Exchange*                   
|Unibanco Holding Class B Preferred Shares, without par value                                                                                                                                                        | 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.

| | 75,565,816, 851 Unibanco Common Shares, no par value per share                   
| | ---------------------------------------------------------------------------------
| | 62,045,605,223 Unibanco Preferred Shares, no par value per share                 
| | 31,514,587,519 Unibanco Holdings Common Shares, no par value per share           
| | 50,458,155,032 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                                                                  
|           | A. | Selected Financial Data                                                          
|           | D. | Risk Factors                                                                     
|           |   
|ITEM 4.    |    | INFORMATION ON THE COMPANY                                                       
|           | A. | History And Development Of The Company                                           
|           |    | Overview                                                                         
|           |    | Our Businesses                                                                   
|           |    | Recent Acquisitions                                                              
|           |    | Capital Expenditures                                                             
|           | B. | Business Overview                                                                
|           |    | Our Business Strategy                                                            
|           |    | Principal Business Activities                                                    
|           |    | Other Information About Unibanco                                                 
|           |    | Competition                                                                      
|           |    | The Brazilian Banking Industry                                                   
|           |    | Regulation And Supervision                                                       
|           | C. | Organizational Structure                                                         
|           | D. | Property, Plant And Equipment                                                    
|          
|ITEM 5.    |    | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                     
|           |    | Overview                                                                         
|           |    | Macroeconomic Factors Affecting Our Financial Condition And Results Of Operations
|           |    | Critical Accounting Estimates                                                    
|           |    | Accounting For Results Of Unconsolidated Affiliates                              
|           | A. | Operating Results                                                                
|           | B. | Liquidity And Capital Resources                                                  
|           | C. | Research And Development, Patents And Licenses Etc                               
|           | D. | Trend Information                                                                
|           | E. | Off Balance Sheet Arrangements                                                   
|           | F. | Tabular Disclosure Of Contractual Obligations                                    
|           |    | Selected Statistical Information                                                 
|          
|ITEM 6.    |    | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                       
|           | A. | Directors And Senior Management                                                  
|           | B. | Compensation                                                                     
|           | C. | Board Practices                                                                  
|           | D. | Employees                                                                        
|           | E. | Share Ownership                                                                  
|          
|ITEM 7.    |    | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                
|           | A. | Major Shareholders                                                               
|           | B. | Related Party Transactions                                                       
|          
|ITEM 8.    |    | FINANCIAL INFORMATION                                                            
|           | A. | Consolidated Statements And Other Financial Information                          
|           |    | Legal Proceedings                                                                
|           |    | Dividends                                                                        
|           | B. | Significant Changes                                                              
|          
|ITEM 9.    |    | THE OFFER AND LISTING                                                            
|           | A. | Offer And Listing Details                                                        
|           | C. | Markets                                                                          
|          
|ITEM 10.   |    | ADDITIONAL INFORMATION                                                           
|           | B. | Memorandum And Articles Of Association                                           
|           | C. | Material Contracts                                                               
|           | D. | Exchange Rates And Exchange Controls                                             
|           | E. | Taxation                                                                         
|           | H. | Documents On Display                                                             
|          
|ITEM 11.   |    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                       
|           |    | Risk Management                                                                  
|          
|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].                                                                      
|ITEM 16.A. |    | Audit Committee Financial Expert                                                 
|ITEM 16.B. |    | Code Of Ethics                                                                   
|ITEM 16.C. |    | Principal Accountants Fees And Services                                          
|ITEM 16.D. |    | Exemptions From The Listing
Standards For Audit Committees                       
|ITEM 16.E. |    | Purchase Of Equity Securities By The Issuer And
Affiliated Purchasers            
|          
|           |    | 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 14.5% of
our outstanding preferred shares as of April 30, 2004. Unibanco Holdings engages in no
activities other than holding our shares.

# 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 our actual
results to differ materially from the expectations reflected in the forward-looking
statements include, but are not limited to, those discussed under Item 3. Key
Information  Risk Factors as well as:

- increases
in defaults by our borrowers and other loan delinquencies;

- increases
in our provision for loan losses;

- deposit
attrition, customer loss or revenue loss;

- changes in
interest rates which may, among other things, adversely affect our 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 June 22,
2004, the exchange rate for reaisinto U.S. dollars was R$3.1341 to US$1.00, based on the commercial selling rate as
reported by the Central Bank of Brazil. The commercial rate was R$2.8892 to US$1.00 as of December 31, 2003.

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 ownership,  as of April 30, 2004,  of 96.6% of
our outstanding  common shares and 14.5% of our outstanding  preferred shares.  Unibanco Holdings engages in
no activities other than holding shares in us. 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, 2002 and 2003 and  consolidated
 statements  of income,  changes in stockholders  equity and cash flows for each of the
 three-years in the period ended  December 31, 2003,  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
10.4% for 2001, 26.4% for 2002 and 7.7% for 2003.

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
Credit Cards Companies Association (ABECS).



# PART 1

# ITEM 1. IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

# ITEM 2. OFFER STATISTICS
AND EXPECTED TIMETABLE

Not applicable.

# ITEM 3. KEY INFORMATION

3.A. SELECTED FINANCIAL DATA

Our
financial statements are presented in reais(Brazilian real, the official currency of
the Federative Republic of Brazil). For more details related to the latest, high and
low exchange rates for reaisinto U.S. dollars, including the high and low exchange
rates for each month during the previous six months and for the five most recent
financial years see Item 10  Additional Information  Exchange Rates and Exchange
Controls.

Our
selected  historical  financial  data as of December 31, 2002 and 2003 and for each of the
three  years in the  period  ended  December  31,  2003 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 as of December  31,  1999,  2000 and 2001 and for each of the two years in the
period ended December 31, 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, 1999 and 2000 have been  audited by  PricewaterhouseCoopers
Auditores  Independentes.  Our consolidated  financial statements as of and for the years ended December
31, 2001,  2002 and 2003 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,
|--------------------------------------------------- | -------------------------------
|                                                    |                                
|                                                    | 1999                           
|                                                    |                                
|US GAAP:                                            | (in millions of R$)            
|Unibanco Consolidated Income Statement Data:       
|Net interest income                                 | R$2,619                        
|Provision for loan losses                           | (534)                          
|                                                    |                                
|Net interest income after provision for loan losses | 2,085                          
|Fee and commission income                           | 1,100                          
|Equity in results of unconsolidated companies (1)   | 78                             
|Other non-interest income (2)                       | 1,358                          
|Operating expenses (3)                              | (2,426)                        
|Other non-interest expense (4)                      | (1,593)                        
|                                                    |                                
|Income before income taxes and minority interest    | 602                            
|Income taxes                                        | (9)                            
|Minority interest                                   | (61)                           
|                                                    |                                
|Net income                                          | R$532                          
|                                                    |                                

|                                                                      | For the Year Ended December 31,
|--------------------------------------------------------------------- | -------------------------------
|                                                                      |                                
|                                                                      | 1999                           
|                                                                      |                                
|                                                                      | (in R$, except per share data) 
|Unibanco Earnings and Dividends Information (16):                     |                                
|Basic and diluted earnings per shares:                               
|Common                                                                | R$0.48                         
|Preferred                                                             | 0.53                           
|Distributed earnings (dividends) per shares:                         
|Common                                                                | 0.20                           
|Preferred                                                             | R$0.22                         
|Weighted average shares outstanding (in thousands)         - Basic:  
|Common                                                                | 539,672                        
|Preferred                                                             | 517,689                        
|Weighted average shares outstanding (in thousands)          Diluted:
|Common                                                                | 539,672                        
|Preferred                                                             | 517,689                        
|Unibanco Holdings Earnings and Dividends Information (16):           
|Basic and diluted earnings per shares:                               
|Common                                                                | R$0.50                         
|Class A Preferred                                                     | 0.56                           
|Class B Preferred                                                     | 0.50                           
|Distributed earnings (dividends) per shares:                         
|Common                                                                | 0.20                           
|Class A Preferred                                                     | 0.22                           
|Class B Preferred                                                     | R$0.20                         
|Weighted average shares outstanding (in thousands)         - Basic:  
|Common                                                                | 286,207                        
|Class A Preferred                                                     | 38,435                         
|Class B Preferred                                                     | 302,440                        
|Weighted average shares outstanding (in thousands)          Diluted:
|Common                                                                | 286,207                        
|Class A Preferred                                                     | 38,435                         
|Class B Preferred                                                     | 302,440                        

|                                                 | As of December 31, 
|------------------------------------------------ | -------------------
|                                                 |                    
|                                                 | 1999               
|                                                 |                    
|                                                 | (in millions of R$)
|Unibanco Consolidated Balance Sheet Data:        |                    
|Assets                                          
|Cash and due from banks                          | R$200              
|Interest-bearing deposits in other banks         | 1,041              
|Trading, available for sale and held to maturity | 8,878              
|Loans                                            | 14,914             
|Allowance for loan losses                        | (756)              
|Investments in unconsolidated companies          | 424                
|Goodwill and other intangibles, net              | 79                 
|Total assets                                     | 33,956             
|Average assets                                   | 31,372             
|                                                
|Liabilities and Stockholders Equity            
|Deposits                                         | R$8,880            
|Short-term borrowings                            | 4,538              
|Long-term debt                                   | 7,414              
|Stockholders equity                             | 4,104              
|Average liabilities                              | 28,193             
|Average stockholders equity                     | 3,179              

|                                                                  | As of and for the Year Ended December 31,
|----------------------------------------------------------------- | -----------------------------------------
|                                                                  |                                          
|                                                                  | 1999                                     
|                                                                  |                                          
|Selected Consolidated Ratios:                                     |                                          
|Profitability and Performance                                    
|Net Interest margin (5)                                           | 9.7%                                     
|Return on average assets (6)                                      | 1.7                                      
|Return on average equity (7)                                      | 16.7                                     
|Efficiency ratio (8)                                              | 69.6                                     
|                                                                 
|Liquidity                                                        
|Loans as a percentage of total deposits                           | 168.0                                    
|                                                                 
|Capital                                                          
|Total equity as a percentage of total assets                      | 12.1                                     
|Total capital to risk-weighted assets (9)                         | 17.5                                     
|                                                                 
|Asset Quality                                                    
|Allowance for loan losses as a percentage of          total loans | 5.1                                      
|Nonperforming loans as a percentage of total          loans (10)  | 1.9                                      
|Allowance for loan losses as a percentage of total               
|nonperforming loans (10)                                          | 271.9                                    
|Net charge-offs as a percentage of average loans                 
|outstanding (11)                                                  | 3.1                                      

|                                                   | For the Year Ended December 31,              
|-------------------------------------------------- | ---------------------------------------------
|                                                   |                                              
|                                                   | 1999                                         
|                                                   |                                              
|                                                   | (in millions of R$, except per share amounts)
|BRAZILIAN GAAP (12):                               |                                              
|Consolidated Income Statement Data:               
|Profit from financial intermediation               | R$2,478                                      
|Net income                                         | 591                                          
|Unibanco Earnings and Dividends Information:      
|Earnings per 1,000 shares:                        
|Common                                             | R$5.57                                       
|Preferred                                          | 5.57                                         
|Distributed earnings (dividends) per 1,000 shares:
|Common                                             | R$1.97                                       
|Preferred                                          | 2.16                                         

|                                          | For the Year Ended December 31,        
|----------------------------------------- | ---------------------------------------
|                                          |                                        
|                                          | 1999                                   
|                                          |                                        
|                                          | (in millions of R$, except percentages)
|Consolidated Balance Sheet Data:          |                                        
|Total assets                              | R$36,038                               
|Total loans                               | 15,811                                 
|Total deposits                            | 9,266                                  
|Stockholders equity                      | 4,002                                  
|Selected Consolidated Ratios:            
|Return on average assets (13)             | 1.7 %                                  
|Return on average equity (14)             | 18.5                                   
|Efficiency ratio (15)                     | 53.4                                   
|Total capital to risk weighted assets (9) | 17.5                                   

---

|(1) | For
more  information  on our  equity  in  results  of  unconsolidated  companies,  see Item
5,        Accounting for results of unconsolidated  affiliates and Item 5.A.  Operating
Results 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 to our        consolidated financial statements and Item
5.A. Operating Results.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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.B. Business Overview.
|--- | -----------------------------------------------------------------------------

|(10) | Nonperforming
loans consist of loans 60 days or more overdue.
|---- | -------------------------------------------------------------

|(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 Commission.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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.
|---- | --------------------------------------------------------------------------------------------------------------------

|(16) | Earnings
per share have been adjusted for all periods presented to reflect the new number of shares that will
result from the reverse stock split, approved on April 30, 2004, in accordance with SFAS
128 Earnings per share (see Note 34(e) to our consolidated financial statements).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.D. RISK
FACTORS

Set forth below are
certain risk factors that could  materially  adversely affect our future  business,
 operating  results or financial  condition.  You should  carefully  consider  these risk
factors and the other  information  in this  document  before making investment decisions
involving our shares.  Additional risk not currently known to us, or which we deem as of
now immaterial,  may also harm us and affect your investment.

Risks Relating to
Brazil

Our business,
almost all of which is located in Brazil, may be adversely affected by actions of the
Brazilian government

Historically the
Brazilian  government has frequently  intervened,  sometimes in drastic ways, in the
Brazilian economy and in the financial services industry.  Past intervention has
included,  among other actions,  currency devaluation,  the imposition of wage, price and
capital  controls,  the freezing of bank accounts,  limitation on exports,  increases in
regulatory  capital  requirement and reserve  requirements,  imposition  of  lending
 limits  and  other  credit  restrictions  and the  imposition  of taxes  on  financial
transactions.  The nature and extent of such intervention is unpredictable.

The actions of the
government may adversely affect our business by:

- reducing
        the demand for our services;

- increasing
      our costs;

- limiting our
ability to provide services;

- reducing the
ability of our customers to repay 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.  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.

Devaluation  of
 the  real  against  the US  dollar  may  harm  our  and  our  Brazilian  borrowers  ability
 to pay          dollar-denominated or dollar-indexed obligations

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 realthat has followed the
Brazilian governments decision in January 1999 to allow the realto float freely.

The Central Bank has
periodically devalued the Brazilian currency during the last four decades. The
exchange rate between the realand the US dollar has varied significantly in recent
years. For example, the realdeclined in value against the US dollar by 18.7% in 2001,
declined again, by 52.3% in 2002, and recovered to some extent, appreciating 18.2% in
2003.

Devaluation of the
realagainst the US dollar (and other foreign currencies) may impair our
ability to pay our dollar-denominated or dollar-indexed liabilities, by making it
more costly for us to obtain the foreign currency required to pay such obligations. To
date, 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
our payment obligations with respect to such liabilities significantly exceed the
amount receivable in respect of such assets, including any financial instruments
entered into for hedging purposes, we could incur significant losses, even if the value
of such financial instruments has not changed in their original currency.
Devaluation of the realmay also affect us by impairing the ability of our Brazilian
corporate borrowers to repay dollar denominated or dollar indexed liabilities to us.

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.

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 of the realagainst the US dollar will increase our cost of
funds and require us to raise our rates on our leasing and lending operations, which,
as a result, may affect our ability to attract new customers who might be deterred from
paying such higher rates.

Appreciation of
the real against the US dollar may adversely affect our income tax liability

During periods when
the realappreciates against the currencies in which we hold our  investments in our non-Brazilian subsidiaries and branches,
we may experience a negative effect on our income tax liability. This is because
losses in realterms on our overseas investments are not deductible for Brazilian tax
purposes, whereas gains in the value of the related real-denominated hedges we maintain
generally are taxable.

Volatility of
currency  exchange rates may lead to an uncertain  economic climate in Brazil that could
 negatively  affect our          ability to finance our operations through the
international capital markets

Devaluation of the
realrelative to US dollar could create additional inflationary pressures in
Brazil by generally increasing the price of imported products and instigating
governmental policies to curb aggregate demand. On the other hand, appreciation of
the realagainst the US dollar may lead to a deterioration of the Brazilian
current account and balance of repayments, as well as dampening export-driven
growth. The potential impact of the floating exchange rate and of measures of the
Brazilian government aimed at stabilizing the real is uncertain.

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  reaching as
high as 2,708% in 1993. More recently,  Brazils rates of inflation were 20% in 1999,
9.8% in 2000,  10.4% in 2001, 26.4% in 2002, 9.3% in 2003 and 1.85% in the first quarter
of 2004, as measured by the IGP-DI (general price index).  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 may
increase and our  operating  and net margins may decrease (if not  accompanied  by an
increase in interest  rates).  Inflationary  pressures may weaken  investor  confidence
 and  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.

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
relationship with 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 have
an adverse impact on          our business

Historically,  adverse
 developments in the economies of other emerging market  countries,  especially those in
Latin America, have had an adverse  impact on the  Brazilian  securities  markets  and
 economy.  These  events  have  negatively  affected  Brazilian companies, including by:

- decreasing the
availability of credit in the Brazilian economy, from both domestic and international
sources of capital;

- resulting in
considerable outflows of funds and declines in the amount of foreign investment in
Brazil; and

- adversely
affecting 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  Argentinean  economic
and political  crisis in 2002. In recent  periods,  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 market 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 regulations that impose:

- 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 be  changed,  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 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. The Central Bank may increase the reserve requirements
in the future or impose new reserve or compulsory deposit requirements.

As of April 30, 2004:

- the rate of
compulsory  deposit  requirements  on time  deposits in the form of  government
 securities in an account with the               Central Bank was 15%;

- the rate of
compulsory deposit requirements on saving deposits in the form of cash deposits was 20%;

- the additional
reserve requirement on time deposits, demand deposits and savings deposits was,
respectively, 8%, 10% and 8%; and

- the reserve
requirement for demand deposits was 45%.

Our balance of demand,
 savings and time deposits  reserve  requirement  was R$4,116 million as of December 31,
2003. 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  Compulsory
Deposit Requirements.

Reserve
                and compulsory deposit requirements reduce our liquidity to make loans
                and other investments. In addition, compulsory deposits generally do not yield
                the same return as our other investments and deposits. This is a result
of the following factors:

- 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
minimum limits for federal housing and rural sector loans may negatively affect our profitability

Under the banking regulation framework, we are required to maintain a minimum percentage of our savings deposits for federal housing financing  and a minimum percentage of total deposits for loans to the rural sector. These limits can directly influence the profitability of our business as a result of two different factors.  If we do not achieve the minimum limit required for these loans, we must keep the difference as compulsory deposits, which generally do not yield the same returns as our other investments and deposits.  In addition, obligatory loans to these sectors might entail more risk and/or be less profitable then other lending opportunities available to us.

In general, as of April 30, 2004:

- the rate
      of minimum loans for federal housing program was 65% of savings deposits; and

- the rate of
minimum loans for loans to rural sector was 25% of total deposits.

Changes in tax
regulation may negatively affect our operations

To support its fiscal
policies,  the Brazilian  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.  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  Other Taxes.

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% in January 2001. Since 2001 the Central Bank has frequently adjusted
the base interest rate, increasing the rate numerous times in response to economic
uncertainties. In response to recent economic stabilization, the Central Bank has
gradually been able to decrease the base interest rate at various intervals, from 26% on
June 18, 2003 to 16% on April 14, 2004.

Although  typically
 increases  in the base  interest  rate enable us to increase  margins,  they 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. See Item 5. Operating and
Financial  Review and  Prospects   Macroeconomic  Factors  Affecting  Our  Financial
 Condition and Results of Operations  Effects of Interest Rates on Our Financial
Conditions and Result of Operations.

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, public and private, and insurance companies.  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 state-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 may be privatized in the future.  The acquisition of an
insurance company or of a bank 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 Banco Fiat.  In April 2003,  ABN
AMRO Bank announced the  acquisition  of 95% of Banco  Sudameris and in May 2003 Banco
Bradesco S.A.  acquired  Banco Bilbao  Vizcaya  Argentaria Brasil,  S.A. In October 2003,
 Banco HSBC acquired  Lloyds TSB Group's  Brazilian  operations,  including  Banco Lloyds
TSB S.A. Banco Múltiplo and Losango  Promotora de Vendas Ltda. In November  2003,  Banco
Bradesco S.A.  acquired Banco Zogbi S.A. and other  companies from Zogbi Group.  We
expect that these acquisitions will increase the competition in the retail sector.

Risks Relating to
Unibanco

The profile of
our loan  portfolio  may change due to  acquisitions  we make or due to changes in
Brazilian  or  international          economic conditions

As of December 31,
2003, our total loans portfolio was R$26,039 million,  compared
to R$25,254 million as of December  31,  2002.  Our  allowance  for credit  losses was
R$1,317  million,  representing  5.1% of our total credit risk as of December 31, 2003,
 compared to R$1,389  million,  representing  5.5% of our total credit risk as of December 31,
2002. See Item 5. Operating and Financial Review and Prospects  Results of Operations
for Year Ended December 31, 2003 Compared to Year Ended December 31, 2002.

The quality of our
loan  portfolio is subject to changes in the profile of the business  resulting both from
organic growth or acquisitions  we make and is dependent on domestic and, to a lesser
extent,  international  economic  conditions.  Our  acquisitions of Fininvest in 2000,
and Creditec and Hipercard in 2004 have affected the quality of our loan portfolio by
 significantly  increasing our exposure to the lower income segment of the retail
 market.  This sector  generally  features a higher volume of  transactions,  higher
margins and higher  default rates than other  sectors.  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 R$14,666 million of our assets, and realized and unrealized  investment gains
and losses have had and will continue to have a significant  impact on our results of
operations.  These gains and losses,  which we record when investments in securities  are
sold or are marked to market (in the case of trading  securities),  may fluctuate
 considerably  from period to period. The level of  fluctuation  depends  primarily  upon
the market  value of the  securities,  which may vary  considerably  based upon our
investment and hedging  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

Our  business
 strategy  includes  growth  through  strategic  acquisitions.  Most  recently,  in March 2004,  we  acquired HiperCard,  a private  label  credit  card  company  and in May
2004 we  acquired  Creditec,  which has a  significant  presence in the Brazilian
 personal loans and consumer finance sector among middle and lower income 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 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 may be               exposed to higher risks than they would be in the
U.S.  securities  market,  especially  with respect to liquidity of the
              Units; 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).

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 reside
outside 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,  and holders of Units, therefore,  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 Unibanco Holdings Common Shares and Units.  Future
sales of Units, or the  availability of Units for future sales,  may have a negative
impact on the market prices of the Units and GDSs. Future sales of substantial  amounts
of Units, 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  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

# 4.A. HISTORY AND
DEVELOPMENT OF THE COMPANY

Overview

Founded in 1924 as a correspondent
bank, 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 comprise Retail Banking, Wholesale Banking, Insurance and Pension Plans and
Wealth Management. See Note 32 to our consolidated financial statements in Item 18 for
additional information on our four reportable segments.

We are one of the largest
private-sector financial institutions in Brazil and have grown substantially both through
organic growth and acquisitions. As of December 31, 2003, on a consolidated basis, we had:

- R$66
billion in total assets;

- R$26.0
billion in total lending, leasing and other credits (including off-balance items);

- R$25.7
billion in total deposits; and

- R$6.8
billion in stockholders' equity.

Our consolidated net income for the
year ended December 31, 2003 was R$873 million, representing a return on average equity of
13.4% and a return on average assets of 1.4%.

Our equity securities have been
publicly traded on the Bolsa de Valores de São Paulo (São Paulo Stock
Exchange), or Bovespa, since 1968. In 1997, we became the first Brazilian bank to list its
equity securities on The New York Stock Exchange, or NYSE. As of December 31, 2003, the
total market value of our equity securities, based on the closing price of our global
depositary shares, was R$9.7 billion.

Our legal name is Unibanco-
União de Bancos Brasileiros S.A. Our address is Avenida Eusébio Matoso 891,
zip code 05423-901, São Paulo, SP, Brazil. Our telephone number is (5511)
3097-1313. Our web site is www.unibanco.com.br. We are a corporation
(sociedade anônima) and were incorporated on May 27, 1967, in
accordance with Brazilian law. Our agent in the United States of America is our
Representative Office of New York, which is located at 65 East 55th Street,
29th Floor; New York, NY; Zip Code 10022; USA; telephone number (1-212)
832-1700.

Unibanco Holdings legal name is
Unibanco Holdings S.A. Its address and telephone number are the same as ours. Unibanco
Holdings is a corporation (sociedade anônima) and it was
incorporated on June 20, 1994, in accordance with the Brazilian law. Unibanco
Holdings agent in the United States of America is our Representative Office of New
York.

Our
Businesses

The following diagram shows our
principal lines of business:

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 small companies with annual revenues of up to R$40 million.
We offer traditional deposit, investment, and credit products under the Unibanco brand. We
have also developed a strong presence in the consumer finance sector through our
subsidiaries Fininvest and Banco Dibens S.A.; our strategic partnership with Magazine
Luiza, LuizaCred; and our strategic alliance with Ponto Frio, PontoCred (formerly named
InvestCred). As of December 31, 2003, we had approximately 6.0 million retail banking
customers and approximately 8.1 million consumer finance customers. We believe we are one
of Brazils largest credit card issuers in terms of cards issued, primarily through
our subsidiaries Fininvest and Unicard Banco Múltiplo S.A., or Unicard, and our
affiliate Credicard S.A.

For the year ended December 31, 2003,
we had total loans (including insurance) of R$10.3 billion, fees and commissions of R$1,613 million, and net income of R$470 million from our
Retail Banking segment.

Wholesale
Banking

Through our Wholesale Banking
business we provide, as of December 31, 2003, approximately 400 institutional
investors and 2,850 large- and mid-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. We service these
clients through an extensive network of regional offices combined with a presence in major
financial centers.

For the year ended December 31, 2003,
we had total loans (including private banking) of R$15.7 billion, fees and commissions of R$329 million and net income of R$172 million from
our Wholesale Banking segment.

Insurance

We provide life,  auto,  health and property and casualty  insurance  coverage,  as well as pensions and retirement  plans, and related
products and services,  to individuals and businesses  primarily  through  Unibanco AIG Seguros S.A., or UASEG,  our joint venture with
American  International  Group, Inc. As part of the joint venture,  we also hold  approximately 50% equity interests in AIGs Brazilian
insurance business, which we refer to as AIG Brasil.

For the year ended  December 31, 2003,  UASEG had
insurance  premiums and private  retirement  plans premiums of R$1,468  million.  Our
insurance  segment had a total net income of R$258 million.  Based on our  proportionate
share of the joint  venture,  net income from
our Insurance segment was R$125 million in 2003.

Wealth
Management

In March 2002, the private banking and asset management businesses were combined to
form the Wealth Management division. The asset management business is conducted primarily through our subsidiary
Unibanco Asset Management, or 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. Through
Unibanco Private Bank, we provide wealth management services targeted to high net worth
individuals with potential investment portfolios of over R$1 million.

For the year ended December 31, 2003,
UAM had R$23,168 million in assets under management and fees and commissions of R$295
million. Net income from our Wealth Management segment was R$106 million in 2003.

As of December 31, 2003 we held the
following positions in the Brazilian financial services market, based on our consolidated
results for 2003 computed in accordance with Brazilian GAAP:

- One of the largest
aggregate number of credit cards issued in Brazil, with 17.4 million cards through
Unicard, Fininvest's private label cards and credit cards, and our proportional share of Credicard
cards;

- fourth
largest private sector pension fund manager in terms of assets under management,
according to data prepared by ANBID (Brazil's National Association of Investment Banks);

- second
largest issuer of private pension plans in terms of consolidated corporate sales,
according to data prepared by ANAPP (National Association of Private Pension Plans); and

- fourth
largest insurance and pension funds provider in terms of net premiums written and gross
revenues, according to SUSEP and ANAPP (UASEG and AIG Brasil on a combined basis).

Recent
Acquisitions

We have built our competitive
position in the Brazilian financial services market and significantly increased our scale
through consistent organic growth and carefully chosen strategic transactions and
alliances. We believe that each of our four business segments provides a solid platform
for carefully managed future growth. Following is a summary of our recent important
acquisitions and joint ventures.

Retail
and Wholesale Banking

Credibanco

In April 2000, we acquired
Credibanco, a small wholesale bank with R$1.8 billion in assets. In particular, the
acquisition bolstered our project finance and Banco Nacional de Desenvolvimento
Econômico e Social, or BNDES (the Brazilian development bank), onlendings portfolio
and staff expertise in the large corporate segment.

Banco
Bandeirantes

In December 2000, we acquired 100% of
Banco Bandeirantes, a São Paulo-based retail bank with assets of R$4.7 billion. 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. In April 2003, we
merged Credibanco-Cartão Unibanco (previously known as Cartão Unibanco) with
Banco Bandeirantes. This business is now known as Unicard Banco Múltiplo S.A., or Unicard.

Investshop

In December 2001, Banco1.net entered
into a strategic alliance with Investshop, Brazils second largest provider of
financial services through the Internet. As a result of this strategic alliance,
Banco1.net clients gained access to Investshop investment products and we expanded our
presence in on-line banking. As of December 31, 2003 we had a 65.9% interest in
Bancol.net. and Portugal Telecom, Investshop Brasil and third party investors held 20.5%,
5.9% and 7.7% interests, respectively.

BNL

In June 2004,  we announced  the  acquisition  of the total  capital of Banco BNL do Brasil ("BNL  Brasil"),
from Banca  Nazionale  del Lavoro  S.p.A.  ("BNL").  BNL will  receive  1,000,000,000  of Units (one billion
Units) from Unibanco and Unibanco  Holdings.  Thus, after the conclusion of the  transaction,  BNL will own,
directly and indirectly,  1.43% of Unibanco's capital.  BNL Brasil  stockholders'  equity to be incorporated
by Unibanco was evaluated in R$ 178.5 million.  BNL Brasil owns a credit  portfolio of R$ 698.5 million plus
a credit card and consumer finance operation with some 107,000 clients and 96,000 cards issued.

Consumer
Finance

Fininvest

In December 2000, we acquired the remaining 50% of Fininvest  that we did not already own.  Fininvest had 64
branches and was present in over 6,000 retailers throughout Brazil.

Ponto
Frio/PontoCred

In August 2001, we announced a
strategic alliance with Globex, 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, renamed PontoCred, which provides credit for Ponto
Frios customers.

Magazine
Luiza/LuizaCred

In September 2001, Fininvest
established a strategic partnership with Magazine Luiza, a Brazilian chain of department
stores located primarily in São Paulo State countryside, western Paraná
State and southern Minas Gerais State. Unibanco and Magazine Luiza founded LuizaCred to
provide financing to Magazine Luiza customers.

Grupo Martins/Tricard

In July 2003,  our  subsidiary  Unicard and  Tribanco,  the financial arm of the Martins  Group,  Brazils  largest
wholesale  distributor,  according  to their  website,  entered  into a  partnership  to manage  Tricard,  Tribanco
affiliate  company.  The main product is the Super Compras  card,  the private label card offered to the clients of
retailers  served by the Martins Group. At the close of 2003,  approximately  268,000 Tricard cards were issued and
offered through a network of 1,562 retailers.

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 management of groups of the National Ford Consortium, a system for financing
goods on an installment plan basis.

Creditec

In May 2004 we acquired Creditec
 Crédito Financiamento e Investimento S/A, or Creditec, from Grupo BBM for a
purchase price of R$49.9 million. Creditec has a significant presence in the Brazilian
personal loans and consumer finance sector among middle and lower income customers.
Creditec had around 600,000 registered clients and operates throughout Brazil, with a strong
presence in the states of Rio de Janeiro and São Paulo, as well as the northeastern
Brazil. The acquisition does not include Creditecs credit portfolio.

HiperCard

On March 1, 2004, we announced the
acquisition of HiperCard Administradora de Cartão de Credito Ltda., or Hipercard,
from Koninklijke Ahold N.V., or Royal Ahold, for R$630 million. HiperCard started as a
private label credit card company for the Bompreço chain of supermarkets and is now
a full independent credit card company with cards presently accepted in more than 60,000
points-of-sale in Northeastern Brazil. As of December 31, 2003, HiperCard had 2.3 million
cards issued and a credit portfolio of R$737 million. The transaction is subject to the
approval of the CADE  Conselho Administrativo de Defesa Econômica, the
Brazilian antitrust authority. Simultaneous with this transaction, Royal Ahold sold the
BomPreço Supermarket chain to Wal Mart. Pursuant to the agreement, the purchase
price is subject to adjustment based upon the finalization of an audited closing statement
which we expect to be completed in the second half of 2004.

Insurance
and Pension Plans

Cigna

In April 2003, Unibanco AIG acquired
Cigna Seguradora S.A., private pension portfolio, adding 120 corporate plans (10,000 participants)
and R$149 million in reserves.

Phenix

On October 31, 2003, UASEG entered
into an agreement to acquire the insurance company Phenix Seguradora SA from Toro Targa
Assicurazioni SpA. and Fiat do Brasil S.A.. The closing of the acquisition is subject to
regulatory approval of the CADE  Conselho Administrativo de Defesa Econômica,
the Brazilian Antitrust Authority. Phenix reported sales of R$73 million in the first half
of 2003. We expect this transaction will enhance our insurance presence in the
southeastern state of Minas Gerais and the southern state of Rio Grande do Sul. In
connection with this acquisition, UASEG also entered into a strategic partnership with
Fiat, a large automobile manufacturer in Brazil. This relationship will give UASEG
preferred access to new corporate insurance contracts arranged by Fiat and some of its
affiliates in Brazil and to its employees pension fund.

Wealth
Management

Unicorp

In April, 2002, the Central Bank
approved the acquisition by our subsidiary, Unipart Participações
Internacionais Ltd., of the remaining 24.5% of the total share capital of Unicorp from the
Moreira Salles Group for US$36 million.

Pictet
Modal

In January 2003, we entered into an
agreement pursuant to which the administration and management of the funds managed by
Pictet Modal were transferred to Unibanco and Unibanco Asset Management, respectively. The
transfer involved nine fixed income funds and three equity funds with aggregate total
assets under management of approximately R$267 million as of January 17, 2003.

Capital
Expenditures

During the period from 2001 to 2003,
our capital expenditures consisted primarily of expenditures for data processing to
automate our branch network and for computer systems, communication equipments and other
technology tools designed to increase the efficiency of our operations, the services
offered to our customers and our productivity. For further details regarding the amount
and nature of our capital expenditures, see Item 5.B. Liquidity & Capital
Resources  Uses of Funding.

4.B.
BUSINESS OVERVIEW

Our
Business Strategy

Guiding
Principles

Our objective is to maintain and
enhance our position as a leading Brazilian 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; a model designed to translate strategy into
operational terms. Our business strategies reflect three institution-wide guiding
principles: continuous pursuit of scale gains; continuous efficiency maximization; and
accelerated personnel development.

In August 2003 Unibanco became the
first and only Latin American institution to appear in the Balanced Scorecard Hall of
Fame, which recognizes companies that excel in the implementation of the Balanced
Scorecard model.

Continuous
Pursuit of Scale Gains

We believe that to maintain
competitive scale we must grow our customer base and expand our product and service
offerings in each of our business segments. We seek to do this through organic growth,
acquisitions, and strategic alliances.

Continuous Efficiency
Maximization

We focus on controlling our costs as
well as our investments across all areas of our business to help maximize returns. For
example:

- When we
make an acquisition,  we analyze the opportunities for increasing  revenues,  reducing
expenses,  and realizing other cost savings in connection with the integration of the
newly acquired                   business.  We have a team of employees  dedicated to
this task. When we integrated  Fininvest in 2003,  operations such as buying,  security,
 legal,  card  processing,  data  processing,  system                   development,
 credit and credit recovery were integrated into our existing  structures.  In addition,
 we are currently  analyzing the integration of the recently  acquired Creditec and
HiperCard                   businesses.

- We reviewed
certain of our expenses including policies for travel,  reimbursements,  use of telephone
 services,  meal expenses,  and parking.  We believe these policies can be revised to
promote                   savings and to establish a greater commitment to efficiency in
our corporate environment.

- We have
identified  potential internal synergies between our consumer finance  businesses and the
Insurance segment that will enable us to simplify the sale of foreclosed  assets,
 controls,  and                   the processing of documents.

- We have
established a unique credit concession and recovery unit for all retail linked units
called "Fabrica de Credito" (Credit Factory) and consolidated all call centers of the
group.

Accelerated
Personnel Development

We need highly qualified,
well-trained employees in order to compete successfully. Over the last several years, we
have introduced increasingly demanding hiring standards and have implemented a variety of
tools to identify and measure employee potential, performance and individual contribution
to the companys strategy. 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, from 69% in 1997 to 86% in 2003.

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 financial institution depends in part on
maintaining and increasing scale in our retail business. Our retail banking customer base
grew from 3.0 million in 1997 to 6.0 million in December 2003. We have increased
scale in part through organic growth initiatives. For example, in October 2000, we
launched our ContAtiva initiative, which markets Unibancos retail banking
services to individuals with monthly income above R$1,000. 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 ContAtiva2in 2003, aimed at attracting new
accounts through 2008. In addition, we have identified several new cross-selling
opportunities through our subsidiaries and strategic partners.

We also seek to increase our scale
through carefully chosen acquisitions and strategic alliances. We believe the consumer
finance sector is one of the most rapidly growing and most profitable segments of the
Brazilian retail financial services market. Achieving a strong presence in consumer
finance is central to our strategy of gaining scale in our retail business and reaching
the lower income segment of the market.

Most recently, in March 2004, we
announced our acquisition of HiperCard, from Royal Ahold. HiperCard started as a private
label credit card company for the Bompreço chain of supermarkets and it is now an
independent credit card company with cards presently accepted in more than 60,000 points
of sale in the Northeastern of Brazil. At December 31, 2003, HiperCard had 2.3 million
cards issued.

Enhance sales to existing
customer base through innovative products and service offerings

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.
We have increased our average products outstanding per bank client to 6.0 as of December
31, 2003 from 2.6 as of March 31, 1997.

We have increased our market
penetration through cross selling, and launching new products such as Conta Sob Medida
(Tailored Account), which permits clients to set their fees based on their historical
relationship with Unibanco and 30 Hour Protection, a service that notifies clients,
through their cell phones, of transactions with their credit or debit cards, and informs
balances in their current accounts and investment portfolios.

Wholesale
Banking Strategy

Enhance
Our Market Position in Brazilian Wholesale Banking

Unibancos Wholesale Bank seeks
to be the bank of choice for Brazilian and foreign clients and corporations and investors
with interests in Brazil. Our strategy combines the strength of a commercial bank with the
agility of a leading investment bank. Our deep knowledge of our clients and their business
coupled with financial capabilities allows us to establish credit limits and to structure
transactions in a differentiated way. In 2003, we maintained our position as the leading
Brazilian bank in the mergers and acquisitions advisory business, acting as financial
advisor in 13 completed transactions, with an aggregate market value of more than US$ 950
million. Among other indicators of our market leadership, Unibanco had a 7.3% market share
and ranked second among private sector banks in terms of total BNDES (the Brazilian
development bank) disbursements, with a total amount of R$1.3 billion in 2003.

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 commoditized, market-standard products
offered by many of our competitors. We believe that our Insurance business has the best
mix of products among the five largest insurers in Brazil. 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), and insurance and coverage
products for the petrochemical and aeronautic 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 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
the merger of several companies into AIG Brasil Cia de Seguros, and the introduction of an Internet portal to
communicate with our brokerage force.

Wealth
Management Strategy

Be
the leading provider of Wealth Management services in Brazil.

The mission of the Wealth Management
division is to provide proactive advice to help our clients to accumulate, preserve and
transfer their wealth. We offer integrated financial solutions through our three main
areas of expertise: asset management, private banking and advisory services. Our tailored
and value-added products are targeted to companies and individuals positioned in the top
end of the wealth pyramid distribution, typically middle to large companies, pension funds
and affluent to high net worth individuals, thus leveraging our unique position in those
market segments. To be able to provide these differentiated services we have developed a
strong local and international network of wealth management specialists in the areas of
succession advice, tax advice, and real state among others. In the area of financial
investments we developed an open architecture model that further differentiates our
offerings. Through this model, our clients have access to our best investment products and
also to the best investment products of third party asset managers. According to data
prepared by ANBID, at the end of 2003, the asset management division had a 9% market share
in the Brazilian private pension funds market while the private banking division had a 6%
market share of assets under management.

Principal
Business Activities

Retail
Banking

Overview

Our Retail Banking business primarily
serves upper and middle income individuals (excluding private banking customers) and
companies with annual sales up to R$40 million. For purposes of internal analysis, we
separate both individuals and companies into smaller groups according to income brackets
to enable us to offer differentiated products and services to these clients. While we
traditionally have focused on middle and upper income clients, 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, PontoCred and LuizaCred.

As of December 31, 2003, we had
approximately 6.0 million customers, comprising current accounts, savings account clients
and retirees, compared to 5.6 million as of December 31, 2002. Including approximately
4.0 million customers from Fininvest, 1.1 million customers from LuizaCred and 3.0
million customers from PontoCred, we had a total of approximately 14.1 million retail
customers as of December 31, 2003. We also use our retail banking operations as a
distribution channel for products and services developed by our non-banking subsidiaries
and affiliates, including mutual funds and automobile and life insurance products.

Distribution
Channels

As of December 31, 2003, our retail
network, including Fininvest, LuizaCred, PontoCred and Banco 24 Horas had a total of
11,884 points of sale throughout Brazil, including: branches; corporate-site branches
(branch located in the premises of corporate clients of Unibanco); and in-store branches
(branches located inside large retailers, such as supermarkets).

Branches

The branch system serves as a
distribution network for all of the products and services offered to our retail customers.
Our 796 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.

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 406 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, 2003, we had 77 in-store branches in many of
Brazils principal retail chains, such as Carrefour, Pão de
Açúcar, Sendas, Wal-Mart and Sonae.

ATMs

We operate 7,115 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., or Tecnologia
Bancária. The ATM network of Tecnologia Bancária has 2,020 machines
throughout the country, and serves clients of 45 banks.

30
Hour Services and Branches

As part of our effort to provide
customers with faster and more efficient modes to complete banking transactions, we
introduced the 30 Hour branch concept in 1992. This is a service that
provides clients with electronic banking services such as cash withdrawal, pre-printed
checkbooks, account statements, and investment services 24 hours a day. 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.

Internet
Banking

We provide a variety of
retail banking services, including opening accounts, utility bill payment, wire transfers,
and mutual funds, through our web site. Since April 2000, we have also offered a
variety of mobile 30 Hours services, enabling clients to access their banking
information from their cellular phones, palm-tops or e-mail. As of December 31, 2003, we
had 1.3 million registered users of our Internet Banking. In 2003, we processed
approximately 101.5 million Internet transactions, an increase of 41% over the same period
in 2002. Use of our Internet banking services has continued to grow rapidly in 2003;
customers accessed our website a total of 56 million times.

Phone

Over the last decade, Unibanco led
innovations in distribution and remote banking, using the telephone initially as a banking
instrument, and now turning it into a sales tool. The original concept of the call center
has been transformed into contact centers, with Telefone 30 Horas functioning as a
relationship and sales platform. Most calls are answered, and the customers banking
transaction carried out, through our electronic voice response system. The system
identifies potential buyers of additional products and transfers the call to a live
operator. This is possible due to utilization of customer relationship management and data
based marketing tools. In 2003, we processed approximately 188 million phone banking
transactions as a result of 86 million calls received by our call center, an average
of approximately 7.2 million calls per month, as compared to an average of approximately
3.1 million calls per month in 1995. According to research conducted by Instituto
Brasileiro de Opinião Pública e Estatística IBOPE
(Brazilian Statistical Public-Opinion Institute) in 2003, Unibanco received a score for
personal service of 6.45 out of a possible 7 points.

Client Base

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
segmented into three different groups: those earning more than R$4,000 per month
(UniClass); 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 UniClass group, we
believe we differentiate ourselves from competitors by providing our customers with:

- products
and services tailored to their needs;

- a
specialized call center with what we believe are higher quality levels including dedicated
customer service representatives;

- specialized
branches for UniClasscustomers, called "Espaco UniClass";

- a
specialized team of account officers within our extensive distribution network; and

- a website
specially designed for this segment.

In the Exclusivo group, we
believe we differentiate ourselves from competitors by providing services and products,
which substantially reduce the time spent by our clients in their basic banking
transactions, such as withdrawals and payment of bills, as well as personalized 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 group, we
focus on retired individuals and employees of companies to which we provide payroll
services. We believe that our relationships with companies in our Wholesale Banking
segment give us a competitive advantage to offer payroll services. We have designed and
implemented special services and products tailored for retired customers, such as personal
appointments, and pre-approved credit lines.

We also classify clients into 32
groups, or DNAs, based upon their income and spending levels. DNA is a simple and powerful
analytical tool that we use internally to refine and customize solutions for different
clients, optimize service costs, and help avoid occasional pricing glitches.

Small
Companies

We serve approximately 500,000 small
companies, consisting primarily of retailers. For companies with annual sales up to R$5
million, we offer products and services through branch account officers dedicated to this
segment. Companies with annual sales ranging from R$5 million to R$40 million, which tend
to require customized products and services, are served by a group of account
representatives separated from our branch network.

Our loan portfolio for small
companies consists of loans with maturities of up to 3 months for unsecured loans, such as
overdrafts on checking accounts, up to twelve months for working capital loans, and up to
three years for lease financing. Loans to small companies totaled approximately R$2.8
billion, or approximately 10.7% of our total loan portfolio, at December 31, 2003. Our
retail banking business also offers small companies various fee-based services, such as
cash management, payroll, and receivables collection.

Consumer
Finance

We provide consumer finance products
and services directly and through:

- our
Fininvest subsidiary;

- Banco
Dibens, in which we have a 51% voting interest;

- our
automobile financing portfolio;

- PontoCred,
in which we have a 50% equity interest;

- 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.

In addition, the consolidation of the
recently acquired Creditec and HiperCard businesses is scheduled to occur in the second
quarter and the second half of 2004, respectively.

At December 31, 2003,  Fininvest  loans had an average  maturity of three months,  and primarily  bore fixed
rates of interest.  At December 31, 2003,  Fininvest had total assets of R1.8 billion.  Its loans  portfolio
stood at  R$1.2 billion at December 31,  2003. We have focused a significant  portion of our acquisition and
joint venture  activity on the consumer  finance  segment of the retail  market.  For  information  on these
transactions, see Recent Acquisitions  Consumer Finance.

For information on these
transactions, see  Recent Acquisionts  Consumer
Finance.

Credit
Cards

The market for consumer credit has
grown as declining inflation in Brazil has led to increased consumption and increased
acceptance of credit cards by merchants. From 1995 to 2003, the number of credit
cards issued in Brazil tripled, according to ABECS.

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:

- our Unicard
subsidiary;

- Credicard,
in which we own a 33.3% stake; and

- our
Fininvest subsidiary.

All three of these companies employ
modern credit review procedures. Each credit card application is reviewed based on credit
scoring and consumer behavior scoring systems. 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.

As of December 31, 2003, Unicard
had issued 4.4 million credit cards, making it one of the largest issuers of credit cards
in Brazil, with an approximate 9.3% market share, calculated based on ABECS data regarding
the total number of credit cards issued in Brazil. The majority of Unicards
customers are Unibancos customers, but Unicard also aggressively markets co-branded
credit cards to non-customers. For example, Unicard issues co-branded cards for Varig
Airlines and certain Brazilian newspapers. During 2003, Unicard had total billings of
R$5.4 billion and total fees of R$226 million.

Fininvest distributes credit cards,
including private label cards, to low-income customers. During 2003, it financed a total
volume of R$1.2 billion in lending, leasing and other credits and had total billings of
R$3.6 billion and total fees of R$233 million.

We have a one-third
interest in Credicard, as do Citibank N.A. and Banco Itaú. Citibank is responsible
for the management of Credicard. Unibanco and its fellow shareholders receive profit
sharing 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. As of December 31, 2003, Credicard had 7.0 million cards issued. During
2003, Credicard Group had total billings of R$38.9 billion. Cardholders include our
customers and customers of other banks, as well as direct customers of Credicard.

In May  2000,  Credicard  created  Orbitall,  a  service  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  employees  that worked in  Credicards  processing  departments.  In August 2003,
Credicard  decreased its capital through transfer of its investment in Orbitall to its shareholders.  During
2003, Orbitall processed 16.4 million cards, which corresponded to some 650 million transactions.

Established in 1996, Redecard is
responsible for the capture and transmission of credit and debit transactions of the
MasterCard, MasterCard Electronic, Maestro, Diners Club International and RedeShop brands
in Brazil. Redecard also provides some products and services for their customers, such as
leasing to retailers machines used for the processing of debit and credit transactions.
Debit card use has been increasing in Brazil. We have a 31.9% interest in Redecard, and
Citibank N.A., Banco Itaú and Mastercard also hold interests in the company.
Citibank is responsible for the management of Redecard.

Banco1.net

We were one of the first Brazilian
banks to offer virtual banking services. 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 banking
services 24 hours a day, seven days a week by phone, fax and personal computer. In May
2000, we, together with PT Multimedia, controlled by Portugal Telecom, transformed
Banco1 into Banco1.net.

In December 2001, Banco1.net entered
into a strategic alliance with Investshop, Brazils second largest homebroker through
the Internet. 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 65.9% interest in Bancol.net. Portugal
Telecom, Investshop Brasil and third party investors hold 20.5%, 5.9% and 7.7%,
respectively.

Loans

Loans to retail customers are an
important part of our retail banking operations. At December 31, 2003, retail loans,
including loans by our subsidiaries and affiliates, were 38.3% of our total loan
portfolio. 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. We believe we are well positioned to expand our retail loan assets when
Brazils trends are for declining interest rates and unemployment. See Item 11.
Quantitative and Qualitative Disclosures About Market Risk  Retail Portfolio.

Funding

Retail banking is an important source
of funding for us. Our extensive distribution network and strong deposit base support our
retail banking operations. Retail banking deposits were R$12,630 million at
December 31, 2003, or 49.1% of deposits.

Savings and Annuities
Product

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 2003 amounted to R$125
million.

Wholesale
Banking

Overview

Our Wholesale Banking business serves
medium- 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 operations 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 2,850 large and medium-sized companies in Brazil as of
December 31, 2003. Loans to large corporate customers were approximately R$13.8 billion at
December 31, 2003 (approximately 53% of our total loan portfolio) as compared to
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, 2003. Loans to middle market corporations
were approximately R$1.6 billion at December 31, 2003 (approximately 6% of our total loan
portfolio), as compared to 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 in accordance with 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 up to 3 years.

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 specialized team of
account officers, which is led by a sector head. Japanese, German and Portuguese companies
that have operations or do business in Brazil and Brazilian companies with interests in
Japan, Germany or Portugal are attended by our Japan, German and Portuguese Desks. We
believe that our knowledge of the Brazilian financial market, combined with the strong
relationships that our bankers have with important companies in Brazil, give Unibanco a
competitive advantage.

Wholesale
Network

We have account  officers  located at our centralized 3 regional  offices (in São Paulo,  Rio de Janeiro and
Belo  Horizonte)  and 18  regional  branches.  Each of our  corporate  customers  is  assigned  a  dedicated
banker,  who is responsible for the day-to-day  relationship with the customer and responsible for assisting
our clients operations throughout Brazil. These customers also benefit from our offices abroad.

Our international network consists of
the following:

- branches in
Nassau and the Cayman Islands;

- representative
offices in New York;

- banking
subsidiaries in Luxembourg, the Cayman Islands, and Paraguay; and

- a brokerage
firm in New York (Unibanco Securities Inc.)

Since the beginning of 2004 the
activities of our brokerage firm in London have been transferred to our subsidiary in
Luxembourg. Our international subsidiaries and branches obtain trade and general purpose
funding for onlending 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 time deposit facilities. Unibanco Cayman is
particularly active in obtaining funding in the Euro-dollar market for purposes of
onlending to our Brazilian clients. Unibanco Cayman is an issuer under our medium-term
note program of US$2.0 billion, and it maintains a trade note program, under which
collectively an aggregate principal amount of approximately US$811 million was outstanding
at December 31, 2003. 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 investment banking services to Brazilian companies. 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 decreased by
10.3% to R$13.1 billion at December 31, 2003, from R$14.6 billion at December 31, 2002. Of
these assets:

- R$2.2
billion were credit operations directly provided to our clients;

- R$6.1
billion were assets we borrowed for purposes of onlending to our Brazilian clients; and

- R$4.8
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, 2003, we had funding
from 96 of our more than 350 correspondent banks, as well as medium- and long-term import
financing funded or insured by over 25 export credit agencies and multilateral agencies.
Our extensive network of correspondent banks and our own international operations help us
provide our customers with foreign exchange and international trade support worldwide.

At December 31, 2003,
we had R$2,505 million in trade finance,  and our outstanding import and export
financing,  on a consolidated  basis,  stood at R$3,277 million.  Our shares of the
Brazilian export financing and          import           financing           markets
          stood          at          5.8%          and          8.1%,
          respectively,           according          to          the          Central
Bank.

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.

During 2003, we were the fourth
largest private sector bank in terms of origination and distribution of fixed income
securities, with an 8.5% market share in origination and 8.5% in distribution for the year
ended December 31, 2003 according to data prepared by ANBID.

Our mergers and acquisitions advisory
team successfully completed 13 transactions over the course of 2003, giving the bank the
top position among Brazilian banks in the Thomson Financial ranking.

Our Brazilian brokerage operation,
Unibanco Corretora de Valores Mobiliários S.A. (UCVM), offers equity and debt
securities and derivatives products, and provides trading services on Brazilian
exchanges for more than 95 institutional customers. UCVM provides research on over 100
listed companies. In 2003, UCVM had 2.8% market share in number of futures contracts
negotiated with the Bolsa de Mercadorias e Futuros(Brazilian Merchantile & Futures exchange) or BM&F, based on BM&F data. We maintain securities
brokerage and distribution operations in Europe, through Unibanco Luxembourg, and in 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 long-term financing.
This combination of investment banking advisory services and commercial lending represents
an important source of revenue for us. During 2003, we completed 11 project finance
advisory mandates involving total investments of over R$1 billion. 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 Brazil in
the ANBID project finance advisers list, by number of projects, in 2003. The assessment is
based upon the investment value of assisted projects.

BNDES 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. 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 at our own risk to the borrowers. These loans are mostly
real-denominated and are generally secured or guaranteed. BNDES onlendings,
excluding Finame, reached R$1.3 billion in 2003, a 7.3% of the total, according to BNDES
data.

Treasury,
Trading and Derivatives Activities

Our treasury unit conducts financial
transactions 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 segments;

- 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 us. 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 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. We also maintain, with eight other
banks, the Extrato Multinacional, which offers integrated cash-management services in
Latin America. At the end of 2003, approximately 85,100 customers used our cash management
services, such as payments and credit, a 6.4% increase compared to 2002. The volume of
collections accounts payable and payrolls in 2003 increased by 5.6% compared to the
previous year, to 152.1 million transactions.

Insurance
and Related Activities

Overview

We engage in insurance and related
activities mainly through our joint venture with AIG. This joint
venture consists primarily of UASEG, which is owned substantially in equal parts by Unibanco and AIG, and
managed by us. According to data released by SUSEP and ANAPP, in December 2003, UASEGs insurance,
pension and retirement plan companies combined with AIG Brasil were the fourth largest insurance provider
in Brazil, based on gross premiums written and pension plans contributions.

For
the year ended December 31, 2003, UASEG had insurance premiums and private retirement
plans premiums of R$1,468 million.

Insurance

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  to  financial  institutions.  Because
approximately  half of UASEGs insurance  premiums are generated through customers of our network we benefit
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.
AIG Brasil  distributes  products  through,  banks,  financial  institutions and 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. For example, the warranty extension program for household
appliances, marketed by Garantech, our joint venture with Multibrás, as of December
31, 2003, sold R$96.7 million in extended warranty contracts.

We have achieved leading market
positions in a variety of specialized areas for commercial lines, including directors and
officers (D&O), and insurance and coverage products for the petrochemical and
aeronautic sectors.

At the end of 2003, we launched  D&O insurance for listed companies, in association with the São Paulo Stock
Exchange (Bovespa). The product was developed recently by AIG in conjunction with the New
York, Tokyo, and Mexico City stock exchanges.

The following graph, based on information by SUSEP and ANS, illustrates the 7.1% market
share of UASEG and AIG Brasil (on a combined basis) of total premiums for the year ended December 31, 2003.

# Market Share
Year ended December 31, 2003

---

Source:SUSEP and ANS.


Although  UASEG is a joint  venture  between  Unibanco and AIG, we hold the 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.  AIG Brasil is jointly owned by Unibanco and AIG, but we do not control
it.  Accordingly,  we do not  consolidate  the  results  of AIG  Brasil  into  our  consolidated  financial
statements.  Instead,  we account  for the  results of AIG Brasil  under the equity  method.  Our net income
reflects approximately 50% of the combined operations.

The following table shows the
premiums earned by UASEG for 2002 and 2003.

|       | For the Year Ended
and As of December 31,
|------ | -----------------------------------------
|       |                                          
|       | 2002                                     
|       |                                          
|       | (in millions of R$, except percentages)  
|       |                                          
|Life   | R$257                                    
|Health | 84                                       
|Auto   | 479                                      
|Fire   | 126                                      
|Others | 220                                      
|Total  | R$1,166                                  

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 ceded to IRB Brasil Resseguros S.A., formerly known as Instituto de Resseguros do
Brasil, or IRB, which is controlled by the Brazilian Government.

On October 31, 2003, UASEG entered into an agreement to acquire the insurance  company Phenix  Seguradora SA
from Toro Targa  Assicurazioni  SpA. and Fiat do Brasil S.A.  Phenix reported sales of R$73 million in the
first  half  of  2003.  We  expect  that  this  transaction  will  enhance  our  insurance  presence  in the
southeastern  state of Minas Gerais and the  southern  state of Rio Grande do Sul. In  connection  with this
acquisition,  we have also entered  into a strategic  partnership  with Fiat.  This  relationship  will give
UASEG preferred access to new corporate insurance contracts arranged by Fiat and its affiliates in Brazil.

Pension
and Retirement Plans

Unibanco AIG Previdência S.A.
(Prever), our subsidiary, manages reserves, that consist of pension and retirement contributions made by institutional
clients and individuals. According to ANAPP, Prever was
the second largest private pension and retirement plans company in Brazil in 2003, in the corporate
segment.. Prever services approximately 648,500 individual and 1,112 corporate clients. At December 31,
2003, technical reserves were R$3.1 billion, an increase of 53.3% compared to December 31, 2002.

Prever sells the main following
products to Brazilian private pension plans.

- Plano
Gerador de Beneficios Livres,or PGBL, enables  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  middle  and  higher  income
customers.

- Vida
Gerador de Beneficio Livre, known as VGBL, combines 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.  Contributions  to VGBL are not tax  deductible to investors.  VGBL is suitable for the
         segment of the population with income around R$2,000 per month (approximately 12 million people).

In 2003, total reserves of PGBL plans reached R$1,216  million,  while VGBL plans totaled  R$439 million,  a
88.9% and 377.2% growth, respectively, compared to 2002.

Wealth
Management

In March 2002 we focused on the
strategy design of the recently combined Unibanco Asset Management (UAM) and the Private
Bank businesses. In 2003 we focused on improving the businesses offering, leveraging the
synergies of both operations as well as developing the technological tools and processes
required of the new organization.

Assets under Management
as of December 31, 2003

As of December 31, 2003, UAM had R$23.2 billion in assets under  management  (including  R$479 million under
the  management of Banco  Dibens),  an increase of 26.0%  compared to 2002. In December  2003, the Financial
Accounting  Standards Board (FASB) issued  interpretation  No. 46 (FIN 46R),  Consolidation of Variable
Interest  Entities , an  interpretation  of Accounting  Research  Bulletin No. 51. FIN 46R is a revision to
the original FIN 46 that addresses the  consolidation of certain  variable  interest  entities (VIEs).  As a
result of the  application  of the  interpretation,  we  consolidated  in our assets R$3.8  billion of funds
managed  by  Unibanco  Asset  Management  in 2003 of which we are the sole beneficiary through our  insurance
companies.  For  further  discussion  of the  effect  of the  application of  FIN  46R on our  consolidated
financial statements, see note 2 (y) to our consolidated financial statements.

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 2003, asset management fees averaged approximately 1.3% per year. UAM uses
our branch network as one of its principal distribution channels.

Since July 2001, UAM has held
Standard & Poors AMP-1 rating (very sound) with respect
to its practices in managing third parties 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. Also in 2003, UAM received
from Fitch Atlantic Ratings, one of the major Brazilian risk rating companies, the highest
rating in the national scale: aaa (am) (bra).

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. The Private Bank reinforcedand segmented its team of managers, allowing
for a deeper involvement with the needs of clients with diverse profiles. Moreover, the
Wealth Management division started centralizing the coordination and delivery of advisory
services in succession, tax, and real estate planning, among others.

Other Information about Unibanco

Risk
Management

Given
the nature of Unibancos business as a financial institution, risk management
practices play an important role in the way our financial institution is managed. Risk
management practices have been integrated into various levels of our organization. A
separate department unit is responsible for identifying, measuring and managing market,
credit and operational risk on an institution-wide basis. In addition, certain business
divisions, owing to their particular risk exposures, are equipped with their own dedicated
risk management staff. We have also formed several committees, composed of Unibancos
senior management, whose task is to evaluate the risks inherent in our activities on an
ongoing basis and update our risk management policies accordingly. See Item 11.
Quantitative and Qualitative Disclosures About Market Risk  Risk Management
for a more detailed discussion of our risk management policies.

Funding

Our principal source of funding is
deposits from the Brazilian public, including individuals and businesses. At December 31,
2003, our total deposits were R$25.7 billion, representing 38.9% 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(Reference rate), an interest rate established by the Central Bank;

- time
deposits, which earn interest; and

- interbank
deposits from financial institutions, which earn the interbank rate of interest.

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.  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,  2003,  most of our time
deposits carried a floating interest rate.

The following  table sets forth our total  deposits,  by type and source,  as of December 31, 2001, 2002 and
2003:

|                 | As of December 31, 
|---------------- | -------------------
|                 |                    
|                 | 2001               
|                 |                    
|                 | (in millions of R$)
|                 |                    
|From Customers:  |                    
|Demand deposits  | R$2,003            
|Time deposits    | 10,858             
|Savings deposits | 5,115              
|From Banks:      | 579                
|                 |                    
|Total            | R$18,555           
|                 |                    

The following table sets forth the mix
of the retail and wholesale deposits at our domestic offices as of December 31, 2001,
2002 and 2003:

|          | As of December 31, 
|--------- | -------------------
|          |                    
|          | 2001               
|          |                    
|          | (in millions of R$)
|          |                    
|Retail    | R$9,592            
|Wholesale | 8,963              
|          |                    
|Total     | 18,555             
|          |                    

Other Sources

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, 2003, our total import
and export funding was approximately R$2.5 billion, compared to R$4.1 billion in December
31, 2002.

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, 2003, we had approximately
R$2.6 billion of securities outstanding in the Eurobond market, compared to R$2.2
billion as of December 31, 2002.

In 2003, Unibanco raised
approximately US$1.4 billion in funding abroad through eight Eurobond issues, two
securitization transactions, and one Tier II subordinate note offering.

At December 31, 2003,  we had  outstanding  R$5.9 billion in local and foreign  onlendings,  which  consist
primarily of  real-denominated  amounts  borrowed from BNDES,  and FINAME,  for loans  extended to Brazilian
clients for investments mainly in fixed assets, such as premises and equipment.

Technology

Technology is important to the execution of several  components of our business  strategy.  We have invested
heavily,  and we will  continue  to do so  in new  technology  to  enable  us to  retain  and  enhance  our
competitive position in various markets, improving the quality of our services and controlling costs.

During 2003, Unibanco invested a
total of R$143 million on technology. Principal projects included:

- investing
in Unicard and Fininvest projects (basically in new technology, organic growth and in
integration of acquired company);

- increasing
the capacity of our central computer systems;

- improving
our management information system;

- upgrading
our ATMs and call center;

- product
development, aimed at satisfying the growing demand from our customers; and

- back-office
upgrading, business support areas, and processing.

Competition

Retail
and Wholesale Banking

Since 1990, the banking industry in
Brazil experienced a period of consolidation. A number of banks were liquidated, many
important state banks were privatized and many medium-sized private sector banks were also
sold. Nevertheless, the market for financial services in Brazil, including banking,
insurance and asset management, remain highly competitive. As of December 31, 2003, there
were 141 multiple-service banks, 23 commercial banks, 21 investment banks, and numerous
savings and loan, brokerage, leasing and other financial institutions.

Banco  Bradesco  and Banco  Itaú are the two  largest  private  sector  banks in Brazil in terms of  assets,
followed by Unibanco,  Banco  Santander-Banespa,  Banco ABN AMRO Real, Banco Safra and HSBC  Bamerindus.  We
expect that the recent  acquisition  activity in the Brazilian  banking market will increase  competition in
the retail sector.

We also face competition 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., or Banco
do Brasil and Caixa Econômica Federal, or CEF accounted for 29.1% of total lending
in the Brazilian banking system as of December 31, 2003, compared to 24.6% as of
December 31, 2002. Public-sector banks operate within the same legal and regulatory
framework as the private sector banks with stronger presence in markets such as
residential mortgage and agricultural lending, than private sector banks.

See Item 3.D. Risk Factors 
Risks Relating to the Brazilian Banking Industry  The increasingly competitive
environment in the Brazilian financial services market may negatively affect our business
prospects.

Credit
Cards & Consumer Finance

The Brazilian credit card market is
highly competitive, consisting of approximately 33 credit card issuers of varying sizes.
The primary competitors of Unicard and Credicard 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.

Post-dated checks also compete with
credit cards. They are 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.

Consumer finance companies, while
targeting different economic segments of the population than banks generally do, are
likely to continue expanding their credit card activities. We believe the major competitor
for Fininvest are Losango, Banco Zogbi and Finasa, which were acquired by Bradesco, and
many small independent companies.

Insurance and Pension Plans

The Brazilian  insurance market is highly  competitive.  The 10 largest insurance groups  represented 78% of
the  insurance  market as of  December  2003.  Our primary  competitors  are the Sul  América  Group,  Banco
Bradesco,  Porto  Seguro,  Banco do Brasil and Banco  Itaú.  For the year ended  December  31,  2003,  these
companies  together  accounted  for R$26  billion of  premiums  written  (based on  information  provided by
SUSEP,  ANAPP and  ANS) in the  Brazilian  insurance & Pension Plans  markets,  or 58%. As of December,  2003
UASEG and AIG Brasil,  on a combined  basis,  had a 7.1% insurance market share,  (8.3% in the pension
plans), representing a total  market  share of 7.5% in  insurance  and pension  plans.  See  -- Insurance  and
Related  Activities  Insurance.  Although  companies  that operate  nationwide  underwrite the majority of
the business,  we also face  competition  from certain local or regional  companies in various  markets that
may have a  relatively  cheaper cost  structure or  specialization  in certain  niches.  We believe that our
main  competitive  factors are our strength,  strong  pathernership  with  international  company brand name
recognition, quality of services, and competitive rates.

Asset
Management & Private Bank

The asset management industry in
Brazil has been dominated by commercial banks offering fixed-income funds to retail bank
customers. Competition in the sector includes such traditional competitors as Banco do
Brasil, Banco Itaú, Banco Bradesco, HSBC, Citibank, CEF and BankBoston. Unibanco
Asset Management 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. An important trend has emerged
in the last couple of years. Increasingly funds of funds is becoming an important product,
especially for the high net worth segment. This trend has fueled the emergence of small
asset managers specialized in multi-markets high risk products, a trend that resembles the
global movement toward hedge funds and funds of hedge funds. These managers have been able
to gather significant volumes, despite their poor proprietary distribution capabilities.
In this regard, UAM has positioned itself in a very good competitive position. Among the
big asset managers UAM was the first to offer its own product in this category of
multi-markets high risk products and also manage to create a leading operation in the fund
of funds business.

The private banking industry in
Brazil is divided in two segments, one dealing with the domestic market and another one
with the international markets. In the local arena, key competitors are Citibank, Banco
Itaú, Banco Bradesco, Banco Safra, HSBC, ABN, BankBoston and Banco Santander, while
in the offshore segment, in addition to the local competitors, banks such as JP Morgan
Chase, UBS, Merrill Lynch, Morgan Stanley, Crédit Suisse First Boston and the Swiss
private banks (Lombard Odier Darier Hentsch, Mirabaud, Julius Baeur, Pictet, among others)
also have a strong presence in Brazil. Both markets are very competitive, and margins are
very thin as a consequence. A recent trend in the Brazilian domestic was initiated by
Unibanco in 2002, when it started offering wealth management services to its clients,
including management of real estate assets and tax advice. Today, other local players also
have such services in their offerings.

THE
BRAZILIAN BANKING INDUSTRY

General

The federal  government  controls some commercial banks 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 they have a stronger
presence in markets such as residential  mortgage and  agricultural  lending than private  sector banks.  In
addition, the development banks act as regional development agencies.

Public Sector

The federal governments
controls some commercial banks 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 they have a stronger presence in markets such as residential mortgage and agricultural
lending than private sector banks. In addition, the 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,  mainly in the industry  sector.  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

The National Financial
System is composed of the following regulatory and inspection bodies:

- the National
Monetary Council (Conselho Monetário Nacional-CMN);

- the Central
Bank (Banco Central);

- the Securities
Commission (Comissão de Valores Mobiliários-CVM);

- the Private
Insurance Superintendency (SUSEP); and

- the
Complementary Pension Secretariat.

The CMN,  the Central
Bank and the CVM regulate the Brazilian banking industry.

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

|National Monetary
Council


establishes currency
and credit policiescontrols lending and
capital limitsapproves monetary
budgetsestablishes  foreign
 exchange  and  interest  rate      policyoversees  activities
 related to the stock exchange      marketsregulates   the
  constitution   and  operation  of      financial institutionsgrants  authority
 to the  Central  Bank  to  issue      currency and establishes reserve requirement levelsestablishes  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 authorize
            and approve:
the establishment and operation of financial institutionscapital increases by financial institutionsthe establishment of branches and facilities
            in Brazil and abroadmergers and acquisitions of financial
            institutionsamendments to by-laws of financial institutionsestablishment or transfer of the principal place of business
            of financial institutionsmerger, spin-off or acquisition transactions resulting
            in the change of control of financial institutions |  | having the power to approve,
            suspend and cancel:


the registration of public companiesthe authorisation for brokers and dealers
              to operate in the securities marketpublic offerings of securities
|establishing:

minimum capital requirementscompulsory reserve requirementsoperational limits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | supervising
            the activities of:

public companiesstock exchangescommodities and futures exchangesmarket members                                                                                                  
|requiring the submission of:

annual audited financial statementssemi-annual audited financial statementsquarterly revised financial statementsmonthly unaudited financial statements                                                                                                                                                                                                                                                                                                                                                                                        |  | requiring:

full disclosure of material events affecting
              the marketannual and quarterly reporting by public companies                                                                                         
|requiring full disclosure of:
all credit transactionsforeign exchange transactionsexport and import transactionsany 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 with a general  permission to regulate
the Brazilian  financial  system through specific laws. The enactment of EC 40/03 will
allow the  legislature  to focus more closely on the  different  issues  affecting  the
 regulation  of the  financial system.  The timely focus on these issues will  hopefully
 lead to greater  efficiencies  within the  financial  system.  The Brazilian Congress
may now vote on several bills  dealing with the  regulation of the  financial  system.
 Congress  would have been unable to do this absent the enactment of this constitutional
amendment.

Principal
Limitations and Restrictions on Activities

Restrictions on
the Extension of Credit

Financial
 institutions  may not grant loans to, or guarantee the 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),
 and 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 limiting the
extension of credit to public-sector  entities,  such as  government-owned  companies and
 governmental  agencies,  which are in addition to certain limits on indebtedness to
which these public sector entities  are already 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  from  extending
 credit to any person or group of related  persons  in an  aggregate  amount equivalent
to 25% or more of the financial  institutions  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;

- own real
property, other than real property for its own offices and branches; or

- acquire equity
investments in other financial institutions abroad, without prior approval by the Central
Bank.

When a bank receives
real estate in  satisfaction  of a debt,  such property must be sold within one year.
Such one-year limit may be extended for two additional periods of one year, subject to
the Central Banks approval.

Repurchase
Transactions

Repurchase
transactions (operações compromissadas) are transactions involving assets that are
sold or purchased subject to the occurrence of certain conditions. Upon the
occurrence of any such conditions, and depending on the terms of the particular
agreement, the seller or the buyer may be obligated to repurchase, or resell the
assets, as the case may be. The conditions triggering the repurchase or resale
obligation vary from one transaction to the other, and typically must occur within a
particular time frame.

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  transactions  involving private  securities  may not exceed
twice the amount of adjusted  shareholders  equity.  Limits on repurchase  transactions
 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 authorized 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

Asset management is
regulated by the CMN, the Central Bank and the CVM.

Only individuals or
entities authorized by the Securities 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  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.

Micro-credit
Regulation

The Brazilian
government has taken several measures intended to encourage lower-income individuals to
have greater access to the Brazilian financial system. Such measures include the
requirement for credit allocation, the simplification of banking procedures, and
the liberalization of credit union (cooperativas de crédito) regulations.

Since 2003, commercial
banks, full service banks licensed to provide commercial banking services, the Caixa Econômica
Federaland credit unions must allocate 2% of their cash deposits to
low-interest-rate loan transactions designated for lower-income individuals, small
companies and informal entrepreneurships, following a specific methodology. Interest
rates on these loans cannot exceed 2% per month, the repayment term cannot be less than
120 days, and the principal amount of the loan cannot exceed R$600 for individuals and
R$1,000 for micro-enterprises.

Credit upon
Payroll Discount

Since December 2003,
 employees  regulated by the  Consolidation of Labor Laws (CLT) are entitled to
authorize  employers to discount directly from employees payroll amounts due under
loans,  financing and lease  transactions,  when the respective  agreements permit such
procedure.  The employers shall transfer the amounts  discounted from  employees  payroll
to the  institutions  which have granted the credits to the employees,  in accordance
with the terms and conditions set forth in the respective  loan,  financing and/or lease
agreements.

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;

- financial,
operational and management information systems; and

- 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

Regulations  enacted
by the CMN on May 30, 2003,  as amended on January  30,  2004,  established  certain
 requirements  in respect of financial institutions independent accountants and required
financial institutions to have an Audit Committee.

All
    financial institutions must be audited by independent accountants. Independent
    accountants can only be hired if they are registered with the Securities
    Commission, certified in specialized 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 they meet several strict requirements
that assure their independence. Moreover, financial institutions must replace
their independent accounting firm at least every five consecutive fiscal years
and former accountants can be rehired only after three complete fiscal years
have passed since their prior service. The financial institutions must designate
a senior manager to be responsible for compliance with all regulations regarding
financial statements and auditing.

In addition to
preparing an audit 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; and

- 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 a reference capital or a consolidated  reference capital equal to or
greater than R$1 billion must  create,  by July 1,  2004,  an  internal  audit
 committee.  The  audit  committee  must be  created  pursuant  to the  financial
institutions  by-laws  and must be composed  of, at a minimum,  3  individuals,  at
least one of whom is an expert in  accounting  and auditing.  In accordance  with the
Brazilian  law, the members of the audit  committee may also be members of the board of
directors of the  institution and must meet certain  requirements  that ensure their
 independence.  The audit committee must report directly to the board of directors and
its main functions include:

- appointing the
independent accountants to be elected by the board of directors;

- supervising
the independent accountants work;

- requesting the
independent accountants replacement when it deems necessary;

- reviewing the
financial statements for each semester, the management and the audit reports;

- supervising
 the accounting and auditing  departments,  including  their  compliance  with internal
 procedures and applicable               regulation;

- evaluating the
managements compliance with the independent accountants recommendations;

- receiving and
publishing information regarding non-compliance with internal procedures or applicable
regulation;

- advising
management on the adoption of internal controls and procedures; and

- meeting  with
 management,  independent  accountants  and  internal  accountants  to verify  their
 compliance  with the audit               committees recommendations

Furthermore,  it is
permitted under Brazilian law, to create a sole audit committee for the whole group of
companies.  In this particular  case, the audit  committee  shall be responsible  for
every and each  institution  pertaining to the same group which falls within  the
requirements set forth in the paragraph above.

The  independent
 accountants  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 fraud.

Auditing
Requirements

Brazilian law requires
financial  institutions to prepare their financial  statements in accordance with certain
standards set forth by Brazilian corporation law and other applicable regulations.

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 weight of


 300% on deferred tax assets

 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 capital adequacy.

- 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.

The  Reference
 Capital  shall be taken into  consideration  for the purpose of defining  the  capital
 adequacy of  financial institutions, except for the permanent assets limit, which is
defined pursuant to certain  legal provisions.

Capital Structure

Financial
 institutions  must be  organized  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 loan  transactions  with  companies into 9
categories,  ranging from AA to H, in accordance  with their risk. Risk  assessment
 includes an evaluation of the borrower,  the guarantor and the relevant loans. Credit
classifications are determined in accordance with Central Bank criteria relating to:

- characteristics
 of the debtor and the  guarantor,  such as their  economic and financial  situation,
 level of  indebtedness,               capacity for generating profits, cash flow, delay
in payments, contingencies and credit limits; and

- characteristics
of the transaction,  such as its nature and purpose, the sufficiency of the collateral,
the level of liquidity               and the total amount of the loan.

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         | 100.0%           

---

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.

A loan may be upgraded
if it has a credit  support or  downgraded  if in default.  Banks must  write-off  loans
6 months after they are ranked H.

In the case of loan
transactions with individuals,  there is a similar  nine-category ranking system. The
loan is graded based on data including the individual's income, net worth and credit
history (as well as other personal data).

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

|Number of Days Loan is Past Due(1) | Maximum 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 are
 required 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;

- maturity 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
authorization); 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
 that, in the aggregate,  are 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

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

- identify and
maintain up-to-date records regarding their customers;

- maintain
internal controls and records;

- record, for a
five-year period, any transaction or set of transactions  performed by individuals or
entities pertaining to the               same  economic  group  involving  Brazilian  and
 foreign  currency,  securities,  metals or any other asset which may be
              converted into money that exceeds R$10,000;

- review
transactions or proposals with characteristics which may indicate the existence of a
crime;

- keep records
of transactions involving checks for a period of 5 years;

- inform the
appropriate  authorities (without the customers knowledge) of any transaction or set of
transactions  performed by               individuals or entities pertaining to the same
group of companies, which involves amounts exceeding R$10,000.00; and

- communicate to
the appropriate authorities, within 24 hours, any suspicious transaction.

In addition,  the
Brazilian  anti-money  laundering law created the Financial  Activity Control Council.
 The main role of the Council  is to  promote  cooperation  among  the  Brazilian
 governmental  bodies  responsible  for  implementing  national  anti-money laundering
policies, in order to avoid the performance of illegal acts and frauds.

Anti-Tax Evasion
Law

The Brazilian  Central
Bank is authorized to require financial  institutions to provide  information  generally
 protected by bank secrecy without judicial  authorization,  as long as they have strong
 circumstantial  evidence that a customer has engaged in tax evasion.  Such evidence may
be represented by, among others:

- declarations
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 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. The reserves imposed on
    demand deposits, savings deposits and time deposits account for substantially
    all amounts required to be deposited with the Central Bank. For further discussion
    of reserve requirements, please 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
 Compulsory Deposit Requirements.

Taxation of
Financial Transactions

Temporary
Contribution on Financial Transactions (CPMF)

The Temporary
Contribution on Financial Transactions (Contribuição Provisória sobre Movimentações
Financeiras  CPMF) is a tax imposed on any type of financial transaction, with
certain limited exemptions. The current rate of the CPMF is 0.38%. Most recently,
on December 19, 2003, a Constitutional Amendment extended the period for the
collection of the CPMF until December 31, 2007. On April 1st, 2004, a provisional
measure created the so called Investment Deposit Accounts, which is an investment
account that allows the investors to make money transfers without paying CPMF.

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) taxes four different types of
transactions at different rates. 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 financial institutions and  non financial entities                      | 1.5% per day           | up to 0.0041% per
        day depending on the transaction                                                                                                                                  
|                                                                                                    
|transactions relating
            to securities and transactions involving gold as a financial asset | 1.5% per day           | 0.5% per day for
            investment funds of any type (1)
      0% on transactions with equity securities
      1%
              on transactions with fixed income securities (2)       
|insurance transactions
            entered into by insurance companies                               | 25%                    | 2% for health insurance
      7% for all other types of insurance
            (3)                                                                                                           
|foreign exchange
            transactions                                                            | 25%                    | 0% (general rule)
      2% on credit card transactions
      5% for remittances
                from abroad that will remain in Brazil for a period lower than
          or equal to 90 days

---

---

|(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,  and by the Brazilian Civil Code in
particular.  However,  regulations established by the 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
 between product and service  providers and consumers and to protect  final  consumers.
 On May, 2004 the Brazilian  Supreme Court of Justice ruled that the Brazilian  Consumer
Defense Code also applies to transactions  between  financial  institutions and their
clients.  We are not in a position,  at this stage, to predict the impact that this will
have on the Brazilian  banking system.  Financial  institutions are also subject to
specific  regulation of the National  Monetary  Council,  which  specifically  regulates
the relationship  between financial institutions and their clients.

The New Civil
Code

Law No.  10,406
 instituted  a new  Brazilian  Civil Code (the New Civil  Code),  which took  effect on
January 11, 2003 and replaced  the prior Civil Code and  substantial  parts of the
 Commercial  Code.  The New Civil Code is  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 under the New Civil Code have not had a material impact on
our current business.

Banking Secrecy

Financial
 institutions  must  maintain the secrecy of their  banking  operations  and services
 provided to their  customers. Certain  exceptions  apply to this obligation,  however,
 such as the sharing of information on credit history,  criminal  activity and violation
of bank  regulations or disclosure of information  authorized by interested  parties.
 Bank secrecy may also be breached when necessary for the investigation of any illegal
act.

Bank Failure

Intervention,
Administrative Liquidation and Bankruptcy

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

Extrajudicial
Liquidation

An extrajudicial
 liquidation of any financial institution (with the exception of public financial
 institutions  controlled by the Federal Government) may be carried out by the Central
Bank if it can be established that:

- debts of the
financial institution are not being paid when due; or

- the financial
institution is deemed insolvent; or

- the financial
institution has incurred losses that could abnormally increase the exposure of the
unsecured creditors; or

- management of
the relevant financial institution has materially violated Brazilian banking laws or
regulations; or

- upon
cancellation of its operating  authorization,  a financial institution's ordinary
liquidation proceedings are not carried               out  within  90 days  or are
 carried  out  with  delay  representing  a risk to its  creditors,  at the  Central
 Bank's               discretion.  Liquidation  proceedings may otherwise be requested,
 on reasonable grounds, by the financial  institution's               officers or by the
intervener appointed by the Central Bank in the intervention proceeding.

Extrajudicial
liquidation proceedings may cease:

- at the
discretion of the Central Bank if the parties concerned assume the  administration  of
the financial  institution after               having provided the necessary guarantees;
or

- when the
liquidator's final accounts are rendered and approved, and subsequently filed with the
competent Public Registry; or

- when converted
to an ordinary liquidation; or

- when the
financial institution is declared bankrupt.

Temporary
Special Administration Regime

In addition to the
aforesaid procedures, the Central Bank may also establish the Temporary Special
Administration Regime ("Regime de Administração Especial Temporária" or "RAET"),
which is a less severe form of Central Bank intervention in private and non-federal
public financial institutions and which allows institutions to continue to operate
normally.

The RAET may be
imposed by the Central Bank in the following circumstances:

- continuous
practice of transactions contrary to the economic and financial policies established by
federal law;

- the
institution fails to comply with the compulsory reserves rules;

- the
institution has operations or circumstances which call for an intervention;

- illegal or
management misconduct; and

- the
institution faces a shortage of assets.

The main object of the
RAET is to assist with the  recovery of the  financial  conditions  of the  institution
 under  special administration.  Therefore,  the RAET does not  affect the  day-to-day
 business  operations,  liabilities  or rights of the  financial institution, which
continues to operate in its ordinary course.

Repayment of
Creditors in a Liquidation

In the liquidation of
a financial  institution,  employees wages and indemnities and tax claims enjoy 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 deposits
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  operating in April 2002.  The Central Bank and CVM have the power to
regulate and supervise this system.  Pursuant  to these  rules,  new  clearing  houses
may be created and all  clearing  houses are  required  to adopt  procedures designed  to
reduce  the  possibility  of  systemic  crises and to reduce  the risks  currently  borne
by the  Central  Bank.  The most important principles of the new Brazilian Payment and
Settlement System are:

- The existence
of 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 authorized by the Brazilian  government.  A foreign  financial
 institution  duly authorized 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 authorization
from the Brazilian government.

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

Supervision in
Other Jurisdictions

We have branches,
 subsidiaries  and  representative  offices in several  foreign  jurisdictions,
 including New York,  Miami, London, Luxembourg, Paraguay, Cayman Islands and the Bahamas.

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 policies and ensuring compliance
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.  Securities  comprise a  substantial  portion of the assets in which
insurance  companies can invest.  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

The regulation of
reinsurance transactions in Brazil has traditionally been the domain of IRB-Brasil
Resseguros S.A.  IRB, a government-controlled entity which enjoyed a monopoly over
the Brazilian reinsurance market from 1932 through 1996. In 1996, the monopoly was
formally eliminated. Pursuant to a law enacted in 1999, the IRB was to be
privatized and its regulatory powers transferred to SUSEP. However, the
constitutionality of this law is being challenged before the Supreme Court. As a
result, until the Supreme Court renders a final decision in this matter, the IRB
will not be privatized and shall remain as the reinsurance regulatory body 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 their exposure, regardless of whether they meet the maximum retention limits.

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.  (For a
discussion on the main provisions of this amendment, see Item 10.B. Memorandum and Articles of Association).



4.C.
ORGANIZATIONAL STRUCTURE

The following chart
sets forth information, as of April 30, 2004, regarding our significant subsidiaries, or
Group:

|(1) | The
percentages refer to the participation in total capital, which is equal to the voting
capital held, unless otherwise        noted.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(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        59.571%.
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(4) | The
percentage of the voting capital held is 96.598%.
|--- | -----------------------------------------------------

|(5) | The
percentage of the voting capital held is 74.495%.
|--- | -----------------------------------------------------

|(6) | The
percentage of the voting capital held is 100.000%
|--- | -----------------------------------------------------

|(7) | These
corporations are mainly controlled by Unipart Participações Internacionais Ltd.
|--- | -------------------------------------------------------------------------------------

|(8) | These
corporations are mainly controlled by Unibanco AIG Seguros S.A.
|--- | ---------------------------------------------------------------------

|(9) | The
percentage of the voting capital held is 52.758%.
|--- | -----------------------------------------------------

|(10) | The
percentage of the voting capital held is 49.996%.
|---- | -----------------------------------------------------

|(11) | The
percentage of the voting capital held is 16.285%.
|---- | -----------------------------------------------------

# 4.D. 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 (total area of 32,093 m2): Principal executive offices and main administrative
offices;

- CAU
(Unibanco Administrative Center-- total area of 45,673 m2): Data Processing Center,
Information Technology, Accounting and Human Resources; and

- Barão de
Iguape building (total area of 25,886 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, 10% are owned
by our Group and 90% are leased. We lease most of our branches under renewable leases with
terms averaging five years.

ITEM 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS

The following
discussion and analysis should be read in conjunction with the consolidated financial
statements and the related notes thereto included in Item 18 of this Form 20-F, on
which we have based this discussion and analysis. Our consolidated financial
statements for the years ended December 31, 2003, 2002 and 2001 have been audited by
Deloitte Touche


            Tohmatsu as described in the Report of Independent Registered
Public Accounting Firm.

Overview

In 2004, we celebrate our 80th anniversary with a solid
position as the third largest Brazilian private sector financial group. We are
a full service financial institution with as of R$66,047 million as of December
31, 2003 , providing a wide range of financial products and services to more
than 14.1 million individual and corporate clients primarily throughout Brazil
and also in foreign countries. Our mission is to actively contribute to the countrys
economic development, serving in a balanced manner the expectations, needs and
interests of clients, employees and shareholders. Our target is to be a leading provider of services in each segment in which we operate,
focusing on aggressive pursuit of scale, continuos efficiency maximization, and accelerated personnel development.

In
2003, our income before income taxes and minority interest grew 115.1% when compared to
2002, as a result of the improvement in operating performance in each of our business
segments.

We operate  our
 business in four  segments:  Retail  Banking,  Wholesale  Banking,  Insurance  and
 Pension  Plans and Wealth Management.

Our primary sources of
revenues and expenses are:

- Interest incomefrom our interest-earning assets including our loans, securities, federal funds sold and securities
purchased under resale agreements and the Central Bank of Brazil (Central Bank) compulsory deposits,
among others;

- Interest expense
from our interest-bearing liabilities, including our savings and time deposits, short-term borrowings
and long-term debt, among others;

- Provisions
for loan lossesbased on the quality and size of our loan portfolio and reflecting our
expectations regarding the ability of our customers to repay their loans;

- Non-interest
income from  fees and  commissions  from each of our four  business  segments,
including banking tariffs, and other fees and


 commissions

 relating to our credit card, asset management,  capital markets,
     investment  banking  and merger and  acquisition  businesses,  from  trading
income as realized and unrealized gain or losses on securities and derivatives transactions,
from insurance premiums, private retirement plan and pension investment contracts,
from exchange


 valuation

 on our


 investments in branches and subsidiaries offshore in foreign currency (investments
 abroad)  and from our equity in unconsolidated companies;

- Non-interest expensefrom personnel and administrative
   expenses, from insurance premiums, private retirement plan and pension investment
   contracts, from contingent provisions, from other taxes and from exchange
devaluation on our investments abroad.

The following table
shows our financial performance highlights for the years ended 2001, 2002 and 2003:

|Year ended December 31,                          | 2001   | 2002   | 2003  
|------------------------------------------------ | ------ | ------ | ------
|                                                 |        |        |       
|In millions of R$ (except percentages)          
|Income before Income taxes and minority interest | 947    | 642    | 1,381 
|Net Income                                       | 825    | 803    | 873   
|Return on average equity                         | 14.2%  | 13.2%  | 13.4% 
|Return on average assets                         | 1.6%   | 1.3%   | 1.4%  
|Basle Capital Ratio                              | 13.7%  | 15.7%  | 18.6% 
|Total Assets                                     | 53,382 | 71,988 | 66,047
|Total Loans                                      | 23,912 | 25,254 | 26,039
|Total Deposits                                   | 18,555 | 26,055 | 25,700
|Shareholdersequity                              | 5,955  | 6,245  | 6,754 

In 2003, each of our business segments contributed to
our net income as follows: 53.8% from Retail Banking, 19.7% from Wholesale Banking,
14.3% from the Insurance and Pension Plans and 12.2% from Wealth Management.

The Brazilian economy was more stable in 2003 compared
to 2002 as it became more certain that the new government, which took office
in January 2003, would maintain the primary economic policy guidelines of the
previous government. This stabilization was reflected in the 18.2% appreciation
of the real against the U.S. dollar, a decrease in the Brazilian inflation
rates and a decrease of more than 10% in the perception of Brazilian country
risk, as measured by J.P. Morgans Emerging Market Bond Index (EMBI), which expresses
the Brazilian spread over U.S. Treasury. Against this backdrop, the Central Bank
reduced the SELIC interest rate from 25% per annum in December 2002 to 16.5%
per annum in December 2003.

In this improving Brazilian economic environment, our
income before taxes and minority interest increased 115.1% in 2003 compared to
2002, with each of our business segments posting pre-tax growth. The increase
of 40.0% in Retail Banking income before taxes and minority interest was principally
based on an increase in banking tariffs due to the growth of our client base
and improvement in our provisions for loan losses, primarily with respect to
our consumer finance companies. Wholesale Bankings income before taxes and minority
interest increased mainly due to the improvement of market conditions in 2003.
The favorable market conditions contributed to an increase in trading income,
as well as in fees and commissions, and a decrease in our loan losses provision.
Insurance and Pension Plans, and Wealth Management income before taxes and minority
interest increased by 30.7% and 4.1%, respectively, primarily due to financial
results and a favorable performance for the fund industry.

The significant income before taxes and minority interest growth was offset
 in part by a higher tax impact, which was primarily attributable to the different
 tax treatment between our gains (losses) from exchange variations on our investments
 abroad and on transactions used to protect our results before income taxes from
 exchange variations on our investments abroad ("economic hedges"). The exchange
 variation gains on investments abroad are not taxable and the exchange variation
losses on investments abroad are non tax-deductible for income tax purposes.

In 2003 and through the first half of 2004, we have continued to grow organically,
 while at the same time entering into strategic transactions to expand our businesses.
 In January 2003, we acquired the asset management portfolio of Banco Pictet-Modal
 to enhance our asset management business and we acquired the Brazilian pension
 business of Cigna Seguradora (a subsidiary of Cigna Corporation) to expand our
 pension fund portfolio. In October 2003, we acquired Phenix Seguradora, the
 insurance business of Fiat do Brasil S.A., to expand our insurance operations. To
 enhance our retail banking business we purchased Creditec, a consumer finance
 company that will increase Fininvests own distribution network, in November
 2003, and HiperCard Administradora de Cartão de Crédito Ltda,
 the Bompreço supermarkets credit card company, in March 2004. In June
 2004, we announced the acquisition of the total capital of Banco BNL do Brasil
 (BNL Brasil), from Banca Nazionale del Lavoro S.p.A. (BNL). The transaction
 includes the creation of an Italian Desk at Unibanco, which will allow BNL and
 Unibanco to offer business opportunities and services to Italian companies in
 Brazil. We believe these selective acquisitions will contribute to the strength
 of our portfolio in the coming years. For additional information concerning
 the acquisitions see Item 4.A. History and Development
 of the Company - Recent Acquisitions and Note 34  Subsequent Events to our
consolidated financial statements.

In 2004, we believe Brazil will experience moderate economic growth and a stabilized
 environment, and as a result, lower interest rates. Net interest spreads in
 banking operations tends to fall in this type of environment as sustained economic
 growth leads to improved payment capacity and lower credit risk of borrowers.
 However, we believe our diversification of products and services, as well as
 our growing individual and corporate client base, particularly in the consumer
 finance and middle market segments, respectively, should enable us to achieve increased
 economies of scale and cross-selling among our business segments, enhancing
our profitability in the future.

Macroeconomic Factors
Affecting Our Financial Condition and Results of Operations

Our earnings and businesses are affected by general
economic conditions, performance of financial markets, interest rate levels,
currency exchange rates, changes in laws, regulations and policies of the Central
Bank, and competitive factors on a global, national or regional basis. Since
all of our Retail Banking customers and the majority of our Wholesale Banking,
Insurance and Wealth Management customers are Brazilian, our financial condition
and results of operations are mainly dependent on Brazilian economic conditions.
For example, changes in the Brazilian economy that adversely affects the ability
of customers to repay their loans, such as high levels of inflation and consequently
interest rates, may affect our financial condition and results of operations.
Moreover, we are also affected by changes in the value of the real relative
to the U.S. dollar and other foreign currencies, since we have assets and liabilities
denominated in or indexed to foreign currencies, primarily the U.S. dollar.

Brazilian Economic
Environment

The following table
shows, for the periods indicated, the main Brazilian macroeconomic indicators:

|                                           | For the Year EndedDecember 31,
|------------------------------------------ | ------------------------------
|                                           |                               
|                                           | 2001                          
|                                           |                               
|Real GDP growth(1)                         | 1.5%                          
|Inflation rate(2)                          | 10.4%                         
|Inflation rate(3)                          | 7.7%                          
|Currency exchange rate (R$/US$) (4)        | 2.3204                        
|SELIC
     interest rate (4)               | 19.0%                         
|Average interbank deposit interest rate(5) | 17.3%                         

---

|(1) | Source:Brazilian Institute of Geography and Statistics (IBGE).
|--- | --------------------------------------------------------------

|(2) | Source: IGP-DI, as published by the Fundação Getúlio Vargas
(FGV).
|--- | ------------------------------------------------------------------

|(3) | Source:IPCA, the Consumer Price Index published by IBGE
|--- | -------------------------------------------------------

|(4) | Source:Central Bank of Brazil. As of December 31 of each year presented.
|--- | ------------------------------------------------------------------------

|(5) | Source:Central de Liquidação e Custódia de Títulos Privados (CETIP)
|--- | -------------------------------------------------------------------

The
   following charts show, for the periods indicated, the real/U.S. dollar
currency rate and the SELIC interest rate:

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 United States 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. These factors, combined with the Argentine crisis and the 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 December
 31, 2000 to December 31, 2001 , as the exchange rate changed from R$1.9554 per
 U.S. dollar at December 31, 2000 to R$2.3204 per U.S. dollar at December 31,
 2001. Concurrently with this devaluation, the Central Bank increased the base
 interest rate (SELIC rate), from 15.25% per annum at January 17, 2001 to 19.0%
 per annum at July 18, 2001, where it remained at this level until the end of the year.
Inflation for 2001 was 10.4% and 7.7% as measured by IGP-DI and IPCA, respectively.

2002. The economy deteriorated in 2002, primarily
due to the political uncertainty relating to the Brazilian presidential election.
During 2002, the real/U.S. dollar exchange rate fluctuated between a
high of R$3.8949 per U.S. dollar and a low of R$2.2709 per U.S. dollar. In October
2002, the Central Bank began to increase the base interest rate from 18% in September
2002 to a high of 25% in December 2002. After the new government elections, signs
that the economic policy guidelines of the previous government would be maintained
led to a decrease in the perception of Brazilian country risk as indicated by
the drop in Brazils indicative cost of sovereign borrowing, according to JP
Morgans Emerging Market Bond Index (EMBI), from a high of approximately 2,400
basis points in October 2002 to approximately 1,500 basis points in December
2002. Inflation for 2002 was 26.4% and 12.5%, as measured by the IGP-DI and IPCA,
respectively. GDP for 2002 was 1.5%. At December 31, 2002 , the exchange rate
was R$3.533 per U.S. dollar.

2003. Following the new governments taking
office in January 2003, the Brazilian economy became more stable compared to
2002, as it became more certain that the new government would maintain the primary
economic policy guidelines of the previous government.

The  stabilization of
the economy was partly due to the governments  decision to shift the primary surplus
from 3.75% of GDP in 2002 to 4.25% in 2003,  dampening  concerns about fiscal
 irresponsibility,  as well as the Central  Banks  decision to temporarily  increase
 interest  rates.  The Central Bank increased the base interest rate to a high of 26.5%
in February 2003 and  subsequently  reduced the base interest rate seven times from 26%
on June 18, 2003 to 16.5% on December 17, 2003.

During 2003, the government advanced proposals to reform
the tax and social security systems, contributing to a decrease in the perception
of Brazilian country risk. The Brazilian EMBI decreased from 1,500 basis points
in December 2002 to 463 basis points at December 31, 2003. The Brazilian inflation
rate as measured by the IPCA, also dropped from 12.5% in 2002 to 9.3% in 2003.
The inflation rate for 2003 was 7.7%, as measured by the IGP-DI, compared to
26.4% for 2002. The real appreciated against the U.S. dollar by 18.2%
for the year ended December 31, 2003 , compared to a devaluation of the real by
52.3% in 2002. At December 31, 2003 , the exchange rate was R$2.8892 per U.S.
dollar.

2004 to Date. Inflation has decreased during the first half of 2004 and
the Central Bank has reduced the base interest rate twice to date in 2004 to
16% per annum on April 14, 2004. However, renewed fears of the effects of a
quicker-than-expected tightening in monetary policy in developed economies has
increased risk aversion worldwide in 2004, bringing the Brazilian EMBI to 698
basis points on May 28, 2004. This increase in risk aversion is leading to some
devaluation of the real this year. On May 31, 2004 the exchange rate
was R$3.1291 per U.S. dollar.

Looking ahead, we believe new challenges will face the Brazilian banking system
 if interest rates continue to fall and we experience a period of higher growth
 and a stabilized economic and political environment. This environment could
 result in lower net interest spreads in banking operations as sustained economic
 growth leads to improved payment capacity and lower credit risk of borrowers,
 although it could also result in an increase in the volume of loans. In recent
 years, we have made several acquisitions and investments in order to increase
 our client base and develop a powerful distribution network throughout the country
 helping us to solidify our position in the Brazilian market and be prepared
to meet these challenges head-on.

Effects of Devaluation
or Appreciation of the Real on Our Financial Condition and Results of Operations

The devaluation or
 appreciation  of the real may affect our net income since a significant  amount of our
assets and  liabilities  are  denominated  in or indexed to foreign  currencies,
 primarily  the U.S. dollar.

When the real devaluates, we incur losses on
net income from our liabilities that are denominated in or indexed to foreign
currencies, such as U.S. dollar-denominated long-term debt and trade finance
credit lines, as the carrying value and interest expense measured in reais increases.
At the same time, we experience gains from our assets that are denominated in
or indexed to foreign currencies, such as U.S. dollar-indexed marketable securities
and loans, as the carrying value and interest income measured in reais also
increases.

On the other hand, when the real appreciates,
we incur gains on net income from our liabilities that are denominated in or
indexed to foreign currencies, as the carrying value and interest expense measured
in reais decreases. At the same time, we experience losses from our assets
that are denominated in or indexed to foreign currencies, as the carrying value
and interest income measured in reais also decreases.

Effects of Interest
Rates on Our Financial Condition and Results of Operations

The increase in the
 Brazilian  interest rate may affect our interest  income as interest  rates on our
interest-earning  assets also increase.  On the other hand, our interest expense may also
be affected as interest rates on our  interest-bearing  liabilities  increase.  In
addition,  changes in volumes affect our interest  income and interest  expense.  For
example,  a decrease in the interest  income  attributable to a decrease in interest
rates may be offset by an increase in the volume of the outstanding loans.

Typically, increases in the interest rate enable us
to increase our revenues from loan operations due to higher net interest spreads
on these operations. However, increases in the interest rate could adversely
affect our results and credit portfolios by reducing demand for credit and increasing
the risk of customer default. On the other hand, decreases in the interest rate
could decrease our revenues from loan operations due to lower spreads. This decrease
in revenues may be offset by an increase in the volume of loans due to increased
demand for credit.

Effects of Inflation
on Our Financial Condition and Results of Operations

Increases in the Brazilian inflation rate may affect our net
income by increasing our costs and decreasing our operating margins if such inflation
is not accompanied by an increase in interest rates. Moreover, inflation may
contribute to increases in volatility in the market due to economic uncertainty,
decreases in spending, lower real income growth, and decreases in consumer confidence,
which in turn could adversely affects our results of operations.

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

Compulsory Deposit
Requirements

The Central Bank imposes several compulsory deposit
requirements on financial institutions, as a mechanism to control the liquidity
of the Brazilian financial system. By changing the compulsory deposit requirements,
the Central Bank is able to effect changes in the amount of our interest-earning
assets and interest-bearing liabilities, and consequently our interest income
and interest expense.

The following table
shows the compulsory deposit requirements as of December 31, 2001, 2002 and 2003:

|                 | 2001        | 2002        | 2003      
|---------------- | ----------- | ----------- | ----------
|                 | Requirement | Requirement | Additional
|Demand Deposits  | 45%         | 45%         | 8%        
|Savings Deposits | 15%         | 20%         | 10%       
|Time Deposits    | 10%         | 15%         | 8%        

The
  important changes the Central Bank made to the compulsory deposit requirements
during this period include:

- In
    June 2002, compulsory deposit requirements relating to savings deposits increased from 15% to 20% and time deposits increased
    from 10% to 15%;

- In August
2002,  additional requirements of 3% on time and demand deposits and 5% on savings
deposits were imposed;

- In October
2002, additional requirements on time, demand and savings deposits increased by 5%;

- In February
2003, compulsory deposit requirements relating to demand deposits increased from 45% to 60%; and

- In August
2003, compulsory deposit requirements relating to demand deposits decreased from 60% to 45%.

The compulsory deposits, including the additional requirements, earn interest,
except for the compulsory deposits related to demand deposits.

Capital Adequacy

The
Central Bank requires banks to comply with  regulations,  which  currently are similar to
the Basle Accord with respect to capital adequacy,  except that the Central Bank has set
11% as the minimum capital  requirement.  The Central Bank also applies capital
requirements  for foreign  currency  exposure,  interest  rate  market  risk,  and credit
swap risk that are part of our Basle  capital adequacy ratio.

In
  September 2001, the Central Bank imposed higher capital requirements for banks foreign
  currency position. This regulation required us to allocate 50% of our capital
  for foreign currency exposure exceeding 5% of adjusted capital. In October
  2002, this requirement was changed 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 adjusted capital. In July 2003, the allocation of capital for foreign currency
  exposure was reduced from 100% to 50%. In summary, there is no requirement
  to allocate capital for exposure from 0% to 5% of adjusted capital; 50% of
  capital must be allocated for exposure between 5% and 30% of adjusted capital;
  and an 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 because our capital levels exceed the requirements of
the Central Bank.

Loan Charge-offs

Our practice is to charge-off loans 360 days after the due date. As
 a result, our allowance for loan losses related to any loan remains on our books
for a longer period until the loan is charged off.

Income Taxes

Our
  income taxes expense consists of two components: the federal income tax and
  the social contribution. For each of the years 2001, 2002 and 2003, the federal
income tax was assessed at a rate of 25% and the social contribution at 9%.

Other Taxes

In
  recent years there have been changes in Brazilian regulations relating to other
  taxes. In February 1999, the calculation base for contribution to the Programa
  de Integração Social,or PIS, relating to
  the Employees Profit Participation Program was expanded from revenues
  to gross revenues. Since February 1999, the PIS rate has been 0.65% of gross revenues. From February 1999 until September
  2003, the rate of the Contribuição para Financiamento de Seguridade
  Social,or COFINS, relating to tax for social security financing,
  was 3% of gross revenues. In September 2003, the COFINS rate was increased
to 4% of gross revenues for the financial services sector.

Pursuant
  to Law No. 10,637, in December 30, 2002 the PIS rate for non-financial companies
  increased from 0.65% to 1.65%. In addition, pursuant to Law No. 10,833 of December
  29, 2003 , in February 2004 the COFINS rate for non-financial companies increased
  from 3.0% to 7.6% and became non-cumulative. These increases will affect a
  few of our consumer finance subsidiaries that are considered non-financial
  companies. Moreover, they may affect the prices charged mainly by our service
providers.

The Contribuição Provisória sobre Movimentações
 Financeiras(the temporary contribution on financial transactions) ,or CPMF,
 has been charged at the rate of 0.38% on certain financial transactions since
June 1999.

Critical Accounting Estimates

In
  preparing our consolidated financial statements, we use estimates, assumptions
  and judgments of our management to account for certain assets, liabilities,
  revenues, expenses and other transactions in accordance with U.S. GAAP. Actual
  results in future periods could differ from those estimates, assumptions and
judgments, and consequently our reported results of operations may be affected.

The
  following is a brief description of the more critical estimates, assumptions
and judgments in the application of our accounting policies under U.S. GAAP.

Allowance for Loan
Losses

We
assess the  creditworthiness of our loan portfolio and establish  allowances for expected
credit losses on a monthly basis.  The process used to determine these reserves  involves
 estimates and judgments. We have determined a minimum  allowance for expected losses
within each clients rating.  However,  based on the judgment and experience of our
senior  management,  higher  percentages of allowances can be used within each clients
rating where  appropriate in order to more accurately  establish the allowances.  We
consider, among other things,  the probability of default and the loss given default
rates in making this  evaluation, as well as the size and diversity of individual
 credits.  Changes in these  estimates and judgments  have a direct impact on the
allowances.

Our
 wholesale  loans  have  distinctive  characteristics  and  therefore  are not
  evaluated as a homogeneous portfolio. Instead, the allowances are currently
  calculated based on the risk profile of each individual borrower, which accounts
  for, among other factors, financial history, cash flows, quality of management,
  relationship history, market conditions and other factors relating to credit
  risk. Also, we employ an internal credit rating system which ranks companies
  from AA1 to H, within different levels, based on quantitative criteria, such
  as recent financial data, and qualitative aspects, such as management and succession
  issues. We consider companies with a credit rating of AA1 and AA2 to be very
  stable and with minimal credit risk, AA3 and A 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 losses and H
  to be poor credit risks (defaults) and fully provisioned against.


 Also, we review credit lines for large-balance loans every 60 to 180 days,
 according to the borrowers credit rating and the external credit environment.

Small-balance
  loans such as overdrafts, credit card loans, mortgage loans and consumer finance
  loans have similar characteristics and are managed using specialized systems
  and processes. We use a wide range of statistical tools to evaluate loans requests
  and clients performance, which include credit and behavior scoring models.
  The allowance for loan losses in the Retail portfolio is established using
  a process that begins with estimates of expected losses based upon various
  analyses. These analyses consider 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 collectibles of loans. We evaluate the adequacy of the allowance
  for loan losses on a monthly basis unless circumstances otherwise require.

We
  believe that our allowance for loan losses is adequate in the present economic
environment.

Fair Value 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. If externally quoted prices a re not available, we determine the fair
  value by reference to 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 on internally developed
pricing models based on independent sources of market information.

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 the fair value of available for sale securities are recognized and
  included as a component of stockholders equity, unless the loss is considered
  to be other-than-temporary. Impairment losses that are not considered temporary
  are recognized as losses in the period in which they occur. We conduct regular
  reviews to assess whether other-than-temporary impairment exists. For additional
  information see Notes 2(f), 2(y) (re. EITF 03-1), 6 and 7 to our consolidated financial
statements.

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.

Insurance reserves

Reserves
  for insurance claims and claims expenses are charged as incurred. The
  reserves for claims and claims expenses represent the accumulation of estimates
  for reported claims and include provisions for claims incurred but not reported.
  The methods of determining such estimates and establishing the reserves,
  including unrecoverable reinsurance, are reviewed and updated regularly. Adjustments
resulting therefrom are reflected in income statements for the current period.

Income taxes

In
  preparing the consolidated financial statements we are required to estimate
  income taxes, which involve an estimation of current tax expense together with
  an assessment of temporary differences. Temporary differences result from the
  temporary differences between the carrying amounts of assets and liabilities
  for financial reporting purposes and the amounts used for income tax purposes,
  and this difference generates net deferred tax assets. Net deferred tax assets
may also comprise tax losses carry forwards.

Our
carrying value of net deferred tax assets  assumes that we will be able to generate
 sufficient future taxable income based on an internal  forecast model using estimates
and assumptions.  We evaluate the reliability  of the  deferred  tax assets  frequently.
 If these  estimates  and  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.  During the year ended December 31,
2003 we recorded no  valuation  allowances  related to our net  deferred  tax  assets.
 For  additional  information concerning the income taxes see Notes 2(q) and 18 to our
consolidated financial statements.

Impairment of
long-lived assets, goodwill and other intangible assets

Our
  balance sheet includes long-lived assets related to our premises and equipment,
  goodwill and other intangible assets. Premises and equipment and intangible
  assets with finite useful lives are depreciated or amortized over their estimated useful lives.
  Useful lives are estimated based on 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 will be adjusted and a loss
will be recognized in current operations.

Statement
  of Financial Accounting Standards 142 Goodwill and Other Intangible Assets (SFAS
  142), provides that goodwill and identified intangible assets with indefinite
  useful lives shall not be amortized but shall be 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 based on the difference between the fair value and
  the book value. Goodwill was tested for impairment at December 31, 2002 and
  2003 and no impairment charges were recorded. In addition, we evaluated the
  useful lives of customer related intangibles and no charge was made regarding
useful lives upon adoption of SFAS 142.

We
  assess impairment of our long-lived assets and intangible assets with finite
  useful lives in accordance with the requirements of SFAS 144 Accounting for
  the Impairment or Disposal of Long-Lived Assets when events and circumstances
  indicate that such impairment may exist. No such impairment has been identified
through December 31, 2003.

Provisions for
litigation

We
  are subject to proceedings, lawsuits and other claims related to tax, labor
  and civil matters. We are required to assess the likelihood of any adverse
  judgments or outcomes to these matters as well as potential ranges of probable
  losses. A determination of the amount of reserves required, if any, for these
  contingencies is made after careful analysis of each individual matter, based
  on legal advisers advice. We record provisions for contingencies only when
  we believe that it is probable that we will incur a loss in connection with
  the matter in dispute. The required reserves for these contingencies may change
  in the future due to new developments in each matter or changes in approach,
  such as a change in settlement strategy in dealing with these matters. Such
changes could result in a negative impact on future results and cash flows.

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 unconsolidated companies during 2003 were:

- a 33.3% equity
interest in Credicard, one of the largest issuer of credit cards in Brazil;

- a 31.9% equity
interest in Redecard S.A., one of the largest  processor of debit card  transactions
              in Brazil;

- a 50.0% equity
interest in Investcred,  a consumer finance company; and

- a 50.0% equity
interest in Luizacred, a consumer finance company.

In
 April  2002,  we  acquired  the  remaining  24.5%  of  the  shareholders  equity  of
 Unicorp, representing  70% of the  voting  shares.  As a result,  we hold 100% of the
voting  shares in  Unicorp  and consolidate its results since then.

For
  additional information concerning the contributions to our net income generated
  by unconsolidated companies, see Results of Operations for Year Ended December
  31, 2003 Compared to Year Ended December 31, 2002 - Non-Interest Income and Results
  of Operations for Year Ended December 31, 2002 Compared to Year Ended December
  31, 2001 - Non-Interest Income and Notes 2(j) and 11 to our consolidated financial
statements.

5.A. OPERATING
RESULTS

Unibanco Holdings, a corporation organized under the laws of Brazil , controls
 Unibanco - União de Bancos Brasileiros S.A. (Unibanco) through its
 ownership of Unibancos shares. As of April 30, 2004 , Unibanco Holdings holds
 96.6% of Unibancos outstanding common shares and 14.5% of Unibancos outstanding
 preferred shares , owning 59.6% of Unibancos total outstanding equity. Unibanco
 Holdings engages in no activities other than holding shares in Unibanco. As
 a result, the financial statements of Unibanco Holdings are similar to Unibanco
 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 Unibancos consolidated financial statements
 also refer to the financial statements of Unibanco Holdings.

Results of
Operations for Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Impact of the
appreciation of the real in 2003

In
  general, fluctuations in foreign currency exchange rates affect our results
  of operations. In 2003, the real appreciated by approximately 18.2%
against the U.S. dollar. As a result, we experienced:

- a decrease in interest income on U.S. dollar-denominated
or indexed loans and securities, when expressed in reais;

- a decrease in interest expense on U.S. dollar-denominated
or indexed borrowings, when expressed in reais;

- an increase in non-interest income relating to gains on economic hedges
  with derivatives of our investments abroad;

- an increase in non-interest expense attributable to
   the reduction in the value, expressed in reais, of our investments
abroad;

- an increase in net interest income relating to gains
   on economic hedges with long term debt and short term borrowings of our investments
abroad.

In our discussion of our operating results for 2003 compared to 2002, when we
 refer to changes from year-to-year being due to the appreciation of the real,
 we are referring primarily to these effects of the appreciation of the realdescribed
 above, as applicable. In addition, when we refer to the appreciation
 of the real by 18.2% against the U.S. dollar, it is based on the exchange rate as of December 31, 2003
(R$2.8892 per US$1.00) compared to the exchange rate as of December 31, 2002 (R$3.5333 per US$1.00).

In
  addition, we refer in our discussion below to average interest earned and average
  interest paid on our interest-earning assets and interest-bearing liabilities,
  respectively. Average interest earned is the yield, taking into account the
  stated interest rate and the appreciation of the real, on interest
  earned on assets denominated in or indexed to foreign currency, when such interest
  is expressed in reais. Average interest paid is the yield, taking into
  account the stated interest rate and the appreciation of the real, on
  interest paid on liabilities denominated in or indexed to foreign currency,
when such interest is expressed in reais.

The
following table shows the principal components of our consolidated net income for
2002 and 2003:

|                                          | For the
          Year Ended 
    December 31, |               
|----------------------------------------- | ---------------------------------------------- | --------------
|                                          | 2002                                           | 2003          
|                                          | (in millions
    of R$)                        |               
|Net interest income                       | R$5,302                                        | R$5,024       
|Provision for loan losses                 | (1,291)                                        | (881)         
|Non-interest income                       | 3,216                                          | 5,503         
|Non-interest expense                      | (6,585)                                        | (8,265)       
|Income before taxes and minority interest | 642                                            | 1,381         
|Income tax                                | 276                                            | (354)         
|Income before minority interest           | 918                                            | 1,027         
|Minority interest                         | (115)                                          | (154)         
|Net income                                | R$
        803                                 | R$
        873

A highlight of 2003 is the 115.1% growth in income before taxes and minority
 interest in 2003 compared to 2002. This increase is mainly due to better performance
 in trading income attributable to more favorable market conditions, reduction
 of provision for loan losses due to the improvement in the credit quality of
 our borrowers and growth of fee and commission income, consisting principally
of banking tariffs and advisory fees.

The net income increase of 8.7% is a result of the growth in income before taxes
 and minority interest, as mentioned above, offset by a R$630 million increase
 in income tax expense in 2003. The increase in income tax expense resulted principally
 from the effect of the appreciation of the real on our economic hedging
 of our investments abroad. During 2003, we fully hedged our investments abroad,
 incurring a loss of R$631 million as a result of the appreciation of the real on our investments abroad that
 was offset by gains of R$636 million on our economic hedges. Since under Brazilian
 tax law, gains or losses on economic hedges are taxable, whereas foreign exchange
 losses on our investments abroad are not deductible and gains are not taxable, we incurred higher income
 tax expense of R$216 million. By contrast, in 2002, when the real depreciated
 by 52.3%, we partially hedged our investments abroad and experienced foreign
 exchange gains of R$1,187 million on our investments abroad and losses of R$794
 million on the economic hedge, which contributed to an income tax benefit of
R$270 million.

Each
of our four business segments posted pre-tax growth in 2003 compared to 2002 as follows:

Retail
  Banking income before taxes and minority interest increased 40.0% in
  2003 compared to 2002. The net interest income increased primarily due to the
  growth of 10.3% in the loan portfolio. This growth was particularly due to
  our small companies and consumer finance segments maintaining net interest
  spreads. The fee and commission income increased 21.3%. This resulted mainly
  from an increase in banking tariffs, due to our increased client base, which
  grew from approximately 5.6 million at December 31, 2002 to approximately 6.0
  million clients at December 31, 2003. The provision for loan losses in this
  segment decreased 18.5%, demonstrating the improvement in the credit quality
  of our borrowers, especially those in the consumer finance segment. Fininvest
  posted a significant decrease in the provision for loan losses as a result
  of a stricter credit policy. Our personnel and administrative expenses in this
  segment increased 12.8%, principally, as a result of growth in our sales force
  headcount, which grew by approximately 1,000 employees, in accordance with our
  organic growth plans. In addition, these expenses grew due to an increase in
  our provisions for labor claims, for collective bargaining agreements with
  bank employees, for annual adjustments of occupancy expenses and for marketing
  campaigns to promote our products.

Wholesale Banking income before taxes and minority interest increased, from a negative to a positive
result, in 2003 compared to 2002, due to unfavorable market conditions that occurred in 2002. This
increase is mainly attributable to growth in trading income, as a consequence of the favorable market
conditions in 2003. Fees and commissions increased 12.7%,
principally in the capital markets, investment banking and mergers and
acquisitions sectors. The provision for loan losses decreased 80.7% demonstrating the
improvement in the risk rating profile of our loan portfolio and the positive impact
of realappreciation. Personnel and administrative expenses in this segment
increased 16.2% for essentially the same reasons described in the Retail Banking
paragraph above, other than the reserve for labor claims and sales force.

Insurance and Pension Plans income before taxes and minority interest increased
 30.7% in 2003 compared to 2002. The net interest income increased 31.3% mainly
 due to financial results, as a consequence of higher interest rates. The insurance
 premiums amounted to R$1,468 million in 2003 compared to R$1,291 million in
 2002, representing a 13.7% growth. We closed the year with a 7.1% market share
 for total premiums as per the official data of SUSEP (National Insurance regulatory
 agency) compared to a 6.3% market share in 2002. The insurance and private retirement
 plan expenses grew 31.1% due to an increase in insurance claims and changes
 in the provisions of pension investment contracts. Despite an increase of 9.4%
 in insurance claims in 2003 compared to 2002, the ratio (insurance claims over
 insurance premiums) fell from 58.0% in 2002 to 55.8% in 2003 due to the increase
in insurance premiums in 2003.

Wealth
  Management income before taxes and minority interest increased 4.1% in 2003
  compared to 2002. In 2002, the volume of assets under management was negatively
  affected by the new rules for marking assets to market and by the challenging
  economic environment created by the presidential elections. During 2003, we
  showed a significant volume growth of assets under management from R$18,384
  million to R$23,168 million, although fee income and average volume remained
at approximately the same levels in 2003 compared to 2002.

Net Interest Income

The
following table shows the principal components of our net interest income for
2002 and 2003:

|                     | For the
          Year Ended 
    December 31, |        
|-------------------- | ---------------------------------------------- | -------
|                     | 2002                                           | 2003   
|                     | (in millions
    of R$)                        |        
|                     |                                                |        
|Interest income (1)  | R$15,045                                       | R$9,355
|Interest expense (2) | (9,743)                                        | (4,331)
|                     |                                                |        
|Net interest income  | R$5,302                                        | R$5,024
|                     |                                                |        

|(1) | Interest income includes the interest from loans, federal
      funds sold and securities purchased under agreements to resell securities,
    deposits in other banks and compulsory deposits.    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Interest expense includes interest from customers and bank deposits,
      federal funds purchased and securities sold under agreements to repurchase
    short term borrowings and long term debt.

Interest
    income declined by R$5,690 million, or 37.8%, interest expense declined by
    R$5,412 million, or 55.5%, and net interest income declined by R$278 million,
  or 5.2% in 2003 compared to 2002. These changes are principally attributable
  to a decrease on average interest rates on U.S. dollar-denominated or indexed
  interest-earning assets and interest-bearing liabilities due to the appreciation
of the real.

Interest
Income

Interest
  income for 2003 decreased R$5,690 million or 37.8%, principally due to a decrease
  in average interest rates earned on assets denominated in or indexed to foreign
  currencies as a result of the appreciation of the real. This decrease
  was offset slightly by the additional interest earned as a result of the increase
of 8.8% in our average interest-earning assets.

The
    following table shows the principal components of our average interest-earning
    assets and the average interest rate earned in 2002 and 2003:

|                                                                        | For the
Year Ended 
December 31, |         
|----------------------------------------------------------------------- | -------------------------------- | --------
|                                                                        | 2002                             | 2003    
|                                                                        | (in millions
of R$)              |         
|Average interest-earning assets                                         |                                  |         
|Interest-bearing deposits in other banks                                | R$2,280                          | R$2,678 
|Federal funds sold and securities
purchased     under resale agreements | 3,771                            | 7,953   
|Central Bank compulsory deposits                                        | 871                              | 3,063   
|Trading assets                                                          | 8,001                            | 5,690   
|Securities available for sale                                           | 5,535                            | 4,900   
|Securities held to maturity                                             | 5,079                            | 5,532   
|Loans                                                                   | 23,708                           | 23,749  
|Other interest-earning assets                                           | 62                               | 65      
|Total                                                                   | R$49,307                         | R$53,630
|Average interest rate earned:                                           | 30.5%                            | 17.4%   

The
    following table shows how much of the R$5,690 million decrease in our interest
    income was attributable to changes in the average volume of interest-earning
    assets and how much was attributable to changes in the average interest earned,
    including the effects of the appreciation of the real, in each case for 2003
as compared to 2002:

|                                                            | 2003/2002 
Increase/Decrease
|----------------------------------------------------------- | ----------------------------
|                                                            | (in millions of R$)         
|Due to changes in average volume of interest-earning
assets | R$1,006                     
|Due to changes in average interest rates                    | (6,696)                     
|Net
change                                                  | R$(5,690)                   

The
  interest income decrease of R$5,690 million in 2003 was principally a result
of:

- a decrease of R$2,376 million in interest and fees on loans;

- a decrease of R$4,544 million in interest on securities;

- an increase of R$339 million in interest on Central Bank compulsory
deposits; and

- an increase of R$902 million in interest income on federal funds
sold and securities purchased under resale agreements.

Interest and Fees
on Loans. The interest income from loan operations decreased
27.9% from R$8,514 million in 2002 to R$6,138 million in 2003. This decrease
was primarily due to the appreciation of the real. At December 31,
2003, 22.9% of our loan portfolio was denominated in or indexed to foreign
currencies, primarily the U.S. dollar, compared with 27.7% at December 31,
2002. The effect of the appreciation of the realwas partly offset by
the increase in revenues attributable to the period of high interest rates
in the first nine months of 2003 and the increase of 3.1% in our loan portfolio
as a result of organic growth. The increase of our loan portfolio occurred
mainly in the Retail Banking segment.

Interest
   on Securities. The interest income on securities (including trading,
   available for sale and held to maturity securities) declined from R$5,519
   million in 2002 to R$975 million in 2003. The 82.3% decrease was primarily
   due to the appreciation of the real. At December 31, 2003 , 43.7%
   of our securities portfolio was denominated in or indexed to foreign
currencies, primarily the U.S. dollar, compared to 60.6% at December 31, 2002.

Interest on Central Bank Compulsory Deposits.The interest income
from our compulsory deposits with the Central Bank, which earn interest increased
from R$173 million for the comparable period in 2002 to R$512 million in 2003.
This R$339 million increase was mainly due to the increase in the compulsory
deposit requirements imposed since the second half of 2002, the increase in
the average volume of deposits, as well as the period of higher interest rates
in the first nine months of 2003.

Interest
   on Federal Funds Sold and Securities Purchased under Resale Agreements.The
   interest income from
federal funds sold and securities purchased under resale agreements increased
from R$652 million in 2002 to R$1,554 million in 2003. This increase was a result
of a 110.9% higher average volume of federal funds sold and securities purchased
under resale agreements in 2003 compared to 2002. In addition, the average interest
rate, as measured by the SELIC rate, was higher in 2003 than in 2002 and the
yield in most of these transactions is correlated to the SELIC rate.

Interest Expense

Interest expense for 2003 decreased R$5,412 million or 55.5%, principally
due to a decrease in average interest rates paid on liabilities denominated
in or indexed to foreign currencies as a result of the appreciation of the real.This
decrease was offset slightly by the additional interest paid as a result of
the increase of 5.5% in our average interest-bearing liabilities.

The following table shows the principal components of our average interest-bearing
liabilities and the average interest rate paid on those liabilities in 2002
and 2003:

|                                                                            | For the
Year Ended 
December 31, | % Change
|--------------------------------------------------------------------------- | -------------------------------- | --------
|                                                                            | 2002                             | 2003    
|                                                                            | (in millions
of R$)              |         
|Average interest-bearing liabilities                                        |                                  |         
|Time deposits                                                               | R$13,799                         | R$16,752
|Savings
      deposits                                                      | 5,284                            | 5,735   
|Deposits from banks                                                         | 296                              | 150     
|Federal funds purchased and securities
sold     under repurchase agreements | 8,251                            | 6,426   
|Short-term borrowings                                                       | 6,133                            | 4,553   
|Long-term debt                                                              | 9,551                            | 12,067  
|Total                                                                       | R$43,314                         | R$45,683
|Average interest rate paid:                                                 | 22.5%                            | 9.5%    

The following table shows how much of the R$5,412 million decrease in our
interest expense in 2003 was attributable to changes in the average volume
of interest-bearing liabilities and how much was attributable to changes
in average interest paid, including the appreciation of the real, in each
case for 2003 as compared to 2002:

|                                                                 | 2003/2002 
Increase/Decrease
|---------------------------------------------------------------- | ----------------------------
|                                                                 | (in millions of R$)         
|Due to changes in average volume of interest-bearing
liabilities | R$796                       
|Due to changes in average interest rates                         | (6,208)                     
|Net change                                                       | R$(5,412)                   

The interest expense decrease of R$5,412 million in 2003 was principally a
result of:

- a decrease of R$3,859 in interest on long-term debt;

- a decrease of R$2,508 million in interest on short-term borrowings;
and

- an increase of R$974 million and R$112 million, respectively,
in interest on time deposits and savings deposits,

Interest
   on long-term debt. The interest expense from our long-term debt declined
   from R$3,557 million in 2002 to R$(302) million in 2003, mainly due to the
   appreciation of the real.As a result of the appreciation of the real the
   average interest paid in 2003 on our international long-term debt
   was a negative 17.9%, compared to a positive 64.2% in 2002. The gains on economic
   hedges of our investments abroad of R$397 million in 2003 also contributed to the
   interest expense decline. This effect was partially offset by the increase
   in average balances of our long-term debt from R$9,551 million in 2002 to
   R$12,067 million in 2003.

Interest
   on short-term borrowings. The interest expense on our short-term borrowings
   declined from R$2,064 million in 2002 to R$(444) million in 2003, mainly due
   to the appreciation of the real. As a result of the appreciation of
   the real, the average interest paid in 2003 on our international
   short-term borrowings was a negative 10.0% in 2003, compared to positive
   33.6% in 2002. The decrease of our average balance of short-term borrowings,
   from R$6,133 million in 2002 to R$4,553 million in 2003, as well as the gains
   on economic hedges of our investments abroad of R$101 million in 2003 also contributed
   to the interest expense decline.

Interest on time and savings deposits. The interest expense on
        time and savings deposits increased R$1,086 million in 2003 due to the
        increase in the average balance and average interest paid. The average
        balances of time and savings deposits increased from R$13,799 million
        and R$5,284 million in 2002 to R$16,752 million and R$5,735 million,
        in 2003, respectively. The average interest paid on time deposits increased
        from 17.5% per annum in 2002 to 20.2% per annum in 2003 and average interest
        paid on savings deposits increased from 7.6% per annum in 2002 to 9.0%
        per annum in 2003 due to the increase in the average interest rates,
as measured by the SELIC rate, in 2003.

Provision for Loan Losses

The
  provision for loan losses in 2003 decreased from R$1,291 million in 2002 to
  R$881 million in 2003, posting a 31.8% change on the year-ended comparison.
  In addition, the provision to average loans ratio improved from 5.2% in 2002
  to 3.5% in 2003. These
  results indicate the credit quality of our loan portfolio. However, these results
  were also influenced by fluctuations in volumes and in currency exchange rates
  related to our foreign currency denominated or indexed portfolio. In 2002,
  the Brazilian economy deteriorated, primarily due to political uncertainty
  relating to presidential elections. As a consequence, the interest rates increased
  and the real devaluated, affecting negatively our Retail and Wholesale
  Banking clients risk of default and increasing our balances and provisions
  denominated or indexed to foreign currencies, principally affecting our Wholesale
  Banking portfolio. In 2003, the Brazilian economy stabilized, the interest
  rate decreased and the real appreciated, providing a better environment
for credit risk management.

The following table shows the changes on our balance of allowance for loan
losses on a consolidated basis for 2002 and 2003:

|                                                                  | For the
Year Ended
December 31, | % Change
|----------------------------------------------------------------- | ------------------------------- | --------
|                                                                  | 2002                            | 2003    
|                                                                  | (in millions
of R$)             |         
|Balance beginning of year                                         | R$1,276                         | R$1,389 
|Provision for loan losses                                         | 1,291                           | 881     
|Loan charge-offs                                                  | (1,529)                         | (1,330) 
|Loan recoveries                                                   | 351                             | 377     
|Net charge-offs                                                   | (1,178)                         | (953)   
|Balance, end of year                                              | R$1,389                         | R$1,317 
|Provision to average loans ratio (including
non-performing loans) | 5.2%                            | 3.5%    
|Total average loans                                               | R$24,792                        | R$24,881

The
    following table shows the changes on our balance of allowance for loan losses
    broken down by Unibanco and others (including Retail and Wholesale Banking),
Fininvest and Unicard businesses for 2002:

|                                                                  | For the
Year Ended December 31, 2002
|----------------------------------------------------------------- | ------------------------------------
|                                                                  | Unibanco 
and others                
|                                                                  | (in millions
of R$)                 
|Balance beginning of year                                         | R$1,012                             
|Provision for loan losses                                         | 719                                 
|Loan charge-offs                                                  | (712)                               
|Loan recoveries                                                   | 196                                 
|Net charge-offs                                                   | (516)                               
|Balance, end of year                                              | R$1,215                             
|Provision to average loans ratio
(including non-performing loans) | 3.2%                                

The following table shows the changes on our balance of allowance
            for loan losses broken down by Unibanco and others (including Retail
and Wholesale Banking), Fininvest and Unicard businesses for 2003:

|                                                                 | For the
Year Ended December 31, 2003
|---------------------------------------------------------------- | ------------------------------------
|                                                                 | Unibanco
and others                 
|                                                                 | (in millions
of R$)                 
|Balance beginning of year                                        | R$1,215                             
|Provision for loan losses                                        | 448                                 
|Loan charge-offs                                                 | (813)                               
|Loan recoveries                                                  | 235                                 
|Net charge-offs                                                  | (578)                               
|Balance, end of year                                             | R$1,085                             
|Provision to average loans ratio (including
nonperforming loans) | 2.0%                                

The provision for loan losses decreased from 2002 to 2003 as follows:

- Unibanco and others decreased R$271 million or 37.7%, mainly due to the improved
 credit quality and the appreciation of the real. In 2003, 25.0% of its
 portfolio, principally in the Wholesale Banking segment, was denominated or
 indexed to foreign currencies;

- Fininvest decreased R$131 million or 31.5%, principally
as a result of a more restrictive credit granting policy; and

- Unicard decreased R$8 million or 5.1%, primarily attributable
to an improvement of collection procedures and a more restrictive credit approval
criteria.

The provision to average loans ratio improved from 2002 to 2003 primarily
due to a better risk profile as follows:

- Unibanco and other improved from 3.2% in 2002 to 2.0%
in 2003;

- Fininvest improved from 31.6% in 2002 to 25.4% in 2003; and

- Unicard improved from 18.0% in 2002 to 15.4% in 2003.

On a consolidated basis, the loan charge-offs decreased 13.0% in 2003, mainly
due to Brazil s improved economic conditions compared to 2002.

Therefore, our allowance for loan losses decreased from R$1,389 million in
2002 to R$1,317 million in 2003, primarily as a result of the improvement in
our credit risk profile and the realappreciation.

The following table shows
our total loans and allowances for loan losses by category in 2002 and 2003:

|                            | As of December
31, 2002 | As of December
31, 2003 |           
|--------------------------- | ----------------------- | ----------------------- | ----------
|Commercial:                 | Total loans             | Total 
allowance        | Total 
net
|Industrial and other        | R$12,782                | R$700                   | R$12,082  
|Import and export financing | 3,955                   | 36                      | 3,919     
|Real estate loans           | 714                     | 55                      | 659       
|Direct lease                | 539                     | 32                      | 507       
|Individuals:                |                         |                         |           
|Overdraft                   | 948                     | 58                      | 890       
|Financing                   | 3,805                   | 298                     | 3,507     
|Credit card                 | 1,713                   | 146                     | 1,567     
|Agricultural                | 798                     | 64                      | 734       
|Total                       | R$25,254                | R$1,389                 | R$23,865  

Our loan portfolio increased 3.1% while our allowance for loan losses decreased
5.2% in 2003 compared to 2002 as follows:

- Industrial and others: despite the loan portfolio increase of
5.7%, the allowance to loans ratio decreased to 4.7% in 2003 compared to 5.5%
in 2002;

- Import and export-financing: the loan portfolio and allowance for loan losses
 decreased 17.1% and 44.4% respectively in 2003 compared to 2002, primarily due
 to the appreciation of the real, as import and export financing portfolio
 is denominated or indexed to foreign currencies, and to better risk profile;

- Real estate loans: the loan portfolio increased 28.0% in 2003
compared to 2002, as a result of a more active participation in real estate
loans. Loans increased R$200 million as a result of us entering into more than
4,000 new loan transactions;

- Direct
  lease (including the leasing of cars, trucks, machinery, computers and equipment
  to the service, industrial and commercial sectors): the loan portfolio decreased
  from R$539 million in 2002 to R$483 million in 2003, reflecting the general
  state of the leasing market. The allowance for loan losses posted a decrease
  of 50% due to a higher foreign currencies denominated or indexed portfolio
  in 2002 when compared to 2003, that was affected by the real depreciation;
 and

- Individuals:
  the portfolio of financing to individuals increased 6.1% in 2003 (compared
  to 2002), due to our organic growth. The financing focused mainly on auto financing
  and consumer finance. At the same time, our allowance for loan losses decreased
  0.3%, showing a decrease in allowance to loans ratio from 7.8% in 2002 to 7.4%
  in 2003. The portfolio of credit card loans increased 25.3% in 2003 compared
  to 2002 followed by an increase in the allowance to loans ratio from 8.5% in
  2002 to 9.4% in 2003, due to a change in the charge offs criteria from a period
  between 180 and 210 days to 360 days after the due date. This was required
  in order to be consistent with the conglomerate criteria.

The following table shows the current classification of the consolidated
loan portfolio by risk category and by business segments for 2002 and 2003:

|           | As of December
31, 2002
|---------- | -----------------------
|           | Loans                  
|           | Whole-                 
|Risk level | sale                   
|           |                        
|AA         | R$6,245                
|A          | 2,314                  
|B          | 2,064                  
|C          | 4,004                  
|D          | 396                    
|E          | 214                    
|F          | 37                     
|G          | 159                    
|H          | 141                    
|Total      | R$15,574               

|      | As of December
31, 2003
|----- | -----------------------
|      | Loans                  
|Risk  | Whole-                 
|level | sale                   
|      |                        
|AA    | R$7,884                
|A     | 3,122                  
|B     | 1,812                  
|C     | 1,674                  
|D     | 406                    
|E     | 309                    
|F     | 36                     
|G     | 22                     
|H     | 178                    
|Total | R$15,443               

At December 31, 2002 and 2003, respectively, approximately 62.9% and 72.9%
of the loans in our loan portfolio were classified in the categories AA to
A, principally due to our Wholesale Banking portfolio.

Our Retail Banking portfolio grew 10.3% in 2003 compared to 2002, mainly due
to growth in the branch network, and in the auto financing and consumer finance
segments. As for the risk profile in 2003, the percentage of loans classified
in the categories AA to A of the portfolio remained relatively stable compared
to 2002.

Our Wholesale Banking portfolio presented a clear improvement on its risk ratings
 profile, with an increase in the percentage of loans classified in the categories
 AA to A, from 55.0% in 2002 to 71.3% in 2003 due to the improvements that occurred
 in the Brazilian economy, including the reduction in SELIC interest rate, appreciation
 of the real and better than expected macroeconomic policy by the new
 governments administration, which resulted in an improved risk perception by
market agents.

Non-Interest Income

The
following table shows the principal components of our non-interest
income for 2002 and 2003:

|                                                                    | For the
Year Ended 
December 31, |        
|------------------------------------------------------------------- | -------------------------------- | -------
|                                                                    | 2002                             | 2003   
|                                                                    | (in millions
of R$)              |        
|Fee and commission income                                           | R$1,854                          | R$2,152
|Trading income (expenses)                                           | (1,972)                          | 689    
|Net gain on securities                                              | 49                               | 193    
|Net gain on foreign currency transactions                           | 96                               | 93     
|Equity in results of unconsolidated companies                       | 184                              | 199    
|Insurance, private retirement plan and pension
investment contracts | 1,291                            | 1,468  
|Other non-interest income                                           | 1,714                            | 709    
|Total                                                               | R$3,216                          | R$5,503

Fee
   and Commission Income. The fees and commission income increased 16.1%
   in 2003 compared to 2002. In 2003, 62.6% of this source of income
   originated from banking tariffs and other fees and commissions, which increased
   26.0% in 2003 compared to 2002. The other 37.4% of this source of income,
   which includes credit card, asset management and collection fees, increased
2.5%, mainly from fees on credit cards.

The
  increase of 26.0% in banking tariffs and other fees and commissions was largely
  due to the increase in our Retail Banking client base as a result of the "ContAtiva" and "ContAtiva2" organic
  growth initiatives. The initial goal of the ContAtiva program was to add
  1.8 million new accounts by the end of 2003. Upon achieving this target in
  February 2003, well ahead of schedule, we launched a second organic growth
  program called ContAtiva2 in March 2003, aimed to attract new accounts through
  2008. In addition to this, our Wholesale Banking segment increased their fees
  from capital markets, investment banking and mergers and acquisitions transactions
  by approximately 55.7%. For additional information on organic growth see Item
  4. Information on the Company - Business Overview - Our Business Strategy -
  Retail Banking Strategy - Achieve Scale Through Organic Growth and Strategic
Transactions.

Trading
   Income (expenses). The trading income (expenses) increased from an expense
   of R$1,972 million in 2002 to an income of R$689 million in 2003, since in
   2003 we were not affected by the unfavorable market conditions that existed
   in 2002. In 2003, mainly due to the real appreciation, we recognized
   a gain of R$205 million from realized gains (losses) on securities, R$346
   million from realized and unrealized gains (losses) on derivatives and securities
   which are primarily used to hedge our treasury and commercial portfolios,
   and R$138 million related to our economic hedges of investments abroad. Conversely,
   in 2002, mainly due to the depreciation of the real, we experienced
   a loss of R$108 million from realized gains (losses) on securities,
   R$166 million from unrealized gains (losses) on securities and derivatives,
   R$904 million from realized gains (losses) on derivatives and R$794 million
related to our economic hedges of investments abroad.

Net
   Gain on Securities. The net gain on securities increased from R$49 million
   in 2002 to R$193 million in 2003, mainly due to realized results
on the sale of securities available for sale.

Equity in Results of Unconsolidated Companies. The equity in
results of unconsolidated companies increased from R$184 million in 2002 to
R$199 million in 2003, mainly due to:

- Pontocred (the
  new name of Investcred): increase of R$6 million, as a result of the 21.7%
  increase in our loan portfolio, from R$589 million in 2002 to R$717 million
  in 2003, and an improvement of the product mix;

- Rodobens(car financing): increase of R$6 million, primarily
due to growth in sales;

- AIG Brasil(insurance company): increase of R$4 million,
due to the improvement in income as a result of AIGs reinsurance operations
expertise and the increase of sales in commercial lines; and

- Credicard Group (formed by Credicard, Redecard and Orbitall):
  decrease of R$4 million, despite the transfer of an important affiliated member
  that started to manage its own portfolio in the second half of 2002.

Insurance,
   Private Retirement Plans and Pension Investment Contracts. In 2003, the
   insurance premiums, private retirement plan premiums and pension
   investment contracts increased 13.7% compared to 2002. The insurance premiums
   increased primarily as a result of our leadership in the corporate segment.
   This advantage is mainly due to AIGs insurance and reinsurance expertise
   in dealing with sophisticated corporate insurance coverage. In addition, market conditions
   are such that customers have demanded greater protection against credit card
theft and fraud, thus further contributing to increase our retained premiums.

The
  private retirement plan premiums increased mainly due to our acquisition of
  the Brazilian pension business of Cigna Seguradora (a subsidiary of Cigna Corporation)
  in April 2003, an increase in corporate pension plans and strong sales of our
  PGBL and VGBL plans. For additional information on PGBL and VGBL see Item
  4. Information on the Company - Business Overview - Our Business Strategy -
Insurance and Related Activities - Pension and Retirement Plans.

Other Non-interest Income.Other non-interest income decreased
        from R$1,714 million in 2002 to R$709 million in 2003 because of the
        positive results in 2002 due to the depreciation of the real on
        our investments abroad denominated in U.S. dollar. This gain in 2002,
        of R$1,187 million, was partially offset by a loss on the economic hedges
        of our investments abroad of R$794 million, and was recorded in our trading
        income. In 2003 as we faced an appreciation of the real, the
impact was recorded in as other non-interest expense.

Non-Interest Expense

The
following table shows the principal components of our non-interest expense
for 2002 and 2003:

|                                                                    | For the
Year Ended 
December 31, |        
|------------------------------------------------------------------- | -------------------------------- | -------
|                                                                    | 2002                             | 2003   
|                                                                    | (in millions
of R$)              |        
|Salaries and benefits                                               | R$1,783                          | R$2,224
|Administrative expenses                                             | 2,202                            | 2,310  
|Amortization of goodwill and other intangibles                      | 90                               | 91     
|Insurance, private retirement plan and pension
investment Contracts | 1,306                            | 1,666  
|Other non-interest expense                                          | 1,204                            | 1,974  
|Total                                                               | R$6,585                          | R$8,265

Salaries and benefits

Salaries and benefits increased 24.7% in 2003 compared
to 2002 principally due to:

- the increases in salaries pursuant to collective bargaining agreements with
 bank employees of 7% in September 2002 and 12.6% in September 2003;

- the growth in our sales force, mostly in our branches, as a result of the organic
 growth plans; and

- the addition of
   R$249 million to our provisions for labor claims in 2003 compared to 2002.

We had 27,625 employees at December 31, 2003 compared to 26,739 employees
at December 31, 2002.

Other Administrative Expenses

Other administrative expenses increased 4.9% in 2003
compared to 2002, primarily due to:

- higher personnel, third-party services,
data processing, telecommunications and publicity expenses due to an increase
in our client base as a result of the organic growth;

- higher rental costs due to annual price
adjustments in the leases for branches and other properties;

- annual adjustments in energy tariffs,
rental, software maintenance and telecommunications contracts;

- higher expenses associated with marketing
campaigns to promote the banking products, particularly in the Retail Banking
and Insurance and Pension Plans segments; and

- increased costs relating to higher processing
volumes in our credit card subsidiaries related to our Retail Banking segment,
such as Unicard, as well as, higher data processing rates.

This
  4.9% increase in other administrative expenses compares favorably to the 9.3%
  inflation rate as measured by the IPCA (the Consumer Price Index published
  by IBGE) in 2003, which we believe demonstrates the efficiency of our cost
  control program. For additional information see Item 4. Information on the
  Company - Business Overview - Our Business Strategy - Guiding Principles - Continuous Efficiency
Maximization.

Insurance,
   private retirement plan and pension investment contracts. The Insurance,
   private retirement plan and pension investment contracts expenses increased
   27.6% from R$1,306 million in 2002 to R$1,666 million in 2003, primarily due
   to the growth of the related PGBL and VGBL sales. For additional information
   on PGBL and VGBL plans see Item 4. Information on the Company - Business
   Overview - Our Business Strategy  Insurance and Related Activities  Pension
and Retirement Plans.

Other
   non-interest expense. Our other non-interest expenses are mainly compo sed
   of the negative exchange variation on investments abroad, contingent provisions
   and other taxes related to services, revenues and others. The increase of
   64.0% or R$770 million in other non-interest expenses in 2003 compared to
   2002 was primarily due to the R$631 million loss on our investments abroad
   denominated in U.S. dollar as a result of the appreciation of the real. This
   loss was offset by the economic hedges of our investment abroad that
   resulted in a gain of R$636 million, R$498 million of which were recorded
   in the interest expense with the remaining R$138 million recorded in the trading
   income (expense). Other taxes were impacted not only by the increase of our
   services and revenues but also by the increase of the COFINS rate from 3%
   to 4% of gross revenues in the last quarter of 2003. In addition, in 2003
we increased our civil litigation provision.

Income Tax

In 2003,
a negative result on income tax and social contribution of R$354 million
 compared to a positive result on income tax and social contributions of R$276
 million in 2002, was due mainly to the different tax treatment between
 our gains (losses) from exchange variations on our investments abroad and on the economic
 hedges of our investments abroad. The exchange variation gains on investments abroad are not taxable and the exchange
 variation losses on investments abroad are non tax-deductible for income tax
 purposes. During 2003, we had foreign exchange losses of R$631 million on our
 investments abroad and a gain of R$636 million on the respective economic hedges,
 in each case due to the appreciation of the real. This created a negative
 tax effect of R$216 million, since under Brazilian tax laws, gains on economic hedges are taxed,
 whereas foreign exchange losses on our investments abroad are not tax-deductible.
 By contrast, in 2002, when the real depreciated, we experienced foreign
 exchange gains of R$1,187 million on our investments abroad and a loss of R$794
 million on the respective economic hedges. This had a beneficial effect on income
 tax and social contribution expenses in 2002, since foreign exchange gains are
 not taxable whereas losses on economic hedges are tax-deductible. As a result
 of these differences in 2003 compared to 2002, we had a R$486 million increase
 in tax expenses related to these economic hedge transactions. This increase
 was partially offset by a tax deduction of R$158 million in interest paid to
 stockholders equity compared to R$22 million in 2002. The payment of tax-deductible
 interest on equity was chosen as an option for profit distribution in 2003 instead
 of dividends as in 2002. For additional information
 regarding income tax expense, see Note 18  Income Taxes to our consolidated
financial statements.

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 Ended 
    December 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 highly volatile 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, primarily in our trading operation.

Our
  non-interest income-trading income (expenses) which includes the net loss on
  futures contracts, including the economic 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 the 52.3% devaluation of the realand 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 Ended 
      December 31, | % Change
|----------------------- | ------------------------------------------------ | --------
|                        | 2001                                             | 2002    
|                        | (in millions
          of R$)                    |         
|                        |                                                  |         
|Interest income         | R$9,713                                          | R$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 realin 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 investments abroad, 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.

|                                                                                                   | 2002/2001 
      Increase (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                          
|                                         |                               
|                                         | (in millions of R$)           
|Average interest-earning assets         
|Interest-bearing deposits in other banks | R$1,838                       
|Federal funds sold and securities       
|purchased under resale agreements        | 3,877                         
|Central Bank compulsory deposits         | 646                           
|Trading assets                           | 10,406                        
|Securities available for sale            | 2,153                         
|Securities held to maturity              | 742                           
|Loans                                    | 21,783                        
|Other interest-earning assets            | 42                            
|                                         |                               
|Total                                    | R$41,487                      
|                                         |                               
|Average interest rate earned:            | 23.4%                         

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.

|                                                            | 2002/2001          
|----------------------------------------------------------- | -------------------
|                                                            | Increase           
|                                                            |                    
|                                                            | (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;

- 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 purchased under agreements to resell; and

- 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 rise 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 U.S. dollar; 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 U.S. dollar as of 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 governments 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 U.S. dollar.

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                          
|                                       |                               
|                                       | (in millions of R$)           
|Average interest-bearing liabilities   |                               
|Time deposits                          | R$8,263                       
|Savings deposits                       | 4,419                         
|Deposits from banks                    | 458                           
|Federal funds purchased and securities
|sold under repurchase agreements       | 8,175                         
|Short-term borrowings                  | 6,800                         
|Long-term debt                         | 8,013                         
|                                       |                               
|Total                                  | R$36,128                      
|                                       |                               
|Average interest rate paid:            | 15.3%                         

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.

|                                                                 | 2002/2001           | 
|---------------------------------------------------------------- | ------------------- | 
|                                                                 | Increase           
|                                                                 |                    
|                                                                 | (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 savings  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; and

- R$922 million
in interest on short-term borrowings to R$2,064 million in 2002 from R$1,142 million in
2001.

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 U.S. dollar. 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 U.S. 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                          
|                                                                 |                               
|                                                                 | (in millions of R$)           
|Balance beginning of year                                        | R$1,005                       
|Provision for loan losses                                        | 1,100                         
|Loan charge-offs                                                 | (1,298)                       
|Loan recoveries                                                  | 469                           
|Net charge-offs                                                  | (829)                         
|                                                                 |                               
|Balance, end of year                                             | R$1,276                       
|                                                                 |                               
|Provision to average loans ratio (including nonperforming loans) | 4.8%                          

|                                                                 | 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 a 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 reaisterms, 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 on 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
|-------------------- | ----------------------- | -----------------------
|                     |                         |                        
|                     | Total                   | Total                  
|Commercial:          | loans                   | allowance              
|                     |                         |                        
|Industrial and other | R$11,981                | R$486                  
|Import and export   
|financing            | 3,283                   | 36                     
|Real estate loans    | 495                     | 41                     
|Direct lease         | 793                     | 88                     
|Individuals:        
|Overdraft            | 1,046                   | 78                     
|Financing            | 3,515                   | 259                    
|Credit card          | 1,966                   | 225                    
|Agricultural         | 833                     | 63                     
|                     |                         |                        
|Total                | R$23,912                | R$1,276                
|                     |                         |                        

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 reaisin 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 affected certain of our large
    clients.

The
increase of 20.5% in reaisterms 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  December 31,  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.

|           | 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 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.B. Business Overview - 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 EndedDecember 31,
|------------------------------------------------------------------- | ------------------------------
|                                                                    |                               
|                                                                    | 2001                          
|                                                                    |                               
|                                                                    | (in millions of R$)           
|Fee and commission income                                           | R$1,653                       
|Trading income (expenses)                                           | 120                           
|Net gain on securities                                              | 18                            
|Net gain on foreign currency transactions                           | 67                            
|Equity in results of unconsolidated companies                       | 235                           
|Insurance, private retirement plan and pension investment contracts | 1,046                         
|Other non-interest income                                           | 622                           
|                                                                    |                               
|Total                                                               | R$3,761                       
|                                                                    |                               

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 U.S. dollar. As a consequence the market value of our trading assets,
      mainly indexed in U.S. dollar 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 economic
      hedges 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. dollar, 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 consolidated financial statements and Item 4. Information
on the Company - Business Overview - Our Business Strategy - Insurance
and Related Activities - Pension and Retirement Plans.

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 investments abroad 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 EndedDecember 31,
|------------------------------------------------------------------- | ------------------------------
|                                                                    |                               
|                                                                    | 2001                          
|                                                                    |                               
|                                                                    | (in millions of R$)           
|Salaries and benefits                                               | R$1,716                       
|Administrative expenses                                             | 2,134                         
|Amortization of goodwill and other intangibles                      | 150                           
|Insurance, private retirement plan and pension investment contracts | 955                           
|Other non-interest expense                                          | 932                           
|                                                                    |                               
|Total                                                               | R$5,887                       
|                                                                    |                               

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 realon
our investments abroad. The devaluation of the realdecreased 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
additional information regarding income tax expense, see Note 18 to our consolidated financial statements.

5.B. LIQUIDITY AND CAPITAL RESOURCES

Overview

Our
asset and  liability  management  policy is  designed to ensure that our  capital
 position  is  consistent  with our risk profile and  applicable  regulatory  standards
and  guidelines.  In  particular,  our policy is designed to avoid  material  mismatches
between assets and liabilities,  optimize our risk-return ratio and ensure that
sufficient  liquidity is available to honor withdrawals of deposits,  make  repayments
 at maturity of other  liabilities,  extend loans or other forms of credit to our
customers and meet our own working capital needs.

We
seek to ensure continuous access to a diversified source of funding at efficient
costs, within the framework of our assets and liabilities management policy which
sets forth limits with respect to risk factors, sensitivity, gaps and concentration
    in certain instruments, such as government securities. As a general rule,
    our main funding provider is the financial market either in reaisor
    foreign currencies. For additional information concerning capital and liquidity
    risk management, see Item 11.
Quantitative and Qualitative Disclosures About Market Risk  Risk Management.

The
    main subjects related to the asset and liability management, as well as liquidity
    and capital resources, are treated in our financial committee meetings that
    occur on a monthly basis. Our financial committee discusses and evaluate
    our liquidity performance in order to determine the minimum liquidity level
    and, if necessary, holds extraordinary meetings to evaluates our liquidity
    position in response to unexpected macroeconomic changes. There is a contingency
    plan already approved by our financial committee that designs the procedures
    in the case of a liquidity crisis. As of May, 2004, we kept a minimum level
    of liquidity of approximately R$3,0 billion.

Our
treasury department is responsible for managing our liquidity and sources of
    funding, including executing investments, in both reaisand foreign
    currencies. The treasury department maintains what we believe is a proper
    balance of maturity distributions and diversification of sources of funds.
    Based upon our levels of resources and the ability to access funding, we
    believe that our overall liquidity is sufficient to meet current obligations
    to customers and debt holders, support expectations for future changes in
    asset and liability levels and support our ordinary working capital needs.

Sources of Funding

Capital

The
following table shows our capital at December 31, 2003, 2002 and 2001:

|As of December 31,Consolidated(in million of R$) | 2001  | 2002  | 2003 
|------------------------------------------------ | ----- | ----- | -----
|                                                 |      
|Stockholders
         Equity (Tier 1)           | 5,955 | 6,245 | 6,754
|Subordinated Debt (Tier 2)                       | -     | 932   | 1,468
|Minority Interest                                | 667   | 724   | 938  

Stockholders Equity

Stockholders
 equity  increased  to R$6,754  million at December 31, 2003 from R$6,245  million at
December  31,  2002.  The increase  primarily  reflects  net income of R$873  million,
 partially  offset by the  payment of R$426  million of  interest on our capital.

Subordinated Debt
Issuances

Our
Tier 2 subordinated debt increased R$536 million in 2003 compared to 2002.

We
accessed  the capital  markets  twice in 2002 to raise Tier 2 capital.  In April  2002,
 we issued US$ 200 million  step-up subordinated  callable notes due 2012.  Interest is
payable on the notes  semi-annually at a rate of 9.375% per annum in the first five years
and 11.7995% per annum  thereafter.  We may redeem the notes beginning in April 2007 or
on any interest  payment date thereafter. In December  2002,  we issued  R$222  million
 subordinated  time  deposits due  December  2012.  The  subordinated  time  deposits are
denominated in reais and are redeemable after December 2007. The time deposits bear
interest at 102% of the interbank deposit rate.

In
December  2003, we issued US$ 200 million  step-up  subordinated  callable  notes due
2013.  The interest is payable on the notes  semi-annually  at a rate of 7.375% per annum
for the first five years and 9.375% per annum  thereafter.  We may redeem the notes
beginning in December,  2008 or on any interest  payment  date  thereafter. The Central Bank
authorized us to record the  subordinated  debt represented by these notes as part of our
Tier 2 regulatory capital in April 2004.

Regulatory Capital

We
     are subject to risk-based capital adequacy guidelines and regulations issued
    by the Central Bank that are similar to the guidelines under the Basle Accord.
    Under Central Bank rules, we are currently required to have a capital adequacy
    ratio of 11% of total capital to total risk-adjusted assets as calculated
    in accordance with Brazilian GAAP. As of December 31, 2003, our capital adequacy
    ratio was 18.6%. For additional information on capital adequacy requirement
    see Item 4.B. Business Overview - Regulation and Supervision.

We
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  ratio,  as well as
the minimum  regulatory  capital  required  under  Brazilian law, as of December 31,
2001,  2002 and 2003.  For  additional  information on capital ratio, see Note 31 to our
consolidated financial statements.

The following table shows our capital ratio, as calculated
    in accordance with Brazilian GAAP, as well as the minimum regulatory capital
    required under Brazilian law, as of December 31, 2001 , 2002 and 2003. For
    additional information on our capital ratio, see Note 31 to our consolidated
financial statements.

|                                    | As of December 31,Consolidated         
|----------------------------------- | ---------------------------------------
|                                    |                                        
|                                    | Partial (1)                            
|                                    |                                        
|                                    | 2001                                   
|                                    |                                        
|                                    | (in millions of R$, except percentages)
|                                   
|Tier 1                              | 13.71%                                 
|Tier 2                              | 0.01                                   
|                                    |                                        
|Total capital                       | 13.72%                                 
|                                    |                                        
|Our regulatory capital              | R$6,203                                
|Minimum regulatory capital required | 4,975                                  
|                                    |                                        
|Excess over minimum regulatory     
|capital required                    | R$1,228                                
|                                    |                                        

---

|(1) | Partial
consolidation excludes non-financial subsidiaries.
|--- | ----------------------------------------------------------

|(2) | Full
consolidation includes both financial and non-financial subsidiaries.
|--- | --------------------------------------------------------------------------

Our
regulatory  capital  increased from R$7,561 million as of December 31,  2002 to R$8,800
million as of December 31, 2003 on a partial consolidation basis (excluding non-financial
 subsidiaries).  On a full consolidation basis, our regulatory capital increased from
R$8,175  million as of December 31, 2002 to R$9,433  million as of  December 30,  2003.
The increase in  regulatory  capital on a partial  consolidation  basis from 2002 to
2003 primarily reflects net income of R$1,090 million,  an increase in subordinated debt
of R$548 million,  and R$27 million of fair value adjustments on securities and
derivative  financial  instruments,  partially offset by dividends of R$426 million that
we paid in the form of interest on own capital in 2003.

Basle Capital
Adequacy Ratio Impacts Year Ended                                          December
31, 2003

|Basle capital adequacy ratio at December 31, 2002 (1)  | 15.71%
|------------------------------------------------------ | ------
|Increase in risk weighted assets                       | 0.30  
|Change in credit swap risk                             | 0.08  
|Change in market risk  interest rates                 | (0.10)
|Increase stockholders equity                          | 1.46  
|Tier 2  December 2003                                 | 1.15  
|Basle capital adequacy ratio at December 31, 2003  (1) | 18.60%

---

|(1) | As
of December 31,2002 and 2003 no capital  allocation was required to foreing  currency
 exposure as our foreign currency exposure was less than 5.0% of adjusted
capital for these periods.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During
2003, 2002 and 2001, 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.  We adopted
this approach primarily due to the  restrictive  credit  environment  that has
 prevailed in Brazil. As our current capital adequacy ratio is in excess of the minimum
 required  ratio, we could increase our loan  portfolio.

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 50.0% of stockholders  equity on a consolidated  basis. At December 31,
2003, 2002 and 2001, our total investment in such assets was less than the Central Banks limit.

Third-Party Liabilities

The
   following table shows our third-party liabilities at December 31, 2001, 2002
 and 2003:

|                                                                          | As of
  December 31,
|------------------------------------------------------------------------- | --------------------
|                                                                          |                     
|                                                                          | 2001                
|                                                                          |                     
|Liabilities (in millions of R$)                                           |                     
|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               
|Import and export financings                                              | 3,359               
|Commercial paper                                                          | 808                 
|Other interbank borrowings                                                | 1,812               
|Others                                                                    | 261                 
|Short-term borrowings                                                     | 6,240               
|Local onlendings                                                          | 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                 
|Long-term debt                                                            | 7,847               
|Other liabilities                                                         | 6,531               
|                                                                          |                     
|Total Liabilities                                                         | R$46,760            
|                                                                          |                     

The
    following table shows our third-party interest-bearing liabilities by maturity at December
31, 2003:

|                                                                                               | December 31, 2003
|---------------------------------------------------------------------------------------------- | -----------------
|                                                                                               |                  
|                                                                                               | Up to 30 days    
|                                                                                               |                  
|Deposits from banks                                                                            | R$62             
|Savings deposits                                                                               | 6,163            
|Time deposits                                                                                  | 1,311            
|Federal
         funds purchased and    securities sold under repurchase   
        agreements | 6,750            
|Short-term borrowings                                                                          | 458              
|Long-term debt                                                                                 | 663              
|                                                                                               |                  
|Total interest-bearing liabilities                                                             | R$15,407         
|                                                                                               |                  

Deposits

Deposits
are the most important source of funding for our banking operations,
     representing 44.1% of our total liabilities at December 31, 2003. Our deposits
     consist primarily of real-denominated interest-bearing time and
     savings deposits and real-denominated non-interest-bearing demand
     deposits. The 1.4% decrease in total deposits at December 31, 2003 compared
     to December 31, 2002 was partially due to the movement by investors of funds
     from deposits to investments funds and assets under management that provided
    more attractive investment opportunities in 2003.

Securities Sold Under Repurchase Agreements

Securities  sold under  repurchase  agreements  decreased  51.1% at December  31, 2003  compared to
December 31, 2002.  This  decrease was  primarily  due to the fact that we acted as a main dealer for  securities
sold under  repurchase  agreements  in the amount of R$8.0 billion on December 31, 2002 at the request of the Central
Bank.  Acting on this kind of  transactions  as a dealer,  depends on the Central  Bank choice to enter into
repurchase  agreements  and to use us as a dealer. On December 31, 2003 we did not act as a main dealer for such transactions.

Import and Export Financing

Trade finance credit
      lines from correspondent banks also represent an important source of funding
      for us. In general, 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. At December 31,
      2003, approximately R$2,322 million, or 92.7%, of our existing credit
      lines were considered short-term (up to 360 days), compared to R$4,030
      million, or 97.8%, at December 31, 2002. The decrease in trade finance
      credit lines was due primarily to the appreciation of the real and
     partially due to our decision to use general purpose funding through other
    borrowings to fund the import and export segment of our loans portfolio.

Other Sources of Funding

Euronotes and Commercial Papers

We
    are an active participant in the capital markets, principally issuing euronotes.
    At December 31, 2003, we had outstanding R$2,591 million of euronotes and
    commercial papers denominated in U.S. dollar and other foreign currencies.
    We use the proceeds of these obligations primarily for general lending purposes,
    mainly to our Brazilian clients. R$2,104 million of these obligations will
    mature in the next twelve months. The 10.9% decrease in our balance of euronotes
    and commercial papers outstanding from December 31, 2002, was primarily due
    to the appreciation of the real, partially
     offset by our issuance of euronotes under our medium-term note, or MTN,
     program in 2003. This program permits the issuance of up to US$2,0 billion
     (or its equivalent in other currencies). Our medium-term note program is
     a relatively inexpensive source of funding and permits us to issue securities
     with a period to maturity of greater than 12 months. As of December 31,
    2003, we had the following issuances outstanding under our MTN program:

|Month of issue | Interest rate | Notes due on  | Aggregate Principal Amount
|-------------- | ------------- | ------------- | --------------------------
|               |               |               |                           
|February 2002  | 6.000%        | February 2004 | US$100 million            
|January 2003   | 6.875%        | January 2004  | US$100 million            
|April 2003     | 5.000%        | April 2004    | US$100 million            
|May 2003       | 5.625%        | November 2004 | US$75 million             
|May 2003       | 5.375%        | May 2004      | EUR75 million             
|July 2003      | 4.000%        | January 2005  | US$125 million            

Notes Issued Under Securitization Arrangements

We securitize the U.S. dollar payment orders that we receive and process through our correspondent
banks.   UBB DPR Company, an exempted special purpose company established under the laws of the Cayman
Islands, acquires these payment orders and uses them as an underlying asset for the issuance of notes in
the international capital markets, as a financial transaction. Proceeds from the sale of notes are
remitted to our subsidiary, Unibanco Cayman, as payment for the sale of the U.S. payment orders. The notes
issued under securitization of U.S. dollar payment orders represented an additional source of funding for
us.

The
    securitized assets consisted of U.S. dollar payment orders, generally referred
    to as Swift MT-100 payments, received and processed by us through our correspondent
    banks. At December 31, 2003, we had outstanding R$2,453 million of liabilities
    representing our


 notes issued under securitization arrangements

..

In
    May 2002, we completed a securitization transaction amounting to US$ 400
    million. The notes mature on April 15, 2009 and pay interest on a quarterly
     basis at a rate of U.S. dollar LIBOR plus a spread of 0.57%. The principal
     amount of the notes will be amortized in consecutive payments starting on
    July 15, 2004.

In June 2003 we completed a US$217million securitization. The issuance
     matures on July 15, 2009 and consists of two tranches, Series 2003-1 notes
     of US$112 million with quarterly interest payments at a rate equal to U.S.
     dollar LIBOR plus a spread of 4.25% and Series 2003-2 notes of US$105 million
    with quarterly interest payments at a fixed rate of 6.15% per annum.

In November 2003, we completed a securitization transaction amounting
     to Y 25 billion, or approximately US$ 227 million. The notes mature on October
     15, 2013 and pay interest on a quarterly basis at a rate of 3.55% per annum,
     which is equivalent to U.S. dollar LIBOR plus 2.86%. The principal amount
     of the notes will be amortized in equal and consecutive payments starting
     on January 15, 2007. To protect currency risk arising from the fact that payment
     orders received by us are denominated in U.S. dollar while the notes are
     denominated in yen, we entered into a cross-currency swap with respect to
     the notes. In connection with this transaction, we changed the structure
     of our MT-100 securitization program to permit us to issue securities in
     yen, sterling and euros in addition to U.S. dollars. We anticipate that
     we will be able to use this structure to access alternative markets, thereby
    diversifying our sources of funding in line with our funding policy.

Mortgaged-Backed Notes

We issue notes collateralized by real estate loans. At December 31, 2003,
     we had R$807 million of these mortgage-backed notes outstanding, of which
     R$772 million will mature within twelve months from December 31, 2003,
     compared to R$633 million of outstanding mortgage-backed notes at December
     31, 2002. This increase is primarily due to the increase in demand for real
    estate loans in 2003 compared to 2002.

Local and Foreign Onlendings

At
    December 31, 2003, we had outstanding R$5,917 million in local and foreign
     onlendings, which consist primarily of real-denominated amounts
     borrowed from the National Economic Development Bank, BNDES, and the National
     Industrial Financing Authority, FINAME, for loans extended to Brazilian
     clients for investments mainly in fixed assets, such as premises and equipment.
     Approximately R$2,107 million of these onlendings mature in the next twelve
     months from December 31, 2003. The increase of 9% in local and foreign onlendings
     obligations from R$5,427 million at December 31, 2002 to R$5,917 million
     at December 31, 2003, was mainly due to our organic growth during 2003 and
     also to a US$ 70 million loan from the International Finance Corporation
     for onlendings to our Brazilian clients in the export business.

Uses of Funding

The
      following table shows our assets at December 31, 2001, 2002 and 2003:

|                                                                      | As of
  December 31,
|--------------------------------------------------------------------- | --------------------
|                                                                      |                     
|                                                                      | 2001                
|                                                                      |                     
|Assets (in millions of R$)                                            |                     
|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 intangibles, net                                                | 360                 
|Other assets                                                          | 4,380               
|                                                                      |                     
|Total Assets                                                          | R$53,382            
|                                                                      |                     

The
      following table shows our interest-earning assets by maturity at December 31, 2003:

|                                                                                 | As of December 31, 2003
|-------------------------------------------------------------------------------- | -----------------------
|                                                                                 |                        
|                                                                                 | Up to 30 days          
|                                                                                 |                        
|Deposits in other banks                                                          | R$2,234                
|Federal funds sold and securities    purchased under resale
          agreements | 8,874                  
|Central bank compulsory    Deposits                                              | 3,292                  
|Trading                                                                          | 5,867                  
|Securities available for sale                                                    | 360                    
|Securities held to maturity                                                      | 86                     
|Loans                                                                            | 6,460                  
|Other                                                                            | 2                      
|                                                                                 |                        
|Total interest-earning assets                                                    | R$27,175               
|                                                                                 |                        

In
        accordance with our asset and liability and liquidity management policy,
        most of our investments are in loans and securities portfolios, as well
        as cash and cash equivalents. At December 31, 2003, our loan portfolio
        represented 39.5%, the securities portfolio 22.2% and cash and cash equivalents
        18.0% of our total assets, compared to 35.1%, 25.2% and 22.8%, respectively,
        at December 31, 2002. In addition to the cash and cash equivalents, we
        believe our securities portfolio, which consists of Brazilian government
        securities, is also a contingent source of liquidity because these securities
can be readily converted into cash.

The Central Bank requires
      compulsory deposits of 23% on time deposits, 30% on savings deposits and
      53% on demand deposits. As of December 31, 2003, we had R$4,116 million
      of compulsory deposits representing 6.2% of our total assets. See Item 5. Operating and Financial Review and Prospects  Macroeconomic
     Factors Affecting our Financial Condition and Results of Operations  Effect
     of Government Regulation on our Financial Condition and Results of Operations
     - Compulsory Deposit Requirements for a detailed discussion
of the Central Banks regulations regarding compulsory deposits.

Federal
    funds sold and securities purchased under resale agreements decreased 34.6%
    at December 31, 2003 compared to December 31, 2002. This decrease was primarily
    due to the fact that we acted as a dealer in the amount of R$8,0 billion
      in 2002 on securities to be sold under repurchase agreements at the request
      of the Central Bank. For additional information see Third
    Party Liabilities  Securities Sold under Repurchase Agreements.

The
      following table shows our capital expenditures in 2001, 2002 and 2003:

|                                                  | For the
  Year Ended December 31,
|------------------------------------------------- | ---------------------------------
|                                                  |                                  
|                                                  | 2001                             
|                                                  |                                  
|                                                  | (in millions
  of R$)            
|Land and buildings                                | R$35                             
|Furniture and equipment                           | 29                               
|Leasehold improvements                            | 104                              
|Data processing                                   | 166                              
|Software developed or obtained for internal
  use | 180                              
|Other                                             | 17                               
|                                                  |                                  
|Total                                             | R$531                            
|                                                  |                                  

During the period from 2001 to 2003, our capital expenditures consisted primarily of expenditures for data
processing to automate our branch network and  for computer systems, communication equipments and other
technology tools designed to increase the efficiency of our operations, the services offered to our
customers and our productivity.

We expect that capital expenditures in 2004 will not be greater than
     our historical levels of expenditure and will consist mainly of investments
     to improve our communications and computer systems and customer service
     and back office administrative systems, as well as investments related to
    Internet.

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,
|---------------------------------------------------- | ---------------------------------
|                                                     |                                  
|                                                     | 2001                             
|                                                     |                                  
|                                                     | (in millions
  of R$)            
|Net cash provided by (used in) operating activities  | R$(2,897)                        
|Net cash provided by (used in) investing activities  | (6,631)                          
|Net cash provided (used in) by financing activities  | 3,392                            
|                                                     |                                  
|Net (decrease) increase in cash and cash equivalents | R$(6,136)                        
|                                                     |                                  

2003

Net cash provided by operating activities

During
 2003, our operating activities provided R$3,169 million net cash, as follows:

- R$2,107
     million provided by our net income adjusted by net-cash items; and
- R$2,344 million provided
      by an increase in other liabilities.

Net cash provided by investing activities

During 2003, net cash provided by investing activities was R$1,792 million,
 consisting of:

- R$6,546
     million provided by proceeds from securities available for sale, offset by
     R$2,642 million in purchase of securities available for sale; and
- R$1,859 million increase in loans, due to our organic growth.

Net cash used in financing activities

During 2003, net cash used in financing activities was R$9,516, consisting
 of:

- R$7,057
     million decrease in short-term federal funds purchased and securities sold
     under repurchase agreements, primarily due to our role as dealer for the
     Central Bank in 2002;
- R$3,148
     million decrease in short-term borrowing, mainly due to a decrease
     in our trade financing lines and the repayments of our commercial papers
     and other interbank borrowings; and
- R$2,364 million increase
       in new borrowings under long-term arrangements net of repayments, mainly
       due to R$1,040 million increase from the issuance of notes issued under
       securitization arrangements, R$536 million increase from a new issuance
       of subordinated debt, R$405 million increase in euronotes due to our issuance
       in 2003 and R$332 million increase in local onlendings (funds borrowed
       from BNDES) due to our organic growth.

2002

Net cash provided by operating activities

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

- R$1,967
     million provided by our net income adjusted by net-cash items; and
- R$4,461 million provided by a decrease in trading assets resulting primarily
     from the reimposition by the Central Bank of reserve requirements on demand,
     savings and time deposits in cash.

Net cash used in investing activities

During 2002, net cash used in investing activities was R$10,695 million, consisting
 of:

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


Net cash provided by financing activities

During
  2002, net cash provided by financing activities was R$15,096, consisting of:

- R$6,213 million increase in short-term federal funds purchased
   and securities sold under repurchase agreements, primarily due to
  our role as dealer for the Central Bank;
- R$6,117 million increase in deposits, mainly time deposits, due
   to the movement by investors of funds away from asset management
  funds as a result of the introduction of the new mark-to-market rule for investment
  funds introduced in 2002; and
- R$3,049
                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 from two issuance of subordinated debt and R$896 million
                increase in local onlendings (funds borrowed from BNDES) due to our organic
                growth.

2001

Net
cash used in operating activities

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.

Net cash used in investing activities

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).

Net cash provided by financing activities

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 onlendings (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 realin 2001.
                These increases in local onlendings 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
                debentures as a result of the expectation 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.

Interest Rate Sensitivity

The management of interest rate sensitivity is a key component of our asset and
 liability management 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 interest rate sensitivity is offset when an equal amount of
 these assets or liabilities matures or reprices on that date. 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:

- the balance between expected rates of
   return and risk;
- the overall exposure to interest rate and risk; and
- the liquidity and capital
   requirements.

We monitor our  positions  maturity  mismatches  and manage them within  established  limits.  Our
management reviews our positions on a daily basis and changes positions promptly as market outlooks change.

The
                                following table shows the repricing periods of our interest-earning assets and interest-bearing
                                liabilities as of December 31, 2003. The information at that date may not
                                reflect interest rate gap positions at other times and may not represent the future impact on our results. 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, 2003
|------------------------------------------------------------------------------ | -----------------
|                                                                               |                  
|                                                                               | Up to 30 days    
|                                                                               |                  
|Deposits in other banks                                                        | R$2,234          
|Federal funds sold and Securities
        purchased under Resale    agreements | 8,874            
|Central bank compulsory    Deposits                                            | 3,292            
|Trading                                                                        | 5,867            
|Securities available for sale                                                  | 360              
|Securities held to maturity                                                    | 86               
|Loans                                                                          | 6,460            
|Other                                                                          | 2                
|                                                                               |                  
|Total interest-earning asset                                                   | R$27,175         
|                                                                               |                  

|                                                                                |                
|------------------------------------------------------------------------------- | ---------------
|                                                                                |                
|                                                                                | Up
  to 30 days
|                                                                                |                
|Deposits
  from banks                                                           | R$62           
|Savings
  deposits                                                              | 6,163          
|Time
  deposits                                                                 | 1,311          
|Federal
  funds purchased and    securities sold under repurchase    agreements | 6,750          
|Short-term
  borrowings                                                         | 458            
|Long-term
  debt                                                                | 663            
|                                                                                |                
|Total interest-bearing liabilities                                              | R$15,407       
|                                                                                |                
|Asset/liability
  gap                                                           | 11,768         
|Cumulative
  gap                                                                | 11,768         
|Ratio
  of cumulative gap to cumulative total interest-earning assets           | 21.1%          

Exchange Rate Sensitivity

Most
                of our operations are denominated in reais. However, we traditionally
                have outstanding at any given time medium and long-term debt denominated in
                foreign currencies, principally the U.S. dollar. Our policy is to avoid material
                exchange rate mismatches. As of December 31, 2003 , our net foreign currency
                exposure was less than 5% of our regulatory capital on a partial consolidation
                basis under the guidelines established by the Central Bank. For additional
                information 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 Conditions and Results of Operations
- Capital Adequacy.

Our foreign currency position arises
primarily through our purchases and sales of foreign currencies (primarily U.S.
dollar) from Brazilian exporters and importers, from other financial institutions
on the interbank market, or on the spot and forward currency markets. We also
enter into derivatives contracts, including swaps, futures and options, to manage
our overall exposure, as well as to assist customers in managing their exposures.
The Central Bank regulates our maximum foreign currency exposure as a percentage
of our regulatory capital.

As
                                of December 31, 2003 , 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 that date under the Central Banks guidelines, mainly because
operations with final maturity in the following business day are not subject to changes in foreign currency as they are settled with an exchange
rate of the previous day. In addition, the information at that date may not reflect the net exposure at other times
                                and may not represent the future impact on our results.

|                                                           | As of December
  31, 2003                
|---------------------------------------------------------- | -----------------------------------------
|                                                           |                                          
|                                                           | R$                                       
|                                                           |                                          
|                                                           | (in millions
  of R$, except percentages)
|Assets                                                     |                                          
|Cash
  and due from banks                                  | R$638                                    
|Loans,
  securities and other assets                       | 47,596                                   
|Less
  than one year                                       | 38,673                                   
|From
  one to three years                                  | 5,608                                    
|More
  than three years                                    | 3,315                                    
|Premises
  and equipment, net                              | 1,442                                    
|Investments
  in unconsolidated companies                  | 589                                      
|Goodwill,
  net                                            | 1,017                                    
|Other
  intangibles, net                                   | 181                                      
|Nonperforming
  loans                                      | 972                                      
|Allowance
  for loan losses                                | (996)                                    
|                                                           |                                          
|Total                                                      | R$51,439                                 
|                                                           |                                          
|Percentage
  of total assets                               | 77.9%                                    
|Liabilities and Stockholders Equity                       |                                          
|Non-interest
  bearing deposits                            | R$2,138                                  
|Deposits,
  borrowings and other liabilities               | 44,285                                   
|Less
  than one year                                       | 32,435                                   
|From
  one to three years                                  | 10,163                                   
|More
  than three years                                    | 1,687                                    
|Stockholders
  equity                                     | 6,754                                    
|                                                           |                                          
|Total                                                      | R$53,177                                 
|                                                           |                                          
|Percentage
  of total liabilities and stockholders equity | 80.5%                                    
|Derivative financial instruments                           |                                          
|Swap contracts                                             |                                          
|Assets position, net                                       | R$1,745                                  
|Liabilities position, net                                  | -                                        
|Swap contracts with daily reset                            |                                          
|Assets position, net                                       | -                                        
|Liabilities position, net                                  | 2,297                                    
|Future contracts                                           |                                          
|Assets position, net                                       | 12,135                                   
|Liabilities position, net                                  | -                                        
|                                                           |                                          
|Net exposure                                               |                                          
|                                                           |                                          

5.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES ETC.

Not applicable.

5.D. TREND INFORMATION

As a Brazilian financial institution, our financial conditions and results
 of operations have been affected by changes in the Brazilian economic conditions
 in recent years. This included real appreciation or depreciation against foreign
 currencies, in particular the U.S. dollar, as well as the level of the Brazilian
interest rate.

Looking at 2004, we believe that Brazil will experience moderate economic growth, primarily as a result of
a more stable economic and political environment.  However, adverse market conditions due to Brazilian
and/or international changes can affect our economic and political environment.

We believe that our Retail Banking segment, and in particular our consumer
 finance businesses, are well positioned to benefit from the expected opportunities
 created by lower interest rates and improved economic stability. We believe
 that our credit risk analysis, particular with respect to sub-prime creditors,
 will permit us to expand our credit lines without compromising credit quality.
 In addition, we will strive for organic growth, acquiring new clients while
 focusing on profitability and retention. In short, the gains in the client-base,
 partnerships, acquisitions and horizontal expansion, allied to the vertical
 expansion promoted by increasing cross sale and cost reduction, should lead
 us towards economies of scale and lower transaction costs in the coming years.

We
  expect to realize growth in our Wholesale Banking credit portfolio, with
  a special emphasis on expanding services to medium-sized companies, as well
  as growth in the total volume of services and cash management solutions provided
 to corporate clients, through a more intense utilization of the internet
  channel. We also expect to increase capital markets operations for large
  companies and financial advisory services to investment projects and M&A
 transactions.

We believe that our Insurance and Pension Plans segment will continue its pattern of growth.  We intend to
focus on maintaining our leadership position in commercial lines, on the development of structured products and on
offering new products, such as Environmental Insurance. Benefiting from synergies with the Wealth
Management division, we intend to offer integrated insurance packages covering home, autos, helicopters,
art, jewelry and other assets. Moreover, we expect substantial growth in individual lines such as personal
accident, life, autos, pensions and homeowners.

The prospects of lower interest rates pose a challenge for traditional mutual funds, since, in previous
years, annual interest rates at lower than 17% have created pressure for lower fund management fees.
However, we believe that given our privileged market position and improved model of operations, we should maintain our growth
and competitiveness in the coming years in our Wealth
Management segment.

As
  a result of being a full service financial institution, we also believe
  that cross-selling products and services among our core business units should
  improve our sources of revenues in the coming years for our Weath Management business.

5.E. OFF BALANCE SHEET ARRANGEMENTS

We and our
 subsidiaries  are involved with several types of off-balance  sheet  arrangements,
 including lines and letters of credit,  financial  guarantees,  and certain  derivative
and hedging  transactions.  We have no off-balance sheet entities or off-balance sheet
arrangements that we believe are reasonably likely to have a material adverse effect
on liquidity or the availability of or the requirements for capital resources.

Derivatives

We use derivative
 financial  instruments to manage our overall exposures,  and to assist our clients in
managing their exposure,  with respect to market risks and currency exchange rate and
interest rate fluctuations.  We also enter into derivative contracts for trading purposes
to take advantage of market opportunities.

The following table
presents the contract/notional amount at fair value at December 31, 2003 of derivative
positions held for trading and hedging purposes.

|                                | Contract/Notional at fair value (1)
|------------------------------- | -----------------------------------
|                                |                                    
|                                | (in millions of R$)                
|Interest rates:                
|Swap contracts                  | R$1,745                            
|Swap contracts with daily reset | (2,297)                            
|Future contracts                | 12,106                             
|Forward contracts               | 22                                 
|Foreign currency:              
|Swap contracts                  | (1,603)                            
|Swap contracts with daily reset | 2,328                              
|Future contracts                | (489)                              
|Forward contracts               | 281                                
|Exchange coupon:               
|Future contracts                | (397)                              
|Equity securities:             
|Forward contracts               | R$8                                

---

|(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, 2003
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.

Interest rate and
currency futures and forwards  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.  Maturities of these contracts at December
31, 2003 range from 2 days to 5 years.  The credit risk  associated  with future and
forwards  contracts is minimized due to daily or monthly cash settlements and by entering
into transactions with a select number of high-quality institutions.

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.

Hedging transactions

Fair value hedge:
At December 31, 2003 we had swap contracts with notional amounts of R$1,837 million
accounted for at fair value and recognized as hedges of the changes in fair value of our loans and
long-term-debt-mortgage indebtedness.

Cash flow hedge:
At December 31, 2003 we had future contracts and swap contracts with a notional
fair value of R$2,963 million and R$1,376 million, respectively, as hedges of the variability in expected
future cash flows associated with the Yen fluctuations, the interbank interest rate (CDI) and the
referential rate (TR) relate to certain loans, time deposits and mortgage indebteness.

The carrying value,
 represented by fair value, of all derivatives  described above are included in trading
account assets and in other liability  derivative  liability as summarized in Notes 6
and 17 to our  consolidated 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 below:

|                                                      | Contractual amounts    
|----------------------------------------------------- | -----------------------
|                                                      |                        
|                                                      | As of December 31, 2003
|                                                      |                        
|                                                      | (in millions of R$)    
|                                                      | 2002                   
|                                                      |                        
|Co-obligation for credit assignment                   | R$15                   
|Guarantees                                            | 4,251                  
|Standby letters of credit and other letters of credit | 302                    

Co-obligation for
credit assignment are assignments of credit in which we continue to have a co-payment
obligation in the event of default by borrower.

Guarantees and standby
letters of credit 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.

At December 31, 2003,
the carrying value of financial guarantees is recorded in Other liabilities in the
amount of R$8 million, including the provision for probable losses in the amount of R$1
million.

For a detailed
discussion of the impact of off-balance sheet arrangements see Note 28 and 29 to our
consolidated financial statements.

5.F. TABULAR
DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Debt obligations

Our medium- and
long-term debt obligations as of December 31, 2003 are summarized as follows:

|                                               | Payments due by period
|---------------------------------------------- | ----------------------
|                                               |                       
|Debt obligations                               | Total                 
|                                               |                       
|                                               | (in millions of R$)   
|                                              
|Euronotes                                      | R$2,591               
|Foreign onlending                              | 253                   
|Local onlending                                | 5,664                 
|Mortgage-backed notes (1)                      | 807                   
|Notes issued under securitization arrangements | 2,453                 
|Subordinated debt                              | 1,468                 
|Other long-term obligations (2)                | 112                   
|                                               |                       
|Total debt obligations                         | R$13,348              
|                                               |                       

---

|(1) | Notes
issued in the Brazilian Market, entirely collateralized by real estate loans.
|--- | -----------------------------------------------------------------------------------

|(2) | Includes
R$49 million of obligations under capital leases and R$63 million of accounts payable for
the purchase of assets.
|--- | --------------------------------------------------------------------------------------------------------------------------

For additional
information related to contractual obligation see Note 16 to our consolidated financial
statements.

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. During 2002, we sold many properties used as branches and,
subsequently, we rented them for the purpose of continuing our operations. Rescission of real estate
leases were R$31 million 2003. Expenses of real estate leases were R$153 million in 2003. The following
table set forth the real estate leases commitments:

|           | Real estate leases commitments
(in millions of R$)
|---------- | --------------------------------------------------
|           |                                                   
|2004       | R$136                                             
|2005       | 114                                               
|2006       | 91                                                
|2007       | 70                                                
|2008       | 48                                                
|Thereafter | 107                                               
|           |                                                   
|Total      | R$566                                             
|           |                                                   

Our monthly amount of
rental payments with no stated maturity in renew process and under litigation is R$2
million.



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 consolidated 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 down 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,                     
|---------------------------------- | ---------------------------------------
|                                   | 2001                                   
|                                   | Average                                
|                                   | balance                                
|                                   | (in millions of R$, except percentages)
|Interest-earning assets:          
|Interest-bearing deposits in other
|banks                              | R$1,838                                
|Federal funds sold and securities 
|purchased under resale agreements  | 3,877                                  
|Central Bank compulsory deposits   | 646                                    
|Trading assets                     | 10,406                                 
|Securities available for sale (1)  | 2,153                                  
|Securities held to maturity        | 742                                    
|Loans                              | 21,783                                 
|Other interest-earning assets      | 42                                     
|                                   |                                        
|Total interest-earning assets      | 41,487                                 
|                                   |                                        
|Non-interest-earning assets:      
|Cash and due from banks            | 709                                    
|Central Bank compulsory deposits   | 803                                    
|Nonperforming loans                | 966                                    
|Allowance for loan losses          | (1,232)                                
|Investments in unconsolidated     
|companies                          | 650                                    
|Premises and equipment             | 1,639                                  
|Goodwill and other intangibles     | 1,447                                  
|Other assets                       | 4,734                                  
|                                   |                                        
|Total non-interest-earning assets  | 9,716                                  
|                                   |                                        
|Total assets                       | R$51,203                               
|                                   |                                        
|Interest-bearing liabilities:     
|Time deposits:                    
|Domestic                           | R$7,941                                
|International                      | 322                                    
|                                   |                                        
|Total                              | 8,263                                  
|                                   |                                        
|Savings deposits:                 
|Domestic                           | 4,281                                  
|International                      | 138                                    
|                                   |                                        
|Total                              | 4,419                                  
|                                   |                                        
|Deposits from banks:              
|Domestic                           | 209                                    
|International                      | 249                                    
|                                   |                                        
|Total                              | 458                                    
|                                   |                                        
|Federal funds purchased and       
|securities sold under repurchase  
|agreements                         | 8,175                                  
|                                   |                                        
|Short-term borrowings:            
|Domestic                           | 55                                     
|International                      | 6,745                                  
|                                   |                                        
|Total                              | 6,800                                  
|                                   |                                        
|Long-term debt:                   
|Domestic                           | 4,877                                  
|International                      | 3,136                                  
|                                   |                                        
|Total                              | 8,013                                  
|                                   |                                        
|Total interest-bearing liabilities | 36,128                                 
|                                   |                                        
|Non-interest-bearing liabilities: 
|Demand deposits:                  
|Domestic                           | 2,047                                  
|International                      | 113                                    
|                                   |                                        
|Total                              | 2,160                                  
|                                   |                                        
|Other non-interest-bearing        
|liabilities                        | 7,099                                  
|                                   |                                        
|Total non-interest bearing        
|liabilities                        | 9,259                                  
|                                   |                                        
|Total liabilities                  | 45,387                                 
|                                   |                                        
|Stockholders equity               | 5,816                                  
|                                   |                                        
|Total liabilities and             
|stockholders equity               | R$51,203                               
|                                   |                                        

---

|(1) | The average balance for 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 2002 compared to 2001 and
to 2003.  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.

|                                                                                | 2002/2001                                      | 2003/2002                                    
|------------------------------------------------------------------------------- | ---------------------------------------------- | ---------------------------------------------
|                                                                                | Increase/ (decrease) 
      due to changes in: | Increase/ (decrease)
      due to changes in:
|                                                                                | Volume                                         | Yield/rate                                   
|                                                                                | (in millions
    of R$)                       
|Interest-earning assets:                                                        |                                                |                                              
|Interest-bearing
    deposits in other banks                                    | R$40                                           | R$(45)                                       
|Federal funds
    sold and securities purchased     under resale agreements     | (14)                                           | 160                                          
|Central Bank compulsory deposits                                                | 32                                             | 67                                           
|Trading
        assets                                                          | (369)                                          | (586)                                        
|Securities available for sale                                                   | 803                                            | 351                                          
|Securities held to maturity                                                     | 1,378                                          | 1,679                                        
|Loans                                                                           | 624                                            | 1,213                                        
|Other interest-earning assets                                                   | 2                                              | (3)                                          
|                                                                                |                                                |                                              
|Total interest-earning assets                                                   | R$2,458                                        | R$2,874                                      
|                                                                                |                                                |                                              
|Interest-bearing liabilities:                                                   |                                                |                                              
|Time deposits:                                                                  |                                                |                                              
|Domestic                                                                        | R$941                                          | R$154                                        
|International                                                                   | 18                                             | (33)                                         
|                                                                                |                                                |                                              
|Total                                                                           | 955                                            | 125                                          
|Savings deposits:                                                               |                                                |                                              
|Domestic                                                                        | 64                                             | -                                            
|International                                                                   | 2                                              | -                                            
|                                                                                |                                                |                                              
|Total                                                                           | 66                                             | -                                            
|                                                                                |                                                |                                              
|Deposits from banks:                                                            |                                                |                                              
|Domestic                                                                        | (15)                                           | 4                                            
|International                                                                   | (3)                                            | (2)                                          
|                                                                                |                                                |                                              
|Total                                                                           | (18)                                           | 2                                            
|                                                                                |                                                |                                              
|Federal funds
    purchased and securities sold     under repurchase agreements | 11                                             | 125                                          
|Short-term borrowings:                                                          |                                                |                                              
|Domestic                                                                        | 19                                             | 12                                           
|International                                                                   | (135)                                          | 1,026                                        
|                                                                                |                                                |                                              
|Total                                                                           | (120)                                          | 1,042                                        
|                                                                                |                                                |                                              
|Long-term debt:                                                                 |                                                |                                              
|Domestic                                                                        | 78                                             | 242                                          
|International                                                                   | 357                                            | 1,338                                        
|                                                                                |                                                |                                              
|Total                                                                           | 436                                            | 1,579                                        
|                                                                                |                                                |                                              
|Total interest-bearing liabilities                                              | R$1,295                                        | R$2,908                                      
|                                                                                |                                                |                                              



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 2001,
2002 and 2003.

|                                                         | For the Year
    Ended December 31,        
|-------------------------------------------------------- | -------------------------------------------
|                                                         | 2001                                       
|                                                         | (in millions
    of R$, except percentages)
|                                                         |                                            
|Total average interest-earning assets                    | R$41,487                                   
|Total average interest-bearing liabilities               | 36,128                                     
|Net interest income (1)                                  | R$4,173                                    
|Average yield on average interest-earning
    assets     | 23.4%                                      
|Average rate on average interest-bearing
    liabilities | 15.3                                       
|Net interest spread (2)                                  | 8.1                                        
|Net interest margin (3)                                  | 10.1%                                      

---

|(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,        
|-------------------------------------------------------------------- | ---------------------------------------
|                                                                     | 2001                                   
|                                                                     | (in millions
of R$, except percentages)
|                                                                     |                                        
|Net income                                                           | R$825                                  
|Average total assets                                                 | 51,203                                 
|Average stockholders' equity                                         | R$5,816                                
|Net income as a percentage of average total
assets                   | 1.6%                                   
|Net income as a percentage of average stockholders' equity           | 14.2                                   
|Dividends payout ratio common and preferred
(1)                      | 39.3                                   
|Average stockholders' equity as a percentage
of average total assets | 11.4%                                  

---

|(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, 2001, 2002 and 2003. The amounts  exclude our  investments
in  unconsolidated  companies (see Note 11 to our consolidated 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 consolidated financial statements).

|                                                                  | As of December
    31,                     
|----------------------------------------------------------------- | -------------------------------------------
|                                                                  | 2001                                       
|                                                                  | (in millions
    of R$, except percentages)
|Trading assets:                                                   |                                            
|Federal
    government securities (1)                             | R$9,399                                    
|Brazilian
    sovereign bonds (3)                                 | -                                          
|Securities
    of foreign governments                             | 18                                         
|Corporate
    debt securities                                     | 31                                         
|Bank
    debt securities                                          | 29                                         
|Mutual
    funds (2)                                              | 1,914                                      
|Stocks                                                            | -                                          
|Derivative
    financial instruments                              | 412                                        
|                                                                  |                                            
|Total                                                             | R$11,803                                   
|                                                                  |                                            
|Trading
    assets as a percentage of total assets                | 22.1%                                      
|Securities available for sale:                                    |                                            
|Federal
    government securities                                 | R$-                                        
|Brazilian
    sovereign bonds (3)                                 | 254                                        
|Securities
    of foreign governments                             | -                                          
|Corporate debt securities                                         | 2,553                                      
|Bank
    debt securities                                          | 161                                        
|Stocks                                                            | 164                                        
|Mutual
    funds                                                  | -                                          
|                                                                  |                                            
|Total                                                             | R$3,132                                    
|                                                                  |                                            
|Securities
    available for sale as a percentage of total assets | 5.9%                                       
|Securities held to maturity:                                      |                                            
|Federal
    government securities                                 | R$-                                        
|Brazilian
    sovereign bonds (3)                                 | 107                                        
|Securities
    of foreign governments                             | -                                          
|Corporate
    debt securities                                     | 467                                        
|Bank
    debt securities                                          | 87                                         
|                                                                  |                                            
|Total                                                             | R$661                                      
|                                                                  |                                            
|Securities
    held to maturity as a percentage of total assets   | 1.2%                                       

---

|(1) |  | Consists
of domestic securities issued by the Central Bank and the Brazilian Treasury,  except for
R$10 million, R$50 million and R$217 million,           represented by Brady Bonds and
Global Bonds issued by the Brazilian government abroad as of December 31, 2001, 2002 and
2003, 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.

At December 31, 2001,
 2002 and 2003 we held no securities of a single  issuer or related  group of companies
 whose the aggregate  book value and market value exceeded 10% of our stockholders  equity,
 except for the R$9,760,  R$11,293 and R$10,515 of investment on Federal  government
 securities and Brazilian sovereign bonds representing 163.9%, 180.8% and 155.7% of our
stockholders equity, respectively.

Maturity Distribution

The following table
shows the maturity  distribution and average yields as of December 31, 2003 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, 2003                          
|--------------------------------- | -------------------------------------------------
|                                  | Due in 1 year or
    less                        
|                                  | R$                                               
|                                  | (in millions
          of R$, except percentages)
|Trading assets:                   |                                                  
|Federal government securities     | R$4,190                                          
|Brazilian sovereign bonds         | 217                                              
|Securities of foreign governments | 67                                               
|Corporate debt securities         | 240                                              
|Bank debt securities              | 89                                               
|Mutual funds (1)                  | 539                                              
|Stocks                            | 47                                               
|Derivative financial instruments  | 478                                              
|                                  |                                                  
|Total (3)                         | R$5,867                                          
|                                  |                                                  
|Securities available for sale:(2) |                                                  
|Federal government securities     | R$258                                            
|Securities of foreign governments | 29                                               
|Corporate debt securities         | 606                                              
|Bank debt securities              | 10                                               
|Stocks(1)                         | 169                                              
|Mutual funds                      | 51                                               
|                                  |                                                  
|Total (3)                         | R$1,123                                          
|                                  |                                                  
|Securities held to maturity:      |                                                  
|Federal government securities     | R$2,206                                          
|Brazilian sovereign bonds         | 92                                               
|Corporate debt securities         | 31                                               
|Bank debt securities              | -                                                
|                                  |                                                  
|Total(3)                          | R$2,329                                          
|                                  |                                                  

---

|(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$71 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, 2001, 2002 and 2003.

|                                    | At fair value           | At amortized cost             |                            
|----------------------------------- | ----------------------- | ----------------------------- | ---------------------------
|                                    | Trading assets          | Securities available for sale | Securities held to maturity
|                                    | (in millions
    of R$)
|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                        
|                                    |                         |                               |                            
|Total                               | R$11,803                | R$3,132                       | R$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                        
|                                    |                         |                               |                            
|Total                               | R$5,299                 | R$6,196                       | R$6,622                    
|                                    |                         |                               |                            
|As of December 31, 2003             |                         |                               |                            
|Brazilian currency ( reais)         | R$5,257                 | R$2,658                       | R$347                      
|Indexed by foreign currency (1)     | 609                     | 157                           | 3,938                      
|Denominated in foreign currency (1) | 1                       | 209                           | 1,490                      
|                                    |                         |                               |                            
|Total                               | R$5,867                 | R$3,024                       | R$5,775                    
|                                    |                         |                               |                            

---

|(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, 2001, 2002 and 2003.

|                     | As of December
    31,                     
|-------------------- | -------------------------------------------
|                     | 2001                                       
|                     | R$                                         
|                     | (in millions
    of R$, except percentages)
|Type of deposit:     |                                            
|Non-interest-earning | R$746                                      
|Interest-earning     | 815                                        
|                     |                                            
|Total                | R$1,561                                    
|                     |                                            

At December 31, 2002
and 2003 we had also R$3,720 million and R$2,547 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, 
|---------------------------------------------------------- | -----------------------
|                                                           | 1999                   
|                                                           | (in millions
    of R$)
|Type of loan:                                              |                        
|Commercial:                                                |                        
|Industrial and other                                       | R$6,765                
|Import financing                                           | 1,424                  
|Export financing                                           | 2,110                  
|Real estate loans, primarily residential
    housing loans | 420                    
|Direct lease financing                                     | 832                    
|Individuals:                                               |                        
|Overdraft                                                  | 617                    
|Financing                                                  | 1,393                  
|Credit card                                                | 598                    
|Agricultural                                               | 477                    
|Nonperforming loans                                        | 278                    
|Allowance for loan losses                                  | (756)                  
|                                                           |                        
|Loans, net                                                 | R$14,158               
|                                                           |                        

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 1999 through 2003. 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.

|                                                                                                                           | As of or for
    the Year Ended December 31,
|-------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------
|                                                                                                                           | 1999                                        
|                                                                                                                           | (in millions
    of R$, except percentages) 
|                                                                                                                           |                                             
|Nonperforming loans                                                                                                        | R$278                                       
|Foreclosed assets, net of reserves                                                                                         | 127                                         
|                                                                                                                           |                                             
|Total
    nonperforming loans and foreclosed assets                                                                        | R$405                                       
|                                                                                                                           |                                             
|Allowance for loan losses                                                                                                  | 756                                         
|Total
    loans                                                                                                            | R$14,914                                    
|Nonperforming loans as a percentage of total
    loans                                                                     | 1.9 %                                       
|Nonperforming
    loans and foreclosed assets as a percentage of total loans                                               | 2.7                                         
|Allowance for
    loan losses as a percentage of total loans                                                               | 5.1                                         
|Allowance for
    loan losses as a percentage of nonperforming loans                                                       | 272                                         
|Allowance for
    loan losses as a percentage of nonperforming loans and foreclosed assets                                 | 187                                         
|Net charge-offs
        during the period as a percentage of average loans outstanding (including
    nonperforming loans) | 3.0%                                        

Credit Approval
Process

For a discussion of
our approval process for retail and wholesale loans,  including credit card loans, see Item
11 - Quantitative and Qualitative Disclosures about Market Risk - Risk Management - Credit Risk.

Risks of the
Loan Portfolio by Category

Credit Risk -
Lending

For a discussion of
credit risk - lending, see Item 11 - Quantitative and Qualitative Disclosures about
Market Risk - Credit.

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, 2001, 2002 and 2003  represented,  27.2%,  27.7% and 22.9%,  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, 2003
|-------------------------- | ---------------------------
|                           |                            
|                           | Due in                     
|                           | 1 month                    
|                           | or
          less          
|                           |                            
|                           | (in millions
    of R$)    
|Type of loan:              |                            
|Commercial:                |                            
|Industrial
    and other   | R$2,413                    
|Import financing           | 46                         
|Export financing           | 321                        
|Real
    estate loans      | 54                         
|Direct lease
    financing | 33                         
|Individuals:               |                            
|Overdraft                  | 336                        
|Financing                  | 764                        
|Credit
    card            | 1,267                      
|Agricultural               | 128                        
|                           |                            
|Total                      | R$
        5,362           
|                           |                            

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

|                                               | As of December
    31, 2003
|---------------------------------------------- | ---------------------------
|                                               |                            
|                                               | Due in                     
|                                               | 1 month                    
|                                               | or less                    
|                                               |                            
|                                               | (in millions
    of R$)    
|Loans to customers
    by maturity subject to: |                            
|Variable rates                                 | R$1,154                    
|Fixed rates                                    | 4,208                      
|                                               |                            
|Total                                          | R$5,362                    
|                                               |                            

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, 2001, 2002 and 2003.
The table does not include nonperforming loans and contingent loans.

|                                              | As of December 31,                     
|--------------------------------------------- | ---------------------------------------
|                                              |                                        
|                                              | 2001                                   
|                                              |                                        
|                                              | Loan
portfolio                         
|                                              |                                        
|                                              | (in millions of R$, except percentages)
|                                              |                                        
|Manufacturing                                 |                                        
|Food, beverages and tobacco                   | R$777                                  
|Basic metal industries                        | 835                                    
|Electricity, gas and water                    | 1,309                                  
|Chemical and pharmaceutical                   | 781                                    
|Paper, pulp, paper and wood products          | 989                                    
|Automobile industry                           | 767                                    
|Extractive                                    | 802                                    
|Production of metal goods                     | 264                                    
|Petroleum                                     | 401                                    
|Textiles, clothing and leather goods          | 250                                    
|Electronic and communication equipment        | 211                                    
|Electric and electronic                       | 203                                    
|Production of machines and equipment          | 595                                    
|Rubber and plastic                            | 136                                    
|Other manufacturing industries                | 8                                      
|                                              |                                        
|Subtotal                                      | 8,328                                  
|                                              |                                        
|Retailers                                    
|Retail                                        | 1,552                                  
|Wholesale                                     | 847                                    
|                                              |                                        
|Subtotal                                      | 2,399                                  
|                                              |                                        
|Financial service                            
|Financial companies                           | 263                                    
|Insurance companies and private pension funds | 109                                    
|                                              |                                        
|Subtotal                                      | 372                                    
|                                              |                                        
|Residential construction loans                | 71                                     
|                                              |                                        
|Other services:                              
|Post office and telecommunications            | 1,034                                  
|Transportation                                | 973                                    
|Real estate services                          | 379                                    
|Construction                                  | 269                                    
|Cultural and sport leisure activities         | 35                                     
|Health and social services                    | 115                                    
|Education                                     | 101                                    
|Associative activities                        | 194                                    
|Lodging and catering services                 | 74                                     
|Other                                         | 1,291                                  
|                                              |                                        
|Subtotal                                      | 4,465                                  
|                                              |                                        
|Agriculture, livestock, forestry and fishing  | 825                                    
|Individuals:                                 
|Consumer loans                                | 5,829                                  
|Residential mortgage loans                    | 423                                    
|Lease financing                               | 198                                    
|                                              |                                        
|Subtotal                                      | 6,450                                  
|                                              |                                        
|Total                                         | R$22,910                               
|                                              |                                        

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, 2002 and 2003, approximately 91.8%, 91.1% 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             
|                       
|AA                     
|A                      
|B                      
|C                      
|D                      
|E                      
|F                      
|G                      
|H                      
|                       
|Total                  
|                       

|As of December 31, 2002
|-----------------------
|                       
|Loans                  
|                       
|Risk level             
|                       
|AA                     
|A                      
|B                      
|C                      
|D                      
|E                      
|F                      
|G                      
|H                      
|                       
|Total                  
|                       

|As of December 31, 2003
|-----------------------
|                       
|Loans                  
|                       
|Risk level             
|                       
|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 1999, 2000, 2001, 2002 and 2003.

|                                           | As of or for the Year Ended December 31,
|------------------------------------------ | ----------------------------------------
|                                           |                                         
|                                           | 1999                                    
|                                           |                                         
|                                           | (in millions of , except percentages)   
|                                           |                                         
|Balance at beginning of period             | R$671                                   
|Charge-offs:                              
|Commercial:                               
|Industrial and other                       | (250)                                   
|Export financing                           | (69)                                    
|Real estate loans                          | (53)                                    
|Direct lease financing                     | (52)                                    
|Individuals:                              
|Overdraft                                  | (91)                                    
|Financing                                  | (229)                                   
|Credit card                                | (116)                                   
|Agricultural                               | (9)                                     
|                                           |                                         
|Total charge-offs                          | R$(869)                                 
|                                           |                                         
|Recoveries:                               
|Commercial:                               
|Industrial and other                       | R$184                                   
|Export financing                           | 9                                       
|Real estate                                | 21                                      
|Direct lease financing                     | 2                                       
|Individuals:                              
|Overdraft                                  | 38                                      
|Financing                                  | 109                                     
|Credit card                                | 51                                      
|Agricultural                               | 6                                       
|                                           |                                         
|Total recoveries                           | R$420                                   
|                                           |                                         
|Net charge-offs                            | R$(449)                                 
|Provision for loan losses                  | 534                                     
|                                           |                                         
|Balance at the end of period               | R$756                                   
|                                           |                                         
|Ratio of net charge-offs during the period
|to average loans outstanding including    
|nonperforming loans during the period      | 3.0%                                    

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 2001, 2002 and 2003:

|                          | For the Year Ended December 31,         | % Change 
|------------------------- | --------------------------------------- | ---------
|                          |                                         |          
|                          | 2001                                    | 2002     
|                          |                                         |          
|                          | (in millions of R$, except percentages)
|                          |                                        
|Provision for loan losses | R$1,100                                 | R$1,291  
|Loan charge-offs          | (1,298)                                 | (1,529)  
|Loan recoveries           | 469                                     | 351      
|                          |                                         |          
|Net charge-offs           | R$(829)                                 | R$(1,178)
|                          |                                         |          
|Provision to loans (1)    | 4.8%                                    | 5.2%     

---

|(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.A. Operating Results.

Allocation of the
Allowance for Loan Losses

The following  table
shows our  allocation of the allowance for loan losses as of December 31, 1999,  2000,
 2001,  2002 and 2003.  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, 
|------------------------------------------------------ | -------------------
|                                                       |                    
|                                                       | 1999               
|                                                       |                    
|                                                       | Allocated
allowance
|                                                       |                    
|Type of loan:                                          |                    
|Commercial:                                           
|Industrial and other                                   | R$270              
|Import financing                                       | 37                 
|Export financing                                       | 23                 
|Real estate loans, primarily
residential housing loans | 14                 
|Direct lease financing                                 | 86                 
|Individuals:                                          
|Overdraft                                              | 27                 
|Financing                                              | 190                
|Credit card                                            | 102                
|Agricultural                                           | 7                  
|                                                       |                    
|Total                                                  | R$756              
|                                                       |                    

|                                                       | As of December 31,                     
|------------------------------------------------------ | ---------------------------------------
|                                                       |                                        
|                                                       | 2002                                   
|                                                       |                                        
|                                                       | Allocated
allowance                    
|                                                       |                                        
|                                                       | (in millions of R$, except percentages)
|                                                       |                                        
|Type of loan:                                          |                                        
|Commercial:                                           
|Industrial and other                                   | R$700                                  
|Import financing                                       | 19                                     
|Export financing                                       | 17                                     
|Real estate loans, primarily residential housing loans | 55                                     
|Direct lease financing                                 | 32                                     
|Individuals:                                          
|Overdraft                                              | 58                                     
|Financing                                              | 298                                    
|Credit card                                            | 146                                    
|Agricultural                                           | 64                                     
|                                                       |                                        
|Total                                                  | R$1,389                                
|                                                       |                                        

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,
|------------------------------- | ----------------------------------------
|                                |                                         
|                                | 2001                                    
|                                |                                         
|                                | Average
        balance                 
|                                |                                         
|                                | (in millions of R$, except percentages) 
|                                |                                         
|Domestic deposits:              |                                         
|Non-interest-bearing deposits: 
|Demand deposits                 | R$2,047                                 
|Interest-bearing deposits:     
|Deposits from banks             | 209                                     
|Savings deposits                | 4,281                                   
|Time deposits                   | 7,941                                   
|                                |                                         
|Total interest-bearing deposits | 12,431                                  
|                                |                                         
|Total domestic deposits         | 14,478                                  
|                                |                                         
|International deposits: (1)    
|Non-interest-bearing deposits: 
|Demand deposits                 | R$113                                   
|Interest-bearing deposits:     
|Deposits from banks             | 249                                     
|Savings deposits                | 138                                     
|Time deposits                   | 322                                     
|                                |                                         
|Total interest-bearing deposits | 709                                     
|                                |                                         
|Total international deposits    | 822                                     
|                                |                                         
|Total deposits                  | R$15,300                                
|                                |                                         

---

|(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, 2003.

|                                | As of December 31, 2003                     
|------------------------------- | --------------------------------------------
|                                |                                             
|                                | Due in
          3 months
           or less
|                                |                                             
|                                | (in millions of R$)                         
|                                |                                             
|Domestic deposits:              |                                             
|Non-interest-bearing deposits: 
|Demand deposits                 | R$2,138                                     
|Interest-bearing deposits:     
|Deposits from banks             | 34                                          
|Savings deposits                | 5,796                                       
|Time deposits                   | 3,221                                       
|                                |                                             
|Total interest-bearing deposits | 9,051                                       
|                                |                                             
|Total domestic deposits         | 11,189                                      
|                                |                                             
|International deposits: (1)    
|Non-interest-bearing deposits: 
|Demand deposits                 | R$576                                       
|Interest-bearing deposits:     
|Deposits from banks             | 46                                          
|Savings deposits                | 367                                         
|Time deposits                   | 687                                         
|                                |                                             
|Total interest-bearing deposits | 1,100                                       
|                                |                                             
|Total international deposits    | 1,676                                       
|                                |                                             
|Total deposits                  | R$12,865                                    
|                                |                                             

---

|(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, 2003.

|                                             | Currency           
|-------------------------------------------- | -------------------
|                                             | Domestic           
|                                             |                    
|                                             | (in millions of R$)
|                                            
|Maturity within 3 months                     | R$3,080            
|Maturity after 3 months but within 6 months  | 2,301              
|Maturity after 6 months but within 12 months | 1,686              
|Maturity after 12 months                     | 5,866              
|                                             |                    
|Total deposits in excess of US$100,000       | R$12,933           
|                                             |                    

Capital

Specific regulatory
capital requirements are discussed in Item 4.B. Business Overview - 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$)      
|                                    | 2001                     
|                                    |                          
|                                   
|Our regulatory capital              | R$6,203                  
|Minimum regulatory capital required | 4,975                    
|                                    |                          
|Excess over minimum regulatory     
|capital required                    | R$1,228                  
|                                    |                          

---

|(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 31 to our Consolidated
 financial statements and Item 5.B Liquidity
and Capital Resources  Sources of Funding - 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,
|------------------------------------------------- | ----------------------------------------
|                                                  |                                         
|                                                  | 2001                                    
|                                                  |                                         
|                                                  | (in millions of R$, except percentages) 
|Federal funds purchased and securities sold under |                                         
|repurchase agreements:                           
|Amount outstanding                                | R$7,587                                 
|Maximum amount outstanding during the period      | 10,461                                  
|Weighted average interest rate at period-end      | 19.0%                                   
|Average amount outstanding during period          | 8,175                                   
|Weighted average interest rate                    | 13.9%                                   
|Import and export financing:                     
|Amount outstanding                                | R$3,359                                 
|Maximum amount outstanding during the period      | 4,429                                   
|Weighted average interest rate at period-end      | 4.1%                                    
|Average amount outstanding during period          | 3,879                                   
|Weighted average interest rate                    | 21.9%                                   
|Commercial paper:                                
|Amount outstanding                                | R$808                                   
|Maximum amount outstanding during the period      | 1,009                                   
|Weighted average interest rate at period-end      | 2.2%                                    
|Average amount outstanding during period          | 740                                     
|Weighted average interest rate                    | 7.3%                                    
|Other interbank borrowings:                      
|Amount outstanding                                | R$1,812                                 
|Maximum amount outstanding during the period      | 2,260                                   
|Weighted average interest rate at period-end      | 3.9%                                    
|Average amount outstanding during period          | 1,968                                   
|Weighted average interest rate                    | 10.3%                                   
|                                                  |                                         
|Other                                             | R$261                                   
|                                                  |                                         
|Total                                             | R$13,827                                
|                                                  |                                         



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A.
DIRECTORS AND SENIOR MANAGEMENT

Unibanco

We are managed by our:

- Board of Directors (Conselho
      de Administração), consisting
  of eight directors; and

- Board of Officers (Diretoria), consisting of twenty-four executive
  officers (which compose the Board of Executive Officers), forty-four officers
  and fifty-one deputy officers.

The Board of Directors is our decision-making body. It determines our general
  corporate 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 Officers is elected by our Board of Directors. The Board of Executive Officers
is responsible for the management and supervision of our corporate activities
by ensuring compliance with our general corporate guidelines and policies established
at general shareholders meetings, by our Board of Directors and pursuant to
our by-laws. All members of the Board of Officers have the power to act on
our behalf pursuant to our by-laws.

As part
    of our strategic relationship with certain of our major foreign shareholders,
    we allow these foreign shareholders to select one person to serve as an officer
  of Unibanco. Such officer is responsible for managing Unibanco's commercial
  relationships (i) with the various companies from the appointing shareholder's
  home country who already have, or have expressed an interest in having, business
  operations in Brazil, and (ii) with Brazilian companies who already have, or
  have expressed an interest in having, business operations in the appointing
  shareholder's home country.

Currently, three of Unibanco's Executive Officers have been selected by our
  major foreign shareholders: (i) Mr. Edwin Rindt, who is responsible for our
  German Desk operations, selected by Commerzbank A.G.; (ii) Mr. Koji Yamada,
  who is responsible for our Japanese Desk operations, selected by Mizuho Financial
  Corporate Bank; and (iii) Mr. Tiago Jorge Rocha e Silva Mateus das Neves, who
  is responsible for our Portuguese Desk operations, selected by Caixa Brasil
  S.G.P.S. S.A.

Our Board of Executive Officers consists of one Chief Executive Officer, one
  Executive President of the Retail Banking Group, two Executive Vice Presidents,
  four Vice Presidents and sixteen Executive Officers.

The Chief Executive Officer is primarily responsible for:

- leading the management of our company;

- coordinating
and supervising the performance of the Executive Vice Presidents and the Vice Presidents;
and

- ensuring compliance with the guidelines and policies established by the Board of
Directors.

The Executive Vice Presidents are responsible for the operational and administrative management of the retail and wholesale banking activities, which comprise the following areas:

- the retail
    banking network;

- customer-site branches;

- credit card operations;

- retail banking credit;

- consumer finance;

- retail banking operations generally;

- the corporate and middle market business units;

- investment banking;

- treasury and international operations;

- national and international securities distribution; and

- private banking.

The Vice Presidents are primarily responsible for:

- planning of efficiency;

- planning, controlling, accounting and management of systems;

- management of assets; and

- insurance and fund pension.

The Executive Officers are responsible for the management and supervision
  of the areas delegated by the Board of Directors or by the Board of Officers
  and for the supervision and coordination of the performance of the Officers
  that are under their supervision.

The Officers
are responsible for the management and supervision of the areas delegated
by the Board of Executive Officers and for the supervision and co-ordination
of the performance of the Deputy Officers that are under their direct
supervision.

The Deputy
Officers are responsible for the management and supervision of the areas
delegated by the Board of Executive Officers or by the Officers.

Pursuant
to Brazilian law, each member of our Board of Directors and Board of
Officers must be approved by the Central Bank. As indicated in the table
below, 2 new directors and 16 new officers were elected at our April
30, 2004 Board of Directors and shareholders meetings and their election is
still pending approval by the Central Bank. In addition, in connection with
changes to our management structure approved at the April 30, 2004 meetings,
we (i) elected a new Chairman and Vice Chairman of our Board of Directors;
(ii) named two executive officers for new positions and; (iii) added 2 new
positions to our Board of Officers. These changes and elections are still pending
Central Bank approval. All of our other directors and officers have been approved
by the Central Bank.

As of the date of this Annual Report, our directors and officers are:

|Directors                         | Position          | Date of Birth    
|--------------------------------- | ----------------- | -----------------
|                                  |                   |                  
|Pedro Sampaio Malan**             | Chairman          | February 19, 1943
|Pedro
    Moreira Salles**        | Vice
    Chairman | October 20, 1959 
|Armínio
    Fraga Neto            | Director          | July 20, 1957    
|Fernando Barreira Sotelino*       | Director          | February 12, 1949
|Gabriel
    Jorge Ferreira        | Director          | October 17, 1935 
|Israel
    Vainboim               | Director          | June 1, 1944     
|Joaquim Francisco de Castro Neto* | Director          | March 30, 1944   
|Pedro
    Luiz Bodin de Moraes    | Director          | July 13, 1956    

|Executive Officers                                 | Position                                                | Date of Birth     
|-------------------------------------------------- | ------------------------------------------------------- | ------------------
|                                                   |                                                         |                   
|Pedro Moreira Salles***                            | Chief Executive Officer                                 | October 20, 1959  
|Joaquim Francisco de Castro Neto                   | Executive President of the Retail Banking
        Group | March 30, 1944    
|João Dionísio Amoêdo***                            | Executive Vice President                                | October 22, 1962  
|Márcio
    de Andrade Schettini***                 | Executive Vice President                                | May 22, 1964      
|Adalberto de Moraes Schettert                      | Vice President                                          | December 22, 1947 
|César
    Augusto Sizenando Silva                  | Vice President                                          | August 21, 1949   
|Geraldo Travaglia Filho *                          | Vice President                                          | May 26, 1951      
|José Castro Araújo
    Rudge*                      | Vice President                                          | September 25, 1957
|Álvaro Portinho de Sá Freire
        Júnior        | Executive Officer                                       | June 2, 1951      
|Armando Zara Pompeu                                | Executive Officer                                       | February 12, 1967 
|Celso Scaramuzza*                                  | Executive Officer                                       | December 12, 1952 
|Daniel Luiz Gleizer*                               | Executive Officer                                       | February 23,1960  
|Edwin Rindt                                        | Executive Officer                                       | April 30, 1960    
|Elio Boccia                                        | Executive Officer                                       | December 6, 1946  
|José Lucas
    Ferreira de Melo                    | Executive Officer                                       | December 30, 1956 
|Koji Yamada                                        | Executive Officer                                       | October 28, 1952  
|Ney Ferraz Dias*                                   | Executive Officer                                       | July 30, 1965     
|Orestes Alves de Almeida Prado                     | Executive Officer                                       | September 14, 1945
|Osias Santana de Brito                             | Executive Officer                                       | October 11, 1963  
|Roberto Lamy*                                      | Executive Officer                                       | April 9, 1958     
|Rogério
    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    
|Valdery Frota de Albuquerque                       | Executive Officer                                       | February 7, 1964  

|Officers                                        | Position | Date of Birth     
|----------------------------------------------- | -------- | ------------------
|                                                |          |                   
|Adhemar Toshimassa Kajita                       | Officer  | August 02, 1952   
|Alfredo Althen Schiavo*                         | Officer  | October 02, 1959  
|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 
|Antonio Fernando Checchia Wever                 | Officer  | August 30, 1962   
|Artur Ambrósio Gregório                         | Officer  | June 2, 1956      
|Carlos Henrique Aguiar Rodrigues Catraio        | Officer  | June 3, 1958      
|Carlos Henrique Tonon Ximenes de Melo           | Officer  | May 21, 1943      
|Claudio Coracini                                | Officer  | April 17, 1956    
|Eduardo Francisco de Castro                     | Officer  | May 02, 1964      
|Eduardo Masset Lacombe                          | Officer  | January 30, 1946  
|Francisco de Assis Crema                        | Officer  | October 4, 1949   
|Humberto Padula Filho                           | Officer  | June 11, 1966     
|Ivo Luiz de
    Sá Freire Vieitas Junior        | Officer  | June 14, 1964     
|João
    Antonio Camargo                        | Officer  | February 24, 1952 
|Jorge Luiz Cardoso Viana                        | Officer  | November 22, 1951 
|José Fernando
    Trita                         | Officer  | January 04, 1959  
|José Ramon
    do Amaral Gomez                  | Officer  | June 20, 1965     
|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    
|Marcelo Felberg                                 | Officer  | February 14, 1962 
|Marcelo Luis Orticelli*                         | Officer  | August 22, 1966   
|Marcia Maria Freitas de Aguiar                  | Officer  | July 09, 1966     
|Marco Antonio do Couto                          | Officer  | January 8, 1951   
|Marcos Alberto da Silva Gomes                   | Officer  | May 10, 1947      
|Marcos Braga Dainesi                            | Officer  | December 02, 1958 
|Marcos Cavalcante de Oliveira                   | Officer  | February 7, 1958  
|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     
|Ricardo Stern                                   | Officer  | September 1, 1962 
|Rogério de Moura Estevão
        Junior         | Officer  | October 5, 1961   
|Rogério
    Vasconcelos Costa                   | 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     
|Sérgio
        Luiz Dobarrio de Paiva           | Officer  | January 7, 1952   
|Tarcisio do Nascimento                          | Officer  | November 06, 1956 

|Deputy officers                                 | Position       | Date of Birth     
|----------------------------------------------- | -------------- | ------------------
|                                                |                |                   
|Andrea Alvim Genovesi*                          | Deputy Officer | May 17, 1967      
|Antonio José Castro
    Costa                   | Deputy Officer | April 05, 1948    
|Antonio José Rocha
    de Almeida*              | Deputy Officer | June 17, 1959     
|Antonio Massaharu Suenaga                       | Deputy Officer | April 04, 1954    
|Carlos Eduardo de Almeida Santos*               | Deputy Officer | November 28, 1960 
|Carlos Elder Maciel de Aquino                   | Deputy Officer | April 9, 1961     
|Carlos Ernesto Gomes Medeiros                   | Deputy Officer | January 27, 1970  
|Claudia Leite Silva                             | Deputy Officer | January 03, 1969  
|Claudia Politanski                              | Deputy Officer | August 31, 1970   
|Danilo José Soares
    Kahil                    | Deputy Officer | July 24, 1955     
|Eduardo Corsetti                                | Deputy Officer | October 26, 1968  
|Fernando Barçante
    Tostes Malta              | Deputy Officer | April 14, 1968    
|Fernando Della Torre Chagas                     | Deputy Officer | July 6, 1970      
|Fernando Otavio Richter Guedes                  | Deputy Officer | April 30, 1956    
|Hermes Eduardo Moreira Filho                    | Deputy Officer | March 10, 1965    
|Ibrahim José Jamhour                            | Deputy Officer | October 15, 1960  
|Irene Ponde Barretto Hesses*                    | Deputy Officer | July 6, 1969      
|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  
|José Cristóvão
    Martins                      | Deputy Officer | March 02, 1951    
|José Eraldo
    Raimundo                        | Deputy Officer | January 04, 1950  
|José Mario
    Bellesso                         | Deputy Officer | December 25, 1949 
|Julio Almeida Gomes                             | Deputy Officer | December 25, 1966 
|Ligia Maria Stoppa da Silva                     | Deputy Officer | May 11, 1963      
|Luiz Gonzaga Arena Junior                       | Deputy Officer | May 7, 1963       
|Manuel Gomes Pereira                            | Deputy Officer | August 21, 1957   
|Marcelo Antonio Montes Vieira                   | Deputy Officer | June 14, 1966     
|Marcelo Ariel Rosenhek                          | Deputy Officer | April 01, 1968    
|Marcelo Figueiredo Salomon*                     | Deputy Officer | July 13, 1967     
|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  
|Marcos Rimoli
    Próspero                      | Deputy Officer | July 1, 1968      
|Marcos Silva Massukado*                         | Deputy Officer | January 27, 1970  
|Maria Célia Furlani
        de Mendonça Camargo | Deputy Officer | November 13, 1957 
|Maria Eliene Dalvi                              | Deputy Officer | September 03, 1968
|Martin Iperus Ruyter Hercules                   | Deputy Officer | May 22, 1963      
|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    
|Ricardo Fantauzzi                               | Deputy Officer | April 27, 1951    
|Rodolpho Lupatelli Junior                       | Deputy Officer | February 12, 1954 
|Rogério Cláudio
        Bacelar Scofano         | Deputy Officer | March
    25, 1955
|Sérgio
    Goldman                              | Deputy Officer | May 21, 1961      
|Silvio José Fonseca
    de Carvalho*            | Deputy Officer | September 27, 1965
|Thomas Tuppy                                    | Deputy Officer | August 16, 1960   
|Valeria Salomão
    Garcia                      | Deputy Officer | October 21, 1970  
|Vittório
    Roberto Giuseppe Guaglianone       | Deputy Officer | August 3, 1957    
|Waldemar de Oliveira Battiferro Junior          | Deputy Officer | April 17, 1967    

|* |  | Election
of these directors and officers is pending approval by the Central Bank.
|- |  | ---------------------------------------------------------------------------------

|** |  | Until
the Central  Bank  approves  the  election of Mr.  Malan as our Chairman and the election
of Mr.       Moreira  Salles as our Vice  Chairman,  Messrs.  Moreira  Salles and
Ferreira  shall  continue to act,       respectively, with full powers as Chairman and
Vice Chairman of our Board of Directors.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*** |  | The
creation of these  positions and the election of these  executive  officers to these
positions are       still pending approval by the Central Bank.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

The biographies of our directors and officers are summarized below:

Directors

Pedro
Sampaio Malan  Mr.
Malan was elected Vice Chairman of our Board of Directors in
2003 and Chairman of our Board of Directors on April 30, 2004.
Mr. Malan served as Brazil's Minister of Finance from 1995 to 2002, as Chairman
of the Central Bank from 1993 to 1994, as Special Council and Chief Negotiator
for External Debt Issues of the Ministry of Finance from 1991
to 1993, as an executive officer of the World Bank from 1986 to 1990 and
again from 1992 to 1993, as an executive officer of the Inter-American Development
Bank from 1990 to 1992, as an officer of the Transnational Companies Center
of the United Nations (UN)
in New York, from 1983 to 1984, and as an officer of the International
Department of Economy and Social Matters of the UN in New York,
from 1985 to 1986. He received a degree in Electrical Engineering in 1965
from the Polytechnic School of the Catholic University (Pontifícia
  Universidade Católica) of Rio de Janeiro and received a Ph.D. in
Economics from Berkeley University , California.

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. On April 30,
    2004, Mr. Moreira Salles was elected Chief Executive Officer of our Board
    of Officers and he will continue to serve as Vice Chairman of our Board of
    Directors. Mr. Moreira Salles also serves as Vice Chairman of the Board of
    Directors of Unibanco Holdings S.A. and Chairman of the Board of Directors
    of Unibanco AIG Seguros. 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 a B.A. in Economics and History from the University of California,
  Los Angeles, where he graduated Magna Cum Laude. He also attended the graduate
  program in International Relations at Yale University and the Management Program
  at Harvard University.

Armínio
      Fraga Neto -Mr.
      Fraga was elected a member of our Board of Directors in January 2004. Mr.
      Fraga served as President of the Central Bank of Brazil from March 1999
      to December 2002. Prior to that, he worked for six years as a managing
      director of Soros Fund Management LLC in New York. Among other academic
      affiliations, Mr. Fraga is an adjunct professor at Getúlio
  Vargas Foundation (Fundaçao Getulio Vargas). He received a
  Ph.D. in Economics from Princeton University in 1985, and Bachelor's and Master's
  degrees in Economics from the Catholic University (Pontifícia Universidade
  Católica) of Rio de Janeiro.

Fernando
Barreira Sotelino  Mr.
    Sotelino joined us in November 1991 as Executive Vice President and head
    of the international and investment banking divisions, coming from Citibank-Brazil
    where he served as managing director in charge of mergers and acquisitions,
    privatizations and investments. On April 30, 2004, Mr. Sotelino was elected
    to serve as a member of our Board of Directors. From March 1998 to April
    2004 Mr. Sotelino served as the Executive President of our Wholesale Banking
    Group. Prior experiences include heading Crocker Bank's Project Finance
    Group (from 1979 to 1986) in San Francisco , California. He also served
    as an Associate Professor of Economics and Finance of the MBA Program of
    the Federal University of Rio de Janeiro (Universidade Federal do
  Rio de Janeiro UFRJ)from 1977 to 1978. He holds
  a B.S. in Civil Engineering, and an M.S. in Industrial Engineering from the
  UFRJ, and received both his M.A. in Economics as well as his MBA from Stanford
  University , California.

Gabriel Jorge Ferreira  Mr.
    Ferreira joined us in 1957 and became Vice Chairman of our Board of Directors
    in 1997, after serving as a Director since 1983. On April 30, 2004, Mr. Ferreira
    was appointed President of our Audit Committee and he will continue to serve
    as a member of our Board of Directors. He also serves as Vice Chairman of
    the Board of Directors of Unibanco AIG Seguros, Director of Unibanco Holdings
    and as President of the National Confederation of the Financing Institutions
    (Confederação Nacional das
  Instituições Financeiras). Mr. Ferreira served as President
  of the Federation of Brazilian Banking Associations (FEBRABAN) from 2001 to
  April 2004, and as a member of the Board of Executive Officers of FEBRABAN
  from 1986 to 2001. He holds an Accounting degree from the Accounting School
  of Barretos, Brazil and a Law degree from the University of São Paulo
  (Universidade de São Paulo).

Israel
Vainboim  Mr. Vainboim joined us in 1969 and has held several positions
in the areas of investments, leasing and credit. He became a member of our
Board of Directors in 1988. Mr. Vainboim also serves as a member of the Board
of Directors and as Executive President of Unibanco Holdings, as a director
of Unibanco AIG Seguros, and as a member of the Management Boards of AIG-Life
Cia. de Seguros, Souza Cruz S.A., E-bit Tecnologia em Marketing S.A., Connectmed
and Itaparica S.A. Empreendimentos Turísticos. He received a B.S. in
Mechanical Engineering from the National School of Engineering, Rio
de Janeiro and an MBA from Stanford University.

Joaquim
Francisco de Castro Neto  Mr.
Castro Neto joined us in 1973 as manager of FINASUL and has since held several
senior positions, becoming an Executive Officer in 1980. He was appointed
to serve as Executive President of our Retail Banking Group in March 1998.
On April 30, 2004, he was elected to serve as a member of our Board of Directors.
He also serves as a director of Unibanco Asset Management. Mr. Castro Neto
holds a B.A. in Management from Getúlio Vargas Foundation (Fundação
Getúlio
  Vargas) and holds a specialization in Sales Management, Marketing and
  Development of New Products from IMEDE - Lausanne , Switzerland.

Pedro Luiz Bodin de Moraes Mr.
    Bodin was elected to our Board of Directors in 2003. He has been serving
    as an officer of Icatu Holding S.A. since 1993, having acted as an officer
    and shareholder of Banco Icatu S.A. from 1993 to 2002. He also served as
    an officer of the Monetary Politics of the Central Bank of Brazil from 1991
    to 1992. Mr. Bodin is an economist, having received a Master's degree in
    Economics from the Catholic University (Pontifícia
  Universidade Católica) of Rio de Janeiro and a Ph.D. degree in
  Economics from Massachusetts Institute of Technology (MIT).

Executive Officers

João
      Dionísio Amoêdo -
    Mr. Amoêdo was elected
  to serve as an Executive Vice President on April 30, 2004. Mr. Amoêdo
  began his career at Citibank, worked as a senior partner at Banco BBA-Creditanstalt
  S.A., and served as Chief Executive Officer of Fináustria CFI e Leasing.
  Mr. Amoêdo holds a degree in Business from the Catholic University (Pontifícia
  Universidade Católica) of Rio de Janeiro and a degree in Civil
  Engineering from the Federal University of Rio de Janeiro (Universidade
  Federal do Rio de Janeiro).

Márcio
      de Andrade SchettiniMr. Schettini was elected to serve
  as an Executive Vice President on April 30, 2004. Mr. Schettini has worked
  in several companies and financial institutions in Brazil. Before joining us,
  he had been President of Unicard, Fininvest and other companies of our group.
  He holds a degree in Engineering and a Master's degree in Administration from
  the Catholic University (Pontifícia Universidade Católica)
  of Rio de Janeiro.

Adalberto de Moraes Schettert  Mr.
    Schettert has been serving as a Vice President since 1992. He received a
    B.S. in Engineering and a B.S. in Administration from the Federal University
    of Rio Grande do Sul (Universidade
  Federal do Rio Grande do Sul), Brazil.

Celso
Scaramuzza  Mr. Scaramuzza joined us in 1979 and has been serving
  as


 a member of our Board of Executive Officers

 since 1994. Mr. Scaramuzza served as a
Vice President from August 1997 to April 2004. Since January 1998,
he has been responsible for our private banking sector, both onshore
and offshore. He received a B.A. in Administration from the Armando Álvares
Penteado Foundation (Fundação
  Armando Álvares Penteado) of São Paulo.

César
      Augusto Sizenando Silva  Mr. Sizenando Silva joined
  us in 1975 and has held several senior positions in the areas of treasury and
  asset management. He was appointed to serve as a Vice President on April 30,
  2004, following a two year term as a Vice President and as a Corporate
  Vice President from March 1998 to April 2002. He also serves 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 a
  B.S. in Economics from the Federal University of Minas Gerais (Universidade
  Federal de Minas Gerais), Brazil.

Geraldo Travaglia Filho  Mr. Travaglia joined us in 1979 and was
  elected to serve as a Vice President on April 30, 2004, after having served
  as an Executive Officer since 1996. From 1998 to 2000, he served as an Executive
  Officer in charge of marketing and products for the retail banking group; from
  1996 to 1997, he was responsible for the integration of branches, systems and
  operations of Banco Nacional; from 1994 to 1995, he conducted the reengineering
  program of Unibanco; and from 1989 to 1993, he served as our controller. Mr.
  Travaglia holds a B.A. degree in Management from the University of São
  Paulo (Universidade de São Paulo).

José Castro Araújo
      RudgeMr. Rudge joined us in 1995,
  when Unibanco purchased Banco Nacional and was elected to serve as a Vice President
  on April 30, 2004. Prior to joining us, he worked for nine years at Sul América
  Seguros and from 1985 to 1987 he was an officer of Bradesco Seguros, responsible
  for the management of the insurance activities of the State of São Paulo
  and Bradesco's international operations. He was also President of Nacional
  Seguros from 1987 to 1995. He holds a degree in Business from the Business
  School of São Paulo (Faculdade de Administração de
  São Paulo) .

Álvaro
      Portinho de Sá Freire
      Junior  Mr. Freire joined
  us in 1998 as an Executive Officer. From 1992 to 1996, he had worked with us,
  holding several positions with the securities underwriting and leasing departments.
  Prior experiences include positions with the World Bank, with The International
  Finance Corporation, with Citicorp Investment Bank and with Donaldson, Lufkin & Jenrette
  Securities Corporation. He holds a degree in Economics from the Federal University
  of Rio de Janeiro (Univesidade Federal do Rio de Janeiro) and a Master's
  degree in Finance from Georgetown University, Washington, D.C.

Armando
      Zara Pompeu  Mr.
    Pompeu joined us in 1991 and has held several positions in the development
    and project areas. He has been serving as an Executive Officer since August
    2000 and is responsible for our branches network.
    Mr. Pompeu holds a degree in Administration from Campos Salles School (Faculdades
    Campos Salles) and a Master's degree in Marketing
  from the Superior School of Publicity and Marketing (Escola Superior de
  Propaganda e Marketing).

Daniel
      Luiz Gleizer - Mr. Gleizer was elected to serve as an Executive
  Officer for the risk management department on April 30, 2004. Mr. Gleizer began
  his career with the International Monetary Fund and has taken on positions
  with several financial institutions, such as Deutsche Bank and Credit Suisse
  First Boston. During the period beginning in March 1999 and ending in February
  2002, Mr. Gleizer had served as director of the Central Bank of Brazil. Mr.
  Gleizer holds a degree in Economics from the Federal University of Rio de Janeiro
  (Universidade Federal do Rio de Janeiro) and a Ph.D. in Economics
  from the University of California, Berkeley.

Edwin
Rindt  Mr.
Rindt joined us in 2002 and presently serves as an Executive Officer
in charge of our German Desk operations. He started his career with
Bank Commerzbank in 1988, and, from 1989 to 1995, served as its manager
for commercial relationship with Latin-American banks. Mr. Rindt
also serves as a representative Executive Officer for Commerzbank
and is responsible for the commercial relationship with Central and
Oriental Europe. He graduated in 1987 in Economics at University of Eberhard-Karls
in Tübingen,
  Germany and holds an M.A. degree in International Studies from the University
of Denver, Colorado.

Élio
      Boccia  Mr. Boccia joined us in 1992 and has held several
  positions in our development and technology sectors. He has been serving as
  an Executive Officer since 1996. Mr. Boccia was elected Technology Personality
  2000 in the Finance Area, pursuant to a poll conducted by the newspaper Informática
  Hoje. He holds a B.A. in Economics from São Luis University (Universidade
  São Luiz).

José Lucas
      Ferreira de Melo  Mr. Ferreira de Melo joined us
  in 1999 as an Executive Officer. Prior to joining us, he served as a director
  at the Comissão de Valores Mobiliários (Securities and Exchange
  Commission of Brazil) in 1992 and as a partner of PricewaterhouseCoopers Auditores
  Independentes until 1997. He holds an Accounting degree from the University
  of Federal District (Universadade do Distrito Federal).

Koji Yamada  Mr.
    Yamada joined us in 2001 and has been an Executive Officer since May 10,
    2001. He also serves as a representative officer of the Mizuho Financial
  Group in Brazil. He holds a B.A. in Economics from Osaka University, Japan.

Ney
      Ferraz Dias -
    Mr. Dias joined Unibanco AIG Seguros, one of our main controlled companies,
    in 1998. In April 2004, he was elected to serve as an Executive Officer.
    Prior to joining us, Mr. Dias had worked with Pricewaterhouse Coopers, formerly
    Coopers & Lybrand. Mr. Dias holds an Administration degree
  from the Federal University of Rio de Janeiro (Universidade Federal do
  Rio de Janeiro).

Orestes
      Alves de Almeida Prado  Mr. Prado joined us in August 2002
  and was subsequently elected to serve as an Executive Officer. Before joining
  us, Mr. Prado had worked with Citibank and ABN-AMRO Bank. He holds an Administration
  degree from the Business School of São Paulo (Escola de Administração
  de Empresas de São Paulo).

Osias
      Santana de Brito Mr. Brito has been an Executive Officer responsible
  for the planning and control sectors since December 2002. He has more than
  nineteen years of experience with the financial markets, and has learned to
  work with both national and international banks. His banking experience covers
  many areas, such as technology, transactions, treasury and control. He holds
  a Ph.D. and a Master's degree in Finance from the University of São
  Paulo (Universidade de São Paulo).

Roberto
      Lamy -Mr. Lamy joined us in 1979 and was elected to serve
  as an Executive Officer on April 30, 2004. Prior to such appointment, Mr. Lamy
  had served in several senior positions, including positions with Fininvest
  and Unicard. He holds an Engineering degree and a degree in Mechanical Engineering
  from the Industrial Engineering School (Faculdade de Engenharia Industrial).

Rogério
      Carvalho Braga  Mr.
      Braga joined us in 1987 as President of Cambuhy Citrus Comercial Exportadora
      S.A. Prior to his appointment as an 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 Catholic University (Pontifícia Universidade
Católica) of São Paulo and an MBA from Pepperdine University.

Sérgio Zappa  Mr. Zappa joined us in 1988 and was appointed
  to serve as an Executive Officer 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
  its Capital Markets Department. He has also worked for the Brazilian National
  Development Bank  BNDES in Rio de Janeiro from 1976 to 1981. He holds a B.A.
  degree in Economics from Georgetown University (1974) and a Master's degree
  in International Management from Thunderbird (1981).

Tiago
      Jorge Rocha e Silva Mateus das Neves  Mr.
    Neves joined us in 2000, and is responsible for our Portuguese Plataform operations.
    He has been serving as an Executive Officer since April 2002. Mr. Neves holds
    an MBA from Dom Cabral Foundation (Fundação Dom Cabral)
    and a B.A. in Political and Economic International Relations from Minho University
    (Portugal), supplemented by extension courses in Financial Institutions Administration
  (Banking) at Getúlio Vargas Foundation (Fundação Getúlio Vargas).

Valdery
      Frota de Albuquerque -Mr.
    Albuquerque was elected to serve as an Executive Officer in December 2003.
    Prior to joining us, he held several positions at Caixa Econômica Federal
    - CEF and Banco Nossa Caixa. He holds an Economics degree and an Economics
    Master's degree, with focus on Political Science, both from the University
  of Brasilia (Universidade de Brasília).

Officers

Adhemar Toshimassa Kajita  Mr. Kajita joined us in 1995, and since
  1997 has been serving as an Officer responsible for our project finance and
  privatization areas. Mr. Kajita formerly worked in the investment banking area
  of Banco Itaú S.A., from 1977 to 1991. He graduated in Aeronautical
  Engineering at the Aeronautic Technology Institute (Instituto de Tecnologia
  Aeronáutica) in 1975, holds a specialization in Business Management
  at Getúlio Vargas Foundation (Fundação Getúlio
  Vargas) in São Paulo and holds an MBA degree from the University
  of Chicago.

Alfredo
      Althen Schiavo Mr. Schiavo joined us in 1986 as manager for
  the funds operational department, being responsible for supervising investment
  fund operations and managing portfolios for individuals and institutional investors.
  From 1995 to 2003, Mr. Schiavo served as an Executive Officer of Unibanco Asset
  Management responsible for the management activities, the controlling department
  and the general back offices. In April, 2004, Mr. Schiavo was elected to serve
  as an Officer for the business, the processing and controlling of third parties
  resources' management, the private bank, the brokerage companies and the international
  treasury departments. Before joining us in 1986, Mr. Schiavo served as a treasury
  Supervisor of Philip Morris Marketing South America for two years. He graduated
  in Business Administration from the University of São Paulo (Universidade
  de São Paulo) Economics Business Administration School and holds
  a post graduated degree in Business Administration from Getúlio Vargas
  Foundation (Fundação Getúlio Vargas) of São
  Paulo.

Angelo Celso Souza Lima de Vasconcellos  Mr.
    Vasconcellos joined us in 1981 and presently serves as an Officer responsible
    for exchange transactions and rural credit areas. He graduated in 1973 in
    Business Management from the 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 has been serving as an Officer responsible for the coordination
  of a part of our banking branch network. He graduated in Economics from Santana
  University (Universidade Santana), and holds a Master's degree in
  Marketing from the University of São Paulo (Universidade de São
  Paulo).

Antonio Carlos Azzi Junior  Mr.
    Azzi has been working with us for 22 years. He has been serving as an Officer
    responsible for our banking branch network since 1995, has attended several
    business banking courses by PROBANC (Programa Avançado de Administração Bancária)
  as well as a course on corporate strategic planning at Associação
  Educacional Nove de Julho in São Paulo.

Antonio
      Fernando Checchia Wever Mr. Wever serves as corporate finance
  Officer responsible for all infrastructure projects related to Brazilian industries,
  including telecommunications, media, energy, transportation, oil and gas, building,
  automotive, heavy machinery and airlines. He coordinates a group of bankers
  who offer the whole range of products to their clients, including M&A,
  structured finance, derivatives, short term loans and cash management. Mr.
  Wever is also responsible for a loan portfolio of approximately R$10 billion.
  Before joining Unibanco, Mr. Wever worked at JPMorgan, where he was responsible
  for its financial institutions, retail banking and telecommunication clients
  in Brazil. Mr. Wever has more than 15 years of experience in the international
  markets, having worked in London, Frankfurt, Paris, Amsterdam and New York.
  Mr. Wever holds a B.S. degree in Industrial Engineering from the Polytechnic
  School of the University of São Paulo (Universidade de São
  Paulo)and an MBA degree from IMD, Lausanne.

Artur
      Ambrósio Gregório Mr.
    Gregório joined
  us in 1980 as Manager / Superintendent of Internal Audit, and was appointed
  to serve as an Officer responsible for Private Banking in 1999. Prior to joining
  us, Mr. Gregório had worked as an auditor at Arthur Young (currently
  Ernest & Young). He graduated in Accounting Sciences from São Judas
  Tadeu University (Universidade São Judas Tadeu) and holds a
  Master's degree in Accounting and Controlling from the University of São
  Paulo (Universidade de São Paulo).

Carlos
      Henrique Aguiar Rodrigues Catraio Mr. Catraio joined us in
  November 1997 and serves as an Officer responsible for correspondent banking
  and financial institutions, for domestic and international loan syndications
  and for all trade finance activities. He is also a Director of the fully-owned
  subsidiary Banco Interbanco, located in Paraguay. Prior to joining Unibanco,
  Mr. Catraio had 15 years banking experience with key international players,
  including Bank of America and Chase Manhattan in Brazil, during which time
  he was mostly dedicated to financial institutions and capital raising activities.
  Mr. Catraio is Portuguese-born and holds a B.A. in Management from the Federal
  University of Rio de Janeiro (Universidade Federal do Rio de Janeiro).

Carlos Henrique Tonon Ximenes de Melo  Mr. Ximenes serves as an Officer
  responsible for the Popular Bank Project, from Fininvest. Until recently,
  he was the CEO of PREVER  Pension Fund Company, an affiliate of Unibanco jointly
  owned with AIG. He graduated in Law from the Catholic University (Pontifícia
  Universidade Católica) of Rio Grande do Sul. Mr. Ximenes
  has a lot of experience with capital markets, having worked for important companies
  in this field, such as Crefisul and Citibank. He also serves as Chairman of
  the Board of Directors of Microinvest, a microcredit company, in partnership
with IFC.

Claudio Coracini  Mr. Coracini joined us in 1992 to work in our merges
  and acquisitions sector and has been serving as an Officer responsible for
  the investments sector since 1995. He graduated in 1978 in Production Engineering
  from the Polytechnic School at the University of São Paulo (Universidade
  de São Paulo) and holds a Master's degree in Industrial Engineering
  from Stanford University, California (1980).

Eduardo Francisco de Castro  Mr.
    Castro joined us in 1993, and has significant experience in marketing, reengineering
    and 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 graduated
    in Naval Engineering from the Naval School of the Federal University of Rio
    de Janeiro (Universidade Federal
  do Rio de Janeiro) and holds a Master's degree in Business Management
  from Getúlio Vargas Foundation (Fundação Getúlio
  Vargas) with extensions at the University of Chicago. He specialized in
  Marketing at the Superior School of Publicity and Marketing (Escola Superior
  de Propaganda e Marketing) and in Management of Small Companies at
  Getúlio Vargas Foundation (Fundação Getúlio
  Vargas).

Eduardo Masset Lacombe  Mr. Lacombe began his career as an assistant
  manager with Brasil Warrant in 1964. From 1969 to 1971 he has acted as our
  representative in Portugal (Lisboa and Porto), to appear before Banco Português
  Atlântico. From 1972 to 1984 he was responsible for the management of
  several branches, and was elected to serve as an Officer in 1991. Since 1995
  Mr. Lacombe has been serving as an Officer responsible for private banking
  in the cities of Rio de Janeiro and Belo Horizonte. He graduated in Business
  Management from the Brazilian Public Management School of Getúlio Vargas
  Foundation (Fundação Getúlio Vargas), Rio de
  Janeiro.

Francisco de Assis Crema -Mr.
    Crema served as our Deputy Officer responsible for onlending transactions
    of BNDES funds from 2000 to April 2004, at which time he was elected to serve
    as an Officer responsible for this field. Mr. Crema has a lot of experience
    in project finance. Formerly, Mr. Crema held for 20 years the position of
    executive officer of Banco Credibanco S.A. in charge of transactions and
    project financing. He graduated in Economics and Accounting Sciences from
    the Economics School of São Luiz (Faculdade
  de Economia São Luiz) and specialized in Finance.

Humberto Padula Filho  Mr. Padula joined us in 1982, and, since 1996,
  has been serving as an Officer responsible for the management of several branches
  located in the city of Rio de Janeiro. He graduated in Marketing and Management
  from Estácio de Sá University (Universidade Estácio
  de Sá).

Ivo Luiz de Sá Freire
      Vieitas Junior Mr. Vieitas joined us
  in December 1998 and presently serves as an Officer for corporate finance.
  Prior to joining us, he had worked at Indosuez W.I. Carr Securities (Credit
  Agricole). He graduated in Mechanical Engineering from the Federal University
  of Rio de Janeiro (Universidade Federal do Rio de Janeiro) and holds
  an MBA from the J.L. Kellogg School of Management.

João Antonio
      Camargo  Mr. Camargo joined us in 1968 and since
  1994 has been serving as an 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 offered 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 has been serving
  as an Officer responsible for the management of the wholesale banking group
  clients' portfolios 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 from the Federal University of Pelotas (Universidade
  Federal de Pelotas), Rio Grande do Sul, in 1975. He has a post-graduate
  degree in Regional Planing and Development from the Institute of Applicable
  Economical Research (Instituto de Pesquisa Econômica Aplicada IPEA).

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
  information technology area. He graduated in Production Engineering from Industrial
  Engineering University, and specialized in Distributed Computing at M.I.T.

José Ramon do
      Amaral Gomez  Mr. Gomez joined us in 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
  positions at Banco1.net. Presently, he serves as an Officer responsible for
  coordinating several branches in the city of São Paulo. Mr. Gomez graduated
  in Marketing from Alcântara Machado Integrated School (Faculdades
  Integradas Alcântara Machado) and holds an MBA degree from Dom Cabral
  Foundation (Fundação Dom Cabral).

Luis
Tadeu Mantovani Sassi Mr.
    Sassi joined us in 1982 as manager of retail banking accounts. In 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 presently serves as an Officer responsible for
    the coordination of our branches network. He graduated in Economics from
    the Catholic University (Pontifícia
  Universidade Católica) of Campinas in 1981, and holds an MBA from
  Getúlio Vargas Foundation (Fundação Getúlio
  Vargas) of Rio de Janeiro.

Luiz Maurício
      Lamenza de Moraes Jardim  Mr. Jardim began his
  career at Banco Nacional S.A. as an economic analyst. In 1995, he was promoted
  to corporate finance and capital markets Deputy Officer and, since 1997, he
  serves as an Officer for international treasury, responsible for our international
  debt placement. He graduated in Economics from Gay-Lussac Higher Studies Institute
  (Instituto Superior Gay-Lussac) in 1986.

Marcel Antonio Baumgartner  Mr.
    Baumgartner joined us in 1986 and, since 2000, he has been serving as an
    Officer responsible for credit operations with large-sized companies. He
    has experience in financial markets transactions, including international
    transactions involving Commerzbank, carried out through Unibanco's German
    Desk. Mr. Baumgartner has been active in the commercial and technical financing
    sectors since 1980. He graduated in Business Management from 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 serves
  as an Officer responsible for our branch network in the city of São
  Paulo. He graduated in Business Management from the 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
  graduate degree in Monetary Economics from the Regional Foundation of Economics
  (Fundação Regional de Economia) of the city of Santa
  Maria, State of Rio Grande do Sul, and received an MBA from Dom Cabral Foundation
  (Fundação Dom Cabral) of Belo Horizonte, State of Minas
  Gerais.

Marcelo Felberg  From 1993 to 2000 Mr. Felberg worked in Great Britain
  representing us and acting as one of the senior managers of Unibanco Securities
  Ltd., a subsidiary of Unibanco. After serving as our Deputy Officer, he presently
  serves as an Officer for fixed rate transactions, securities negotiations and
  other related banking services. Mr. Felberg has 20 years of experience in the
  national and international capital markets and corporate finance areas, having
  worked for several institutions such as HSBC Markets Limited, Midland Bank,
  Bank of America and Chase Manhattan Bank. He graduated in Economics from the
  Catholic University (Pontifícia Universidade Católica)
  of Rio de Janeiro and has attended to an extension course in Corporate Finance
at the London Business School.

Marcelo Luis Orticelli  Mr. Orticelli has been working with us for
  16 years, developing planning and controlling activities as well as human resources
  improvement programs. After serving as a Deputy Officer, in April 2004, Mr.
  Orticelli was elected to serve as an Officer for human resources area. He graduated
  in Business Management from the Catholic University (Pontifícia
  Universidade Católica) of São Paulo and holds a Master's
  degree from Getúlio Vargas Foundation (Fundação Getúlio
  Vargas) in cooperation with University of Texas.

Marcia Maria Freitas de Aguiar  Ms.
    Aguiar joined our legal department in 1986. She has been serving as our legal
    Officer since 1998, responsible for legal consulting related to transactions
    involving the wholesale and retail banking groups, capital markets, asset
    management and credit cards, as well as for legal consulting related to our
    strategic corporate transactions. She graduated in Law from the University
    of the State of Rio de Janeiro (Universidade
  do Estado do Rio de Janeiro) in 1988, and holds a Master's degree in Corporate
  Law from New York University School of Law.

Marco Antonio do Couto Mr.
    Couto joined Banco Bandeirantes in 1997 as regional manager. In 2001, when
    Unibanco purchased Banco Bandeirantes, Mr. Couto was transferred to Unibanco
    and began to serve as Officer responsible for our branches network located
    in the eastern region of the City of São
  Paulo. Presently, he serves as Officer for our Wealth and Education department.
  Mr. Couto is graduated in Business Sciences from the Integrated Simonsen Schools
  (Faculdades Integradas Simonsen) of Rio de Janeiro.

Marcos Alberto da Silva Gomes  Mr. Gomes joined us after being transferred
  from Banco de Investimento do Brasil S.A., where he started working in 1979.
  Presently he serves as an Officer responsible for corporate finance transactions
  in the States of Minas Gerais and Espírito Santo and in parts of the
  midwestern, northern, and northeastern 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 graduated in
  Business Management from 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 (Universidade Federal do
  Rio de Janeiro).

Marcos Braga Dainesi  Mr. Dainesi joined us in 2003 and serves as
  an Officer responsible for the restructuring of our credit portfolio. He has
  been active in the financial markets 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 graduated in Engineering from
  the University of São Paulo (Universidade de São Paulo).

Marcos Cavalcante de
      Oliveira Mr.
    Oliveira joined us as a lawyer in 1983, and worked with us until 1986. From
    1987 to 1988 he acted as a legal counsel to BANERJ  Banco do Estado do Rio de Janeiro.In 1988, Mr.
  Oliveira rejoined Unibanco and has since acted, among others, in the legal,
  retail products, retail marketing and branches network areas. Presently, he
  serves as an Officer responsible for our legal departments of civil and labor
  litigation divisions. Mr. Oliveira graduated from the University of the State
  of Rio de Janeiro (Universidade do Estado do Rio de Janeiro) and holds
  a Ph.D. degree in Credit and Finance and a Master's degree in Social and Corporate
  Law, both from the Federal University of Rio de Janeiro (Universidade Federal
  do Rio de Janeiro). He also holds an MBA from the Business School of the
  University of Pennsylvania.

Nilton Sérgio
      Silveira Carvalho  Mr. Carvalho joined us in
  1981 as a productivity analyst. Since 2000, Mr. Carvalho has been serving as
  an Officer responsible for banking security and services related to technology
  processes development and implementation. He graduated in Electrical Engineering
  in 1978 and holds a post graduate degree in Production Engineering from the
  Industrial Engineering University (Universidade de Engenharia Industrial).

Paulo Meirelles de Oliveira Santos  Mr. Santos joined Unibanco in
  2002 and currently serves as private bank Officer, responsible for the coordination
  of our commercial managers in São Paulo. He started working with financial
  markets 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 from the Military Institute
  of Engineering (Instituto Militar de Engenharia) in the city of Rio
  de Janeiro, and holds an MBA from the American Graduate School of International
  Management.

Reinaldo Pereira da Costa Rios  Mr. Rios joined us in 1987, having
  occupied several positions involving banking transactions, including leasing
  transactions. Since 1997, he has been serving as domestic treasury Officer,
  responsible for pricing and liquidity management, and for the rendering of
  services for our private banking area. He graduated in Economics from Armando Álvares
  Penteado Foundation (Fundação Armando Álvares Penteado)
  in 1983.

Ricardo Amand  Mr.
    Amand has been working with us for 21 years, and since 2000 has been serving
    as an Officer responsible for our branch network. Furthermore, Mr. Amand
    has been credited for his pioneering efforts in attracting investments in
    Brazilian and other foreign structured finance transactions by Japanese multinational
    companies. He graduated in Business Management and in Economics from Metropolitans
    Schools (Faculdades Metropolitanas Unidas) and holds a post-graduate
    degree in Financing Management and Control from Getúlio
  Vargas Foundation (Fundação Getúlio Vargas).

Ricardo Coutinho Mr.
    Coutinho joined Unibanco 9 years ago. Since 2002, he has been serving as
    retail banking Officer responsible for retail banking branches in the city
    of São
    Paulo. He graduated in Business Management from Ipiranga Associated Schools
    (Faculdades Associadas Ipiranga),
  attended an extension course in Marketing at the Superior School of Publicity
  and Marketing (Escola Superior de Propaganda e Marketing), holds an
  MBA from Brazilian Institute of Capital Market (Instituto Brasileiro de
  Mercado de Capitais), and received a post-graduate degree in Marketing
  Management from the Methodist University of High Studies.

Ricardo Stern Mr.
    Stern joined Unibanco in 2003 as Officer of our capital market department.
    Recently, he became the Officer responsible for the products of our investment
    banks, which comprises the merger and acquisitions, project finance, onlending
    and capital market structure departments. Before joining us, Mr. Stern served
    as Vice President of JP Morgan's Latin American M&A Group (1999/2003) and as head of the merger and acquisitions
  team of Banco Patrimônio de Investimento (1997/1999). Prior to that,
  Mr. Stern had already worked with us, having served in several positions in
  our capital market department, such as Officer for mergers and acquisitions
  (1989/1997). He holds a B.S. degree from Getúlio Vargas Foundation (Fundação
  Getúlio Vargas).

Rogério de Moura Estevão
      Junior Mr. Estevão
  joined Banco Nacional in 1992 as planning manager and, following the merger
  of Banco Nacional with Unibanco in 1995, he became responsible for the auto
  service area and for the consolidation of Unibanco's and Banco Nacional's network
  of branches. In 1996, Mr. Estevão was elected to serve as an Officer
  responsible for the branch network located in the State of Santa Catarina,
  and in 1998, he was elected to serve as an Officer for retail products, involving
  the extension of loans to individuals, services and payments, and investments.
  In 2001, he was placed in charge of the development of our capitalization,
  syndicating and real estate business companies. Mr. Estevão graduated
  in Mechanical Engineering from the Federal University of Rio de Janeiro (Universidade
  Federal do Rio de Janeiro) in 1984 and has attended several courses in
  Marketing, Business and Finance at the Dom Cabral Foundation (Fundação
  Dom Cabral), in partnership with INSEAD (France) in 1985, and at PROBANC
  Unibanco, developed by the adviser company  Moroco-Boston in 1996, with a
  focus on retail banking.

Rogério Vasconcelos
      Costa  Mr. Costa has been serving as an
  Officer for 33 years, responsible for our branch network in the State of Minas
  Gerais. He previously worked at Shell Brasil de Petróleo S.A. in their
  marketing and planning areas, before joining Banco Nacional, where he has been
  active in the commercial area for 6 years. Mr. Costa received a degree in Business
  Management, a post graduate degree in Economics and an MBA from Dom Cabral
  Foundation (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 transactions sector.
  Since 1999, he has been serving as Officer in the cash and asset management
  products area. Mr. Valente graduated in Electrical Engineering with a specialization
  in Electronics from the Military Institute of Engineering (Instituto Militar
  de Engenharia). He holds an MBA in Financial Engineering from MIT Sloan
  School of Management and a Master's degree in Computing Science from the Military
  Institute of Engineering (Instituto Militar de Engenharia).

Rubem Rollemberg Henriques  Mr. Henriques joined us in 1996 to be
  a regional Officer responsible for several branches located in the city of
  Rio de Janeiro. Since December 2002, Mr. Henriques has been serving as an Officer
  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 midwestern region of Brazil. He worked at Banco Nacional S.A. from
  1986 to 1995 and was responsible for marketing strategy for banking products.
  He graduated in Business Management and in Systems Analysis from Guanabara
  Business Management University.

Rubens dos Reis Cavalieri  Mr.
    Cavalieri joined us in 2002 and is presently an Officer in the mergers and
    acquisitions department. He held many positions at Citigroup for ten years,
    and also worked at Banco UBS Warburg S.A. from 2001 to 2002. Mr. Cavalieri
    graduated in Aeronautical Engineering and Mechanics from the Aeronautic Technology
    Institute (Instituto de Tecnologia
  Aeronáutica) 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 marketing, including social marketing, press support,
  events and promotion, public relations and web marketing. She graduated in
  Social Communication, with an extension in Public Relations from Santos University
  (Universidade de Santos) in 1984, holds a post-graduate degree in
  Publicity and Marketing from the Superior School of Publicity and Marketing
  (Escola Superior de Propaganda e Marketing), as well as an MBA degree
  from Dom Cabral Foundation (Fundação Dom Cabral).

Sérgio Luiz
      Dobarrio de Paiva Mr. Paiva joined us
  in 1995 as Officer responsible for corporate banking, assuming responsibility
  for the middle market department in 2000. Before joining us, Mr. Paiva worked
  with Citibank, where he began serving as clerk in 1971, rising to become a
  Resident Vice President, and serving in such position until 1994. He graduated
  in Business from Lusíada Foundation (Fundação Lusíadas) of
  Santos.

Tarcisio do Nascimento  Mr. Nascimento joined us in 1972 and has
  since held several positions in the branches network area. Presently, Mr. Nascimento
  serves as an Officer responsible for the branches network in the city of Rio
  de Janeiro. He graduated in Business Management from the Universities of Joinville
  (Universidades da Região de Joinville) in 1979.

Deputy Officers

Andrea Alvim
        Genovesi Ms.
    Genovesi joined us in July 2000 as a superintendent of branches network,
    responsible for the management of all our supermarket-based Brazilian branches.
    In July, 2002, she assumed the position of sector superintendent, becoming
    responsible for overseeing our retail sector's strategies in dealing with
    high net worth individuals. In April, 2004, Ms. Genovesi was elected to serve
    as commercial Deputy Officer for the retail branches network of the State
  of Paraná. Before joining us, Ms. Genovesi served as head of branch
  at Bank Boston. She holds a graduate degree in Mathematics from the Catholic
  University of Santos (Universidade Católica de Santos) as well
  as a graduate degree in Information Technology from the Technology School of
  São Paulo (Faculdade de Tecnologia do Governo de São Paulo).
  In addition, she has a specialization in Marketing of Services from Getúlio
  Vargas Foundation (Fundação Getúlio Vargas),
  holds an MBA in Finance from the Brazilian Institute of Capital Market (Instituto
  Brasileiro de Mercado de Capitais IBMEC), and has attended an international
  extension course from the University Carlos III in Madrid, Spain.

Antonio José Castro
      Costa  Mr.
    Costa joined Unibanco in 2001, when he became a Deputy Officer responsible
    for the coordination of several branches located in the southern part of
    the State of Minas Gerais. Mr. Costa began his career in 1972 at Morada S.A.,
    where he held several positions until 2001. He graduated in Economics from
    Augusto Mota University (Universidade
  Augusto Mota) in 1980 and attended an Advanced Marketing course at Getúlio
  Vargas Foundation (Fundação Getúlio Vargas) in
1985.

Antonio
José Rocha
      de Almeida On April 30, 2004, Mr. Almeida
  was elected to serve as Deputy Officer responsible for restructuring our vehicles
  financing area and supervising the expenses and investments budget. He began
  his career in 1982 as engineer of projects with EMBRAER. In 1985, he joined
  Elebra S.A. Eletrônica Brasileira as manager, becoming the officer responsible
  for information technology until 1993. From 1993 to 1995, Mr. Almeida served
  as systems manager with the Companhia Brasileira de Cartuchos, and from March
  1995 to October 1995, he served as general manager of information technology
  with Brasilprev Previdência Privada. He also served as officer
  of information technology with Indústrias Klabin de Papel e Celulose,
  and as manager of projects with McKinsey & Company.Mr. Almeida
  graduated in Aeronautical Engineering from the Technological Institute of Aeronautic (Instituto
  Tecnológico de Aeronáutica), and holds a post-graduate degree
  in Computer Science from the Mathematics and Statistics School of the University
  of São Paulo (Universidade de São Paulo). In addition,
  he holds an MBA from the Economics and Business School of the University of
  São Paulo (Universidade de São Paulo), and has an executive
  course in Technology Management from the Massachusetts Institute of Technology.

Antonio Massaharu Suenaga  Mr. Suenaga joined us in 1997 as Deputy
  Officer responsible for management of credit and for monitoring credit operations.
  He contributes to the development, maintenance and enhancement of our credit
  policy, to the development of new credit products, and to the evaluation of
  credit risks. Mr. Suenaga graduated in Business Management from the University
  of São Paulo (Universidade de São Paulo) in 1976.

Carlos Eduardo de Almeida
      Santos Mr.
    Santos joined us in 2000 as products manager, responsible for current accounts
    and banking fees products, becoming products' superintendent in charge of
    such departments. In April, 2004, Mr. Santos was elected to serve as a Deputy
    Officer, responsible for our branches network located in the States of Pernambuco,
    Paraíba and
  Rio Grande do Norte. Mr. Santos began his career with Banco Banorte S.A. in
  1978 as clerk, and became its products' general manager, serving in such position
  until 1995. From 1995 to 2000, he served as products' manager of Banco Bandeirantes
  S.A. He graduated in Business from Federal University of Pernambuco (Universidade
  Federal do Pernambuco), holds an MBA in Finance from the Brazilian Institute
  of Capital Market (Instituto Brasileiro de Mercado de Capitais  IBMEC)
  and has a specialization in Means of Payments from the University of Miami,
  Florida.

Carlos Elder Maciel
      de Aquino Mr. Aquino has 25 years of experience
  in due diligence of financial institutions (Unibanco, Bandeirantes and Banorte).
  He graduated in Accounting Sciences from the Federal University of Pernambuco
  (Universidade Federal de Pernambuco), and holds a post-graduate degree
  in Economics Engineering from the Catholic University of Pernambuco (Universidade
  Católica de Pernambuco) as well as a post-graduate degree in Business
  Finance from the University of Pernambuco Foundation (Fundação
  Universidade de Pernambuco). Mr. Aquino also holds an executive MBA from
  the Brazilian Institute of Capital Markets (Instituto Brasileiro de Mercado
  de Capitais) and is currently studying for an MBA degree at the University
  of São Paulo (Universidade de São Paulo).

Carlos Ernesto Gomes Medeiros  Mr.
    Medeiros joined us in 2001 and serves as Deputy Officer responsible for the
    budget and management information of our credit portfolio division. He acquired
    solid experience working in the risk management sector for nine years. Mr.
    Medeiros graduated in Law from Fluminense Federal University (Universidade Federal Fluminense)in 1996. In addition,
  he holds a degree in Electronical Engineering (1993) and a Master's degree
  in Management Sciences from the Federal University of Rio de Janeiro (Universidade
  Federal do Rio de Janeiro).

Cláudia Leite
      Silva  Ms. Silva joined Nacional Seguros S.A.
  in 1991 and was transferred to Unibanco in 1995, when she became sales marketing
  superintendent. Presently, Ms. Silva serves as 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 from the Catholic University (Pontifícia
  Universidade Católica) in 1991 and holds an MBA degree from Dom
  Cabral Foundation (Fundação Dom Cabral).

Claudia Politanski  Ms. Politanski joined us in 1991 and presently
  serves as Deputy Officer responsible for providing the legal support related
  to our activities in banking, capital markets, investments, mergers and acquisitions
  and for the legal support related to the corporate work of all our controlled
  companies. She graduated in Law from the University of São Paulo (Universidade
  de São Paulo) in 1992 and holds an LL.M. degree from the University
  of Virginia.

Danilo José Soares
      Kahil  Mr.
    Kahil joined us in 1995 to work in the consumer financing and leasing areas
    and is presently serving as Deputy Officer in the individual credit division.
    He began his career in finance in 1976, working in planning, data processing
    and statistics divisions, as well as in the commercial investments divisions
    of financial institutions. Mr. Kahil graduated in Business Management from
    the Social Studies Foundation (Fundação
  de Estudos Sociais) of the State of Paraná, and has a specialization
  degree in Financing from the Catholic University of Business Management and
Economy.

Eduardo Corsetti Mr. Corsetti joined Unibanco in 1987 and, since
  2002, has been serving as Deputy Officer responsible for the area of corporate
  finance in Rio de Janeiro. He graduated in Economics from Mackenzie University
  (Universidade Mackenzie)in 1991, received post-graduate degrees in
  Finances from the Brazilian Institute of Capital Markets (Instituto Brasileiro
  de Mercado de Capitais) in 1996, and in Business Management from the Harvard
  Extension School in 1997.

Fernando Barçante
      Tostes MaltaMr. Malta began his
  career at Banco Nacional in 1988 and has been working with us for 15 years.
  He has worked in several capacities, and has accumulated significant experience
  and knowledge of our operations in the financial market and in the national
  and international economies. Mr. Malta graduated from the department of Computer
  Science of the Catholic University (Pontifícia Universidade Católica)
  of Rio de Janeiro in 1989, where he served as professor for 3 years. He holds
  an MBA from the Dom Cabral Foundation (Fundação Dom Cabral)
  and a specialization degree in Business from the Kellogg School of Management.

Fernando Della Torre ChagasMr.
    Chagas began his career in Banco Nacional in 1992 and joined us in 1995,
    when Unibanco purchased Banco Nacional. Since October 2003 he has been serving
    as a Deputy Officer responsible for our activities in the investments, mergers
    and acquisitions, and private equity sectors. Prior to such assignment, Mr.
    Chagas served in the sales and trading sector until 1998. He graduated in
    Business from the Business and Economy School of Getúlio Vargas Foundation
    (Fundação Getúlio
  Vargas) of São Paulo in 1992 and holds an MBA from the Wharton
  School at the University of Pennsylvania.

Fernando Otavio Richter
      Guedes  Mr.
    Guedes joined us in 1999 and serves as Deputy Officer in the commercial area
    for financing portfolio products. He has been active in financial markets
    since 1979. He graduated in Business Management from the Cândido Mendes
    School (Faculdade Cândido
  Mendes) in 1978.

Hermes
Eduardo Moreira Filho -Mr.
    Moreira Filho serves as a Deputy Officer for corporate finance. He is responsible
    for consumer assistance in the sectors of sanitation, petroleum and gas exploitation
    and transportation. Prior to this, Mr. Moreira Filho had worked from 1983
to 1988 at Banco Mercantil de São
  Paulo in the treasury and corporate banking departments. He graduated in Business
  from the Santa Úrsula University (Universidade Santa Úrsula)
  of Rio de Janeiro, specializing in Economics, and pursued the Program of Specialization
  of Finance Executives (Programa de Especialização de Executivos
  Financeiros)at the Business School of the University of São Paulo
  (Universidade de São Paulo).

Ibrahim José Jamhour Mr. Jamhour joined us in 1995 and since
  2000 has been serving as Deputy Officer of the in-store-banking unit, responsible
  for several retail banking branches located in the States of São Paulo
  and Paraná. Before joining us, Mr. Jamhour worked for Shell Brasil S.A.
  and Banco Nacional S/A. He graduated in 1982 in Mechanical Engineering from
  the Federal University of the State of Paraná (Universidade Federal
  do Estado do Paraná)and holds an MBA degree from Stanford University,
  California.

Irene Ponde Barreto
      Hesses Ms. Hesses joined us in 1997 as projects
  manager and became segments superintendent in 2000. In April 2004, she was
  elected to serve as a Deputy Officer for the branches network. Before joining
  us, Ms. Hesses served as a senior adviser to Gemini Consulting. She graduated
  in Business from the Catholic University of Salvador (Universidade Católica
  de Salvador), holds a post-graduate degree in Finance from Getúlio
  Vargas Foundation (Fundação Getúlio Vargas) of
  São Paulo and holds an MBA in Services Marketing from the University
  of São Paulo (Universidade de São Paulo).

Iuri Garcia Zacharias  Mr.
    Zacharias joined Banco Nacional S.A. in 1987 and presently serves as Deputy
    Officer responsible for the coordination of several branches located in the
    city of Rio de Janeiro. He has 16 years of experience in the management,
    budget, planning and sales areas. He graduated in Economic Sciences in 1989
    from the Catholic University (Pontifícia
  Universidade Católica) of Salvador, and received a post-graduate
  degree in Corporate Management from Dom Cabral Foundation (Fundação
  Dom Cabral) in 2000.

Janio Francisco Ferrugem Gomes  Since 1999 Mr. Gomes has been serving
  as Deputy Officer responsible for the cost control area. Mr. Gomes started
  working in the financial markets sector in 1984, in the areas of credit and
  companies restructuring. He graduated in Civil Engineering from Armando Álvares
  Penteado Foundation (Fundação Armando Álvares Penteado)
  in 1982, in Economics from the Catholic University (Pontifícia Universidade
  Católica) of São Paulo in 1988, and holds an MBA degree
  from Dom Cabral Foundation (Fundação Dom Cabral).

Jorge Luis Merege Correia Mr. Correia joined us in 2001 and since
  2002 he has been serving as Deputy Officer of the corporate finance area for
  the southern region of Brazil. He has 22 years of professional experience,
  acquired in six different financial institutions, in the commercial and credit
  areas. Mr. Correia graduated in Business Management from Getúlio Vargas
  Foundation (Fundação Getúlio Vargas) and has
  followed extension courses with an emphasis in corporate strategy.

José Cristóvão
      Martins Mr. Martins joined us
  in 1974 and in 2003 he was elected to serve as Deputy Officer responsible for
  the management of data processing centers and telecommunication network. He
  graduated in Mechanical Engineering.

José Eraldo
      Raimundo Mr. Raimundo joined us as Deputy Officer
  and as Executive Officer of Unibanco Leasing S.A. Arrendamento Mercantil. He
  has comprehensive experience in leasing processes, credit to consumers and
  credit control. He graduated in Philosophy from the Philosophy School of Pernambuco
  (Faculdade de Filosofia de Pernambuco).

José Mario Bellesso Mr. Bellesso joined us in 1993 as superintendent
  responsible for our, and our affiliated companies', technological system development,
  and presently serves as Deputy Officer for 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 graduated in Computing
  and Operational Engineering from Mackenzie University (Universidade Mackenzie).

Julio Almeida Gomes Mr.
    Gomes joined us in 2002 and in December, 2003, was elected to serve as a
    Deputy Officer for the planning of efficiency department. Prior to joining
    us in 2002, Mr. Gomes had served as engagement manager of Mckinsey & Company, Dallas (1999/2002), and had already worked
  with us in the department of cash management and banking services to the wholesale
  and retail banking (1997/1999). He graduated in Aeronautical InfraStructure
  Engineering from the Aeronautical Technology Institute (Instituto de Tecnologia
  Aeronáutica), focused in operations and planning of airports. In
  addition, Mr. Gomes holds a Master's degree in Business Management from the
  Federal University of Rio Grande do Sul (Universidade Federal do Rio Grande
do Sul).

Ligia Maria Stoppa
      da Silva  Ms.
    Silva joined us in 1994 as credit manager, and she presently serves as credit
    Deputy 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. where she held the position of underwriting and credit
    manager. Ms. Silva graduated in Business Management from Getúlio
    Vargas Foundation (Fundação
  Getúlio Vargas) in 1978 and holds a post graduate degree in Finance
  from the same institution.

Luiz Gonzaga Arena
      Junior Mr.
    Arena Junior joined us in August 2000 as superintendent of global sourcing
    and, in August 2003, was elected to serve as a Deputy Officer for assets.
    Before joining Unibanco, Mr. Arena Junior served as industrial manager of
    Cambhuy M. C. Ltda. He graduated in Electrical Engineering from the Federal
    University of Uberlândia (Universidade Federal de
  Uberlândia).

Manuel
Gomes Pereira -Mr.
    Pereira serves as Deputy Officer for information and legal management, with
    25 years of experience in the management and performance of retail bank audit
    activities, and 4 years experience in the accounting area. He has been a
    professor of Financial Business, Accounting, Balance Analysis and Micro-Economic
    at the São Luiz University (Faculdade
  São Luiz),the Metropolitan Schools (Faculdades Metropolitas
  Unidas) and the Brazilian School of Business  Royller Institute
  (Faculdade Brasileira de Administração  Instituto Royller) for
  11 years.Mr. Pereira also served as treasury officer of the Institute
  of Brazilian Internal Auditors (AUDIBRA - Instituto dos Auditores Internos
  do Brasil) for 6 years (1988/1994) and was a member of the Commission
  of Due Diligence and Accounting Rules of ABRASCA (CANC - Comissão
  de Auditoria e Normas Contábeis) for 4 years (1989/1993). He graduated
  in Economics from the Metropolitan Schools (Faculdades Metropolitas Unidas) and
  pursued an extension course in Systems and Technology of Information Management
  at UCLA - University of California, Berkeley. Mr. Pereira also holds a post-graduate
  degree in Controlling and Finance from the University of São Paulo (Universidade
  de São Paulo) and an MBA from Dom Cabral Foundation (Fundação
  Dom Cabral).

Marcelo Antonio Montes
      Vieira Mr.
    Vieira joined us in 1985 and presently serves as 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 graduated in Business Management and External Commerce from the Ítalo
  Brasileira School (Faculdade Ítalo Brasileira).

Marcelo Ariel Rosenhek Mr. Rosenhek joined us in 2000 and since then
  he has been responsible for analyzing new businesses and supervising our results
  and the results of our subsidiaries, as well as being responsible for financial
  planning and international and domestic treasury control. He began his professional
  career as assistant officer of Brasil Warrant Administração de
  Bens e Empresas Ltda. Since April, 2003, Mr. Rosenhek serves as Deputy Officer
  of the investment area. He graduated in Civil Engineering from University of
  São Paulo (Universidade de São Paulo) Engineering School
  and holds an MBA degree from Carnegie Mellon University (1993).

Marcelo Figueiredo Salomon -Mr.
    Salomon has joined us as chief economist and on April 30, 2004, he was elected
    to serve as a Deputy Officer for the macroeconomics research department.
    Prior to this, he was the Brazil and Argentina Chief Economist at ING-Bank
    São Paulo for two and a half years. From
  2000 to 2001 he held the Emerging Market Currency Strategist position in Deutsche
  Bank's New York branch, and from 1997 to 2000, he was a Latin American Economist
  in Merrill Lynch's New York branch. He is an adjunct professor at Getúlio
  Vargas Foundation (Fundação Getúlio Vargas) of
  São Paulo. Mr. Salomon holds a Ph.D. from Columbia University and an
  MBA from Getúlio Vargas Foundation (Fundação Getúlio
  Vargas) of São Paulo, both degrees focusing on Economics.

Marcelo Tonhazolo Mr.
    Tonhazolo joined us in 2000 and is presently serving as Deputy Officer responsible
    for our communications channels and our Internet, call center, telemarketing
    and self-services areas. He graduated in Mathematics from University of São
    Paulo (Universidade de São
  Paulo) in 1988.

Marcia
Klinke dos Santos  Ms. Klinke joined our legal department
  in 1991 and currently heads our the legal compliance department,
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. Klinke is also in charge of our Environmental Management System
with respect to financing facilities provided by Unibanco to its
corporate clients either directly or through the onlending of resources provided
by international multilateral agencies and international banks. Ms. Klinke
was responsible for creating the Ethics Institutional Manual and is in charge
of the coordination of the Ethics Committee. Ms Klinke holds a Law
degree from the University of São
Paulo (Universidade
  de São Paulo) Law School as well as a Master's degree in Comparative
  Law from the University of Miami Law School, which was preceded by a Master's
  Course in Corporate Law from the University of Manitoba School of Law (Winnipeg).

Marciana Emilia Barbosa  Ms.
    Barbosa joined us in 1983 and presently serves as Deputy Officer responsible
    for corporate finance transactions in Minas Gerais and Espírito Santo
    States, the midwestern region and parts of the northern and northeastern
    regions of Brazil. She accumulated vast experience in the credit, financing
  and charging areas of financial institutions and holds a degree in Law.

Marcos Eduardo Buckton de Almeida  Mr.
    Almeida joined us in 1995 as officer responsible for the branch network.
    Since 2001 Mr. Almeida has been serving as 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 graduated in Mechanical Engineering from
    the Military Institute of Engineering (Instituto
  Militar de Engenharia- IME) in 1983.

Marcos Rimoli Próspero Mr.
    Prospero joined us in 1991 during the process of consolidating the remote
    channels between Unibanco 30 Horas and Telemarketing. Following this assignment,
    he served in the corporate projects, operations and assets departments. In
    the assets area, he served as an Officer responsible for the global sourcing,
    engineering, architecture and real estate management. Presently, Mr. Prospero
    serves as a Deputy Officer responsible for the working relationship and endomarketing
    departments. He graduated in Economics from the Economics and Business School
    of University of São
  Paulo (Universidade de São Paulo) and holds an MBA from Cornell
  University.

Marcos Silva Massukado
      -Mr. Massukado began his career with
  us in 1994 as planning and controlling manager, maintaining this position until
  2000. In 2001, he left our company and served as a strategic adviser at Diamond
  Cluster International. In 2002, Mr. Massukado returned to Unibanco, this time
  as superintendent of small businesses, requiring the creation and implementation
  of strategies designed to assist the needs of our small business clients with
  annual revenues below R$5MM. In 2004, he was elected to serve as a Deputy
  Officer for the companies sector, which requires Mr. Massukado to design strategies
  to assist our clients with annual revenues between R$5MM and R$40MM.

Maria Celia Furlani
      de Mendonça
      Camargo  Ms. Camargo has occupied
  management positions for 13 years, and Ms. Camargo presently serves as Deputy
  Officer responsible for several branches located in the northern and northeastern
  regions of Brazil. She has 27 years of experience in the banking area, 10 of
  which were dedicated to management of client portfolios in retail, corporate
  and private banking. Ms. Camargo holds degrees in Accounting Sciences and in
  Law and holds an MBA specializing in the 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 area. Since 2002 she has been serving as
    Deputy Officer, 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 graduated in Accounting Sciences
    from the Superior Social Sciences Center of Vila Velha (Centro Superior
    de Ciências Sociais de Vila Velha), and holds
  an MBA degree in Finance from the Brazilian Institute of Capital Markets (Instituto
  Brasileiro de Mercado de Capitais), Rio de Janeiro and a degree in Corporate
  Management from Dom Cabral Foundation (Fundação Dom Cabral).

Martin Iperus Ruyter
      Hercules Mr. Hercules joined us in 2001 and
  presently serves as Deputy Officer responsible for our relationship with German
  companies investing in Brazil. He began his career at Commerzbank AG in Germany
  (Frankfurt), Singapore and India (Bombay). He has also assumed managerial positions
  with international banks in the Middle East, and has served as credit analyst
  and officer for multinational companies in Indonesia. Mr. Hercules graduated
in Process Engineering from Stuttgart University.

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 Deputy Officer, coordinates the creation of
    our email channel and the development of Internet banking for companies.
    Mr. Wsevolojskoy graduated in Business Management from Getúlio Vargas
    Foundation (Fundação Getúlio
  Vargas), and holds an MBA degree from M.I.T.

Raquel Breidenbach Langhanz  Ms. Langhanz joined us in 1993 as accounts
  manager and branch network superintendent. She has been serving as Deputy Officer
  since 2002, and she is in charge of several branches located in the countryside
  of the States of São Paulo, Minas Gerais and Goiás. She graduated
  in Social Communication with a specialization in Public Relations from University
  of Vale do Rio dos Sinos (Universidade do Vale do Rio dos Sinos),
  holds a post-graduate degree in Finance from the Catholic University (Pontifícia
  Universidade Católica) of the State of Rio Grande do Sul and also
  holds an MBA degree from Dom Cabral Foundation (Fundação
  Dom Cabral).

Ricardo dos Santos
      Andrade Mr. Andrade joined our legal department
  in 1980 and presently serves as Deputy Officer of the legal department's litigation
  division and is in charge of our labor, corporate and retail banking group
  lawsuits. Mr. Andrade graduated in Law from Catholic University (Pontifícia
  Universidade Católica) of São Paulo.

Ricardo Fantauzzi Mr.
    Fantauzzi joined our audit area in 2003 as Deputy Officer responsible for
    the audit of the wholesale banking and wealth management operations. Mr.
    Fantauzzi has several years of commercial banking experience, having been
    head of the Brazilian audit team in three multinational banks  Bank Boston, Chase Manhattan Bank and HSBC. He also served as an Officer
  for the branches network operations in two multinational banks  Bank Boston
  and ABN AMRO Bank. He holds graduate degrees in Business Administration and
  Accounting, both from the Catholic University (Pontifícia Universidade
  Católica) of Sao Paulo. He served as the President of The Institute
  of Internal Auditors (IIA  Chapter São Paulo) in 1989/90.

Rodolpho Lupatelli Junior -Mr. Lupatelli Junior joined us in April
  1994 as credit manager of the wholesale banking. In January 1996, he became
  superintendent of this area and in June 2003, he was elected to serve as Deputy
  Officer responsible for the credit of medium size companies, private banking
  and Interbanco. Before joining us, Mr. Lupatelli Junior has served as credit
  manager of Citibank NA. He has 23 years experience in credit-related analysis
  and decision-making. Mr. Lupatelli Junior graduated in Economics from the Catholic
  University (Pontifícia Universidade Católica) of São
  Paulo.

Rogério 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 sector, which represents us before governmental authorities. Mr.
  Scofano graduated in Electrical Engineering from the Federal University of
  Rio de Janeiro (Universidade Federal do Rio de Janeiro), holds an
  MBA degree from COPPEAD  Federal University of Rio de Janeiro (Universidade
  Federal do Rio de Janeiro) and a post-graduate degree in Finance, supplementing
  the Master's degree from New York University.

Sérgio Goldman Mr. Goldman has been the head of our fixed
  income and equity research team since November 2003. During the 11 years prior
  to joining us, Mr. Goldman has worked in equity research in well regarded international
  institutions such as Baring Securities, Bear Stearns, Paribas and Banco Santander.
  In this period, he has been ranked on several occasions in the Institutional
  Investor Survey for leading the best regarded equity research team in Brazil.
  Mr. Goldman has a B.S. degree in Electronical Engineering from Rio de Janeiro's
  Catholic University (Pontifícia Universidade Católica)
  and an MBA from COPPEAD - Federal University of Rio de Janeiro (Universidade
  Federal do Rio de Janeiro).

Silvio José Fonseca
      de Carvalho -Mr. Carvalho joined our clients
  relationship department in 2001 and in April, 2004, was elected to serve as
  a Deputy Officer for the retail branches network located in the cities of Ribeirão
  Preto, São José do Rio Preto and in the Triângulo Mineiro
  region. Prior to that, Mr. Carvalho had served as systems manager of Banco
  Nacional (1989/1995), as marketing manager of Unibanco (1195/1998), as general
  manager of marketing of Cia. Bozano (1998/2000), and as a Deputy Officer for
  relationship marketing of Banco Boavista S.A. He holds a graduate degree in
  Business from Cândido Mendes School (Faculdade Cândido Mendes)
  of Rio de Janeiro, with an extension course in Marketing from the Superior
  School of Publicity and Marketing (Escola Superior de Propaganda e Marketing) and
  an extension course in Systems Analysis from Cândido Mendes University
  (Universidade Cândido Mendes). In addition, he holds a senior
  executive MBA from the Brazilian Institute of Capital Market (Instituto
  Brasileiro de Mercado de Capitais  IBMEC).

Thomas
Tuppy  Mr. Tuppy joined us as manager of system development
  in 1993 and has been serving as Deputy Officer since 2002, responsible for
  the information technology group. He has 20 years of experience in the information
  technology area, 11 years of which where spent at Rodhia S.A. Mr. Tuppy graduated
  in Mechanical Engineering from Mauá Engineering School (Faculdade
  de Engenharia Mauá), specialized in Business Management at Getúlio
  Vargas Foundation (Fundação Getúlio Vargas) in
  São Paulo and holds an MBA degree from University of São Paulo
  (Universidade de São Paulo) Business Management Institute Foundation.

Valéria Salomão
      Garcia Ms. Garcia joined Unibanco in
  2003 and was elected to serve as a Deputy Officer for risk management. Prior
  to joining Unibanco, Ms. Garcia had spent several years in the banking supervision
  field, working for the Central Bank of Brasil. Ms. Garcia holds a degree in
  Economics from the University of São Paulo (Universidade de São
  Paulo) in 1992, and holds a Master of Science degree in Business Administration
  (Finance) from Getúlio Vargas Foundation (Fundação
  Getúlio Vargas) (2002).

Vittório Roberto
      Giuseppe Guaglianone Mr. Guaglianone joined
  us in 1982 and since then he has held several senior positions. In 1995, he
  became our regional superintendent in Rio Grande do Sul and in 1999 he was
  elected to serve as Deputy Officer. From 2000 to 2002, he was responsible for
  our in-store branches sector and in 2003 he became our Officer responsible
  for the collection area. He graduated in Accounting Sciences from Cruzeiro
  do Sul University (Universidade Cruzeiro do Sul) in 1986 and has attended
  several business banking courses such as PROBANC (Programa Avançado
  de Administração Bancária) in 1994/1995 and Corporate
Management in 1997/1998.

Waldemar
      de Oliveira Battiferro Junior -Mr. Battiferro Junior has
  12 years of experience in the financial market field, having worked in the
  treasury department of Citibank, Banco Nacional and Unibanco. Mr. Battiferro
  Junior joined us in 1994 and until 2000 was responsible for the Brazilian currency
  operations. Presently, he serves as a Deputy Officer for the investments' strategic
  department of our private bank. He graduated in Business from Armando Alvares
  Penteado Foudantion (Fundação Armando Alvares Penteado)
  and holds an MBA from the Massachussets Institute of Technology - M.I.T.

Each director is elected for a one-year term by the general shareholders meeting
  and may be reelected upon expiration of his term. A director may not be reelected
  after his sixty-fifth birthday, unless agreed by the Board of Directors. The
  terms of the present members of the Board of Directors expire on April 30,
  2005.

Members
of the Board of Officers are elected for one year term and may be re-elected
upon expiration of their terms. An Officer may not be re-elected after his
sixtieth birthday, unless this is approved by the Board of Directors. In addition,
as approved at the Board of Directors Meeting held on April 30, 2004, the Chief
Executive Officer may determine whether an Officer who has turned fifty-eight
years old may stand for re-election. The terms of the present members of the
Board of Officers expire on April 30, 2005.

Unibanco Holdings

Unibanco Holdings is managed by its:

- Board of Directors
        (Conselho de Administração),
      consisting of seven directors; and
- Board of Officers (Diretoria), consisting of three officers.

The Board of Directors is Unibanco Holdings' decision-making body. It determines
  Unibanco Holdings general corporate guidelines and policies by:

establishing its corporate strategy;
      reviewing its business plans; and
      supervising and
                monitoring the activities of its 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 Unibanco Holdings' general corporate
  guidelines and policies established by the general shareholders meetings, by
  Unibanco Holdings' Board of Directors and pursuant to its by-laws. The members
  of the Board of Officers have the 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   
|----------------------------------------- | ------------- | ----------------
|                                          |               |                 
|Roberto
                Konder Bornhausen | Chairman      | October 22, 1933
|Pedro
                Moreira Salles      | Vice Chairman | October 20, 1959
|Carlos Alberto de Oliveira Cruz           | Director      | July 13, 1940   
|Gabriel Jorge Ferreira                    | Director      | July 13, 1956   
|Guilherme Affonso Ferreira                | Director      | May 09, 1951    
|Israel Vainboim                           | Director      | June 01, 1944   
|Tomas Tomislav Antonin Zinner             | Director      | January 29, 1938

|Officers                        | Position                | Date of Birth    
|------------------------------- | ----------------------- | -----------------
|                                |                         |                  
|Israel Vainboim                 | Chief Executive Officer | 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 by the general shareholders meeting
  and may be reelected upon expiration of his term. The terms of the present
directors of Unibanco Holdings expire on April 30, 2005.

In accordance
    with the Shareholders Agreement of Unibanco Holdings, each of its major shareholders
    may, at their sole discretion, select one person to serve as a member of
    its Board of Directors, provided that such person be elected in a general
    shareholders meeting. Currently, there are two Directors of Unibanco Holdings
    who were elected based on such agreement: (i) Mr. Carlos Alberto de Oliveira
    Cruz, selected by Caixa Brasil S.G.P.S. S.A. and (ii) Mr. Guilherme Affonso
    Ferreira, selected by Bahema Group. For a description of Unibanco Holdings'
    major shareholders see Item 7  Major Shareholders and Related
    Party Transactions.

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 30, 2004 and all members of the Board of Officers of Unibanco Holdings
  were elected for a term that expires on April 30, 2005.

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's first term as Chairman of the Board of Directors of Unibanco
    Holdings started on February 4, 1997 and ended on April 28, 2003. On April
    30, 2004, Mr. Bornhausen began his second term as Chairman of the Board of
    Directors of Unibanco Holdings. From 1991 to 1996, Mr. Bornhausen served
    as Chairman of Unibanco's Board of Directors, and from 1973 to 1988 Mr.
    Bornhausen continuously served as a member of Unibanco's Board of Executive
    Officers. Mr. Bornhausen graduated in Agronomical Engineering from Rural
  University of Rio de Janeiro (Universidade Rural do Rio de Janeiro).

Carlos Alberto de Oliveira Cruz  Mr. Cruz has been serving as a member
  of the Board of Directors 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.

Guilherme
                        Affonso Ferreira  Mr. Ferreira has been serving as a member
  of the Board of Directors of Unibanco Holdings since December 14, 1994. Mr.
                        Ferreira also served as investment analyst in Banco Noroeste, and
                        as President of several companies of the Bahema Group. Mr. Ferreira
                        graduated in Production Engineering from the Polytechnic School of
                        the University of São Paulo
                        (Universidade
  de São Paulo) and holds a post-graduate degree in Economics and
  Politics from Macalester College, in Minneapolis.


Tomas Tomislav Antonin Zinner  Mr. Zinner joined Unibanco in 1965
  as the investment banking Officer and served as a member of Unibanco's Board
  of Directors from 1988 to 2004. Throughout his career in Unibanco, he has held
  several senior positions, including head of the international department and
  senior credit Officer, and until recently served as Unibancos President
  and Chief Executive Officer. He currently serves as a member of the Boards
  of Directors of Unibanco Holdings, Unibanco AIG Seguros, Banco Fininvest, CIBRASEC
  (Brazilian Securitization Company), the Brazilian Association for Infrastructure
  (ABDIB), Confab (largest pipe industry in Brazil), and CP Participações.
  Outside of Unibanco, Mr. Zinner also serves as Chairman of the Board of The
  Nature Conservancy (TNC) in Brazil. He holds a B.A. from the School of Economics
  of the Federal University of Rio de Janeiro (Universidade Federal do Rio
  de Janiero) and a graduate degree from the University of Chicago.

6.B. COMPENSATION

Unibanco

Compensation of Directors and Officers

At the annual shareholders meeting, our shareholders establish the maximum
  aggregate compensation of our directors and officers for the corresponding
  year. In 2003, the maximum aggregate compensation for our Board of Directors
  and Board of Officers was:

- R$800,000 per month for our directors as a group; and
- R$3,500,000 per month for our officers as a group.

For the year ended December 31, 2003, all our directors and officers as a
  group (119 persons as of such date) actually received, for services provided
  in all capacities to us, aggregate compensation of R$18.5 million. The directors
  and officers of all our companies, including Unibanco, received, for services
  provided in all capacities, an aggregate compensation of R$29.7 million for
  the year ended December 31, 2003.

For 2004, the maximum aggregate compensation for our Board of Directors, Board
  of Officers and Audit Committee members shall be:

- R$15,000,000 per year for our directors and audit committee members
      as a group; and
- R$150,000,000 per year for our officers as a group.

Our directors and 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, 2003 was R$10.3 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 our managers the opportunity to participate in our capital and benefit from increases in the value of our stock.

Under the plan, stock options are granted to select managers for a price based
  on the market price of our shares at the date of grant. A special 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, 2004, options to purchase 1,129,800,000 Units were granted
  to 339 officers and directors, under the stock option plan. For the year ended
  December 31, 2003, we recognized R$10 million of compensation expenses related
  to the stock option plan.

Unibanco Holdings

At the annual shareholders meeting, the shareholders of Unibanco Holdings
  established the maximum aggregate compensation of directors and executive officers.

In 2003, the maximum aggregate compensation for Unibanco Holdings' Board of
  Directors and Board of Officers 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
    2003, all our directors and executive officers as a group (11 persons as
    of December 31, 2003) actually received, for services in all capacities to
  Unibanco Holdings, aggregate compensation of R$36,000. This amount
    also includes profitability related discretionary bonuses.

For 2004, the maximum aggregate compensation for Unibanco Holdings' Board
  of Directors and Board of Executive Officers shall be:

- R$100,000 per month for the members of the Board of Directors
      of Unibanco Holdings as a group; and
- R$100,000 per month for the members of the Board of Executive
      Officers of Unibanco Holdings as a group.

Affiliates and Subsidiaries

Unicard
Banco Múltiplo S.A. (former Banco Credibanco S.A.)

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
        Comércio e Entretenimento Ltda. (former BWU Vídeo
Ltda.)

As of December 31, 2003,  executive  officers,  members of management of BWU Comércio e  Entretenimento  Ltda. and Unibanco  Representação e Participações  Ltda., as fiduciary agent of the quotas
owned by some directors,  collectively owned approximately  0.3457% of its quotas,  under a stock option plan. According to such stock option plan, the Board of Directors of BWU Comércio e Entretenimento Ltda. may
grant to executive officers and members of management the option to purchase up to 3.9825% of the quotas issued by
BWU Comércio e Entretenimento Ltda.

6.C. BOARD PRACTICES

The information
                set forth in "Item 6A. Directors, Senior Management and Employees  Directors
and Senior Management" is incorporated into this section by reference.

Unibanco Holdings and 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.

We and Unibanco Holdings do not have a Remuneration Committee.

At our April 30, 2004 Extraordinary
    Shareholders Meeting, our shareholders approved the creation of our statutory
    Audit Committee, in order to comply with the requirements of Brazilian Law.
    Further information regarding the Audit Committee regulations may be found
    in Item 4.B. Business Overview - Regulation and Supervision.
  The creation of our Audit Committee is still subject to the Central Bank's
  approval.

Our Audit Committee may be composed of between 3 and 5 members elected by
  our shareholders at a properly adjourned meeting for a 5-year maximum term
  of office. The Audit Committee will have a Chairman elected by our Board of
  Directors.

The following persons were elected as members of our Audit Committee at our
  April 30, 2004 Ordinary Shareholders Meeting:

Mr. Gabriel Jorge Ferreira -
    Mr. Ferreira's curriculum vitae is
  described in Item 6A  Directors, Senior Management and Employees. He was
  appointed chairman of the audit committee by the board of directors at their
  April 30, 2004 meeting.

Mr. Eduardo Augusto de Almeida
      Guimarães -Mr. Guimarães
  holds degrees in Economics and Civil Engineering, as well as a master's degree
  in Production Engineering from the Universidade Federal do Rio de Janeiro and
  a Doctor's degree in Economics from London University. Mr. Guimarães
  was Economist of Instituto de Planejamento Econômico e Social (Institute
  of Economic and Social Planning) (from 1969 to 1975) and of Financiadora
  de Estudos e Projetos (Studies and Projects Financer) (from 1975 to 1990);
  executive officer (from 1985 to 1988) and chairman (from 1990 to 1992) of Fundação
  Instituto Brasileiro de Geografia e Estatística (Brazilian Institute
  of Geography and Statistics Foundation); Secretary of National Treasury (from
  1996 to 1999); chairman of Banco do Estado de São Paulo (Bank
  of the State of São Paulo) (from 1999 to 2000) and chairman of Banco
  do Brasil (from 2001 to 2003). He was also adjunct professor of the Economics
  Department of Universidade Federal Fluminense (from 1969 to 1980) and
  a professor at the Economics Institute of Universidade Federal do Rio de
  Janeiro (from 1991 to 1998), where he was also principal (from 1982 to
  1985).

Mr.
                        Guy Almeida Andrade - Mr. Andrade holds a degree in Accounting
  from Universidade de São Paulo and a degree in Business Management
  from Universidade Mackenzie. He is the chairman of the Instituto
  dos Auditores Independentes do Brasil (Brazilian Independent Auditors
  Institute). He is also a member of the board of directors of the International
  Federation of Accountants, chairman of the audit committee of the same institution
  and partner of Magalhães Andrade Auditores Independentes and
  of RBA Global Auditores Independentes, two auditing companies.

Our by-laws do not specify an age limit for serving on the Audit Committee.

The members
    of our Audit Committee shall not receive any other compensation from our
    affiliates in addition to the compensation for serving as a member of the
    Audit Committee. Audit Committee members who also serve on the Board of Directors
    may choose to receive remuneration regarding one of such positions.

Article 38 of our by-laws lists
the powers of the Audit Committee. In particular, the Audit Committee has the power to review, prior
to their publication, the semi-annual financial statements, including explanatory notes, managements
reports and the reports issued by the independent auditors of each one of our consolidated subsidiaries.
In addition, our Audit Committee is entitled to recommend to the Boards of Officers from each of our
consolidated subsidiaries amendments to the policies and procedures within the scope of its attributions.

Our Audit Committee shall meet ordinarily once each trimester and extraordinarily
  whenever corporate interests so require. The decisions of the Audit Committee
  shall be 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.

Our board of directors currently serves as our audit committee for purposes
  of the Sarbanes-Oxley Act of 2002 and we are considering any changes that may
  be required to qualify our Audit Committee as an audit committee for purposes
  of the Sarbanes-Oxley Act and the rules promulgated by the SEC thereunder.

Unibanco Holdings is not required by Brazilian Law to have its own Audit Committee.
  The board of directors of Unibanco Holdings currently serves as its audit committee
  for purposes of the Sarbanes-Oxley Act.

6.D.
EMPLOYEES

Unibanco Pessoas (Unibanco
People), our human resources area, is committed to promoting professional growth and aligning
the interests of Unibancos employees with our strategic objectives. Unibanco People
develops tools for improving the process of managing human capital, focusing on
professional training and development, capturing and attracting new talent, developing
incentive and recognition programs, and improving relations with the in-house community
(employees) and the external community (government bodies and unions).

As of December 31, 2003, Unibanco and
its subsidiaries had 27,625 employees, up from 26,739 at the end of December 31, 2002. The
following table shows the number of Unibanco employees as of December 31, 2001, 2002 and
2003, grouped by business area.

|                          | Number of Employees
|------------------------- | -------------------
|                          |                    
|Area                      | 2001               
|                          |                    
|Retail Branches           | 10,386             
|Corporate-Site Branches   | 1,741              
|Unicard                   | 463                
|Wholesale                 | 1,513              
|Insurance                 | 1,373              
|Unibanco Asset Management | 148                
|Banco 1.net               | 302                
|Banco Dibens              | 104                
|Fininvest                 | 5,102              
|Others                    | 8,572              
|Total                     | 29,704             
|                          |                    

The following table
sets forth the number of Unibanco employees as of December 31, 2001, 2002 and 2003,
grouped by title and region:

|               | Number of Employees
|-------------- | -------------------
|               |                    
|Title          | 2001               
|               |                    
|Director       | 182                
|Superintendent | 305                
|Manager        | 1,903              
|Others (1)     | 27,314             
|Total          | 29,704             

---

|(1) | Includes
employees in foreign offices.
|--- | --------------------------------------

|                | Number of Employees
|--------------- | -------------------
|                |                    
|Region          | 2001               
|                |                    
|Southeast       | 23,943             
|South           | 2,509              
|Northeast       | 2,159              
|Center-East     | 786                
|Foreign Offices | 178                
|North           | 129                
|Total           | 29,704             

Approximately  41% 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 bank employees unions typically
have 12-month terms and are subject to renewal in September of each year.

We offer our outstanding senior
managers the opportunity to become shareholders. Our Stock Option Program awards
exceptional performance and contribution to the groups development. Up to December
31, 2003, we had granted 1,123,900,000 stock options, in the form of Units under this
program. These options are exercisable between January 21, 2005 and December 17, 2009, at
an average exercise price of R$92.97 per 1,000 options. Each Unit consists of one
ação preferencial, or preferred share, of Unibanco and one
ação preferencial Classe B, or Class B preferred share of Unibanco Holdings,
our parent.

We also emphasize employee training.
In 2003, 20 executives attended the MBA Consórcio program at the
Fundação Dom Cabral. 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 10 top ranked business schools. Since 1996, 35
professionals have been sponsored in schools such as Wharton, Kellogg, MIT, Stanford,
Chicago, Michigan, and the London Business School.

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. In connection with the third
annual award in 2003, we received 164 submissions, selected 24 finalists and chose five
winners and two special achievement nominees. Each winning team was awarded 200 lots of
1,000 Units.

Unibanco  has  been  undertaking  an  Employee   Satisfaction  Survey  since  1997,  conducted  by  external
consultants.  This is an  important  factor in our ability to assess the  organizational  climate,  identify
areas in need of  improvement  and take required  actions to provide  employees  with concrete  solutions to
foster healthy working environment that supports personal development.

In 2003, this survey posted a level
of employee satisfaction with Unibanco of 86%, a 17% improvement over the first survey
conducted in 1997. Regarding motivation, 76% of the employees now state that they
are either motivated or very motivated in their day-to-day work, which reflects a 24-point
improvement over the first survey.

6.E. SHARE
OWNERSHIP

Equity Ownership of
Directors and Officers

See Item 6.B.
 Compensation   Unibanco  Directors and Officers  Stock Option Plan for a  description
 of our stock option plan for selected  members of  management.

As  of May 31, 2004,
 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  approximately
 1.470% 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.

Until April 14, 2004,
 under this plan, E. Johnston issued its preferred  shares to participants who paid for
such shares with the  dividends  received.  The shares held under the plan would 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.

As of April 15, 2004,
the Special Preferred  Shareholders  Meeting and the Extraordinary  Shareholders  Meeting
of E. Johnston approved a reduction of capital by which the preferred  shareholders
 received Units held by E. Johnston in exchange for such preferred shares.

Therefore,  since
April 15, 2004,  the  participants  of our stock option plan hold Units,  being  provided
 that are no other changes in our stock option rules.

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

7.A.
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 96.6% of our voting
interest.

The following  table
shows the beneficial  ownership of our outstanding  common and preferred  shares as of
April 30, 2004. 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                      | 0.0%                     
|Float(1)                                        | 2,206,521,588          | 2.9%                     
|Our Directors and Executive Officers as a group | 45,958                 | 0.0%                     
|Treasury                                        | 0                      | 0.0%                     
|                                                |                        |                          
|Total                                           | 75,565,816,851         | 100.0%                   

|(1) | 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.,  a company
controlled by Moreira Salles family,  controls Unibanco Holdings through its ownership of
common shares representing 78.6% 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 preferred shares (this percentage refers to the sum of preferred shares and units). As of April 30, 2004, Caixa Geral de Depósitos equity participation in Unibanco Holdings, 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 in 12.5% of our total outstanding equity.

On September 30, 2003, Mizuho Corporate Bank Ltd. and Commerzbank AG sold an aggregate of approximately 5.8 billion Units in a global secondary offering in Brazil, the United States and elsewhere. The number of Units sold represented 9.36% of our non-voting capital and 11.66% of the non-voting capital of Unibanco Holdings.  As a result of this global offering, Mizuho has entirely liquidated its equity interest in us, which prior to the offering represented directly and indirectly 4.8% of our outstanding preferred shares; and Commerzbank has reduced its ownership of our outstanding preferred shares from 8.8% to 5.2%. However, we expect to maintain our historical business relationships with both Commerzbank and Mizuho.

These are the only
 significant  changes 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 April 30, 2004 and
the number of Unibanco  Holdings common and preferred shares owned by each such
shareholder.

|                                 | Unibanco Holdings Common Shares | Unibanco Holdings Preferred Shares
|-------------------------------- | ------------------------------- | ----------------------------------
|Shareholder                      | Number of Shares ON             | % of Total                        
|                                 |                                 |                                   
|E. Johnston Rep. E Part, S.A.    | 24,777,810,580                  | 78.6%                             
|Caixa Brasil SGPS, S.A.          | 3,713,843,587                   | 11.8%                             
|Commerzbank AG                   | 0                               | 0.0%                              
|Bahema
                Group (1) | 1,456,891,332                   | 4.6%                              
|Sul America Group                | 616,522,006                     | 2.0%                              
|Float (2)                        | 949,520,000                     | 3.0%                              
|Others directors                 | 14                              | 0.0%                              
|Treasury                         | 0                               | 0.0%                              
|                                 |                                 |                                   
|Total                            | 31,514,587,519                  | 100.0%                            

|(1) | 125,385,000
 shares are in the  custody of Câmara  Brasileira  de  Liquidação  e  Custódia - CBLC (São
Paulo  Stock  Exchange's       Clearing House).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Consisting
of our floating shares in the market
|--- | -----------------------------------------------

We estimate, based on the information received by the Depositary, that 69,447,910 of our Global Depositary Shares are held by approximately 3,700 beneficial owners and 22 record (registered) holders, as of April 30, 2004. Each of our Global Depositary Shares represents 500 Units, each Unit consisting of one Unibanco preferred share and one Unibanco Holdings preferred share.  Therefore, 53.2% of our total preferred shares and  65.7% of Unibanco Holdings total preferred shares are held in the United States in the form of Global Depositary Shares.

7.B. 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,  as well as any enterprises in
which such parties own a substantial interest or over which they can exercise significant
influence.

Under Brazilian law,
financial  institutions may not grant loans or advances to affiliates,  statutory
officers,  directors or their  family  members, nor to any  enterprises  in which such
 parties  own more than 10%.  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  and it does not limit
our ability to enter into  transactions in the interbank market with our affiliates that
are financial institutions.

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.,  Unicard  Banco  Múltiplo  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, credit cards 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

Commerzbank and Caixa Geral de Depósitos, financial institutions that are our strategic shareholders, and Mizuho, one of our former strategic shareholders, have, from time to time, extended trade-related and general purpose credit lines with us mainly for onlending purposes.  On December 31, 2003, the total amount outstanding under those credit lines related to Caixa Geral de Depósitos and Commerzbank was approximately R$819 million. The total amount outstanding under the credit line relating to Mizuho was approximately R$49  million on December 31,2003.

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

8.A.
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 19 - Financial Statements & Exhibits.

Legal
Proceedings

We
are a party to lawsuits and administrative proceedings incidental to the normal course of
our business, as described below. We believe that any potential liabilities arising from
such lawsuits and administrative proceedings will not have a material adverse effect on
our financial condition or results.

We
are involved in several tax disputes, mainly relating to the constitutional validity of
certain taxes imposed on us by the Brazilian government.

In
addition, Labor unions and former employees have filed several lawsuits against us seeking
compensation for labor rights. In such cases, we usually enter into settlement agreements
with our former employees.

We are party to a number of civil legal  proceedings  relating  to,  among  others,  claims  alleged  against us by clients in
connection  with  financial  services  provided by us and our  subsidiaries  and claims  relating to the  collection  of our  financial
products and are involved in several  lawsuits  resulting  from the  corporate  reorganizations  associated  with our  acquisitions  of
certain  Brazilian  financial  institutions.  In addition,  we are a party to several  lawsuits  filed by clients for the adjustment of
deposits required under certain anti-inflationary plans implemented by the Brazilian government.

We
are not party to any material administrative proceedings before the Security Exchange
Commission, the Brazilian Private Insurance Superintendency (SUSEP), or the
Central Bank of Brazil. In the ordinary course of our business, we are involved with
certain disputes filed by consumers with the Central Bank and SUSEP, but none of these
proceedings are material to our business.

We
believe that the provisions we have made for the lawsuits to which we and our subsidiaries
are defendants are sufficient to cover any probable and estimated losses from litigation,
and that there are no suits pending or threatened, individually or in the aggregate, that
if decided against us or our subsidiaries would have a material adverse effect on our
business, financial condition or results of operations. However, it is not possible for us
to determine all potential costs and fines that we may incur. On December 31, 2003, we
have provisioned (i) R$442 million for civil litigation; (ii) R$672 million for tax
litigation; and R$742 million for labor litigation.

There
are no material proceedings to which any of our directors or members of senior management,
or any of our affiliates, are either a party against us or our subsidiaries or have a
material interest against us or our subsidiaries.

# 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  treasury 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 at least twice a year, usually in January and July.

# 8.B. SIGNIFICANT CHANGES

Market Maker for Units

To increase the liquidity of our
Units in the Brazilian market, we hired in May 2004 LatinFinance Advisory & Research S.A. and
Ágora Senior Corretora de Títulos e Valores Mobiliários S.A., a
securities brokerage company, to be, respectively, advisor and Market Maker for our Units
with respect to BOVESPA, the São Paulo Stock Exchange.

Reverse
stock split

We and Unibanco Holdings approved a
reverse stock split of our respective stocks, common and preferred shares, including the
Units (each Unit represents one preferred share issued by Unibanco and one preferred share
issued by Unibanco Holdings), at the ratio of 100 (one hundred) shares to 1 (one) share.
We believe that the reverse stock split will provide more efficiency in the relationship
with the shareholders, reduce operational costs and increase our stock liquidity. The
reverse stock split is pending the Brazilian Central Bank approval and we expect it will
be consummated in the second half of 2004.

# ITEM 9. THE OFFER AND
LISTING

9.A.
OFFER AND LISTING DETAILS

Our preferred and common 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.

9.C.
MARKETS

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 ExchangeUS$ per GDS | São PauloStock ExchangeR$per 1,000 Unit
|----------------------------- | ---------------------------------- | ---------------------------------------
|                              | High                               | Low                                    
|Year ended December 31,      
|1999                          | 29.96                              | 8.72                                   
|2000                          | 32.57                              | 20.82                                  
|2001                          | 31.03                              | 12.72                                  
|2002                          | 26.06                              | 5.99                                   
|Year ended December 31, 2002:
|First quarter                 | 23.75                              | 18.98                                  
|Second quarter                | 26.06                              | 13.32                                  
|Third quarter                 | 16.05                              | 6.74                                   
|Fourth quarter                | 11.72                              | 5.99                                   
|Year ended December 31, 2003:
|First quarter                 | 14.57                              | 9.50                                   
|Second quarter                | 17.84                              | 14.23                                  
|Third quarter                 | 19.50                              | 15.09                                  
|Fourth quarter                | 24.46                              | 20.00                                  
|Year ended December 31, 2004:
|First quarter                 | 26.10                              | 22.13                                  
|Month of:                    
|                             
|January 2004                  | 26.10                              | 23.29                                  
|February 2004                 | 24.50                              | 22.13                                  
|March 2004                    | 25.91                              | 23.26                                  
|April 2004                    | 25.68                              | 19.60                                  
|May 2004                      | 19.40                              | 17.00                                  
|As at June 23, 2004           | 20.47                              | 18.65                                  

ITEM
10. ADDITIONAL INFORMATION

# 10.B. MEMORANDUM AND
ARTICLES OF ASSOCIATION

Summary of the By-laws of Unibanco - União de Bancos Brasileiros S.A.
and of 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. Our Corporate
Taxpayers Enrollment Number is 33.700.394/0001-40 and our State Enrollment Number is
35300102771.

Unibanco
Holdings is a company incorporated under the laws of the Federative Republic of Brazil.
Its Corporate Taxpayers Enrollment Number is 00.022.034/0001-87 and its State Enrollment
Number is 35300140443.

The
information below refers to Unibanco Holdings by-laws and our by-laws, both dated
April 30, 2004. Our by-laws are currently subject to the Central Banks approval.

Objectives and Purposes

Unibanco

Our
corporate objective and purpose, as described in article 2 of our by-laws, are
    to perform those operations and services which are permitted to be performed
    by financial institutions according to Brazilian Law. This includes conducting
    foreign exchange. We may also participate in the share capital of other companies,
    pursuant to the applicable legal and statutory provisions, but we may not
    (i) acquire real property not intended for our own use, with the exception
    of certain cases permitted by law, or (ii) issue debentures or
partes beneficiárias.

Unibanco Holdings

Unibanco Holdings objective and purpose, as described in article 2 of its by-laws, are to participate in the share capital of other companies. Unibanco Holdings exclusively holds equity interest in Unibanco. It does not currently intend, on a permanent basis, to conduct any activity other than holding Unibancos 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 8 (eight) directors.
                Directors are elected by our shareholders at the shareholders meeting, for
                a 1 (one) year term of office. Pursuant to the Brazilian Corporation Law and
                our by-laws, all directors must also be shareholders. Our by-laws do not specify
                a minimum number of shares that a director must own.

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 (or the Vice Chairman if the Chairman is not present), in addition
to his own vote, is entitled to cast the tie breaking vote.

Article
15 of our by-laws specifies that the age limit for serving on 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 member of our Board of  Directors,  of our Audit  Committee  and
of our Board of Officers,  subject to the  aggregate  maximum  amount  approved by
 shareholders  at the annual                              shareholders meeting; and

- the
performance bonus of each member of our Board of Directors and  our Board of Officers.

Our Board of Officers
may be composed of up to 150  members:

- One  Chief
Executive Officer;

- up to 10
 Executive Vice-Presidents and Vice-Presidents; and

- up to 139
 Executive Officers, Officers and Deputy Officers.

The
Chief Executive Officer, the Executive Vice Presidents, the Vice-Presidents and the
Executive Officers form the Board of Executive Officers. Until July 1, 2004, the Board of
Officers will also include 1 (one) Executive President of the Retail Banking Group.

All
members of the Board of Officers are elected by our directors at the Board of Directors
Meeting for a 1 (one) year term of office. The Board of Executive Officers is responsible
for the management and supervision of our corporate activities and the Board of Officers
has the power to act on our behalf in accordance with our by-laws.

Article
20 of our by-laws specifies that the age limit for holding a position on our Board of
Officers is 60 (sixty) years. Such limit may be extended at the Board of Directors
discretion.

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. Directors
are elected by the shareholders at the shareholders meeting for a 1 (one) year term of
office. Pursuant to the Brazilian Corporation Law and the by-laws of Unibanco Holdings,
all directors are required to be shareholders. Unibanco Holdings by-laws do not
specify a minimum number of shares that a director must own.

Unibanco
Holdings by-laws do not specify an age limit for serving on the Board of Directors.

Article
16 of Unibanco Holdings by-laws lists the exclusive powers of its Board of
Directors. Pursuant to this provision, the Board has the power to, among other things,
determine the remuneration of each member of the Board of Directors and the Board of
Officers, subject to the maximum aggregate amount approved by shareholders at the annual
shareholders meeting.

The
Board of Directors ordinarily meets twice a year and additionally meets whenever corporate
interests so require. The decisions of the 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 (or the Vice Chairman if the Chairman is not present), in addition to his own
vote, is entitled to cast the tie breaking vote.

The
Board of Officers is made up of 3 (three) members: 1 (one) Chief Executive Officer
                and 2 (two) Officers. All members are elected by the Board of Directors,
                for a 1 (one) year term. Unibanco Holdings by-laws do not specify an
                age limit for holding a position on the Board of Officers.

The
Board of Officers is responsible for the management and supervision of Unibanco
Holdings corporate activities and has the power to act on behalf of Unibanco
Holdings in accordance with its by-laws.

Certain
Provisions of Brazilian Law

Under
Brazilian law, the controlling shareholders, directors and officers may not take or
receive loans or advances from financial institutions in which they are shareholders,
directors or officers. In addition, we may not grant loans or advances 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.

In
addition, directors and officers may not take part in any corporate transaction or
deliberate with respect to any corporate transaction in which they have a conflict of
interest with the company. Any director or officer who believes he may have a conflict
must inform the companys other officers and directors of the nature and extent of
his interest in the transaction.

# Audit Committee

Please
see "Item 6.C. Board Practices" for information regarding our Audit Committee.

# Description of capital stock

General

Unibanco

As
of April 30, 2004, our fully subscribed and paid in capital stock is equal to
R$5,000,000,000, represented by 140,885,833,318 registered shares with no par value. Of
these:

- 75,565,816,851
are common shares, and

- 65,320,016,467
are preferred shares.

Unibanco Holdings

As
of April 30, 2004, Unibanco Holdings fully subscribed and paid in capital stock was
equal to R$1,863,449,958.72, represented by 84,330,476,296 registered shares with no par
value, as follows:

- 31,514,587,519
common shares, and

- 52,815,888,777
preferred shares.

Payment for subscribed
shares

Pursuant
to the Brazilian Corporation Law, the liability of the shareholders of corporations
(sociedades anônimas) is limited to the price paid for the subscribed
shares. The law further states that the shareholder must pay for these shares in
accordance with the terms and conditions of the by-laws or the subscription bulletin, as
the case may be. If the by-laws or the subscription bulletin do not state the amounts and
terms of payment, the management bodies shall inform the shareholders of their duty to
make the appropriate payments in the manner set forth in the law.

If
a shareholder does not make the appropriate payments for the subscribed shares, the
company may, in its discretion, seek the payment through court proceedings or by selling
the shareholders shares on the stock exchange.

Unibanco common
shares

Each
common share entitles the holder to one 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 participate, on the same basis as our preferred
shareholders, in capital increases resulting from reserves and profits.

Unibanco preferred
shares

Our preferred shares are not convertible into common shares and, except in limited circumstances, do not entitle the holder to  voting rights.  Our preferred shares entitle the holder to the following additional rights:

- participation
in the net profits of each fiscal year, in an amount which ensures each preferred
shareholder a yearly dividend 10% higher than that distributed to each common shareholder;

- priority in
the return of capital, without a premium, in case of liquidation, based on the portion of
the capital stock represented by these shares; and

- participation,
on an equal basis with holders of common shares, in capital increases resulting
    from the capitalization of reserves and profits.

Unibanco Holdings'
common shares

Each
common share entitles the holder to one vote at shareholders meetings and to
    receive, together with the Unibanco Holdings preferred shares, dividends
    equivalent to 100% of Unibanco Holdings net profit. In addition, common shareholders
    are entitled to participate, on the same basis as the other shares of Unibanco
    Holdings, in capital increases resulting from the capitalization of reserves
and profits.

Unibanco Holdings'
preferred shares

The
                preferred shares of Unibanco Holdings do not entitle the holders to voting
                rights, except in limited circumstances. Unibanco Holdings preferred
                shares entitle the holder to the following additional rights:

- priority
    in the distribution of a minimum semiannual dividend of the higher of, (i)
    R$0.15 per one thousand shares (adjusted for any applicable stock split or
    recombination); 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;

- 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 reserves and profits.

In
September 2003, 100% of the class "A" preferred shares issued by Unibanco Holdings were converted into class "B" preferred shares.  Therefore,  the relevant provisions of the by-laws were duly
amended to eliminate the separate Class A preferred shares and the shares formerly  designated class "B" preferred shares are now designated  "preferred shares".  Nevertheless,  due to operational  matters,  the
designation of Unibanco Holdings preferred shares shall not be altered on the negotiations occurred until the next notice to the market.

Units

Pursuant
to article 43 of the Brazilian Corporation Law, Units are defined as share deposit
certificates. Each certificate, or Unit, represents one of our preferred shares and one
preferred share of Unibanco Holdings. Accordingly, for each of our preferred shares
deposited, an equal number of preferred shares of Unibanco Holdings must also be deposited
to form a Unit.

We
provide each holder of Units with a statement related to his account as requested, at the
end of each month in which a transaction takes place and once per year if no transactions
occur. This statement contains the following information:

- the date
and place of issuance,

- an
indication that it is a report on Units "Certificado Escritural de Depósito de
Ações",

- the number
and type of deposited shares,

- that the
underlying shares, as well as dividends paid thereon and amounts corresponding to
redemption or amortization,  will only be made available to the holder of the Units or to
the person such holder                              indicates in writing; and

- 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 provide, among other things, that a
holder of a Unit is a holder of one of our preferred shares and one of the preferred
shares of Unibanco Holdings, entitled to all the rights inherent to such shares.

Units
holders rights

The
following procedures relate to the exercise of the rights conferred by the shares
underlying the Units:

- 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;

- A holder of
Units is entitled to participate at our and Unibanco Holdings'  shareholders meetings,
and to exercise all rights conferred to the relevant shareholders with respect to the
underlying shares;                              and

- If
 preemptive  rights  relating to the  underlying  shares of one or both  companies  are
granted to  shareholders,  a holder of Units is entitled to  subscribe  for shares of one
or both  companies  as                              applicable, and the shares may be
issued to such holder separately or, if preemptive rights are granted and exercised with
respect to both companies, as additional Units.

Special
Provisions Relating to the Form and Transfer of Shares and Units

Our
shares, the shares of Unibanco Holdings and the Units are registered in book-entry form
and we act as registrar for these securities.

Any
transfer of ownership in our shares, the shares of Unibanco Holdings, the shares deposited
with us for the issuance of Units, and the Units themselves can only be effected through
book entries upon the presentment of a written order of the holder of the relevant
securities or the presentment of a court order or authorization, which shall be kept in
our files. Such entries attribute to the transferee the shares or Units acquired and
withdraw from the transferor the shares or Units sold.

The
Units 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 - OTA).  After receiving the order, the broker agent must deposit the Units in the custody of the Brazilian 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 transferred to our custody and registered in the name of their
new holder.

Limitations on
Foreign Investors' Rights to Own Securities

Foreign investors seeking to invest in Brazilian securities are required
to comply with various rules and regulations, which include rules requiring the
registration of investors and their investments with the Central Bank, the Brazilian
Securities and Exchange Commission, and the Brazilian Registry of Legal Entities. In
addition, foreign investors who wish to invest in the voting shares of Brazilian
financial institutions require the prior authorization of the Brazilian government.
For a more detailed discussion on these limitations on foreign investors rights to own
securities, see Item 10. Additional Information  Exchange Rates and Exchange
Controls  Restrictions on Foreign Investments and Overseas Remittances and
Item 4.B. Business Overview - Regulation and Supervision  Foreign
Investments and the Federal Constitution  Foreign Investments in Brazilian Financial
Institutions.

Cancellation
of Units

In
accordance with our by-laws and Unibanco Holdings by-laws, a holder of a Unit may,
at any time, cancel his 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.

Shareholders
meetings

Pursuant
to our by-laws and Unibanco Holdings by-laws, annual shareholders meetings are held
within 4 (four) months following the end of the fiscal year. At the annual meeting,
shareholders, among other things:

- analyze,
discuss and approve our financial statements; and

- deliberate
about the use of our net profits for the fiscal year, as well as the distribution of
dividends.

Pursuant
to our by-laws and Unibanco Holdings by-laws, extraordinary shareholder meetings may
be held whenever the corporate interests so require.

According
to the Brazilian Corporation Law, the general shareholders meetings may be called by the
Board of Directors. In addition, general shareholders meetings may also be convoked by:

- the Fiscal
Committee, in circumstances specified by law;

- any
shareholder, in case managers do not convoke the meeting within 60  days of the required
date;

- shareholders
who represent at least 5%  of the capital stock, if directors fail to call a meeting
within 8 days of a convocation request; or

- shareholders
 who represent at least 5% of the capital stock or 5% of the  shareholders  with no right
to vote, if the Directors  fail to call a meeting within eight (8) days of the
 convocation  request                              for installing the Fiscal Committee.

Our
shareholders meetings, as well as those 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 in the Valor Econômico, both newspapers with circulation
in the city of São Paulo. This notice must contain the agenda for the meeting and,
in case of an amendment to the by-laws, an indication of the subject matter.

The
meetings generally take place at our principal office. A shareholders meeting
    in which all the shareholders participate will be considered valid, notwithstanding
    failure to meet the legal requirements for the convocation.

According
to our and Unibanco Holdings by-laws, shareholders meetings 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 so in his
stead. The Chairman shall choose among the shareholders present one or more shareholders
to serve as secretaries of the meeting.

Our
shareholders may be represented at shareholders meetings by a proxy that meets the
conditions imposed by law. The identity of a shareholder shall be proved, if so required,
by the presentation of a document evidencing his identity.

Voting
rights

Each
of our common shares and the common shares of Unibanco Holdings entitles the holder to one
vote at shareholders meetings. Except as otherwise provided by law, resolutions of a
general shareholders meeting are passed by majority of votes.

Under
Brazilian Corporation Law, the holders of our preferred shares and the preferred shares of
Unibanco Holdings are entitled to vote in the event we do not pay their minimum dividends
for three consecutive fiscal years. In this event, the voting right of the preferred
shares remains effective until such dividends are paid in full.

The
                majority of holders of our preferred shares and the preferred shares of Unibanco
                Holdings, voting separately as a class, in a special meeting, have the right
                to approve proposals of the majority of the voting shareholders that would:

- change the
rights and privileges of the preferred shares; and

- create a
new class of preferred shares with superior rights.

Under
Brazilian Corporation Law, non-controlling holders of our preferred shares and the
preferred shares of Unibanco Holdings representing at least 10% of the capital stock have
the right to elect or dismiss one 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 described above for at least 3 (three) months
immediately before the shareholders meeting. Similarly, non-controlling holders of
our common stock and the common stock of Unibanco Holdings which represent at least 15%
(fifteen percent) of our voting capital stock have the right to elect or dismiss 1 (one)
member of the Board of Directors, subject to the same terms and restrictions that apply to
the non-controlling holders of our and Unibanco Holdings preferred shares.

Preemptive
rights

Each
shareholder of Unibanco Holdings and our shareholders have a general preemptive
right to subscribe for shares in the event of any capital increase in the proportion to
his 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
offers 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 and the foreign shareholders of
Unibanco Holdings who hold an indirect participation in our capital stock may be prevented
from exercising their preemptive rights.

Change
of Control Provisions

Under
Brazilian Corporation Law, the sale of control of a publicly held company can only be
effected if the purchaser makes a public offer to purchase the voting shares of the
remaining shareholders at a price equal to at least 80% (eighty per cent) of the price
paid for the controlling block of shares.

Right of withdrawal and
redemption

Our by-laws and the by-laws of Unibanco  Holdings do not set forth any  redemption  provision;  however,  unless the by-laws state  otherwise,  the redemption of shares shall only be effected if, in a shareholders
meeting convoked specifically to deliberate upon such matter, it is approved by shareholders representing at least half of the relevant shares.

The
Brazilian Corporation Law provides that, under limited circumstances, a shareholder has
the right to withdraw his or her equity interest from the company and to receive payment
for the portion of shareholders equity attributable to his or her equity interest.

Capital increases

Our
Board of Directors may increase our corporate capital by 95,195,526,716 shares, up to a
maximum authorized amount of 236,081,360,034. This capital increase may be effected
without amending our by-laws or obtaining shareholder approval, subject to the applicable
limitations under Brazilian Corporation Law. As a financial institution, 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 at a
shareholders meeting, through an amendment to our by-laws.

The
Board of Directors of Unibanco Holdings may increase its corporate capital by
180,000,000,000shares, up to a maximum authorized amount of 60,000,000,000 common
shares and 120,000,000,000 preferred shares. This capital increase may be effected without
amending Unibanco Holdings by-laws or obtaining shareholder approval, and without
maintaining the existing proportion among the classes of shares, subject to applicable
limitations under Brazilian Corporation Law. No more than 2/3 of the capital stock may be
represented by non-voting shares.

Acquisition of our
own shares

We
and Unibanco Holdings may acquire our own shares, in order to cancel them or to keep them
in our treasury, subject to authorization by our Board of Directors and certain
limitations and conditions established by the CVM and by the Brazilian Corporation Law.
Among other limitations, we may only repurchase shares with available profits and reserves
as reflected in our most recent balance sheet and we may only hold 10% of each class of
outstanding shares in treasury.

Approval by the
Central Bank

The
Central Bank must approve every amendment to 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 a
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, statutory 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 (i) semiannual balance sheets
                or earning  reserves; or (ii) balance sheets issued on shorter periods, in
                which case the distribution of dividends shall not exceed the amount  of capital
                reserves. These interim payments may be off set against the mandatory dividend.

Unibanco
Holdings by-laws contain the following provisions with respect to dividends for each
fiscal year:

- the company
shall distribute as dividends the entirety of the fiscal year's profit which remains
after the creation of the legal reserve, when applicable;

- preferred
 shares receive a semiannual  minimum  dividend of, the higher of (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 (i)
        semiannual balance sheets or earning reserves; or (ii) balance sheets issued
        on shorter periods, in which case the distribution of dividends shall not exceed
        the amount of capital reserves. These interim payments may be off set against
        the mandatory dividend.

Our
and Unibanco Holdings Board of Directors normally declare dividends during the first
quarter of each 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 terminate within three years from the date they were
offered to the shareholder. In the event such legal action terminates, we and Unibanco
Holdings will be entitled to such dividends.

Pursuant
to Brazilian Corporation Law, we may suspend the mandatory distribution of dividend if the
Board of Directors determines that payments of the mandatory distribution of dividend
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 five days 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.

We
and Unibanco Holdings intend to continue to distribute dividends at an annual rate equal
to the mandatory dividend.

Interest
on capital stock

According
to our by-laws and the by-laws of Unibanco Holdings, any interest distributed to the
shareholders, up to the limit of the long term interest rate (Taxa de Juros de Longo
Prazo), shall be taken into account for the purpose of calculating the amount of the
mandatory distribution of dividend, as provided for in paragraph 7 of Article 9 of Law
9249 of 12.26.95.

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 increases his
participation in the capital stock of the company by 5%, the shareholder must give notice
of the increase to CVM, the Stock Exchanges and to the over-the-counter market in which
the company has its securities negotiated. Such notice must contain the following
information:

- name and
qualification of the acquirer;

- objectives
of the acquirer;

- quantity of stock option and
subscription rights, by species and/or class of shares, already held directly or indirectly by the
 acquirer or by any person related to him;

- quantity of
convertible  debentures already held,  directly or indirectly,  by the acquirer or by any
person related to him,  establishing the quantity of shares subject to such possible
 conversion,  by                              class and specie; and

- existence
of any agreement which regulates voting rights or the sale and purchase of securities
issued by the company.

When
the controlling shareholder has already increased its equity participation by 10% (ten
percent) or more of any class of shares, 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 shareholders
equity participation (through option, convertible debenture, etc.) must be taken into
account.

Acquisition
by any other person or company

Pursuant
to CVMs regulations, if a company, an individual, or a group of individuals, acting
together or representing only one interest, achieve a direct or indirect participation of
10% (ten percent) in the capital stock of a publicly-held 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 increase their
participation by 5% (five percent) or more of a specie or class of shares of the
companys capital stock.

10.C. MATERIAL CONTRACTS

BUS
Serviços de Telecomunicações S.A.  Closing Agreement

On
June 26, 2002, ANATEL (Brazilian National Telecommunications Agency) approved the transfer
of control of Bus Serviços de Telecomunicações S.A. (BUS)
to Portugal Telecom S.A. (PT) or its affiliates. Primesys S.A.
(Prymesis) acquired all BUS common shares held by Bus Holding S.A. (BUS
Holding), representing 80.01% of BUS voting capital and 26.67% of BUS total shares,
pursuant to a Closing Agreement, dated as of June 28, 2002. As a result, Primesys became
the holder of 100% of the capital of BUS, and we and União de Comércio
Participações Ltda. became holders of 100% of the capital of BUS Holding.

10.D. EXCHANGE RATES AND EXCHANGE CONTROLS

Only
institutions authorized by the Central Bank to operate in the foreign exchange markets may
purchase or 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 realexperienced 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 realdeclined 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. The real
recovered to some extent in 2003. The real declined against the dollar up to May,
2004 as a result of the changing outlook concerning the reversal of the expansionist path
of US monetary policy and the ensuing dropping inclination of the international financial
market to run risks in emerging markets.

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. dollarsReaisper US$1.00

1. Low, High,
Average and Period-End, from 1995 to 2003:

|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     | 3.5329    
|2003   | 2.8219 | 3.6623 | 3.0723     | 2.8879    

2.  Low and High, from January 2004 to June 2004:

|Period   | Low    | High  
|-------- | ------ | ------
|         |        |       
|January  | 2.8022 | 2.9409
|February | 2.9016 | 2.9878
|March    | 2.8752 | 2.9410
|April    | 2.8743 | 2.9522
|May      | 2.9569 | 3.2051
|June (2) | 3.1119 | 3.1647

Source: The Central
Bank


|(1) | Represents
the average of the month-end exchange rates during the relevant period.
|--- | ----------------------------------------------------------------------------------

|(2) | Through  June 22, 2004.
|--- | -----------------------

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.

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 from the date they withdraw the Units from the Depositary  Receipt
program,  establishing a representative of its investments in
                             Brazil.

Any
individual, corporation or partnership resident or domiciled abroad may register with the
Brazilian Securities and Exchange Commission  CVM and the Central Bank as a foreign
investor. Such foreign investor 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.

In
addition, a foreign entity, corporation or partnership which invests in the Brazilian
financial and securities markets (except for investments in depositary certificates issued
abroad, such as the GDS) must apply with the CVM for registration with the Brazilian
Registry of Legal Entities (CNPJ). The CNPJ registration is maintained by the
Brazilian federal tax authorities and a tax number is granted in connection therewith. In
such particular cases, the right to (i) convert into foreign currency the payment of
dividends and earnings resulting from the sale of shares and securities, and (ii) remit
such amounts from Brazil, is subject to registrations both with the Central Bank and the
CNPJ.

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.

10.E. TAXATION

Taxation
of GDSs and Units in Brazil

We
describe below the main Brazilian income tax consequences relating to the acquisition,
ownership and disposition of GDSs 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
relating to the acquisition, ownership and disposition of GDSs 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 program maintained in the United States and on the assumption that
each obligation in the Deposit Agreement and any related documents will be performed in
accordance with its terms.

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 capital gains.

CPMF

When
Unibanco Holdings pays dividends or interest, such payment is subject to the Temporary
Contribution on Financial Transactions, or CPMF.

Taxation
of Non-Stock 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 tax.

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 accrued interest, 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%.

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.

Taxation
of Gains

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.

As a
general rule, if you sell your Units and realize a gain from the sale, you will be
required to pay tax on the gains at a rate of 20%.

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
a holder of GDSs, you may cancel your GDSs and exchange 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, or 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
CVM and you are 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 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.D. Exchange Rates and Exchange
Control");

- with the
CVM, and you sell your Units in Brazil  realizing a gain on the sale, you will pay tax on
the 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 a gain subject to
                             Brazilian tax;

- if you (i)
 exchange  your GDSs for Units;  (ii) you do not register  your  investment  with the CVM
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 be required 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 GDSs under our Depositary Receipt program.

Other Brazilian
Taxes

There
are no other Brazilian taxes applicable to the ownership, acquisition or disposition of
GDSs or Units by a non-Brazilian holder.

# 10.H. 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.govor
http://www.cvm.gov.brthat 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

Risk
Management

We continuously strive to improve our
risk management practices, which are integrated into the various levels of our
organization. A separate department and independent unit is responsible for identifying,
measuring and managing market, credit and operational risk on a consolidated basis
institution-wide. In addition, while the bank presents a clear risk management focused
environment, some business divisions, due to their specific risk exposures, have dedicated
risk management staff. Several committees, composed of senior management, evaluate the
risks involved in our activities and propose risk management policies accordingly.

Credit
Risk

Credit risk is related to the ability
of a borrower to meet its financial obligations. It is associated with exposures that are
more likely to be held to maturity, such as corporate and retail loans. 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 (rating
framework).

Wholesale
Portfolio

Our wholesale loans have distinctive
characteristics and therefore we evaluate them on an individual basis rather than as a
homogeneous portfolio. We base the credit decisions on the following factors: financial
history, cash flows, quality of management, relationship history, market conditions and
other factors relating to credit risk. To properly manage our portfolio, we employ an
internal credit rating system, which ranks companies from AA1 to H, within 14 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, since
borrowers financial situations can deteriorate after the loan is made. The rating
system is structured as follows:

- AA and A
are very stable with minimal credit risk and considered to be financially very sound;

- B and C are
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 are higher risks or have potential problems; and

- H are 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. As for 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, 2003, approximately 93.7%
of our wholesale loan portfolio ranked between AA and C.

Retail
Portfolio

Credit  management in the retail banking  business can be  characterized by the processing of a large volume
of credit requests and we manage credit risk on a portfolio basis.  Small-balance  loans such as overdrafts,
credit card loans,  residential housing loans and consumer  installments loans have similar  characteristics
and we manage our  portfolios  of these  loans by using  specialized  systems and  processes.  We use a wide
range of statistical  tools to evaluate loans  requests and clients'  performance,  which include credit and
behavior  scoring - backed by  dedicated  systems - that are  currently  developed  internally.  In order to
better manage our credit portfolio,  our internal policy defines four different risk levels scenarios,  from
a normal economic environment to a high  recession/inflation  scenario.  However, in order to more precisely
establish  the  allowances,  estimates and  judgments  based on loss  experience,  risk  characteristics  of
specific  subportfolios  among other factors  might also be taken into account.  We evaluate the adequacy of
the allowance for our credit portfolio on a monthly basis unless circumstances otherwise require.

Operational
Risks

Operational risks are related to an
institutions unexpected losses, due to its systems, processes, practices and control
measures being adversely effected by human error, damaged support infrastructure, fault
modeling, services or products, and to business environment changes or other adverse
market conditions.

To meet the requirements of
international market practices and the internal regulations of the Brazilian financial
market, we have an internal control structure, which includes a standard listing of risks
and controls. We have a reference guide in our intranet, which provides clear descriptions
of the typical key risks and required controls for certain processes. Periodical
evaluations are conducted in which area managers and their staff identify their main
activities and inherent risks, and access the effectiveness of current controls. This
process, which is ongoing, allows controls to be improved and potentially reduce risk
exposure.

Management
of Systems Risk

As banking operations diversify and
the volume of transactions involving computers and telecommunications networks increase,
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 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 have participated in a combined
underwriting process. For example, UASEG uses information from insurance applications to
evaluate life insurance proposals. For certain life insurance applicants, a medical
examination is required to better analyze the risk. Property and casualty insurance
underwriters and engineers assess and evaluate risks prior to quotations for property and
casualty coverages. The evaluations 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.

Market
Risk

Market risk is related to potential
losses derived from changes in interest and exchange rates, among others. 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, capitalization, 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 analyzed 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.

Our financial committee, which consists of representatives from senior management,
meets monthly. This committee establishes the position limits for our treasury unit, taking into account, market
volatilities, liquidity, institutional needs, and potential risks. Extraordinary meetings of the financial
committee are held if unexpected changes in the macroeconomic environment arise that generates opportunities
and/or risks.

Our risk committee, which consists of representatives of the board, business directors
and risk management professionals also meets every month. The committees main objective is to review policies
related to treasury, brokerage, products and custody, among other things. 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 on
positions and exposures in accordance with policy limits.

We use derivatives as the main market
instrument for our 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 are interest rate and foreign
exchange futures, forwards 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 that 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, which are very liquid assets. No
state or municipal position was carried during 2003. We also have been carrying a Eurobond
portfolio of low risk Brazilian issuers. This is a small portfolio when compared to our
government securities position.

The duration of instruments traded in
Brazil is 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.

All
arbitrage decisions take place at our headquarters 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.

VaR

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% confidence level (2.33
standard deviation) to calculate the VaR on a daily basis. 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.

Backtesting

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 are conducted on a daily basis and work as
an effective tool under normal conditions. Irregular market movements such as those seen
in 2002 in the Brazilian financial markets are clearly defined as stress and are
incorporated in the Stress test.

Stress
testing

Stress tests are also part of our
risk policy. Scenarios for maintenance, quick worsening, huge worsening and enhancement of
market conditions are conducted and revised weekly. In addition, whenever political or
economic events that may affect the financial market are foreseen, a new scenario is
generated and positions reevaluated in order to understand the impacts for the bank.

Non-trading
activities

Both trading and non-trading
activities are measured and controlled by the same tools and methodologies. The positions
closed by us with clients and hedged in the market are evaluated by VaR and Stress tools
using the same data and projections and kept under rigorous monitoring.

Our
primary market risk exposures as of December 31, 2003 and 2002 were related to interest
rates (fixed, floating and indexed in U.S. dollars).

The following table sets forth the
VaR calculated on our overall risk portfolio during 2001, 2002 and 2003.

|                                         | Average | Minimum | Maximum | As of December 31, 2003
|---------------------------------------- | ------- | ------- | ------- | -----------------------
|(in millions of R$)                     
|Interest rate risk on domestic position:
|Fixed                                    | R$3.9   | R$0.4   | R$8.2   | R$5.7                  
|Floating - IGPM indexed                  | 1.8     | 0.3     | 7.2     | 0.3                    
|Floating - TR indexed                    | 0.1     | 0.0     | 0.3     | 0.1                    
|Floating - US$ indexed                   | 3.5     | 0.3     | 13.3    | 3.2                    
|Foreign exchange risk - US$              | 2.1     | 0.0     | 19.9    | 0.1                    
|Stock market                             | 2.9     | 0.0     | 3.8     | 0.0                    
|Interest rate risk on foreign position   | 33.2    | 9.2     | 73.4    | 16.4                   
|Structured position:                    
|Equity of foreign branches               | 31.2    | 9.4     | 112.4   | 9.4                    
|Consolidated risk                        | R$37.8  | R$13.3  | R$96.0  | R$20.6                 
|                                        
|                                        
|                                         | Average | Minimum | Maximum | As of December 31, 2002
|(in millions of R$)                     
|Interest rate risk on domestic position:
|Fixed                                    | R$6.2   | R$2.0   | R$18.3  | R$2.9                  
|Floating - IGPM indexed                  | 2.5     | 0.1     | 8.7     | 7.3                    
|Floating - TR indexed                    | 0.6     | 0.2     | 1.1     | 0.3                    
|Floating - US$ indexed                   | 18.5    | 2.9     | 67.6    | 6.7                    
|Foreign exchange risk - US$              | 12.4    | 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               | 53.9    | 12.9    | 110.9   | 80.0                   
|Consolidated risk                        | R$92.9  | R$21.9  | R$192.5 | R$96.6                 
|                                        
|                                        
|                                         | Average | Minimum | Maximum | As of December 31, 2001
|(in millions of R$)                     
|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               | 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 2003, 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
|------------------- | ------------------------------------------------------------
|                    |                                                             
|                    | 2002                                                        
|                    |                                                             
|(in millions of R$)
|up to R$20          | 0.0%                                                        
|over R$20 to R$40   | 32.0                                                        
|over R$40 to R$60   | 11.9                                                        
|over R$60 to R$80   | 0.8                                                         
|over R$80 to R$100  | 11.9                                                        
|over R$100 to R$120 | 4.4                                                         
|over R$120 to R$140 | 11.1                                                        
|over R$140 to R$160 | 9.9                                                         
|over R$160 to R$180 | 13.8                                                        
|over R$180 to R$200 | 4.4                                                         
|over R$200          | 0.0                                                         
|                    |                                                             
|                    | 100.0%                                                      
|                    |                                                             

In 2002, Brazil experienced
economical and political turmoil that stressed the financial market to levels of
volatility never seen before. As a consequence, the frequency of VaR numbers of a higher
magnitude increased.

# ITEM 12. DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES

Not
applicable.

# PART II

# ITEM 13. DEFAULTS,
DIVIDEND ARREARAGES AND DELIQUENCIES

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

Our
and Unibanco Holdings management, with the participation of the Chief Executive
Officers and Chief Financial Officers, have evaluated the effectiveness of our and
Unibanco Holdings disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
Exchange Act) as of the end of the period covered by this report. Based on
such evaluation, our and Unibanco Holdings Chief Executive Officers and Chief
Financial Officers have concluded that, as of the date of such period, our and Unibanco
Holdings disclosure controls and procedures were adequate and effective.

Change
in Internal Control over Financial Reporting

There
have been no changes in our and Unibanco Holdings internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) that occurred during the fiscal year ended December 31, 2003 that have materially
affected, or are reasonably likely to materially affect, our or Unibanco Holdings
internal control over financial reporting.

# ITEM 16. [RESERVED]

# ITEM 16.A. AUDIT
COMMITTEE FINANCIAL EXPERT

Our
board of directors currently serves as our audit committee for purposes of the
Sarbanes-Oxley Act of 2002. See Item 6.C. Board Practices, for a discussion of our board
and audit committee practices. Our board of directors has determined that we do not have
an audit committee financial expert (as defined under the rules and
regulations of the U.S. Securities and Exchange Commission) on the board because, as
defined, an audit committee financial expert for Unibanco must, among other things, be a
financial expert in U.S. GAAP. One or more members of our board are expert in Brazilian
GAAP and we believe the skills, experience and education of our board members qualifies
them to carry out all of their duties as members of the board, including oversight of the
preparation of our U.S. GAAP financial statements. In addition, the board has the ability
to retain independent accountants, financial advisors or other consultants, advisors and
experts whenever it deems appropriate.

The
board of directors of Unibanco Holdings currently serves as its audit committee for
purposes of the Sarbanes-Oxley Act of 2002. See Item 6.C. Board Practices, for a discussion
of Unibanco Holdings board practices. Unibanco Holdings board of directors has
determined that it does not have an audit committee financial expert on the board because,
as defined, an audit committee financial expert for Unibanco Holdings must, among other
things, be a financial expert in U.S. GAAP. One or more members of Unibanco Holdings
board are expert in Brazilian GAAP and Unibanco Holdings believes the skills, experience
and education of its board members qualifies them to carry out all of their duties as
members of the board, including oversight of the preparation of Unibanco Holdings
U.S. GAAP financial statements. In addition, the board has the ability to retain
independent accountants, financial advisors or other consultants, advisors and experts
whenever it deems appropriate.

# ITEM 16.B. CODE OF ETHICS

We
have adopted a Code of Ethics that applies to our principal executive officers, principal
financial officers and principal controllers, in addition to other officers and employees
within our economic group.

The
full text of our Code of Ethics is published on our website, at the following address:
http://ri.unibanco.com.br/ing/plm/met/index.asp. Copies of the Code of Ethics are
also available, without charge, by writing to Avenida Eusébio Matoso, 891 
15th Floor  São Paulo, SP  Brazil; Zip Code 05423-901; Attn.
Mr. Marcelo Rosenhek.Amendments to, and waivers granted under, our Code of Ethics,
if any, will be promptly disclosed on our website.

Unibanco
Holdings has not adopted a Code of Ethics because the members of its Board of Officers are
also members of our Board of Directors or Board of Executive Officers, and therefore are
subject to the provisions of the Code of Ethics adopted by Unibanco.

ITEM 16.C. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

The following table presents fees for professional audit services rendered by Deloitte Touche Tohmatsu
Auditores Independentes (Deloitte) for the audit of our annual financial statements for the years
ended December 31, 2003, and December 31, 2002, and fees billed for other permitted services rendered
by Deloitte during those periods.

|                       | 2002                        | 2003   
|---------------------- | --------------------------- | -------
|                       |                             |        
|                       | (in
    thousands of reais)
|Audit Fees (1)         | R$4,376                     | R$4,794
|Audit-Related Fees (2) | 312                         | 682    
|Tax Fees (3)           | -                           | 3      
|All Other Fees         | -                           | -      
|Total                  | R$4,688                     | R$5,479

|(1) | Audit services consisted principally of audit work performed
        on the consolidated financial statements, as well as work generally only
        the independent auditor can reasonably be expected to provide, such as
    statutory audits.     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Audit-related services consisted primarily of accounting consultations
        and audit in connection with comfort letters, reviews of internal controls,
        vehicles inventory relating to our Insurance business and due diligence
    process.
|(3) | Tax services consist of services rendered by the independent auditor
    for tax compliance.                                                                                                                                                           

Audit Committee's Pre-approval Policies

Our
    board of directors and the board of directors of Unibanco Holdings currently
  serve as our audit committees for purposes of the Sarbanes-Oxley Act of 2002.
  Our board of directors and the board of directors of Unibanco Holdings require management to obtain the board's prior approval
  in order to engage the independent auditors to provide any audit or permitted
non-audit services to us or our subsidiaries.

On
    April 14, 2004, our board of directors and the board of directors of Unibanco
  Holdings pre-approved the engagement of PricewaterhouseCoopers Independent
  Auditors or PWC to provide audit and certain audit-related services to us and
  our subsidiaries. The engagement of PWC to provide any permitted non-audit
  services shall be approved either by our board of directors or by an independent
director indicated by the board.

We
    established an audit committee to comply with Brazilian law and are considering
  any changes that may be required to qualify our Audit Committee as an audit
  committee for purposes of the Sarbanes-Oxley Act and the rules promulgated
by the SEC thereunder.

# ITEM 16.D. EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not
applicable.

# ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not
applicable.

# 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, 2002 and 2003 and
for the years ended December 31, 2001,  2002 and 2003 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:

Report
of Independent Registered Public Accounting Firm

Unibanco
Holdings S.A. and subsidiary

Consolidated
balance sheets as of December 31, 2002 and 2003

Consolidated
statements of income for the years ended December 31, 2001,
                            2002 and 2003

Consolidated
statements of changes in stockholders equity for the years ended
                           December 31, 2001, 2002 and 2003

Consolidated
statements of cash flows for the years ended December 31, 2001,
                           2002 and 2003

Unibanco
- União de Bancos Brasileiros S.A. and subsidiaries

Consolidated
balance sheets as of December 31, 2002 and 2003

Consolidated
statements of income for the years ended December 31, 2001, 2002
                           and 2003

Consolidated
statements of changes in stockholders equity for the years ended
                           December 31, 2001, 2002 and 2003

Consolidated
statements of cash flows for the years ended December 31, 2001,
                           2002 and 2003

Notes
to the consolidated financial statements

Credicard
S.A. Administradora de Cartões de Crédito

Independent
auditors report

Balance
sheets as of December 31, 2002 and 2003

Statements
of earnings for the years ended December 31, 2001, 2002 and 2003

Statements
of changes in shareholders equity for the years ended December 31, 2001, 2002 and 2003

Statements
of changes in financial position for the years ended December 31, 2001, 2002 and 2003

Notes
to the financial statements

| | (b) | Exhibits
| | --- | --------

|1.1 | Articles
of Association of Unibanco- União de Bancos  Brasileiros S.A., as amended and
consolidated          on April 30, 2004, (English-language version).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|1.2. | Articles
of Association of Unibanco  Holdings S.A., as amended and  consolidated  on April 30,
2004          (English-language version).
|---- | ----------------------------------------------------------------------------------------------------------------------------------------

|2.(b) | Certain  instruments with respect to our long-term debt have
not been filed          as an exhibit to this annual report on Form 20-F because the
total amount of debt authorized  under          any such  instrument  does not  exceed
 10% of the  total  assets of us and our  subsidiaries  on a          consolidated
 basis.  We agree to  furnish  a copy of each  such  instrument  upon  request  of the
         Securities and Exchange Commission.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.1. | Please
refer to Note 2 (w) to our consolidated financial statements.
|---- | --------------------------------------------------------------------

|8.1 | List
of our Subsidiaries.
|--- | -------------------------

|12.1 | Certifications
of our and Unibanco Holdings Chief Executive Officers pursuant to Section 302 of the Sarbanes-Oxley Act.
|---- | ------------------------------------------------------------------------------------------------------------------------

|12.2 | Certifications
of our and Unibanco Holdings Chief Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act.
|---- | ------------------------------------------------------------------------------------------------------------------------

|13.1 | 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 and authorized the  undersigned to sign this annual report to be signed on their
behalf.

| | UNIBANCOUNIÃO DE BANCOS BRASILEIROS S.A.
| | -----------------------------------------
|
|
|
|
| |                                          
| | By:                                      
| |                                          
| |                                          
|
|
| |                                          
| | By:                                      
| |                                          
| |                                          

| | UNIBANCO HOLDINGS S.A.
| | ----------------------
|
|
|
|
| |                       
| | By:                   
| |                       
| |                       
|
|
| |                       
| | By:                   
| |                       
| |                       

Dated:  June 28, 2004.

---



REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

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, 2003 and 2002, and the related  consolidated  statements of income,
 changes in  stockholders'  equity and cash flows for each of the three          years in
the period ended December 31, 2003. 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.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | We
conducted our audits in accordance with the standards of the Public Company  Accounting
 Oversight Board (United States).  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 provide a reasonable basis
for our opinion.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | In
our opinion, 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, 2003 and 2002, and          the  consolidated  results of their  operations
and their cash flows for each of the three years in the period ended December 31, 2003,
in conformity  with  accounting  principles  generally  accepted in the          United
States of America.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

/s:/ Deloitte Touche
Tohmatsu
Auditores Independentes
June 24, 2004
São Paulo, Brazil



Unibanco Holdings
S.A. and SubsidiaryConsolidated Balance Sheets(Expressed in millions of Brazilian
Reais)


---

|                                                                        | As of December 31,
|----------------------------------------------------------------------- | ------------------
|                                                                        |                   
|                                                                        | 2002              
|                                                                        |                   
|Assets                                                                  |                   
|Cash and due from banks                                                 | R$934             
|Interest-bearing deposits in other banks                                | 1,957             
|Federal funds sold and securities purchased under resale agreements     | 13,561            
|                                                                        |                   
|Cash and cash equivalents                                               | 16,452            
|Interest-bearing deposits in other banks                                | 352               
|Central Bank compulsory deposits                                        | 3,926             
|Trading assets, at fair value                                           | 5,299             
|Securities available for sale, at fair value                            | 6,196             
|Securities held to maturity, at cost                                    | 6,622             
|Loans                                                                   | 25,254            
|Allowance for loan losses                                               | (1,389)           
|                                                                        |                   
|Net loans                                                               | 23,865            
|Investments in unconsolidated companies                                 | 574               
|Premises and equipment, net                                             | 1,520             
|Goodwill, net                                                           | 1,079             
|Other intangibles, net                                                  | 270               
|Other assets                                                            | 5,835             
|                                                                        |                   
|Total Assets                                                            | R$71,990          
|                                                                        |                   
|Liabilities                                                            
|Deposits from customers:                                               
|Demand deposits                                                         | R$3,247           
|Time deposits                                                           | 16,845            
|Savings deposits                                                        | 5,890             
|Deposits from banks                                                     | 64                
|                                                                        |                   
|Total deposits                                                          | 26,046            
|Federal funds purchased and securities sold under repurchase agreements | 13,806            
|Short-term borrowings                                                   | 6,305             
|Long-term debt                                                          | 10,928            
|Other liabilities                                                       | 7,933             
|                                                                        |                   
|Total Liabilities                                                       | 65,018            
|                                                                        |                   
|Commitments and contingent liabilities (Note 30)                        | -                 
|                                                                       
|Minority interest in consolidated subsidiaries                          | 3,210             
|                                                                        |                   
|Stockholders' Equity                                                   
|Preferred stock "A" (Note 19)                                           | 143               
|Preferred stock "B" (Note 19)                                           | 970               
|Common stock (Note 19)                                                  | 819               
|Additional paid in capital                                              | 6                 
|Treasury stock, at cost                                                 | (40)              
|Capital reserves                                                        | 479               
|Appropriated retained earnings                                          | 1,889             
|Accumulated other comprehensive losses                                  | (141)             
|Unappropriated retained earnings                                        | (363)             
|                                                                        |                   
|Total Stockholders' Equity                                              | 3,762             
|                                                                        |                   
|Total Liabilities and Stockholders' Equity                              | R$71,990          
|                                                                        |                   

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,
|------------------------------------------------------------------- | -------------------------------
|                                                                    |                                
|                                                                    | 2001                           
|                                                                    |                                
|Interest Income                                                    
|Interest and fees on loans                                          | R$6,677                        
|Interest on federal funds sold and securities purchased under      
|agreements to resell                                                | 506                            
|Interest on securities:                                            
|Trading                                                             | 1,861                          
|Available for sale                                                  | 346                            
|Held to maturity                                                    | 56                             
|Interest on deposits in other banks                                 | 187                            
|Interest on Central Bank compulsory deposits                        | 74                             
|Interest on other assets                                            | 6                              
|                                                                    |                                
|Total interest income                                               | 9,713                          
|                                                                    |                                
|Interest Expense                                                   
|Interest on deposits:                                              
|From banks                                                          | 53                             
|From customers:                                                    
|Savings deposits                                                    | 338                            
|Time deposits                                                       | 1,330                          
|Interest on federal funds purchased and securities                 
|sold under agreements to repurchase                                 | 1,134                          
|Interest on short-term borrowings                                   | 1,142                          
|Interest on long-term debt                                          | 1,542                          
|                                                                    |                                
|Total interest expense                                              | 5,539                          
|                                                                    |                                
|Net Interest Income                                                 | 4,174                          
|Provision for loan losses                                           | 1,100                          
|                                                                    |                                
|Net Interest Income After Provision for Loan Losses                 | 3,074                          
|                                                                    |                                
|Non Interest Income                                                
|Fee and commission income                                           | 1,653                          
|Trading income (expenses)                                           | 120                            
|Net gain on securities                                              | 18                             
|Net gain on foreign currency transactions                           | 67                             
|Equity in results of unconsolidated companies                       | 235                            
|Insurance, private retirement plan and pension investment contracts | 1,046                          
|Other non-interest income                                           | 622                            
|                                                                    |                                
|Total non-interest income                                           | 3,761                          
|                                                                    |                                
|Non Interest Expense                                               
|Salaries and benefits                                               | 1,716                          
|Administrative expenses                                             | 2,134                          
|Amortization of goodwill and other intangibles                      | 150                            
|Insurance, private retirement plan and pension investment contracts | 955                            
|Other non-interest expense                                          | 931                            
|                                                                    |                                
|Total non-interest expense                                          | 5,886                          
|                                                                    |                                
|Income Before Income Taxes and Minority Interest                    | 949                            
|                                                                    |                                
|Income Taxes                                                       
|Current tax expense                                                 | (144)                          
|Deferred tax (expense) benefit                                      | 106                            
|                                                                    |                                
|Total income taxes                                                  | (38)                           
|                                                                    |                                
|Income Before Minority Interest                                     | 911                            
|Minority Interest                                                   | (426)                          
|                                                                    |                                
|Net Income                                                          | R$485                          
|                                                                    |                                

(continue)



Unibanco Holdings
S.A. and SubsidiaryConsolidated Statement of Income
(Expressed in millions of Brazilian Reais, except otherwise indicated)


---

(continuation)

|                                                             | For the Year Ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             |                                
|                                                             | 2001                           
|                                                             |                                
|Net income applicable to common shares                       | R$214                          
|Net income applicable to preferred A shares                | 24                             
|Net income applicable to preferred B shares                | R$247                          
|Earnings per shares  in Brazilian Reais (2)                
|Distributed earnings (dividends)                            
|. Common                                                     | R$0.22                         
|. Preferred "A" (1)                                          | 0.24                           
|. Preferred "B"                                              | 0.22                           
|Undistributed earnings                                      
|. Common                                                     | 0.35                           
|. Preferred "A" (1)                                          | 0.39                           
|. Preferred "B"                                              | 0.35                           
|Basic and diluted earnings per share                        
|. Common                                                     | 0.57                           
|. Preferred "A" (1)                                          | 0.63                           
|. Preferred "B"                                              | 0.57                           
|Weighted average shares outstanding (in thousands)  Basic  
|. Common                                                     | 371,384                        
|. Preferred "A" (1)                                          | 38,435                         
|. Preferred "B"                                              | 429,411                        
|Weighted average shares outstanding (in thousands) - Diluted
|. Common                                                     | 371,384                        
|. Preferred "A" (1)                                          | 38,435                         
|. Preferred "B"                                              | 429,411                        

---

|(1) | The distributed earnings (dividends)  presented in 2003 correspond only to the dividends paid as from July 31, 2003 as the preferred shares class A were not entitled do the dividends paid as from January 30, 2004 since all preferred
           shares class A were converted to preferred shares class B during 2003 (see Note 19).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Earnings per share have been
adjusted for all periods  presented to reflect the new number of shares that will result from the reverse stock split,
approved on April 30, 2004, in accordance  with SFAS 128 Earnings per share (see Note
           34(e)).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The accompanying notes
are an integral part of these consolidated financial statements



Unibanco Holdings
S.A. and SubsidiaryConsolidated 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          | 2001                           
|                                                                    |                 |                                
|Capital                                                             |                 |                                
|Preferred shares
 "A" - balance beginning      of period/year       | 3,843,541,338   | R$143                          
|Share conversion                                                    | (3,843,541,338) | -                              
|                                                                    |                 |                                
|Balance end of period/year                                          | -               | 143                            
|                                                                    |                 |                                
|Preferred shares "B" -
balance beginning       of period/year       | 43,115,835,701  | 959                            
|Stock issued in private offering                                    | 232,663,384     | 11                             
|Share conversion                                                    | 3,843,541,338   | -                              
|Share conversion                                                    | 5,623,848,354   | -                              
|                                                                    |                 |                                
|Balance end of period/year                                          | 52,815,888,777  | 970                            
|                                                                    |                 |                                
|Common shares - balance beginning of period/year                    | 37,138,435,873  | 819                            
|Share conversion                                                    | (5,623,848,354) | -                              
|                                                                    |                 |                                
|Balance end of period/year                                          | 31,514,587,519  | 819                            
|                                                                    |                 |                                
|Additional paid in capital  balance beginning of year              |                 | -                              
|Stock compensation plan                                             |                 | -                              
|                                                                    |                 |                                
|Balance end of year                                                 |                 | -                              
|                                                                    |                 |                                
|Treasury stock, at cost balance beginning of period/year            |                 | -                              
|Purchase of own stock in a buy-back program                         | 922,147,249     | (40)                           
|Purchase of own stock                                               | 20,069          | -                              
|Purchase of own stock in a buy-back program                         | 1,435,566,427   | -                              
|                                                                    |                 |                                
|Balance end of period/year                                          | 2,357,733,745   | (40)                           
|                                                                    |                 |                                
|Capital reserves - balance beginning of year                        |                 | 479                            
|                                                                    |                 |                                
|Balance end of year                                                 |                 | 479                            
|                                                                    |                 |                                
|Appropriated retained earnings                                     
|Legal reserve - balance beginning of year                           |                 | 76                             
|Transfer from retained earnings                                     |                 | 29                             
|                                                                    |                 |                                
|Balance end of year                                                 |                 | 105                            
|                                                                    |                 |                                
|Unrealized income reserve  balance beginning of year               |                 | 941                            
|Transfer from retained earnings                                     |                 | 354                            
|                                                                    |                 |                                
|Balance end of year                                                 |                 | 1,295                          
|                                                                    |                 |                                
|Special dividends reserve  balance beginning       and end of year |                 | 37                             
|                                                                    |                 |                                
|Total appropriated retained earnings                                |                 | 1,437                          
|                                                                    |                 |                                
|Accumulated other comprehensive losses                             
|Securities available for sale  balance beginning of year           |                 | (21)                           
|Securities available for sale, net of applicable taxes              |                 | (12)                           
|                                                                    |                 |                                
|Balance end of year                                                 |                 | (33)                           
|                                                                    |                 |                                
|Cash flow hedges  balance beginning of year                        |                 | -                              
|Cash flow hedges, net of applicable taxes                           |                 | -                              
|                                                                    |                 |                                
|Balance end of year                                                 |                 | -                              
|                                                                    |                 |                                
|Total accumulated other comprehensive losses                        |                 | (33)                           
|                                                                    |                 |                                
|Unappropriated retained earnings  balance    beginning of year     |                 | (103)                          
|Net income for the year                                             |                 | 485                            
|Dividends - Preferred shares class "A"                              |                 | (10)                           
|Dividends - Preferred shares class "B"                              |                 | (95)                           
|Dividends - Common shares                                           |                 | (83)                           
|Transfer to reserves                                                |                 | (383)                          
|                                                                    |                 |                                
|Balance end of year                                                 |                 | (189)                          
|                                                                    |                 |                                
|Total Stockholders' Equity                                          |                 | R$3,586                        
|                                                                    |                 |                                

The accompanying
notes are an integral part of these consolidated financial statements



Unibanco
Holdings S.A. and SubsidiaryConsolidated Statement of Cash Flows(Expressed in
millions of Brazilian Reais)


---

|                                                                         | For the Year Ended December 31,
|------------------------------------------------------------------------ | -------------------------------
|                                                                         |                                
|                                                                         | 2001                           
|                                                                         |                                
|Operating activities                                                    
|Net income                                                               | R$485                          
|Adjustment to reconcile net income to net cash provided (used in) by    
|operating activities:                                                   
|Provision for loan losses                                                | 1,100                          
|Provision for insurance and private retirement claims                    | 43                             
|Depreciation                                                             | 258                            
|Amortization of goodwill and other intangibles                           | 150                            
|Provision for losses on foreclosed assets and unconsolidated investments | 4                              
|Loss (gain) on unconsolidated companies                                  | 4                              
|Loss on foreclosed assets                                                | 45                             
|Gain on securities                                                       | (18)                           
|Loss (gain) on sales of premises and equipment                           | (2)                            
|Deferred tax benefits                                                    | (106)                          
|Equity in results of unconsolidated companies                            | (235)                          
|Stock-based compensation expenses                                        | -                              
|Minority interest of consolidated subsidiaries                           | 426                            
|Changes in assets and liabilities                                       
|Trading assets (increase) decrease                                       | (4,967)                        
|Other assets increase                                                    | (292)                          
|Other liabilities increase                                               | 235                            
|                                                                         |                                
|Net cash provided by (used in) operating activities                      | (2,870)                        
|                                                                         |                                
|Investing activities                                                    
|Net increase in deposits with banks                                      | (339)                          
|Net increase in Central Bank compulsory deposits                         | (112)                          
|Purchases of available for sale securities                               | (3,173)                        
|Proceeds from sales of available for sale securities                     | 1,469                          
|Purchases of securities held to maturity                                 | (155)                          
|Proceeds from matured and called securities held to maturity             | 329                            
|Net increase in loans                                                    | (4,259)                        
|Acquisition of companies                                                 | -                              
|Acquisition of minority interest                                         | (11)                           
|Purchases of premises and equipment                                      | (498)                          
|Proceeds from sale of premises and equipment                             | 55                             
|Proceeds from sale of foreclosed assets                                  | 90                             
|Purchases of unconsolidated companies                                    | (222)                          
|Proceeds from sale of unconsolidated companies                           | 40                             
|Dividends received from unconsolidated companies                         | 151                            
|Minority interest of consolidated subsidiaries                           | (177)                          
|                                                                         |                                
|Net cash provided by (used in) investing activities                      | (6,812)                        
|                                                                         |                                
|Financing activities                                                    
|Net increase (decrease) in deposits                                      | 4,852                          
|Net increase (decrease) in federal funds purchased                      
|and securities sold under repurchase agreements                          | (2,163)                        
|Net increase (decrease) in short-term borrowings                         | 411                            
|Borrowings under long-term debt arrangements                             | 5,137                          
|Repayment of long-term debt                                              | (4,486)                        
|Purchase of own stocks                                                   | (40)                           
|Cash dividends paid                                                      | (165)                          
|                                                                         |                                
|Net cash provided by (used in) financing activities                      | 3,546                          
|                                                                         |                                
|Net increase (decrease) in cash and cash equivalents                     | (6,136)                        
|Cash and cash equivalents at beginning of year                           | 10,987                         
|                                                                         |                                
|Cash and cash equivalents at end of year                                 | R$4,851                        
|                                                                         |                                
|Supplemental:                                                           
|Cash paid for interest (Note 2(b))                                       | R$5,562                        
|Cash paid for income taxes                                               | 179                            
|Stock issued in exchange for purchased of minority interest              | 11                             
|Loans transferred to foreclosed assets                                   | 66                             
|Securities transferred from trading to available for sale                | -                              
|Securities transferred from trading to held to maturity                  | -                              
|Dividends declared but not yet paid                                      | 100                            

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,
|----------------------------------------------------------------------- | ------------------
|                                                                        |                   
|                                                                        | 2002              
|                                                                        |                   
|Assets                                                                 
|Cash and due from banks                                                 | R$934             
|Interest-bearing deposits in other banks                                | 1,957             
|Federal funds sold and securities purchased under resale agreements     | 13,561            
|                                                                        |                   
|Cash and cash equivalents                                               | 16,452            
|Interest-bearing deposits in other banks                                | 352               
|Central Bank compulsory deposits                                        | 3,926             
|Trading assets, at fair value                                           | 5,299             
|Securities available for sale, at fair value                            | 6,196             
|Securities held to maturity, at cost                                    | 6,622             
|Loans                                                                   | 25,254            
|Allowance for loan losses                                               | (1,389)           
|                                                                        |                   
|Net loans                                                               | 23,865            
|Investments in unconsolidated companies                                 | 574               
|Premises and equipment, net                                             | 1,520             
|Goodwill, net                                                           | 1,079             
|Other intangibles, net                                                  | 270               
|Other assets                                                            | 5,833             
|                                                                        |                   
|Total Assets                                                            | R$71,988          
|                                                                        |                   
|                                                                       
|Liabilities                                                            
|Deposits from customers:                                               
|Demand deposits                                                         | R$3,247           
|Time deposits                                                           | 16,854            
|Savings deposits                                                        | 5,890             
|Deposits from banks                                                     | 64                
|                                                                        |                   
|Total deposits                                                          | 26,055            
|Federal funds purchased and securities sold under repurchase agreements | 13,806            
|Short-term borrowings                                                   | 6,305             
|Long-term debt                                                          | 10,928            
|Other liabilities                                                       | 7,925             
|                                                                        |                   
|Total Liabilities                                                       | 65,019            
|                                                                        |                   
|                                                                       
|Commitments and contingent liabilities (Note 30)                        | -                 
|                                                                       
|Minority interest in consolidated subsidiaries                          | 724               
|                                                                        |                   
|                                                                       
|Stockholders' Equity                                                   
|Preferred stock (Note 19)                                               | 1,549             
|Common stock (Note 19)                                                  | 2,142             
|Additional paid in capital                                              | 9                 
|Treasury stock, at cost                                                 | (90)              
|Capital reserves                                                        | 295               
|Appropriated retained earnings                                          | 338               
|Accumulated other comprehensive losses                                  | (234)             
|Unappropriated retained earnings                                        | 2,236             
|                                                                        |                   
|                                                                       
|Total Stockholders' Equity                                              | 6,245             
|                                                                        |                   
|                                                                       
|Total Liabilities and Stockholders' Equity                              | R$71,988          
|                                                                        |                   

The accompanying
notes are an integral part of these consolidated financial statements



Unibanco  União de
Bancos Brasileiros S.A. and SubsidiariesConsolidated Statement of Income(Expressed
in millions of Brazilian Reais)


---

|                                                                    | For the Year Ended December 31,
|------------------------------------------------------------------- | -------------------------------
|                                                                    |                                
|                                                                    | 2001                           
|                                                                    |                                
|Interest Income                                                    
|Interest and fees on loans                                          | R$6,677                        
|Interest on federal funds sold and securities purchased under      
|agreements to resell                                                | 506                            
|Interest on securities:                                            
|Trading                                                             | 1,861                          
|Available for sale                                                  | 346                            
|Held to maturity                                                    | 56                             
|Interest on deposits in other banks                                 | 187                            
|Interest on Central Bank compulsory deposits                        | 74                             
|Interest on other assets                                            | 6                              
|                                                                    |                                
|Total interest income                                               | 9,713                          
|                                                                    |                                
|Interest Expense                                                   
|Interest on deposits:                                              
|From banks                                                          | 53                             
|From customers:                                                    
|Savings deposits                                                    | 338                            
|Time deposits                                                       | 1,331                          
|Interest on federal funds purchased and securities                 
|sold under agreements to repurchase                                 | 1,134                          
|Interest on short-term borrowings                                   | 1,142                          
|Interest on long-term debt                                          | 1,542                          
|                                                                    |                                
|Total interest expense                                              | 5,540                          
|                                                                    |                                
|Net Interest Income                                                 | 4,173                          
|Provision for loan losses                                           | 1,100                          
|                                                                    |                                
|Net Interest Income After Provision for Loan Losses                 | 3,073                          
|                                                                    |                                
|Non Interest Income                                                
|Fee and commission income                                           | 1,653                          
|Trading income (expenses)                                           | 120                            
|Net gain on securities                                              | 18                             
|Net gain on foreign currency transactions                           | 67                             
|Equity in results of unconsolidated companies                       | 235                            
|Insurance, private retirement plan and pension investment contracts | 1,046                          
|Other non-interest income                                           | 622                            
|                                                                    |                                
|Total non-interest income                                           | 3,761                          
|                                                                    |                                
|Non Interest Expense                                               
|Salaries and benefits                                               | 1,716                          
|Administrative expenses                                             | 2,134                          
|Amortization of goodwill and other intangibles                      | 150                            
|Insurance, private retirement plan and pension investment contracts | 955                            
|Other non-interest expense                                          | 932                            
|                                                                    |                                
|Total non-interest expense                                          | 5,887                          
|                                                                    |                                
|Income Before Income Taxes and Minority Interest                    | 947                            
|                                                                    |                                
|Income Taxes                                                       
|Current tax expense                                                 | (144)                          
|Deferred tax (expense) benefit                                      | 106                            
|                                                                    |                                
|Total income taxes                                                  | (38)                           
|                                                                    |                                
|Income Before Minority Interest                                     | 909                            
|Minority Interest                                                   | (84)                           
|                                                                    |                                
|Net Income                                                          | R$825                          
|                                                                    |                                

(continue)



Unibanco  União de
Bancos Brasileiros S.A. and SubsidiariesConsolidated Statement of Income(Expressed
in millions of Brazilian Reais, except otherwise indicated)


---

(continuation)

|                                                             | For the Year Ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             |                                
|                                                             | 2001                           
|                                                             |                                
|Net income applicable to common shares                       | R$427                          
|Net income applicable to preferred shares                    | R$398                          
|Earnings per shares  in Brazilian Reais(1)                 
|Distributed earnings (dividends)                            
|. Common                                                     | R$0.22                         
|. Preferred                                                  | 0.24                           
|Undistributed earnings                                      
|. Common                                                     | 0.34                           
|. Preferred                                                  | 0.38                           
|Basic and diluted earnings per share                        
|. Common                                                     | 0.56                           
|. Preferred                                                  | 0.62                           
|Weighted average shares outstanding (in thousands)  Basic  
|. Common                                                     | 755,687                        
|. Preferred                                                  | 643,309                        
|Weighted average shares outstanding (in thousands)  Diluted
|. Common                                                     | 755,687                        
|. Preferred                                                  | 643,309                        

---

|(1) | Earnings per share have been
adjusted for all periods  presented to reflect the new number of shares that will result from the reverse stock split,
approved on April 30, 2004, in accordance  with SFAS 128 Earnings per share (see Note
           34(e)).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The accompanying
notes are an integral part of these consolidated financial statements



Unibanco  União de
Bancos Brasileiros S.A. and SubsidiariesConsolidated Statement of Changes in
Stockholders Equity(Expressed in millions of Brazilian Reais, except for number of
shares)


---

|                                                                      | Number ofshares | For the Year Ended December 31,
|--------------------------------------------------------------------- | --------------- | -------------------------------
|                                                                      |                
|                                                                      | 2001            | 2002                           
|                                                                      |                 |                                
|Capital                                                              
|Preferred shares - balance beginning of period/year                   | 65,084,425,585  | R$1,407                        
|Stock issued in private subscription                                  | 232,663,384     | 2                              
|Transfer from reserves and retained earnings                          | -               | 140                            
|Share conversion                                                      | 2,927,498       | -                              
|                                                                      |                 |                                
|Balance end of period/year                                            | 65,320,016,467  | 1,549                          
|                                                                      |                 |                                
|Common shares - balance beginning of period/year                      | 75,568,744,349  | 1,979                          
|Transfer from reserves and retained earnings                          | -               | 163                            
|Share conversion                                                      | (2,927,498)     | -                              
|                                                                      |                 |                                
|Balance end of period/year                                            | 75,565,816,851  | 2,142                          
|                                                                      |                 |                                
|Additional paid in capital  balance beginning of year                |                 | -                              
|Stock compensation plan                                               |                 | -                              
|                                                                      |                 |                                
|Balance end of year                                                   |                 | -                              
|                                                                      |                 |                                
|Treasury stock, at cost                                              
|Preferred shares - balance beginning of period/year                   | 324,523,855     | (5)                            
|Purchase of own stock in a buy-back program                           | 1,973,097,251   | (83)                           
|Purchase of own stock in a buy-back program                           | 41,440,138      | -                              
|Purchase of own stock in a buy-back program                           | 935,350,000     | -                              
|                                                                      |                 |                                
|Balance end of period/year                                            | 3,274,411,244   | (88)                           
|                                                                      |                 |                                
|Capital reserves                                                     
|Share premium  balance beginning and 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                             |                 | 190                            
|Transfer from retained earnings                                       |                 | 49                             
|Transfer to capital stock                                             |                 | (15)                           
|                                                                      |                 |                                
|Balance end of year                                                   |                 | 224                            
|                                                                      |                 |                                
|Special dividends reserve  balance beginning and end         of year |                 | 64                             
|                                                                      |                 |                                
|Total appropriated retained earnings                                  |                 | 288                            
|                                                                      |                 |                                
|Accumulated other comprehensive losses                               
|Securities available for sale  balance beginning of year             |                 | (35)                           
|Securities available for sale, net of applicable taxes                |                 | (19)                           
|                                                                      |                 |                                
|Balance end of year                                                   |                 | (54)                           
|                                                                      |                 |                                
|Cash flow hedges, net of applicable taxes  balance                   |                 | -                              
|beginning of year                                                    
|Cash flow hedges, net of applicable taxes                             |                 | -                              
|                                                                      |                 |                                
|Balance end of year                                                   |                 | -                              
|                                                                      |                 |                                
|Total accumulated other comprehensive losses                          |                 | (54)                           
|                                                                      |                 |                                
|Unappropriated retained earnings  balance                           
|beginning of year                                                     |                 | 1,657                          
|Net income for the year                                               |                 | 825                            
|Dividends - Preferred shares                                          |                 | (156)                          
|Dividends - Common shares                                             |                 | (167)                          
|Transfer to capital                                                   |                 | (287)                          
|Transfer to reserves                                                  |                 | (49)                           
|                                                                      |                 |                                
|Balance end of year                                                   |                 | 1,823                          
|                                                                      |                 |                                
|Total Stockholders' Equity                                            |                 | R$5,955                        
|                                                                      |                 |                                

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,
|------------------------------------------------------------------------------- | -------------------------------
|                                                                                |                                
|                                                                                | 2001                           
|                                                                                |                                
|Operating activities                                                            |                                
|Net income                                                                      | R$825                          
|Adjustment to reconcile net income to net cash provided (used in) by           
|operating activities:                                                          
|Provision for loan losses                                                       | 1,100                          
|Provision for insurance and private retirement claims                           | 43                             
|Depreciation                                                                    | 258                            
|Amortization of goodwill and other intangibles                                  | 150                            
|Provision for losses on foreclosed assets and unconsolidated        investments | 4                              
|Loss (gain) on unconsolidated companies                                         | 4                              
|Loss on foreclosed assets                                                       | 45                             
|Gain on securities                                                              | (18)                           
|Loss (gain) on sales of premises and equipment                                  | (2)                            
|Deferred tax benefits                                                           | (106)                          
|Equity in results of unconsolidated companies                                   | (235)                          
|Stock-based compensation expenses                                               | -                              
|Minority interest of consolidated subsidiaries                                  | 84                             
|Changes in assets and liabilities                                              
|Trading assets (increase) decrease                                              | (4,967)                        
|Other assets increase                                                           | (294)                          
|Other liabilities increase                                                      | 212                            
|                                                                                |                                
|Net cash provided by (used in) operating activities                             | (2,897)                        
|                                                                                |                                
|Investing activities                                                           
|Net increase in deposits with banks                                             | (339)                          
|Net increase in Central Bank compulsory deposits                                | (112)                          
|Purchases of available for sale securities                                      | (3,173)                        
|Proceeds from sales of available for sale securities                            | 1,469                          
|Purchases of securities held to maturity                                        | (155)                          
|Proceeds from matured and called securities held to maturity                    | 329                            
|Net increase in loans                                                           | (4,259)                        
|Acquisition of companies                                                        | -                              
|Acquisition of minority interest                                                | (11)                           
|Purchases of premises and equipment                                             | (498)                          
|Proceeds from sale of premises and equipment                                    | 55                             
|Proceeds from sale of foreclosed assets                                         | 90                             
|Purchases of unconsolidated companies                                           | (222)                          
|Proceeds from sale of unconsolidated companies                                  | 40                             
|Dividends received from unconsolidated companies                                | 151                            
|Minority interest of consolidated subsidiaries                                  | 4                              
|                                                                                |                                
|Net cash provided by (used in) investing activities                             | (6,631)                        
|                                                                                |                                
|Financing activities                                                           
|Net increase (decrease) in deposits                                             | 4,853                          
|Net increase (decrease) in federal funds purchased                             
|and securities sold under repurchase agreements                                 | (2,163)                        
|Net increase (decrease) in short-term borrowings                                | 410                            
|Borrowings under long-term debt arrangements                                    | 5,137                          
|Repayment of long-term debt                                                     | (4,486)                        
|Purchase of own stocks                                                          | (83)                           
|Cash dividends paid                                                             | (276)                          
|                                                                                |                                
|Net cash provided by (used in) financing activities                             | 3,392                          
|                                                                                |                                
|Net increase (decrease) in cash and cash equivalents                            | (6,136)                        
|Cash and cash equivalents at beginning of year                                  | 10,987                         
|                                                                                |                                
|Cash and cash equivalents at end of year                                        | R$4,851                        
|                                                                                |                                
|Supplemental:                                                                  
|Cash paid for interest (Note 2(b))                                              | R$5,562                        
|Cash paid for income taxes                                                      | 179                            
|Stock issued in exchange for purchased minority interest                        | 2                              
|Loans transferred to foreclosed assets                                          | 66                             
|Securities transferred from trading to available for sale                       | -                              
|Securities transferred from trading to held to maturity                         | -                              
|Dividends declared but not yet paid                                             | 171                            

The accompanying
notes are an integral part of these consolidated financial statements



Unibanco Holdings S.A.
and Subsidiary andUnibanco - 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,
2002 and 2003, Holdings held 96.59% and 96.60% of Unibancos common (voting) and
15.94% and 13.74% of Unibancos 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 and 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 Investimento
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 32 with
respect to segment information).

The
consolidated financial statements of Holdings includes 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 and the accounts of
our special purpose company, described in Note 2 (p), and the investments funds of our
insurance companies, described in Note 2 (y). 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, 2003 are:

|                                                            |                               |              | Ownership interest
|----------------------------------------------------------- | ----------------------------- | ------------ | ------------------
|                                                            |                               |              |                   
|Direct and indirect subsidiary companies                    | Activity                      | Country      | Total             
|                                                            |                               |              |                   
|. Unibanco AIG Seguros S.A.                                 | insurance                     | Brazil       | 49.707%           
|Unibanco AIG Previdência S.A.                               | pension andretirement plans   | Brazil       | 49.707            
|Unibanco AIG Saúde Seguradora S.A.                          | insurance                     | Brazil       | 49.707            
|. Unibanco Representação e Participações Ltda.              | holding                       | Brazil       | 100.000           
|Unibanco Companhia de Capitalização                         | savings andannuities products | Brazil       | 99.992            
|Administradora e Corretora de Seguros Unibanco    Ltda.     | insurance broker              | Brazil       | 99.999            
|. Unicard Banco Múltiplo S.A.                               | credit card                   | Brazil       | 100.000           
|. Banco Fininvest S.A.                                      | bank and credit card          | Brazil       | 99.920            
|. Banco Dibens S.A.                                         | bank                          | Brazil       | 51.001            
|Dibens Leasing S.A. - Arrendamento Mercantil                | leasing                       | Brazil       | 51.000            
|. Banco1.net S.A.                                           | bank                          | Brazil       | 65.934            
|. Unibanco Leasing S.A. - Arrendamento Mercantil            | leasing                       | Brazil       | 99.999            
|. Unibanco Asset Management - Banco de    Investimento S.A. | asset management              | Brazil       | 99.999            
|. Unibanco Corretora de Valores Mobiliários S.A.            | security broker               | Brazil       | 100.000           
|. Interbanco S.A.                                           | bank                          | Paraguay     | 99.999            
|. Unipart Participações Internacionais Ltd.                 | holding                       | CaymanIsland | 100.000           
|Unibanco - União de Bancos Brasileiros    (Luxembourg) S.A. | bank                          | Luxembourg   | 99.999            
|Unibanco Cayman Bank Ltd.                                   | bank                          | CaymanIsland | 100.000           
|Unicorp Bank & Trust Ltd.                                   | private bank                  | CaymanIsland | 100.000           
|Unibanco Securities Inc.                                    | security broker               | USA          | 100.000           
|Unibanco Securities Ltd.                                    | security broker               | England      | 100.000%          

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 at
the time of purchase.

(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 consider 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$1,797 and R$1,563 at December 31, 2002 and R$1,618 and R$2,458 at
December 31, 2003, respectively. The increase in our interest and monetary correction
accrued on our interest-bearing liabilities was mainly due to the increase in the accrual
on time deposits due to the high interest rates experienced during the first nine months
of 2003 (see the maturity of our time deposits in Note 14).

(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 (expense) 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 the hedged items, as well
as the 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 as of 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 in non-interest
income-trading income (expense)".

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 (see Note
28).

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 record provisions for
probable losses, as necessary.

(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$214 and R$57 at December
31, 2002 and 2003, 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 monetary correction (as
explained in Note 2 (b)). Interest income is recorded on an accrual basis using the
effective interest method and is 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 60 days or more past due 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, except those related to our credit card operations.

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 which we
evaluated under SFAS 5 Accounting for Contingencies (SFAS 5) when
in our judgment all amounts due, including accrued interest and indexation, 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.

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 Disposal of Long-Lived Assets when events and circumstances indicate
that such impairment may exist. No such impairment has been identified through December
31, 2002 and 2003.

(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
on January 1st, 2002, we implemented SFAS 142 Goodwill and Other
Intangible Assets (SFAS 142), 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 purchase 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. An impairment loss is
recorded to the extent 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 and December 31, 2002 and
2003.

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 and 2003, intangible assets included in our
consolidated balance sheet consist of the customer relationship intangibles of retail
banking of Banco Bandeirantes S.A. (Bandeirantes) that are being amortized
over 5 years (see Note 3).

(n)    
          Foreclosed assets, including real estate

Assets
received upon foreclosure of loans or in lieu of foreclosure, including real estate, are
initially recorded at 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)    
          Transfers of financial assets

Transfers
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. Transfers of financial
assets that do not meet these requirements are accounted for as secured borrowings (see Note 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 (SFAS 140) and in accordance
with Emerging Issues Task Force Topic D-14 Transactions Involving Special Purpose
Entities (EITFD-14). We have consolidated this SPC since December 31,
2002. Such consolidation did not have a material effect on our consolidated financial
statements. General factors considered in making this determination included whether the
majority owner (or owners) of 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.

For
a discussion of the impact of the adoption of FIN 46R see Note 2(y).

(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
fully 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, securities available for
sale and securities held to maturity 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
reaisat 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 in December 2003. In December 2002, we had a very minor and fully
funded plan covering 2 employees. 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$317, R$319 and R$359 in 2001, 2002 and
2003, respectively.

In
addition, we and part of our employees sponsor a Free Benefits Generation
Program (PGBL), a system whereby the participant accumulates financial resources
during his/her career, through contributions paid by the employee and the Company where
he/she works. These contributions are invested in an Exclusive Financial Investment Fund
(FIFE). The program is based on defined contribution.

The
program is managed by Unibanco AIG Previdência S.A., and Unibanco Asset Management
 Banco de Investimento S.A. is responsible for the financial management of the FIFE
funds.

The
contributions made by employees vary according to their ages between 1% and 9% of their
wages, and the contributions made by Unibanco vary according to the return on equity in
the prior year between 50% and 200% of the participants contribution, directly
related to the return on equity.

We
and a portion of our employees also sponsor a defined contribution pension plan
administered by Trevo-Instituto Bandeirantes de Seguridade Social, for the primary purpose
of supplementing the retirement benefits provided by the government retirement plans,
substantially through a defined contribution plan.

On
December 1, 2003, in order to segregate the assets and liabilities related to Unibanco
Conglomerate sponsors, the Secretaria de Previdência Complementar (Supplementary
Retirement Department) approved the spin-off the defined contribution pension plan managed
by Trevo  Instituto Bandeirantes de Seguridade Social. The total equity spun off of
was R$318, including R$156 of actuarial liability and R$162 of reserves and funds which
were incorporated by Plano de Previdência Unibanco (Unibancos retirement
plan). The management will continue to be made by Trevo  Instituto Bandeirantes de
Seguridade Social.

After
the process to comply with Complementary Law No. 109/01 and amendments, Unibancos
retirement plan will be afforded to the employees of the Unibanco Conglomerate sponsor
companies in order to become the best choice of the current Free Benefits Generation
Program managed by Unibanco AIG Previdência S.A.

In
addition we recorded our respective participation in the reserves and funds related to
Unibancos retirement plan as Other assets  prepaid expenses in the
amount of R$35, other assets  others in the amount of R$120 with the
counter entry as an income in other non-interest income in the amount of R$155
(see Note 24).

During
2002 and 2003, the sponsor contribution totaled R$3 and R$10, respectively.

A
substantial portion of our employees belong to a 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,
the liability for a cost associated with restructuring plans is recognized and measured
initially at fair value only when the liability is 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 communicated 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
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 2001 since no stock options, convertible securities or other
stock equivalents were outstanding for the year. In 2002 and 2003 we issued stock options
convertible securities and calculated the diluted earnings but the dilution was not
meaningful in 2002 and did not have a significant effect in 2003 (see Consolidated
Statement of Income).

# HOLDINGS

Earnings
per share are presented based on the three classes (2003  two 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 adopted and issued accounting standards

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. The adoption of SFAS 146 did not have a significant impact on our consolidated
financial position and results of operations.

SFAS
147 Acquisitions of Certain Financial Institutions was issued during October
2002 and 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. The adoption of SFAS 149 did not have a
material impact on our consolidated financial statements.

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. The adoption of SFAS 150 did not
have a material impact on our consolidated financial statements.

FASB
Interpretation 45 Guarantors Accounting and Disclosure Requirements for
Guarantees, (FIN 45) was issued in November 2002 which expands on the accounting
guidance of SFAS 5, 57 an 107 and incorporates without change the provision of SFAS 34,
which is being superseded. 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 adopted
FIN 45 as of December 31, 2002 and did not have a material impact on our consolidated
financial statements (see Note 29).

In
December 2003, the Financial Accounting Standards Board (FASB) issued
interpretation No. 46R (FIN 46R), Consolidation of Variable Interest
Entities, an interpretation of Accounting Research Bulletin No. 51. FIN 46R is a
revision to the original FIN 46 that addresses the consolidation of certain variable
interest entities (VIEs). The revision clarifies and provides a framework for identifying
and evaluating VIEs for consolidation purposes. FIN 46R must be applied no later than
January 1, 2004 for special-purpose entities (SPEs) and December 31, 2004 for
non-SPEs. We anticipated the adoption of FIN 46R and consolidated in 2003 the
exclusive investment funds of our insurance companies. We, through our insurance
companies, are the sole beneficiaries of the profits received from the funds and are
solely responsible for the losses of the funds and used these funds as a strategy to hold
assets. These investment funds are equivalents to VIEs. The consolidation of such
investment funds did not have a material impact on our net income or our
stockholders equity, however consolidation did have an impact on our consolidated
balance sheet. These investment funds, of which a substantial portion were classified as
trading assets in prior years, amounted to R$3,864 and are represented by R$3,411 of
trading assets (mainly federal government securities), R$560 of cash and cash equivalents,
R$3 of other assets, R$16 of other liabilities and R$94 of minority interest from our
unconsolidated insurance companies as a result of the application of the interpretation.
We also reduced by R$3,777 the amount of funds under management as these funds are managed
by Unibanco Asset Management and they are no longer considered as assets under management.
We are still in the process of studying and evaluating the impact of FIN 46R. However, at
this time we do not expect the impact of FIN 46R to have a significant effect on our
consolidated financial statements (see also Note 2(p)).

In
November 2003, the Financial Accounting Standards Board ratified the Emerging Issues Task
Force (EITF) pronouncement EITF 03-1, The Meaning of Other-Than-Temporary Impairment
and Its Application to Certain Investments. This EITF pronouncement requires certain
additional disclosures in relation to other-than-temporary impairments investments
accounted for under the cost method, or investments classified as either securities
available for sale or held to maturity under SFAS 115 (including individual securities and
mutual funds) and investments accounted for under SFAS 124. These additional disclosures
are required for periods ended after December 15, 2003, and can be found in Note 7 and 8.
In June 2004, the Emerging Issues Task Force finalized its revision of EITF Issue 03-1
requiring the application of additional procedures to determine when an investment is
considered impaired, when that impairment is other-than-temporary and the measurement of
impairment loss, including subsequent accounting effective for the year ended December 31,
2004. We do not expect that the full adoption of EITF Issue 03-1 will have a significant
effect on our consolidated financial statements.

SOP
03-3: Accounting for Certain Loans or Debt Securities Acquired in a Transfer
was issued by the AICPA in December 2003. It provides guidance on the accounting for
differences between contractual and expected cash flows from the purchasers initial
investment in loans or debt securities acquired in a transfer, if those differences are
attributable, at least in part, to credit quality. Among other things, SOP 03-3: prohibits
the recognition of the excess of contractual cash flows over expected cash flows as an
adjustment of yield, loss accrual or valuation allowance at the time of purchase; requires
that subsequent increases in expected cash flows be recognized prospectively through an
adjustment of yield; and requires that subsequent decreases in expected cash flows be
recognized as an impairment. In addition, SOP 03-3 prohibits the creation or carrying over
of a valuation allowance in the initial accounting of all loans within its scope that are
acquired in a transfer. SOP 03-3 becomes effective for loans or debt securities acquired
in fiscal years beginning after December 15, 2004.

# Note 3 
Acquisitions, Goodwill and Other Intangibles

(i)  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 a 50% 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.

(ii)  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 price was based on independent appraisal report, 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, because we did not have a
majority control interest.

(iii)  2003
Acquisitions

In
March 2003, we acquired the pension and retirement plans of Seguradora Cigna through our
subsidiary Unibanco AIG Previdência S.A. and paid R$2 for a customer relationship
intangible and market share participation. We also signed a service agreement that will
preserve the same rights and obligations previously agreed.

(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
indefinite 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 2 years, at December
31, 2003. Fair value was determined by using discounted cash flow methodology, and no
impairment adjustment was necessary at January 1st and December 31, 2002 or
December 31, 2003, for the goodwill recorded. The following tables present the changes in
goodwill and other intangibles, during the years ended December 31, 2002 and 2003:

|                           | As of December 31, 2002
|-------------------------- | -----------------------
|                           |                        
|                           | Goodwill               
|                           |                        
|                           | Retailbanking          
|                           |                        
|Balance, beginning of year | R$ 969                 
|Acquisition                | -                      
|Amortization               | -                      
|                           |                        
|Balance, end of year       | R$ 969                 
|                           |                        

|                                | As of December 31, 2003
|------------------------------- | -----------------------
|                                |                        
|                                | Goodwill               
|                                |                        
|                                | Retail banking         
|                                |                        
|Balance, beginning of year      | R$ 969                 
|Acquisition                     | -                      
|Foreign exchange rate variation | -                      
|Amortization                    | -                      
|                                |                        
|Balance, end of year            | R$ 969                 
|                                |                        

The estimated aggregate amortization expense for each of the two succeeding fiscal years of the remaing useful life represented by customer relationship intangible is R$91 in 2004 and R$90 in 2005.

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 2001:

|                                                              | Pro-forma Year ended December 31, 2001
|------------------------------------------------------------- | --------------------------------------
|                                                              |                                       
|                                                              | Holdings                              
|                                                              |                                       
|Net income:                                                  
|Reported net income                                           | R$ 485                                
|Add back goodwill amortization, net of applicable tax benefit | 24                                    
|                                                              |                                       
|Adjusted net income                                           | R$ 509                                
|                                                              |                                       
|Basic earnings per share - in Brazilian Reais (1):           
|Reported earnings per share                                  
|Common shares                                                 | R$ 0.57                               
|Preferred shares                                              | -                                     
|Preferred shares A                                          | 0.63                                  
|Preferred shares B                                          | 0.57                                  
|Add back impact of goodwill amortization                     
|Common shares                                                 | R$ 0.03                               
|Preferred shares                                              | -                                     
|Preferred shares A                                          | 0.03                                  
|Preferred shares B                                          | 0.03                                  
|Adjusted earnings per share                                  
|Common shares                                                 | R$ 0.60                               
|Preferred shares                                              | -                                     
|Preferred shares A                                          | 0.66                                  
|Preferred shares B                                          | 0.60                                  

____________________


|(1) | Earnings per share have been
adjusted for all periods  presented to reflect the new number of shares that will result from the reverse stock split,
approved on April 30, 2004, in accordance  with SFAS 128 Earnings per share (see Note
           34(e)).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 4 - Related
Party Transactions

The Moreira Salles
Group owns 66.72% and 78.62% of Holdings common voting stock at December 31, 2002 and
2003,  respectively,  and therefore  indirectly controls 96.59% of the Unibanco's voting
stock at December 31, 2002 and 2003. 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,
2002 and 2003, the  Commerzbank AG owns 11.44% and 4.26% of the capital of Holdings and
1.75% and 2.55% of the capital of Unibanco,  respectively;  and the Caixa Geral de
Depositos owns 12.42% of the capital of Holdings and owns 4.8% of the capital of
Unibanco.  At December 31, 2002,  Mizuho  Financial  group  (Mizuho) owns 2.71% of the
capital of Holdings and 3.11% of the capital of Unibanco and in September  2003,  Mizuho
entirely sold its participation in the capital of Holdings and Unibanco (see Note 19).
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,
2002 and 2003 was R$1,364 and R$819, 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 price was based on an 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,
2001, 2002 and 2003, we had the following transactions with these related parties:

|Company                                                                 | 2002 | 2003
|----------------------------------------------------------------------- | ---- | ----
|                                                                        |      |     
|Assets                                                                 
|Federal funds sold and securities purchased under resale agreements    
|Banco Investcred Unibanco S.A                                           | -    | 2   
|Interest-bearing deposits in other banks                               
|Banco Investcred Unibanco S.A                                           | 229  | 321 
|Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento       | 183  | 272 
|                                                                        |      |     
|Total                                                                   | 412  | 593 
|                                                                        |      |     
|                                                                       
|Trading assets, at fair value                                          
|Banco Investcred Unibanco S.A                                           | -    | 6   
|Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento       | -    | 4   
|                                                                        |      |     
|Total                                                                   | -    | 10  
|                                                                        |      |     
|Other assets                                                            | 72   | 89  
|                                                                        |      |     
|Total assets                                                            | 484  | 694 
|                                                                        |      |     
|                                                                       
|                                                                       
|Company                                                                 | 2002 | 2003
|                                                                        |      |     
|Liabilities                                                            
|Deposits                                                               
|Demand deposits                                                         | -    | 4   
|Time deposits                                                          
|Consórcio Nacional Ford                                                 | -    | 36  
|Unibanco Rodobens Administradora de Consórcios Ltda                     | -    | 26  
|Other                                                                   | -    | 13  
|                                                                        |      |     
|Total                                                                   | -    | 79  
|                                                                        |      |     
|Federal funds purchased and securities sold under repurchase agreements
|Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento       | -    | 7   
|                                                                        |      |     
|Other liabilities                                                      
|Redecard S.A. (a)                                                       | 194  | 167 
|Other                                                                   | 54   | 5   
|                                                                        |      |     
|Total                                                                   | 248  | 172 
|                                                                        |      |     
|Total liabilities                                                       | 248  | 258 
|                                                                        |      |     

|Company                                                           | 2001 | 2002 | 2003
|----------------------------------------------------------------- | ---- | ---- | ----
|                                                                  |      |      |     
|Interest income                                                  
|Interest on deposits with banks                                  
|Banco Investcred Unibanco S.A                                     | 3    | 35   | 56  
|Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento | 4    | 23   | 45  
|Interest on securities                                           
|Trading income                                                   
|Banco Investcred Unibanco S.A                                     | -    | 29   | 8   
|Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento | -    | 2    | 3   
|Fee and commission income                                        
|Unibanco Rodobens Administradora de Consórcios Ltda               | -    | -    | 6   
|Other income                                                     
|Credicard S.A.  Administradora de Cartões de Crédito             | -    | -    | 12  
|Deposits                                                         
|Unicorp Bank & Trust Ltd. (b)                                     | 27   | 3    | -   
|Consórcio Nacional Ford                                           | -    | -    | 6   
|Unibanco Rodobens Administradora de Consórcios Ltda               | -    | -    | 5   
|Other                                                             | 18   | -    | 3   
|Derivatives                                                      
|Banco Investcred Unibanco S.A                                     | -    | -    | 27  
|Luizacred S.A. Sociedade de Crédito, Financiamento e Investimento | -    | -    | 1   
|Other interest expenses                                           | 13   | 15   | 1   
|Non interest income                                               | 25   | 12   | -   
|Non interest expense                                             
|Administrative expenses                                          
|Tecnologia Bancária S.A.                                          | 15   | 18   | 20  
|Bus Serviços de Telecomunicações S.A.                             | 25   | 35   | -   
|Other                                                             | 15   | 15   | 10  
|Other non-interest expenses                                       | 12   | 9    | 79  

____________________


|(a) | Consist
primarily of payments to be made to the company due to debit card transactions.
|--- | ---------------------------------------------------------------------------------------

|(b) | See
Note 3.
|--- | -----------

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$5 and R$7 in 2001, 2002 and 2003,  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     | 2002              
|                     |                   
|Non-interest earning | R$ 698            
|Interest-earning     | 3,228             
|                     |                   
|Total                | R$ 3,926          
|                     |                   

At December 31, 2002 and 2003 we had also R$3,720 and R$2,547 of federal  government  securities,  linked to Central Bank in a form of compulsory  deposits,  recorded as trading assets in the amount of
R$382 in 2002 and R$339 in 2003, securities available for sale in the amount of R$10 in 2002 and R$65 in 2003 and securities held to maturity in the amount of R$3,328 in 2002 and R$2,143 in 2003.

# Note 6  Trading
Assets

Trading
assets, stated at fair value, are presented in the following table:

|                                  | As of December 31,
|--------------------------------- | ------------------
|                                  |                   
|                                  | 2002              
|                                  |                   
|Federal government securities (a) | R$ 2,527          
|Brazilian sovereign bonds         | -                 
|Securities of foreign governments | 31                
|Corporate debt securities         | 23                
|Bank debt securities              | 28                
|Mutual funds (b)                  | 2,282             
|Stocks                            | -                 
|Derivative financial instruments:
|Swaps                             | 408               
|Forward                           | -                 
|                                  |                   
|Total                             | R$ 5,299          
|                                  |                   

_______________________


|(a) | Include
R$307 in 2002 and R$131 in 2003 linked to margin guarantees,  mainly to the Brazilian
Futures and Commodities  Exchange (BM&F);  R$382 in 2002 and R$339 in 2003
       linked to Central Bank as compulsory deposits and R$646 in 2002 and R$175 in 2003
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.  In 2003 the decrease is due
to the application of FIN 46R to our exclusive  investment funds (see
     Note 2(y)).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net
trading income in 2001, 2002 and 2003, included in non interest income was as follows:

|                                                            | For the year ended December 31,
|----------------------------------------------------------- | -------------------------------
|                                                            |                                
|                                                            | 2001                           
|                                                            |                                
|Realized gains on securities                                | R$ 179                         
|Realized losses on securities                               | (92)                           
|Realized gains (losses) on derivatives                      | (36)                           
|Net unrealized gains (losses) on securities and derivatives | 69                             
|                                                            |                                
|Net                                                         | R$ 120                         
|                                                            |                                

# 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, 2002                 |               |                      |                       |          
|Federal government securities     | 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  
|                                  |               |                      |                       |          
|                                 
|                                 
|December 31, 2003                
|Federal government securities(a)  | R$679         | R$16                 | R$12                  | R$683    
|Securities of foreign governments | 29            | -                    | -                     | 29       
|Corporate debt securities         | 2,028         | 40                   | 102                   | 1,966    
|Bank debt securities              | 139           | 5                    | -                     | 144      
|Stocks                            | 169           | 6                    | 24                    | 151      
|Mutual funds                      | 51            | -                    | -                     | 51       
|                                  |               |                      |                       |          
|Total                             | R$3,095       | R$67                 | R$138                 | R$3,024  
|                                  |               |                      |                       |          

---

|(a) | Include
R$442 in 2002 and R$50 in 2003 linked to margin guarantees, mainly to the BM&F; R$10 in
2002 and R$65 in 2003 linked to Central Bank as compulsory deposits and
R$613 in 2002 subject to repurchase commitments.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The fair
value of the securities available for sale in unrealized losses positions at December 31,
2003 were as follows:

|                              | Less than 12 months | 12 months or longer   | Total    
|----------------------------- | ------------------- | --------------------- | ---------
|                              |                     |                       |          
|                              | Fairvalue           | Grossunrealizedlosses | Fairvalue
|                              |                     |                       |          
|Federal government securities | R$13                | R$1                   | R$56     
|Corporate debt securities     | 1,298               | 99                    | 5        
|Stocks                        | 119                 | 24                    | -        
|                              |                     |                       |          
|Total                         | R$1,430             | R$124                 | R$61     
|                              |                     |                       |          

We have evaluated the
 unrealized  losses of our  securities  available for sale at December 31, 2002 and 2003
and we considered  they were temporary in nature except for the amount of R$98 and R$17
of other than-temporary  losses recorded as Non interest income-net gain on securities.
 We conduct a monthly review to identify and evaluate  investments that have indications
of possible  impairment,  considering the financial condition and near-term prospects of
the issuer and our ability and intention to hold the investment for a period of time
sufficient to allow for any anticipated recovery.

At December 31, 2002
and 2003, 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$1,469, R$2,033 and R$6,546, in 2001, 2002
and 2003, respectively.

Gross gains and losses
realized on the sale of securities available for sale were as follows:

|       | For the year ended December 31,
|------ | -------------------------------
|       |                                
|       | 2001                           
|       |                                
|Gains  | R$39                           
|Losses | 2                              
|       |                                
|Net    | R$37                           
|       |                                

The
amortized cost and fair value of available for sale securities, by contractual maturity,
were as follows:

|                                       | As of December 31,
|-------------------------------------- | ------------------
|                                       |                   
|                                       | 2002              
|                                       |                   
|                                       | Amortizedcost     
|                                       |                   
|Due in one year or less                | R$1,760           
|Due after one year through five years  | 3,190             
|Due after five years through ten years | 1,014             
|Due after ten years                    | 140               
|No stated maturity                     | 437               
|                                       |                   
|Total                                  | R$6,541           
|                                       |                   

# Note 8  Securities
Held to Maturity

The
amortized cost and fair value of securities held to maturity were as follows:

|                                  | Amortizedcost | Grossunrealizedgains | Grossunrealizedlosses | Fairvalue
|--------------------------------- | ------------- | -------------------- | --------------------- | ---------
|                                  |               |                      |                       |          
|                                  |               |                      |                       |          
|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  
|                                  |               |                      |                       |          
|                                 
|                                 
|                                  | Amortizedcost | Grossunrealizedgains | Grossunrealizedlosses | Fairvalue
|                                  |               |                      |                       |          
|                                  |               |                      |                       |          
|December 31, 2003                
|Federal government securities (a) | R$4,285       | R$291                | R$-                   | R$4,576  
|Brazilian sovereign bonds         | 1,140         | 100                  | -                     | 1,240    
|Corporate debt securities         | 291           | 11                   | 14                    | 288      
|Bank debt securities              | 59            | 3                    | -                     | 62       
|                                  |               |                      |                       |          
|Total                             | R$5,775       | R$405                | R$14                  | R$6,166  
|                                  |               |                      |                       |          

---

|(a) | Include
R$1,134 in 2002 and R$1,219 in 2003 linked to margin guarantees, mainly to the BM&F; R$3,328
in 2002 and R$2,143 in 2003 linked to Central Bank as compulsory deposits and
R$737 in 2002 and R$912 in 2003 subject to repurchase agreements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Unrealized  losses on
securities  held to maturity  were not  considered  material.  We have  evaluated the
 unrealized  losses of our  securities  held to maturity at December 31, 2002 and 2003
and we considered  they were  temporary in nature.  We conduct a monthly review to
identify and evaluate  investments  that have  indications  of possible  impairment,
 considering  the financial  condition and near-term prospects of the issuer and our
ability and intention to hold the investment for a period of time sufficient to allow for
any anticipated recovery.

In 2001 we recognized
other than-temporary losses of R$19 on securities and recorded as Non interest income -
net gain on securities.

The amortized cost and
fair value of securities held to maturity, by contractual maturity, were as follows:

|                                       | As of December 31,
|-------------------------------------- | ------------------
|                                       |                   
|                                       | 2002              
|                                       |                   
|                                       | Amortized cost    
|                                       |                   
|Due in one year or less                | R$1,722           
|Due after one year through five years  | 4,849             
|Due after five years through ten years | 39                
|Due after ten years                    | 12                
|                                       |                   
|Total                                  | R$6,622           
|                                       |                   

At December 31, 2002 and 2003 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.

# Note 9  Loans

|                                                       | As of December 31,
|------------------------------------------------------ | ------------------
|                                                       |                   
|                                                       | 2002              
|                                                       |                   
|Commercial:                                            |                   
|Industrial and other                                   | R$12,480          
|Import financing                                       | 1,231             
|Export financing                                       | 2,714             
|Real estate loans, primarily residential housing loans | 648               
|Direct lease financing (a)                             | 520               
|Individuals:                                          
|Overdraft                                              | 873               
|Financing                                              | 3,503             
|Credit card                                            | 1,516             
|Agricultural                                           | 791               
|Nonperforming loans                                    | 978               
|                                                       |                   
|Total loans                                            | R$25,254          
|                                                       |                   

---

|(a) | The
total lease payments to be received amounted to R$666 and R$601 as of December 31, 2002
and 2003, 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 December 31,
|----------------------------------------------- | ------------------
|                                                |                   
|                                                | 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                
|2008             | 11                
|Thereafter       | 3                 
|                 |                   
|Total            | R$666             
|                 |                   

Our nonperforming
loans by classification and valuation allowance for impaired loans were as follows:

|                                                          | As of December 31,
|--------------------------------------------------------- | ------------------
|                                                          |                   
|                                                          | 2002              
|                                                          |                   
|                                                          | Nonperformingloans
|                                                          |                   
|Industrial and other                                      | R$302             
|Import and export financing                               | 10                
|Real estate loans, primarily residential housing    loans | 66                
|Direct lease financing                                    | 19                
|Individuals                                               | 574               
|Agricultural                                              | 7                 
|                                                          |                   
|Total                                                     | R$978             
|                                                          |                   

All impaired loans
have a valuation allowance recorded under SFAS 114 for large balance loans or SFAS 5 Accounting
for Contingencies for small and homogeneous 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,
|------------------------------------------------------------ | -------------------------------
|                                                             |                                
|                                                             | 2001                           
|                                                             |                                
|Average balance of nonperforming loans subject to impairment | R$966                          

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, 2002 and 2003 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,
|-------------------------- | -------------------------------
|                           |                                
|                           | 2001                           
|                           |                                
|Balance, beginning of year | R$1,005                        
|Provision for loan losses  | 1,100                          
|Loan charge-offs           | (1,298)                        
|Loan recoveries            | 469                            
|Net charge-offs            | (829)                          
|                           |                                
|Balance, end of year       | R$1,276                        
|                           |                                

# Note 11 
Investments in Unconsolidated Companies

|                                                                     | As of or for the year ended December 31, 2003 | Investment               | Equity income (loss)    
|-------------------------------------------------------------------- | --------------------------------------------- | ------------------------ | ------------------------
|                                                                     |                                               |                          |                         
|                                                                     | Participation                                 | Stock-holders'equity (a) | Netincomefor theyear (a)
|                                                                     |                                               |                          |                         
|                                                                     | Total                                         | Voting                   | 2002                    
|                                                                     |                                               |                          |                         
|Retail banking                                                       |                                               |                          |                         
|Credicard S.A-Administradora de Cartões   de Crédito (d)             | 33.333%                                       | 33.333%                  | R$295                   
|Redecard S.A.                                                        | 31.943                                        | 31.942                   | 82                      
|Orbitall Serviços e Processamento de    Informações Comerciais Ltda  | 33.333                                        | 33.333                   | 57                      
|Serasa S.A. (b)                                                      | 19.120                                        | 16.411                   | 155                     
|Cibrasec  Companhia Brasileira de    Securitização (b)              | 12.499                                        | 12.499                   | 48                      
|Tecnologia Bancária S.A                                              | 21.432                                        | 21.432                   | 123                     
|Unibanco Rodobens Administradora de    Consórcios Ltda.              | 50.000                                        | 50.000                   | 32                      
|Luizacred S.A. Sociedade de Crédito,    Financiamento e Investimento | 49.998                                        | 49.996                   | 44                      
|Banco Investcred Unibanco S.A                                        | 49.997                                        | 49.997                   | 146                     
|Goodwill paid on acquisition of investments                          |                                               |                          |                         
|Others                                                               |                                               |                          |                         
|                                                                    
|Total                                                                |                                               |                          |                         
|Wholesale banking                                                   
|Interchange Serviços S.A.                                            | 25.000                                        | 25.000                   | 34                      
|Others                                                               |                                               |                          |                         
|Total                                                                |                                               |                          |                         
|Insurance                                                           
|AIG Brasil Companhia de Seguros                                      | 49.999                                        | 49.999                   | 74                      
|Others                                                               |                                               |                          |                         
|Total                                                                |                                               |                          |                         
|Wealth management                                                   
|Unicorp Bank & Trust Ltd. (c).                                       | 100.000%                                      | 100.000%                 | -                       
|Total                                                                |                                               |                          |                         
|Total of investments in unconsolidated    companies                  |                                               |                          |                         
|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) | Companies
in which we own less than 20% of voting shares but exercise significant  influence over
their      operations.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(c) | In
April 2002 we acquired the remaining 24.5% of total stock of Unicorp Bank & Trust Ltd.
 Representing      a 70.0% of interest in its voting shares.  As a consequence we
consolidated  Unicorp as from April 2002      (see Note 3).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Information
 about the financial  position and results of Credicard,  presented in accordance with
U.S.      GAAP, is as follows:
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|                     | 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 December 31, 2001
|------------------------- | ------------------------------------
|                          |                                     
|                          | Brazilian GAAP                      
|                          |                                     
|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 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

|                                                         | Estimatedusefullife (years) | As of December 31,
|-------------------------------------------------------- | --------------------------- | ------------------
|                                                         |                            
|                                                         | 2002                        | 2003              
|                                                         |                             |                   
|Land                                                     | -                           | R$193             
|Buildings                                                | 25                          | 502               
|Furniture and equipment                                  | 10                          | 313               
|Leasehold improvements                                   | 5-10                        | 396               
|Data processing equipment                                | 5                           | 818               
|Costs of software developed or obtained for internal use | 5                           | 381               
|Vehicles                                                 | 5                           | 2                 
|Others                                                   | -                           | 81                
|                                                         |                             |                   
|Total                                                    |                             | 2,686             
|Less: Accumulated depreciation                           |                             | 1,166             
|                                                         |                             |                   
|Premises and equipment, net                              |                             | R$1,520           
|                                                         |                             |                   

Depreciation  expense
was R$258,  R$259 and R$291 in 2001, 2002 and 2003,  respectively,  including R$24, R$12
and R$21 related to depreciation  expense on assets under capital leases in 2001, 2002
and 2003, respectively.

We have entered into
leasing  agreements,  mainly related to data  processing  equipment,  which is 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 were  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
realized in gains were  recognized  depending on whether or not we provided 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, during 2002 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 30.

# Note 13  Other
Assets

|                                                           | As of December 31,
|---------------------------------------------------------- | ------------------
|                                                           |                   
|                                                           | 2002              
|                                                           |                   
|Deferred tax assets, net (see Note 18)                     | R$2,194           
|Prepaid taxes                                              | 975               
|Restricted escrow deposits for contingencies (see Note 30) | 1,125             
|Prepaid expenses                                           | 257               
|Negotiation and intermediation of securities               | 83                
|Income receivable                                          | 124               
|Insurance premiums receivable                              | 70                
|Foreclosed assets, net                                     | 92                
|Retirement government benefit advances                     | 52                
|Others                                                     | 861               
|                                                           |                   
|Total                                                      | R$5,833           
|                                                           |                   

# Note 14  Time
Deposits

The
following table shows the maturity of outstanding deposits with balances issued by us.

|                                             | As of December 31,
|-------------------------------------------- | ------------------
|                                             |                   
|                                             | 2002              
|                                             |                   
|Maturity within 3 months                     | R$5,066           
|Maturity after 3 months but within 6 months  | 720               
|Maturity after 6 months but within 12 months | 1,356             
|Maturity after 12 months but within 5 years  | 9,712             
|                                             |                   
|Total deposits                               | R$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,
|-------------------------------------------------------------------- | ------------------
|                                                                     |                   
|                                                                     | 2002              
|                                                                     |                   
|Federal funds purchased, securities sold under repurchase agreements | R$13,806          
|Short-term borrowings                                               
|Import and export financings                                         | 4,121             
|Commercial paper                                                     | 721               
|Other interbank borrowings                                           | 1,327             
|Others                                                               | 136               
|                                                                     |                   
|Total                                                                | R$20,111          
|                                                                     |                   

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 3.7% p.a. and 3.5% p.a. for import and
export financings in 2002 and 2003,  respectively,  2.2% p.a. for commercial paper in
2002 and 2.7% p.a. and 2.3% p.a. for other interbank borrowings, in 2002 and 2003,
respectively.

The following table
presents the federal funds purchased, securities sold under repurchase agreements and
short-term borrowings by maturities.

|                                                                         | As of December 31,
|------------------------------------------------------------------------ | ------------------
|                                                                         |                   
|                                                                         | 2002              
|                                                                         |                   
|Federal funds purchased and securities sold under repurchase agreements:
|Due in 1 month or less                                                   | R$13,806          
|Short-term borrowings:                                                  
|Due in 1 month or less                                                   | 555               
|Due in between 1 and 3 months                                            | 820               
|Due in between 3 and 6 months                                            | 2,836             
|Due after 6 months                                                       | 2,094             
|                                                                         |                   
|Total                                                                    | R$20,111          
|                                                                         |                   

# Note 16  Long-term
Debt

The
composition of long-term debt is as follows:

|                                               | As of December 31,
|---------------------------------------------- | ------------------
|                                               |                   
|                                               | 2002              
|                                               |                   
|                                              
|Local onlendings                               | R$5,332           
|Euronotes                                      | 2,186             
|Notes issued under securitization arrangements | 1,413             
|Subordinated debt                              | 932               
|Mortgage indebtedness                          | 633               
|Interbank onlendings                           | 161               
|Foreign onlendings                             | 95                
|Obligations under capital leases               | 83                
|Others                                         | 93                
|                                               |                   
|Total                                          | R$10,928          
|                                               |                   

# 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 1.0% p.a. and 2.5% p.a.,  in 2002 and 2003,  plus variable  interest  based on the TJLP  (Long-term  interest rate  determined by the Central Bank on a quarterly  basis,  not
inflation-adjusted),  US dollar or the BNDES (National Economic and Social Development Bank) basket of currencies.  The borrowings are primarily from BNDES and FINAME (National Industrial Finance Authority) in the
form of credit lines.

# Euronotes

|                  | Original  |          |        | Carrying amount(net of repurchases)as of December 31,
|----------------- | --------- | -------- | ------ | -----------------------------------------------------
|                  | term in   |          |        |                                                      
|Maturity date (a) | years (a) | Currency | Coupon | 2002                                                 
|                  |           |          |        |                                                      
|                 
|February 18, 2003 | 1         | US$      | 4.25%  | R$28                                                 
|March 30, 2003    | 2         | US$      | 7.25%  | 294                                                  
|June 6, 2003      | 0.6       | US$      | 4.69%  | 24                                                   
|August 26, 2003   | 2.1       | US$      | 7.25%  | 314                                                  
|October 17, 2003  | 6         | EURO     | 7.00%  | 324                                                  
|January 16, 2004  | 1         | US$      | 6.88%  | -                                                    
|February 15, 2004 | 2         | US$      | 6.00%  | 347                                                  
|February 18, 2004 | 1         | US$      | 6.25%  | -                                                    
|February 26, 2004 | 3         | US$      | 8.50%  | 8                                                    
|April 16, 2004    | 1         | US$      | 5.00%  | -                                                    
|May 19, 2004      | 1         | EURO     | 5.38%  | -                                                    
|November 5, 2004  | 1.5       | US$      | 5.63%  | -                                                    
|December 12, 2004 | 8         | US$      | 10.50% | 340                                                  
|December 23, 2004 | 8         | US$      | 10.00% | 12                                                   
|January 21, 2005  | 1.5       | US$      | 4.00%  | -                                                    
|December 24, 2007 | 5         | US$      | 6.50%  | 8                                                    
|December 9, 2009  | 6         | US$      | 4.28%  | -                                                    
|April 15, 2014    | 13        | US$      | 8.00%  | 87                                                   
|Others            |           |          |        | 400                                                  
|                  |           |          |        |                                                      
|Total             |           |          |        | R$2,186                                              
|                  |           |          |        |                                                      

---

|(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 U.S. dollar denominated  electronic remittance payment orders (DPRs) generally referred to as SWIFT MT-100 payments,  received
and processed by us through our correspondent banks pursuant to which we sold such DPRs to UBB Diversified  Payment Rights Finance Company, a special purpose company.  The full payment of principal and interest on
the issued series of notes is guaranteed by a third-party  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.

|              | Original principal amount issued |               |              |                          |      | As of December 31,
|------------- | -------------------------------- | ------------- | ------------ | ------------------------ | ---- | ------------------
|              |                                  |               |              |                          |     
|              | Issue                            | Maturity      | Coupon       | Currency                 | 2002 | 2003              
|              |                                  |               |              |                          |      |                   
|Series 2002-1 | US$400 million                   | May 2002      | April 2009   | 3-month LIBOR (1)+ 0.57% | US$  | R$1,413           
|Series 2003-1 | US$112 million                   | June 2003     | July 2009    | LIBOR (1)+ 4.25%         | US$  | -                 
|Series 2003-2 | US$105 million                   | June 2003     | July 2009    | 6.15%                    | US$  | -                 
|Series 2003-3 | ¥ 25 billion                     | November 2003 | October 2013 | 3.55% (2)                | YEN  | -                 
|              |                                  |               |              |                          |      |                   
|              |                                  |               |              |                          |      | R$1,413           
|              |                                  |               |              |                          |      |                   

---

|(1) | London
InterBank Offered Rates.
|--- | -------------------------------

|(2) | Equivalent
in U.S. dollar terms to 2.86% per annum over U.S. dollar LIBOR. To hedge currency
 mismatch       risk stemming from the fact the payment orders  received by us are
 denominated in U.S.  dollars while       the notes are  denominated  in Yen, we entered
into a cross currency  swap,  part of the  counterparty       risk of which has been
assumed by the International Finance Corporation.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Subordinated debt

|                               |               |               |                        | Carrying amount
|------------------------------ | ------------- | ------------- | ---------------------- | ---------------
|                               |               |               |                        |                
|                               | Issue         | Maturity      | Remuneration per annum | 2002           
|                               |               |               |                        |                
|Step-up subordinated           |               |               |                        |                
|callable notes (1)             | April 2002    | April 2012    | 9.375%                 | R$710          
|Step-up subordinated          
|callable notes (2)             | December 2003 | December 2013 | 7.375%                 | -              
|Subordinated time deposits (3) | December 2002 | December 2012 | 102% of CDI (4)        | 222            
|                               |               |               |                        |                
|Total                          |               |               |                        | R$932          
|                               |               |               |                        |                

---

|(1) | The
debt can be  integrally  redeemed  in  April  2007 or in each  subsequent  interest
 payment.  The       interest rate from the fifth year will be 11.7995% per annum.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The
debt can be  integrally  redeemed in December 2008 or in each  subsequent  interest
 payment.  The       interest rate from the fifth year will be 9.375% per annum.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Subordinated
time deposits can be redeemed from December 2007.
|--- | --------------------------------------------------------------

|(4) | The
Brazilian interbank interest rate.
|--- | --------------------------------------

# Maturity of long-term
debt

|           | As of December 31,
|---------- | ------------------
|           |                   
|           | 2002              
|           |                   
|2003       | R$4,070           
|2004       | 1,898             
|2005       | 1,107             
|2006       | 776               
|2007       | 801               
|2008       | 674               
|Thereafter | 1,602             
|           |                   
|Total      | R$10,928          
|           |                   

# 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
20.0% p.a. in 2002 and 6.0% p.a. to 22.0% p.a. in 2003. 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 December 15, 2011, with
an average interest rate of 4.5% per annum.

# Note 17  Other
Liabilities

|                                                                     | As of December 31,
|-------------------------------------------------------------------- | ------------------
|                                                                     |                   
|                                                                     | 2002              
|                                                                     |                   
|Pension investment contracts (of pension fund management subsidiary) | R$1,829           
|Insurance claims reserve                                             | 766               
|Retirement plan reserve (of pension fund management subsidiary)      | 175               
|Provision for litigations (see Note 30)                              | 1,453             
|Income taxes and other taxes payable                                 | 351               
|Payable to merchants - credit card                                   | 444               
|Collection of third-party taxes, social contributions and other      | 315               
|Social and statutory                                                 | 343               
|Derivatives liability (see Note 28):                                
|Swaps                                                                | 467               
|Accounts pending settlement                                          | 125               
|Employee related liabilities                                         | 138               
|Foreign exchange portfolio                                           | 446               
|Others                                                               | 1,073             
|                                                                     |                   
|Total                                                                | R$7,925           
|                                                                     |                   

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 is 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%
|----------------------- | ---
|Social contribution (a) | 9  
|                        |    
|Composite               | 34%
|                        |    

---

|(a) | The
enacted rate was 8% for 2001.
|--- | ---------------------------------

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,
|---------------------------------------------------------- | -------------------------------
|                                                           |                                
|                                                           | 2001                           
|                                                           |                                
|Income before income taxes                                 | R$947                          
|Less: Equity in results of unconsolidated companies        | 235                            
|                                                           |                                
|Tax basis                                                  | 712                            
|                                                           |                                
|Tax expense at statutory rates                             | (242)                          
|                                                           |                                
|Adjustments to derive effective tax rate:                 
|Exempt foreign source income from subsidiaries (a)         | 92                             
|Tax benefit on interest attributed to stockholders' equity | 4                              
|Other permanent differences                                | (1)                            
|Effect of changes in tax laws and rates on deferred tax    | 7                              
|Non-taxable capital gains                                  | 6                              
|Non-taxable exchange gain (losses) on foreign assets       | 96                             
|                                                           |                                
|Income tax (expense) income                                | R$(38)                         
|                                                           |                                

---

|(a) | Beginning
January 1, 2002 all income of subsidiaries abroad is 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 and 2002 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,
|------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------
|                                                                                                                                                             |                   
|                                                                                                                                                             | 2002              
|                                                                                                                                                             |                   
|Provision for credits losses                                                                                                                                 | R$720             
|Other provisions not currently deductible (mainly provision for litigations)                                                                                 | 414               
|Tax benefit on reorganization of subsidiaries                                                                                                                | 221               
|Tax losses carryforwards                                                                                                                                     | 672               
|Fair value adjustments on securities and derivatives financial instruments                                                                                   | 158               
|Other temporary differences, mainly expenses recognized under U.S. GAAP                                                                                     
|in advance of recognition under Brazilian GAAP and for tax purposes                                                                                          | 137               
|                                                                                                                                                             |                   
|Deferred tax assets                                                                                                                                          | 2,322             
|                                                                                                                                                             |                   
|Effect of differences between indexes used for price-level restatement purposes    for tax and U.S. GAAP purposes, mainly relating to premises and equipment | 16                
|Temporary differences relative to leasing depreciation                                                                                                       | 110               
|Others                                                                                                                                                       | 2                 
|                                                                                                                                                             |                   
|Deferred tax liabilities                                                                                                                                     | 128               
|                                                                                                                                                             |                   
|Net deferred tax asset, included in other assets                                                                                                             | R$2,194           
|                                                                                                                                                             |                   

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, 2001,
2002 and 2003, the capital of Holdings comprises the following shares, without par value:

|                                      | As of December 31,
|------------------------------------- | ------------------
|                                      |                   
|                                      | 2001              
|                                      |                   
|Voting common shares                  | 37,138,435,873    
|Non-voting class "A" preferred shares | 3,843,541,338     
|Non-voting class "B" preferred shares | 43,348,499,085    
|                                      |                   
|Total shares                          | 84,330,476,296    
|                                      |                   

At December 31, 2002
and 2003, 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.

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).

On April 28, 2003, the
 Extraordinary  Shareholders  Meeting  approved the  conversion of class A preferred
 shares to class B preferred  shares on a one for one basis,  at any time, at
shareholder option. All shareholders converted their class A preferred shares into
class B preferred shares.

On
August 19, 2003, the Extraordinary Shareholders Meeting approved the conversion of common
shares into class B preferred shares, on a one for one basis, at shareholder
option, until August 22, 2003. The conversion was limited to a maximum of 2/3 of common
shares related to the total amount of shares. 5,623,848,354 common shares were converted
into class B preferred shares.

Class
B preferred shares have no voting rights, are entitled to receive a
semi-annual minimum dividend of R$0.15 (fifteen cents) per thousand shares or semi-annual
priority dividend of 1.5% of stockholders equity resulting in an annual priority
dividend of 3% (three percent) of stockholders equity, have priority in the
reimbursement of capital in the case of the capital liquidation up to the amount of
capital represented by such preferred shares. The common and class B preferred
shareholders participate in equal conditions in distribution of dividends and in capital
increases from monetary restatement of revenues, reserves and income.

The
shares of Holdings and Unibanco are traded also in the form of Share Deposit Certificates
(Units) or Global Depositary Shares (GDS). Each Unit represents a preferred share issued
by Unibanco and a class B preferred share issued by Holdings and is traded in
the Brazilian Market. Each GDS represents 500 Units and is traded in the international
market.

Appropriated
retained earnings Brazilian law and the Holdings 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 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, 2002 and 2003.

# UNIBANCO

At
December 31, 2001, 2002 and 2003, the Banks capital comprised the following shares,
without par value:

|                            | As of December 31,
|--------------------------- | ------------------
|                            |                   
|                            | 2001              
|                            |                   
|Voting common shares        | 75,568,744,349    
|Non-voting preferred shares | 65,317,088,969    
|                            |                   
|Total shares                | 140,885,833,318   
|                            |                   

At
December 31, 2002 and 2003, 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
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, 2002 and 2003 were
R$2,719 and R$3,009, 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 a buy-back program for a period of three months. On December 27, 2001 the
renewal of buy-back program was approved.  Up                to December 31, 2001,
 153,200,000 of Unibanco's preferred shares, and 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$42.39 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | The
Board of Directors of Unibanco and 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  Holdings Class B preferred shares, to be maintained in
treasury for subsequent sale or cancellation,  without capital  reduction.  During 2003,
 228,000,000                Unibanco preferred shares were acquired, and 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 Units and 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 average price of
R$47.85 per thousand shares as treasury stocks.
The fair value of treasury
stocks at December 31, 2003, based on the Unit price at December 30, 2003, on the Sao
Paulo Stock Exchange, was R$236 (2002 - R$93) in Unibanco and R$170 (2002 - R$37) in
Holdings.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# SHARE CONVERSION 
HOLDINGS AND UNIBANCO

The
Extraordinary General Meeting of Unibanco and Holdings held on August 18, 2003 approved
the statutory alterations that allow Unibancos shareholders to convert their common
shares in preferred shares issued by Unibanco and the Holdings shareholders to
convert their common shares into class B preferred shares issued by Holdings.
The conversion was made at the proportion of one common share issued by Unibanco for one
preferred share issued by Unibanco and of one common share issued by Holdings for one
class B preferred share issued by Holdings.

The
maximum term for the conversion of shares issued by Unibanco and Unibanco Holdings was up
to August 29, 2003 and August 22, 2003, respectively.

# GLOBAL OFFER AND
EXCHANGE OFFER  HOLDINGS AND UNIBANCO

Global
Offer

In
September 2003, Unibanco shareholders, Mizuho Corporate Bank Ltd. (Mizuho) and Commerzbank
Aktiengesellschaft (Commerzbank), entirely and partially sold, respectively, their
participation in Unibanco and Unibanco Holdings in a Global Offer in Brazil and abroad.
Mizuho is no longer a shareholder of Unibanco and Commerzbank reduced its interest. The
Units belonging to both were sold at the price of R$109.67 per thousand Units, totaling
R$637 million.

From
the total number of Units sold, 1.7 billion were distributed to non-institutional and
institutional investors in Brazil and the remaining 4.1 billion were distributed, under
the form of Global Depositary Shares  GDSs, to investors abroad, on over-the-counter
market. The Units sold represent 11.66% of the non-voting capital of Unibanco Holdings and
9.36% of Unibancos non-voting capital.

Exchange
Offer

Unibanco
and Holdings offered to the holders of preferred shares in the Brazilian market the
opportunity to exchange pairs of preferred shares for Units. The Exchange Offer Auctions
occurred on September 22 and October 30, 2003, when 15.6 billion and 1.25 billion of
preferred shares, respectively, were exchanged for Units. After the Exchange Offer, there
are still 2.9 billion of Unibanco preferred shares outstanding in the market (not in the
form of Units) and representing 2% of Unibancos total capital. Adding the two
auctions, 83% of the Unibanco and Holdings preferred shares, that could be exchanged, was
exchanged for units.

From
November 2003, the Conversion Program will be maintained during two years and up to
December 31, 2003 16.8 billion of preferred Units were exchanged, allowing holders of
Unibanco preferred shares and Holdings preferred class B shares as of the date
of the Exchange Offer Announcement (September 15th, 2003) to convert their pairs of
preferred shares into Units.

The
float of Units in the Brazilian market increased approximately 57% after conclusion of the
Global and Exchange Offers.

# Note 20 
Restructuring Charges

Restructuring
charges directly related to the Bandeirantes acquisition.

In
connection with the Bandeirantes acquisition in December, 2000, 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
estimated restructuring charges directly related to the acquisition of Bandeirantes
totaled 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. 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 and 2003 no restructuring
charges was recorded.

# Note 21  Fee and
Commission Income

|                                               | For the year ended December 31,
|---------------------------------------------- | -------------------------------
|                                               |                                
|                                               | 2001                           
|                                               |                                
|Banking tariffs and other fees and commissions | R$910                          
|Credit card fees                               | 362                            
|Asset management fees                          | 251                            
|Collection fees                                | 130                            
|                                               |                                
|Total                                          | R$1,653                        
|                                               |                                

Note 22  Insurance,
Private Retirement Plan and Pension Investment Contracts

(a) Income

|                                    | For the year ended December 31,
|----------------------------------- | -------------------------------
|                                    |                                
|                                    | 2001                           
|                                    |                                
|Insurance premiums                  | R$1,008                        
|Pension investment contracts income | 24                             
|Private retirement plan premiums    | 14                             
|                                    |                                
|Total                               | R$1,046                        
|                                    |                                

(b) Expenses

|                                                    | For the year ended December 31,
|--------------------------------------------------- | -------------------------------
|                                                    |                                
|                                                    | 2001                           
|                                                    |                                
|Adjustment to insurance reserves for claims         | R$40                           
|Adjustment to private retirement plans for benefits | 3                              
|Adjustment to pension investment contracts          | 158                            
|Insurance claims incurred                           | 591                            
|Private retirement plans benefits expenses          | 30                             
|Acquisition costs and other                         | 133                            
|                                                    |                                
|Total                                               | R$955                          
|                                                    |                                

Note 23 -
Administrative Expenses

|                                                  | For the year ended December 31,
|------------------------------------------------- | -------------------------------
|                                                  |                                
|                                                  | 2001                           
|                                                  |                                
|Net occupancy expenses for premises and equipment | R$584                          
|Communication expenses                            | 348                            
|Technology expenses                               | 208                            
|External administrative services                  | 303                            
|Banking and brokerage fees                        | 261                            
|Advertising and publicity                         | 191                            
|Supplies                                          | 49                             
|Other                                             | 190                            
|                                                  |                                
|Total                                             | R$2,134                        
|                                                  |                                

Note 24 - Other
Non-Interest Income and Expense

|                                                             | For the year ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             |                                
|                                                             | 2001                           
|                                                             |                                
|Other non-interest income:                                   |                                
|Participation in reserves and funds of Unibancos retirement
|plan (see Note 2(u) (i)  Pension Plan)                      | R$-                            
|Premium bond income                                          | 61                             
|Provision for losses on foreclosed assets and unconsolidated
|investment no longer required                                | 38                             
|Provisions for litigation no longer required                 | 7                              
|Foreign exchange rate variation on other liabilities         | -                              
|Gain on sale of foreclosed assets, investments              
|and premises and equipment                                   | 23                             
|Monetary correction of restricted escrow deposits            | 29                             
|Exchange gain on foreign investments (a)                     | 282                            
|Others                                                       | 182                            
|                                                             |                                
|Total                                                        | R$622                          
|                                                             |                                

|                                                             | For the year ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             |                                
|                                                             | 2001                           
|                                                             |                                
|Other non-interest expense:                                  |                                
|Exchange loss on foreign investments (b)                     | R$-                            
|Service, revenue and other taxes (including tax litigation)  | 442                            
|Civil litigation expenses                                    | 35                             
|Credit card selling expenses                                 | 55                             
|National financing system contributions                      | 43                             
|Expenses related to checks and billing, net                  | 40                             
|Loss on sale foreclosed assets, unconsolidated              
|investments and premises and equipment                       | 85                             
|Statutory profit sharing                                     | 9                              
|Provision for losses on foreclosed assets and unconsolidated
|investments                                                  | 11                             
|Uninsured losses of branch network                           | 11                             
|Foreign exchange rate variation on other liabilities         | -                              
|Restructuring charges (c)                                    | 14                             
|Others                                                       | 187                            
|                                                             |                                
|Total                                                        | R$932                          
|                                                             |                                

---

|(a) | During 2001 and 2002 the Real devalued against the US dollar 18.7% and 52.3%
          respectively, (R$2.3204=US$1.00 at December 31, 2001 and R$3.5333=US$1.00 at
          December 31, 2002).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | During 2003, the Real appreciated against the US dollar
          18.2% (R$3.5333=US$1.00 at December 31, 2002 and R$2.8892=US$1.00 at December
          31, 2003).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | 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 related with Bandeirantess
          integration (see
Note 20). The related costs are expensed as incurred.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 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
on the date of grant using a Black-Scholes model with the following weighted average
assumptions:

|                                   | 2002      | 2003     
|---------------------------------- | --------- | ---------
|                                   |           |          
|Expected volatility                | 56.2%     | 52.8%    
|Risk-free interest rate            | 26.4      | 24.7     
|Expected annual dividends per Unit | 4.7       | 5.4      
|Expected annual forfeited          | 2.0%      | 8.4%     
|Expected option life               | 4.5 years | 4.5 years

As
a result we recognized an expense of R$9 and R$10 during the year ended December 31, 2002
and 2003, respectively.

The
following table summarized the changes stock option plans during the years ended December
31, 2002 and 2003.

|                                | 2002                            | 2003                           
|------------------------------- | ------------------------------- | -------------------------------
|                                |                                 |                                
|                                | Options (in thousands of Units) | Weighted average exercise price
|                                |                                 |                                
|Balance, beginning of year      | -                               | R$-                            
|Granted                         | 669,700                         | 91.18                          
|Forfeited                       | -                               | -                              
|                                |                                 |                                
|Balance at end of year          | 669,700                         | R$91.18                        
|                                |                                 |                                
|Options exercisable at year-end | -                               | -                              
|                                |                                 |                                

The following table
summarized the information about stock options outstanding at December 31, 2003:

|Range of exercise prices | Options (in thousands of Units) | Weighted average remaining contractual life | Weighted average exercise price
|------------------------ | ------------------------------- | ------------------------------------------- | -------------------------------
|                         |                                 |                                             |                                
|R$69.04  R$80.00        | 59,000                          | 3.8                                         | R$70.37                        
|R$80.01  R$90.00        | 131,200                         | 4.3                                         | 85.98                          
|R$90.01  R$95.00        | 560,000                         | 3.1                                         | 93.10                          
|R$95.01  R$100.00       | 334,300                         | 4.7                                         | 98.34                          
|R$100.01  R$110.00      | 39,400                          | 4.3                                         | 102.81                         
|                         |                                 |                                             |                                
|                         | 1,123,900                       | 3.8                                         | R$92.97                        
|                         |                                 |                                             |                                

Note 26 -
Comprehensive Income

HOLDINGS

|                                                             | For the year ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             |                                
|                                                             | 2001                           
|                                                             |                                
|Net income reported in statement of income                   | R$485                          
|                                                             |                                
|Unrealized holding gains (losses) arising during the period:
|Unrealized gains (losses) on securities available for sale   | (18)                           
|Unrealized losses on cash flow hedging instruments           | -                              
|                                                             |                                
|Other comprehensive income (loss) before tax                 | (18)                           
|Income tax related to items of other comprehensive income    | 6                              
|                                                             |                                
|Other comprehensive income (loss), net of tax                | (12)                           
|                                                             |                                
|Comprehensive income                                         | R$473                          
|                                                             |                                

Accumulated other
comprehensive loss is as follows:

|                      | For the year ended December 31,
|--------------------- | -------------------------------
|                      |                                
|                      | 2001                           
|                      |                                
|Beginning balance     | R$(21)                         
|Current period change | (12)                           
|                      |                                
|Ending balance        | R$(33)                         
|                      |                                

UNIBANCO

|                                                                 | For the year ended December 31,
|---------------------------------------------------------------- | -------------------------------
|                                                                 |                                
|                                                                 | 2001                           
|                                                                 |                                
|Net income reported in statement of income                       | R$825                          
|                                                                 |                                
|Unrealized holding gains (losses) arising during the period:    
|Unrealized gains (losses) on securities available for sale       | (29)                           
|Unrealized losses on cash flow hedging instruments               | -                              
|                                                                 |                                
|Other comprehensive income before tax                            | (29)                           
|Income tax related to items of other comprehensive income (loss) | 10                             
|                                                                 |                                
|Other comprehensive income (loss), net of tax                    | (19)                           
|                                                                 |                                
|Comprehensive income                                             | R$806                          
|                                                                 |                                

Accumulated other
comprehensive income (loss) is as follows:

|                      | For the year ended December 31,
|--------------------- | -------------------------------
|                      |                                
|                      | 2001                           
|                      |                                
|Beginning balance     | R$(35)                         
|Current period change | (19)                           
|                      |                                
|Ending balance        | R$(54)                         
|                      |                                

# 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,
|-------------------------------------- | ------------------
|                                       |                   
|                                       | 2002              
|                                       |                   
|                                       | Carrying          
|                                       | amount            
|                                       |                   
|Assets                                
|Cash, due from banks and short-term   
|investments                            | R$16,804          
|Central Bank compulsory deposits       | 3,926             
|Trading assets, including derivatives  | 5,299             
|Securities available for sale          | 6,196             
|Securities held to maturity            | 6,622             
|Gross loans, excluding leases          | 24,734            
|Liabilities                           
|Deposits                               | 26,055            
|Federal funds purchased and securities
|sold under repurchase agreements       | 13,806            
|Short-term borrowings                  | 6,305             
|Long-term debt                         | 10,928            
|Derivatives liabilities (a)            | 467               

---

|(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$352 in 2002 and R$675 in 2003 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 is 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 is 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 Risk Management

# (a) Purposes and Use
Policies

We
use derivative financial instruments to manage our own overall exposures or to assist our
clients, in market risks, foreign exchange rates risk and interest rate risk. We also
enter into derivative contracts for trading purposes to take advantage of market
opportunities in order to aggregate value in our results.

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

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

# (b) Hedging Policies

The
use of the derivative financial instruments as part of our asset and liability risk
management process can be made as an overall position related to our net position
undertaken in a certain market or related to a specific assets and liabilities attributed
to a particular risk.

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

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

# (c) Risk Management

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

Credit Risk

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

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

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

# Market Risk

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

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

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

# Liquidity Risk

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

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

# Operating risks

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

To
meet the requirements of international market practices and the internal regulations of
the Brazilian financial market, 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, which is
accessible from all group areas. Periodic evaluations are held where area managers and
their staff identify their main activities and inherent risks, and assess the
effectiveness of current controls. This process allows controls to be improved, resulting
in reduced risk exposure.

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

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

# Change in the Internal
Structure

We
are backed by a professional management team with clear procedures to safeguard impartial
decision-making, timely implementation of initiatives and strategies, and capacity to act
promptly to scenario changes. In order to consolidate this position, in April 2004,
important changes in our internal structure were announced. Risk Management (credit,
market, liquidity and operational), macroeconomic research and capital, and structure
allocation and cost of capital functions now report directly to the chief executive
officer. The new model seeks to assure and reinforce excellence in the risk management
process.

# (d) 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, 2002 and 2003 of derivative positions held for trading and hedging purposes.

|****                              | **As of
     December 31,**                 
|--------------------------------- | --------------------------------------------
|                                  |                                             
|****                              | **2002**                                    
|                                  |                                             
|****                              | **Contract/Notional at
     fair value (1)**
|                                  |                                             
|**Interest rates:**               |                                             
|Swap
  contracts                  | R$1,828                                     
|Swap
  contracts with daily reset | (18)                                        
|Future
  contracts                | 4,853                                       
|Forward
  contracts               | -                                           
|**Foreign currency:**             |                                             
|Swap
  contracts                  | (1,886)                                     
|Swap
  contracts with daily reset | 18                                          
|Future
  contracts                | 1,159                                       
|Forward
  contracts               | 166                                         
|**Exchange coupon:**              |                                             
|Future
  contracts                | (2,628)                                     
|**Equity securities:**            |                                             
|Option
  contracts                | 2                                           
|Forward
  contracts               | R$-                                         
|                                  |                                             
|Total credit risk                 |                                             
|                                  |                                             

---

|(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, 2003
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$408 and
R$403 that are classified as Trading assets at December 31, 2002 and 2003,
respectively. Additionally, we have liabilities related to other interest rate and
currency swaps in the amounts of R$467 and R$261 that are classified as Other
liabilities at December 31, 2002 and 2003, respectively. At December 31, 2002 and
2003 the provision for probable losses related to credit risk in the swaps was R$1.

Interest
rate and currency futures and forwards 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. Maturities of these contracts at December 31, 2003 range
from 2 days to 5 years. The credit risk associated with future and forwards contracts is
minimized due to daily or monthly cash settlements and by entering into transactions with
a select number of high-quality institutions.

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 had no
credit exposure associated with purchased equity securities option in 2002 and 2003.

# Hedging transactions

Prior
entering a hedge transaction, we formally documents the relationship between hedging
instruments and hedged items, as well as the risk management objective and strategy for
undertaking various hedge transactions. This process includes linking all derivative
instruments that are designated as fair value or cash flow hedges to specific assets and
liabilities on the balance sheet or to specific forecasted transactions along with a
formal assessment at both inception of the hedge and on an ongoing basis as to the
effectiveness of the derivative instrument in offsetting changes in fair values or cash
flows of the hedged item. If it is determined that the derivative instrument is not highly
effective as a hedge, hedge accounting is discontinued and the adjustment to fair value of
the derivative instrument is recorded in net income.

Fair
value hedge: 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, 2003 there were swap contracts with notional
amounts of R$1,837 accounted for at fair value and recognized as hedge of the changes in
fair value of our loans and long-term-debt-mortgage indebtedness.

Cash
flow hedge: At December 31, 2002 we designated future contracts indexed to the
Brazilian benchmark interest rate with notional amounts 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 (CDI). At December
31, 2003 there were future operations and swap contracts with notional amounts at fair
value of R$2,963 and R$1,376, respectively, as hedge of the variability in expected future
cash flows associated with the Yen fluctuations, the interbank interest rate (CDI) and the
referential rate (TR) relating to certain loans, time deposits and mortgage indebteness.
During the next twelve months we expect to reclassify to earnings R$98 of pretax net
losses, or R$64 after tax, on cash flow hedge derivatives currently reported in
accumulated other comprehensive losses in the pretax amount of R$125. The
minimum length of time over which we are hedging exposure to the variability in future
cash flow is through April 2009. 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 and marketable securities occur.

For
the year ended December 31, 2002 and 2003, 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 derivatives described above are included
in trading account assets and in other liability  derivative liability as summarized
in Notes 6 and 17.

# Note 29 
Off-Balance Sheet Financial Arrangements

# 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,** 
|                                                        |                             
|                                                        | **2002**                    
|                                                        |                             
|Co-obligation for credit
   assignment                  | R$15                        
|Guarantees                                              | 4,251                       
|Standby letters of credit and other
   letter of credit | 302                         

At
December 31, 2002 and 2003, the carrying value of financial guarantees is recorded in
Other liabilities in the amount of R$10 and R$8, including the provision for
probable losses in the amount of R$3 and R$1, respectively.

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, 2002 and 2003 we have contractual amounts of R$11,207 and R$11,955,
respectively, of unfunded commitments to extend credit for a specified time period to lend
to customers who have complied with predetermined contractual conditions. These contracts
have maturities of 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 30 
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$18,384 and R$23,168 at December 31, 2002
and 2003, respectively, are not included in our consolidated balance sheet (see Note 2(y)
 FIN 46R). Fees are generally charged monthly, at average rates of 1.3% per year
(for 2003, 2002 and 2001) of the market value of the assets under management. We do not
guarantee minimum returns or the principal amount invested on such funds.

# Litigation

We
and our subsidiaries are defendants in several legal actions, mainly relating to income
taxes, indirect taxes and civil and labor claims. Based on the advice of our legal
counsels, 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 2001, 2002 and 2003 were as follows:

|                                            | **As of
     December 31,**
|------------------------------------------- | ---------------------------
|                                            |                            
|                                            | **2001**                   
|                                            |                            
|Balance,
  beginning of year                | R$1,266                    
|Provision
  charged                         | 284                        
|Payments
  (1)                              | (147)                      
|Reversal
  of provisions no longer required | (7)                        
|                                            |                            
|Balance,
  end of year (see Note 17)        | R$1,396                    
|                                            |                            

__________________________


|(1) | In 2003, refers mainly to the payment of tax litigation and to the transfer of
          tax litigation to Other Liabilities  Income taxes and other taxes
          payable in the amount of R$201 due to fiscal amnesty. In 2002, refers
          mainly to payments of tax litigation due fiscal amnesty.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 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. During 2002, we sold many properties
used as branches and, subsequently, we rented them for the purpose of continuing our
operations. Rescission of real estate leases did not involve material penalties in 2001
and were R$28 and R$31 in 2002 and 2003, respectively. Expenses of real estate leases were
R$114, R$118 and R$153, in 2001, 2002 and 2003, respectively. The following table set
forth the real estate leases commitments:

|2004       | R$136
|---------- | -----
|2005       | 114  
|2006       | 91   
|2007       | 70   
|2008       | 48   
|Thereafter | 107  
|           |      
|Total      | R$566
|           |      

Our
monthly amount of rental payments with no stated maturity in renew process and under
litigation is R$2.

# Note 31 
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 the 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 the 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,**       
|------------------------------ | ----------------------------------
|                               |                                   
|                               | **Partial
     consolidation (a)**
|                               |                                   
|                               | **2002**                          
|                               |                                   
|In accordance with the Central |                                   
|Bank requirements              |                                   
|Tier
  I Capital               | 13.82                             
|Tier
  II Capital              | 1.89                              
|                               |                                   
|Total
  Capital                | 15.71                             
|                               |                                   

|   
|---
|(a)
|(b)

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 50% of stockholders equity on a consolidated
basis. The Central Bank also limits unconsolidated investments, premises and equipment and
intangible assets to 50% of stockholders equity on a full consolidated basis. At
December 31, 2002 and 2003 our total investment in such assets was less than the Central
Bank limit.

# Note 32  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, 2001,
2002 and 2003, by segment, in accordance with SFAS 131 Disclosures about Segments of
an Enterprise and Related Information.

|                           | **For
     the year ended December 31, 2001**
|-------------------------- | ---------------------------------------------
|                           |                                              
|                           | **Retail
  banking**                         
|                           |                                              
|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                                          
|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                 | 302                                          
|                           |                                              
|Identifiable assets        | R$22, 859                                    
|                           |                                              

|   
|---
|(a)



|                                                 | **For
the year ended December 31, 2002**
|------------------------------------------------ | ----------------------------------------
|                                                 |                                         
|                                                 | **Retail
banking**                      
|                                                 |                                         
|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                                
|                                                 |                                         

|                                                 | **For
the year ended December 31, 2003**
|------------------------------------------------ | ----------------------------------------
|                                                 |                                         
|                                                 | **Retail
banking**                      
|                                                 |                                         
|Net
interest income                              | R$3,893                                 
|Provision
for loan losses                        | (839)                                   
|Insurance
and private retirement
plan premiums   | -                                       
|Equity
in earnings of unconsolidated
companies   | 200                                     
|Fee
and commission income                        | 1,613                                   
|Other
non-interest income                        | 669                                     
|Salaries
and benefits and administrative
expense | (3,740)                                 
|Insurance
and private retirement
plan expenses   | -                                       
|Other
non-interest expense                       | (1,264)                                 
|                                                 |                                         
|Income
before taxes and
minority interest        | 532                                     
|Income
taxes                                     | (41)                                    
|Minority
interest                                | (21)                                    
|                                                 |                                         
|Net
income                                       | R$470                                   
|                                                 |                                         
|Identifiable
assets                              | R$21,416                                
|                                                 |                                         

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 33  Parent
Company Financial Information

Condensed
financial information of Holdings, the Parent Company, is presented below:

|                                           | **As
     of December 31,**
|------------------------------------------ | ---------------------------
|                                           |                            
|**Balance sheet:**                         | **2002**                   
|                                           |                            
|Interest-bearing deposits with banks       | R$9                        
|Investment in Unibanco                     | 3,759                      
|Dividends receivable                       | 105                        
|Other assets                               | 2                          
|                                           |                            
|Total assets                               | R$3,875                    
|                                           |                            
|Dividends payable                          | R$104                      
|Other liabilities                          | 9                          
|Stockholders' equity                       | 3,762                      
|                                           |                            
|Total liabilities and stockholders' equity | R$3,875                    
|                                           |                            

|                                                     | **For the
     year ended December 31,**
|---------------------------------------------------- | ----------------------------------------
|                                                     |                                         
|**Statement of income:**                             | **2001**                                
|                                                     |                                         
|Interest
  on deposits in banks                      | R$1                                     
|Dividends
  from Unibanco                            | 188                                     
|Equity
  in undistributed earnings of Unibanco       | 297                                     
|Non-interest
  expense                               | 1                                       
|                                                     |                                         
|Net
  income                                         | R$485                                   
|                                                     |                                         
|**Statement of cash flows:**                         | ****                                    
|**Operating activities:**                            |                                         
|Net
  income                                         | R$485                                   
|Less
  - Equity in earnings of Unibanco              | 485                                     
|Change in assets and liabilities                     |                                         
|Other
  assets                                       | (20)                                    
|Other
  liabilities                                  | 21                                      
|                                                     |                                         
|Net
  cash provided by operating activities          | 1                                       
|                                                     |                                         
|**Investing activities:**                            |                                         
|Cash
  dividends received                            | 165                                     
|Cash
  dividends paid                                | (165)                                   
|Purchase
     of additional investment in Unibanco   | (11)                                    
|                                                     |                                         
|Net
  cash used in investing activities              | (11)                                    
|                                                     |                                         
|**Financing activities:**                            |                                         
|Proceeds
  from the issuance of stock                | 11                                      
|                                                     |                                         
|Net
     increase (decrease) in short-term borrowing | 1                                       
|                                                     |                                         
|Net
  cash provided by financing activities          | 12                                      
|Net
  increase in cash and cash equivalents          | 2                                       
|Cash
     and cash equivalents at beginning of year  | 7                                       
|                                                     |                                         
|Cash
  and cash equivalents at end of year           | R$9                                     
|                                                     |                                         

**Note
  34  Subsequent
Events**

|(a) | In
October 2003, our subsidiary  Unibanco AIG Seguros S.A. entered into an agreement to
acquire the insurance company Phenix Seguradora S.A. from Toro Targa Assixurazioni SpA.
and Fiat do Brasil S.A for R$13 million.                      We expect that this
transaction will enhance our insurance presence in the southeastern state of Minas Gerais
and the southern state of Rio Grande do Sul. In connection with this acquisition,  we
have also entered                      into a strategic  partnership with Fiat, which is
one of the biggest  automobile  manufacturers  in Brazil.  This  relationship  will give
to Unibanco AIG Seguros S.A.  preferred access to new corporate  insurance
                     contracts arranged by Fiat and some of its affiliates in Brazil.
 Phenix's acquisition is being based on independent  appraisal report and is being
accounted for following the purchase method. At January 16, 2004,
                     the transaction was approved by the Brazilian antitrust regulatory
authority.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | In
November 2003, we signed a purchase and sale agreement,  through our subsidiary Banco
Fininvest S.A., with Grupo BBM to acquire Creditec,  a company with a significant
 presence in the Brazilian personal loans and                      consumer finance
sector among middle and lower income customers. The value of the transaction was R$50
million. We intend to acquire a chain of stores, the physical and technological
infrastructure,  the staff and                      the client base.  Creditec's loan
origination relates primarily to personal loans,  payroll-linked loans and consumer
financing.  The company has approximately 600,000 registered clients and its network
totals 226                      points-of-sale  in the main cities of Brazil,  consisting
of 64 stores and 162  points-of-sale  established in retail outlets.  Creditec's
 acquisition is being based on independent  appraisal  report and is being
                     accounted for following the purchase method. At May 13, 2004,
Creditec's acquisition was approved by the Central Bank and other authorities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | In
March 2004, we acquired HiperCard Administradora de Cartao de Credito Ltda., or
HiperCard,  from the Dutch group Koninklijke Ahold N.V. for R$630 million,  subject to
further purchase price adjustments.  HiperCard                      was founded in 1982
as the Bompreco  supermarkets  private label credit card company and is presently
 accepted in more than 60,000  points-of-sale  in the Northeast of Brazil.  HiperCard is
the primary  method of                      payment used in the Bompreco  supermarket
chain. We and Bompreco S.A. - Supermercados do Nordeste,  a subsidiary of Wal-Mart
Stores, Inc., also signed a service agreement that will govern and preserve the business
                     relationship  between  HiperCard and Bompreco.  All services offered
by HiperCard will be maintained and HiperCard will continue to be Bompreco's  clients'
 preferred method of payment.  The relationship  with the                      60,000
 points-of-sale  will also be maintained.  Hipercard's  acquisition is being based on
independent  appraisal report and is being accounted  following the purchase  method.
 The transaction is subject to the                      approval of the Brazilian
antitrust regulatory authority.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | On
March 26, 2004, we signed through our subsidiary Interbanco S.A., with Citibank NA -
Paraguay Branch, a purchase and sale agreement to acquire the credit card and consumer
financing transactions.  The value of the                      transaction was US$30
million and increases significantly the credit card and retail banking presence of
Interbanco in Paraguay.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | On
April 30, 2004, the  Extraordinary  Shareholders'  meetings  approved a reverse stock
split of common and preferred shares of Unibanco and Holdings,  including the Units, in
the ratio of 100 shares to 1 share. The                      reverse stock split is
subject to the approval of the Central Bank,  which we expect to occur in the second half
of 2004. In accordance  with SFAS 128 "Earnings per share",  we have adjusted our
earnings per share                      information presented herein to reflect the
pending stock split.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | In May 2004, in addition to the important changes in our internal structure announced in April 2004, we are
offering to our executives a program of antecipated retirement plan with supplemental benefits. Those eligible are
executives with an age over 55 years and the option has to be done between June and September 2004. We do not expect any significant
effect on our consolidated financial statement as of December 31, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | In
June 2004, we announced the acquisition of the total capital of Banco BNL do Brasil ("BNL
Brasil"),  from Banca Nazionale Del Lavoro S.p.A. ("BNL"). BNL will receive
 1,000,000,000 Units,  equivalent to 10,000,000                      Units considering
the reverse stock split, from Unibanco and Unibanco Holdings. Thus, after the conclusion
of the transaction,  BNL will own, directly and indirectly, 1.43% of Unibanco's capital.
BNL Brasil owns a                      credit  portfolio that includes 107 thousand
 clients and 96 thousand cards issued.  The transaction  also includes the creation of an
Italian Desk at Unibanco,  which will allow BNL and Unibanco to offer business
                     opportunities and services to Italian companies in Brazil. The
transaction is subject to the approval of the relevant regulatory authorities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Independent auditors report

The Administrative
Council and ShareholdersCredicard S.A. Administradora de Cartões de CréditoSão
Paulo - SP

We have audited the
accompanying  balance sheets of Credicard S.A.  Administradora de Cartões de Crédito as
of December 31, 2003 and 2002 and the related  statements of earnings,  changes in
shareholders  equity and changes in financial  position for the years ended  December
 31, 2003,  2002 and 2001 which,  as described in Note 2, have been  prepared on the
basis of  accounting  practices  accepted in Brazil.  These  financial statements are the
responsibility of the Companys management.  Our responsibility is to express an opinion
on these financial statements based on our audit.

We conducted our
audits in accordance with auditing  standards  generally  accepted in the United States
of America.  U.S.  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 audit
provides a reasonable basis for our opinion.

In our opinion,  the
financial  statements referred to above present fairly, in all material respects,  the
financial position of Credicard S.A.  Administradora de Cartões de Crédito as of December
31, 2003 and 2002, and the results of its operations,  changes in its shareholders  equity
and changes in its financial position for the years ended December 31, 2003, 2002 and
2001, in conformity with accounting  practices adopted in Brazil.

June 9, 2004

KPMG Auditores
IndependentesCRC 2SP014428/O-6

|José Gilberto Montes Munhoz  | Giuseppe Masi               
|---------------------------- | ----------------------------
|Accountant CRC 1SP145676/O-5 | Accountant CRC 1SP176273/O-7

(A free translation of
the original report in Portuguese containing financial statements prepared in accordance
with accounting practices adopted in Brazil)



Credicard S.A.
Administradora de Cartões de Crédito

Balance sheets

December 31, 2003
and 2002

(In thousands of Reais)

|Assets                                        | 2003      | 2002     
|--------------------------------------------- | --------- | ---------
|                                             
|Current assets                                | 3,107,613 | 2,544,895
|                                              |           |          
|Cash and cash equivalents                     | 839       | 2,063    
|Short-term investments                        | 270,487   | -        
|Accounts receivable from cardholders          | 2,796,784 | 2,422,272
|Income tax withheld                           | 10,657    | 7,764    
|Other accounts receivable                     | 39,792    | 116,448  
|Doubtful receivables                          | 327,183   | 300,763  
|Allowance for doubtful receivables            | (351,118) | (318,911)
|Prepaid expenses                              | 12,989    | 14,496   
|                                             
|Long-term assets                              | 295,512   | 285,033  
|                                              |           |          
|                                             
|Deferred income and social contribution taxes | 295,512   | 285,033  
|                                             
|Permanent assets                              | 19,679    | 155,941  
|                                              |           |          
|                                             
|Fixed assets                                  | 11,871    | 78,536   
|Investments in subsidiaries                   | -         | 25,833   
|Other investments                             | 7,580     | 7,662    
|Deferred charges                              | 228       | 43,910   
|                                              |           |          
|                                              | 3,422,804 | 2,985,869
|                                              |           |          

|Liabilities                  | 2003      | 2002     
|---------------------------- | --------- | ---------
|                            
|Current liabilities          | 2,704,416 | 2,317,006
|                             |           |          
|Accounts payable - Acquirers | 2,386,624 | 1,789,911
|Labor obligations            | 5,389     | 23,869   
|Taxes payable                | 33,600    | 30,736   
|Prepaid membership fees      | -         | 217,253  
|Borrowings                   | 25,577    | 31,679   
|Other accounts payable       | 253,226   | 223,558  
|Long-term liabilities        | 408,403   | 350,740  
|                             |           |          
|Provision for tax risks and 
|other contingent liabilities | 408,403   | 350,740  
|                            
|Shareholders' equity         | 309,985   | 318,123  
|                             |           |          
|Capital stock                | 175,533   | 191,000  
|Capital reserve              | 53,609    | 41,738   
|Revenue reserve              | 6,263     | 38,200   
|Retained earnings            | 74,580    | 47,185   
|                             |           |          
|                             | 3,422,804 | 2,985,869
|                             |           |          

See the accompanying
notes to the financial statements.



Credicard S.A.
Administradora de Cartões de Crédito

Statements of earnings

Years ended December
31, 2003, 2002 and 2001

(In thousands of
Reais, except net income per share)

|                                                        | 2003      | 2002      | 2001     
|------------------------------------------------------- | --------- | --------- | ---------
|                                                       
|Gross operating income                                  |           |           |          
|Operating income                                        | 1,928,991 | 2,355,627 | 2,374,726
|Service tax                                             | (44,258)  | (48,044)  | (49,148) 
|COFINS tax                                              | (60,598)  | (75,220)  | (73,674) 
|Financial income, net of financial expenses of R$75,289
|in 2003, R$123,160 in 2002 and R$69,967 in 2001         | 40,166    | 51,120    | 50,931   
|                                                        |           |           |          
|                                                       
|                                                        | 1,864,301 | 2,283,483 | 2,302,835
|                                                        |           |           |          
|Operating (revenue) expenses                           
|Administrative and general                              | 1,168,226 | 1,401,463 | 1,267,169
|Equity in the income (losses) of subsidiaries           | (33,036)  | (13,878)  | (1,203)  
|Depreciation and amortization                           | 30,103    | 47,734    | 43,825   
|Allowance for doubtful receivables                      | 271,416   | 309,084   | 394,511  
|                                                        |           |           |          
|                                                        | 1,436,709 | 1,744,403 | 1,704,302
|                                                        |           |           |          
|Operating income                                        | 427,592   | 539,080   | 598,533  
|                                                        |          
|Non-operating results                                   | 4,510     | 31,733    | (3,090)  
|                                                        |           |           |          
|Income before income and                               
|social contribution taxes                               | 432,102   | 570,813   | 595,443  
|                                                       
|Social contribution tax                                 | (38,307)  | (43,318)  | (56,382) 
|                                                       
|Income tax                                              | (96,450)  | (133,766) | (132,671)
|                                                        |           |           |          
|Net income for the year                                 | 297,345   | 393,729   | 406,390  
|                                                        |           |           |          
|Net income per share - R$                               | 7,66      | 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, 2003, 2002 and 2001

(In thousands of
Reais)

|                                   |          | Capitalreserve | Revenuereserve |           |          
|---------------------------------- | -------- | -------------- | -------------- | --------- | ---------
|                                   |          |                |               
|                                   | Capital  | Fiscal         | Legal          | Retained  |          
|                                   | stock    | incentives     | reserve        | earnings  | Total    
|                                  
|Balances at January 1st, 2001      | 171,000  | 6,445          | 20,881         | 35,372    | 233,698  
|                                  
|Capital increase                   | 20,000   | -              | (20,000)       | -         | -        
|                                  
|Fiscal incentives                  | -        | 17,304         | -              | -         | 17,304   
|                                  
|Distribution of interim dividends  | -        | -              | -              | (35,372)  | (35,372) 
|                                  
|Net income for the year            | -        | -              | -              | 406,390   | 406,390  
|                                  
|Distributions:                    
|Legal reserve                      | -        | -              | 20,319         | (20,319)  | -        
|Distribution of dividends          | -        | -              | -              | (324,728) | (324,728)
|                                   |          |                |                |           |          
|                                  
|Balances at December 31st, 2001    | 191,000  | 23,749         | 21,200         | 61,343    | 297,292  
|                                   |          |                |                |           |          
|                                  
|Balances at January 1st, 2002      | 191,000  | 23,749         | 21,200         | 61,343    | 297,292  
|                                  
|Fiscal incentives                  | -        | 17,989         | -              | -         | 17,989   
|                                  
|Distribution of interim dividends 
|Related to prior years             | -        | -              | -              | (61,343)  | (61,343) 
|Related to intermediary dividends  | -        | -              | -              | (347,770) | (347,770)
|                                  
|Net income for the year            | -        | -              | -              | 393,729   | 393,729  
|                                  
|Prior-year adjustments (Note 11g)  | -        | -              | -              | 18,226    | 18,226   
|                                  
|Distribution of income proposed in
|Ordinary General Meeting:         
|Legal reserve                      | -        | -              | 17,000         | (17,000)  | -        
|                                   |          |                |                |           |          
|                                  
|Balances at December 31st, 2002    | 191,000  | 41,738         | 38,200         | 47,185    | 318,123  
|                                   |          |                |                |           |          
|                                  
|Balances at January 1st, 2003      | 191,000  | 41,738         | 38,200         | 47,185    | 318,123  
|                                  
|Capital increase                   | 38,199   | -              | (38,199)       | -         | -        
|                                  
|Decrease in capital (Note 6)       | (53,666) | -              | -              | -         | (53,666) 
|                                  
|Subsidy for fiscal incentives      | -        | 11,871         | -              | -         | 11,871   
|                                  
|Distribution of dividends         
|Related to prior years             | -        | -              | -              | (28,959)  | (28,959) 
|Related to intermediary dividends  | -        | -              | -              | (234,729) | (234,729)
|                                  
|Net income for the year            | -        | -              | -              | 297,345   | 297,345  
|                                  
|Distribution of income proposed   
|in Ordinary General Meeting       
|Formation of legal reserve         | -        | -              | 6,262          | (6,262)   | -        
|                                   |          |                |                |           |          
|                                  
|Balances at December 31st, 2003    | 175,533  | 53,609         | 6,263          | 74,580    | 309,985  
|                                   |          |                |                |           |          

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, 2003, 2002 and 2001

(In thousands of Reais)

|                                                        | 2003     | 2002      | 2001   
|------------------------------------------------------- | -------- | --------- | -------
|Sources of funds                                       
|From operations                                        
|Net income for the year                                 | 297,345  | 393,729   | 406,390
|Revenue (expenses) not affecting working capital:      
|Equity in the income (loss) of subsidiaries             | (33,036) | (13,878)  | (1,203)
|Depreciation and amortization                           | 30,103   | 47,734    | 43,825 
|Provision for losses with tax incentives                | 11,870   | 17,989    | 17,304 
|Prior-year adjustment                                   | -        | 18,226    | -      
|Results on sale of fixed assets                         | (1,933)  | (30,590)  | 464    
|                                                        |          |           |        
|                                                       
|                                                        | 304,349  | 433,210   | 466,780
|                                                        |          |           |        
|                                                       
|Increase in long-term liabilities                       | 57,663   | 40,920    | 589    
|                                                       
|Dividends received from subsidiaries                    | 6,156    | -         | 1,165  
|                                                       
|From third parties                                     
|Disposal of fixed assets                                | 6,760    | 23,851    | 210    
|Decrease in long-term assets                            | -        | 22,651    | -      
|Decrease in permanent assets through transfer of assets | 106,139  | -         | -      
|Decrease in long-term assets through transfer of assets | 22,192   | -         | -      
|                                                        |          |           |        
|                                                       
|                                                        | 135,091  | 46,502    | 210    
|                                                        |          |           |        
|                                                       
|                                                        | 503,259  | 520,632   | 468,744
|                                                        |          |           |        
|                                                       
|Application of funds                                   
|Investments in                                         
|Fixed assets                                            | 25,336   | 48,133    | 22,208 
|Deferred charges                                        | 5,256    | 8,349     | 28,140 
|Investments                                             | 1,000    | 10,305    | 28     
|Dividends paid                                          | 263,688  | 409,113   | 360,100
|Increase in long-term assets                            | 32,671   | -         | 46,923 
|                                                        |          |           |        
|                                                       
|                                                        | 327,951  | 475,900   | 457,399
|                                                        |          |           |        
|                                                       
|Increase in net working capital                         | 175,308  | 44,732    | 11,345 
|                                                        |          |           |        
|                                                       
|Changes in net working capital                         
|                                                       
|Current assets                                          | 562,718  | (433,628) | 126,936
|Current liabilities                                     | 387,410  | (478,360) | 115,591
|                                                        |          |           |        
|                                                       
|Net working capital                                     | 175,308  | 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, 2003, 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.
 Administradora  de Cartões de Crédito has concluded the process of  separating  the
 businesses  for  processing,  and issuing and  management  of credit cards.  On August
1, 2003,  the assets and liabilities  related to the business of processing credit cards
were transferred to its subsidiary  Orbitall Serviços e Processamento de Informações
 Comerciais Ltda.,  through a capital increase,  via transfer of assets, which totaled:
Current assets R$128,965, Long-term assets R$22,192, Fixed assets R$106,139 and
Current liabilities R$256,296. On August 20, 2003, Credicard decreased its capital
through transfer of its investment in Orbitall to its shareholders.

As a result of this
separation of businesses,  the annual fees paid by credit  cardholders have become
revenue for Orbitall,  the company  responsible for the operating  process in the
rendering of services to the credit cardholders.

2
Description of significant accounting policies

The financial
statements were prepared in accordance with 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.

Remuneration for
guarantees provided is allocated daily to the statement of earnings on a pro rata basis,
over the terms of the operations.

In 2002 and 2001 the
annuities collected from the credit cardholders are recorded in Prepaid  Membership fees in
current  liabilities,  upon billing,  and accrued to income in accordance over the period
         services are provided.

The income tax for 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, less 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,  which
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 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  receivables,  which occurs on average 70
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 legal collection proceedings 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
accounts  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
the balance to fall due.

e. Permanent
assets

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
Short-term investments

Represented by
investments in Financial Investment Funds managed by Banco Itaú S.A, restated based on
the value of the quota informed by the administrator.

4
Other accounts receivable

Other accounts
 receivable are composed  primarily of services rendered of R$9,374 (R$39,078 in 2002),
 judicial deposits of R$18,173 (R$16,383 in 2002) and accounts  receivable  transferred
to Caixa Econômica Federal of R$44,461 in 2002. Fixed assets

5 Fixed assets

|                         | Annual 
depreciation 
rate % | 2003    | 2002     
|------------------------ | ---------------------------- | ------- | ---------
|                        
|Furniture and fixtures   | 10                           | 4,105   | 16,315   
|Facilities               | 10                           | 835     | 9,090    
|Equipment                | 10, 20 e 40                  | 6,920   | 223,462  
|Vehicles                 | 20                           | 537     | 1,093    
|Trademarks and patents   | -                            | 151     | 157      
|Data processing system   | -                            | 4,439   | -        
|Leasehold improvements   | (*)                          | -       | 23,977   
|                         |                              |         |          
|                        
|Total                    |                              | 16,987  | 274,094  
|                        
|Accumulated depreciation |                              | (5,116) | (195,558)
|                         |                              |         |          
|                        
|                         |                              | 11,871  | 78,536   
|                         |                              |         |          

(*) In accordance with
the terms of the respective rental contracts.

6 Investments in
subsidiaries

The investments in
subsidiaries are as follows:

|                          | Orbitall Serviços e
Processamento de Informações 
Comerciais Ltda. (i) | Credicard Comercial e Importadora Ltda. (i) | Total
|------------------------- | ---------------------------------------------------------------------- | ------------------------------------------- | -----
|                          |                                                                        |                                             |      
|                          | 2003                                                                   | 2002                                        | 2003 
|                         
|Position of subsidiaries:
|Capital                   | -                                                                      | 11,600                                      | -    
|Net income for the period | -                                                                      | 13,884                                      | -    
|Shareholders equity      | -                                                                      | 25,495                                      | -    
|Number of quotas          | -                                                                      | 1,099,635                                   | -    
|                         
|Investment position:     
|Percentage of ownership   | -                                                                      | 100%                                        | -    
|Equity pick-up            | 33,327                                                                 | 13,884                                      | (291)
|Book value of investments | -                                                                      | 25,495                                      | -    

|(i) | On August 1, 2003,  Credicard  transferred  its investment in Credicard  Comercial e Importadora  Ltda to Orbitall  Serviços e  Processamento  de Informações  Comerciais  Ltda  (Orbitall).  On August 20, 2003, the
         investment in  Orbitall in the amount of R$53,666, was transferred to the shareholders of Credicard, through a decrease in its  Capital.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7 Borrowings

|                   | Balances at 12/31/03 | Average interest rates         | Maturity | Guarantees | Balances at 12/31/02
|------------------ | -------------------- | ------------------------------ | -------- | ---------- | --------------------
|Foreign borrowings | 25,577               | 5.35% p.a. +exchange variation | 06/01/04 | -          | 31,679              

8 Other accounts
payable

|                                       | 2003    | 2002   
|-------------------------------------- | ------- | -------
|                                      
|Accounts payable                       | 6,910   | 12,607 
|Amounts to transfer to Orbitall        | 52,957  | -      
|Employees participation program       | 15,077  | 42,126 
|Insurance premium payable              | 27,775  | 12,506 
|Other sales expenses                   | 22,056  | 19,421 
|Technological operations               | 4,344   | 37,863 
|Commissions to associated banks        | 16,878  | 12,917 
|Sales incentive plan /fidelity program | 58,247  | 47,677 
|Interest payable - Cardholders         | 19,970  | 11,257 
|Other                                  | 29,012  | 27,184 
|                                       |         |        
|                                       | 253,226 | 223,558
|                                       |         |        

9 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 in the books when distributed and are proposed
by the  administrative  bodies or decided on by the shareholders.

10 Transactions
with related parties

It is the Companys
policy to conduct  transactions with related parties on an arms length basis in accordance with market  conditions.  Income from services rendered to third parties include the effective income
incurred during the year and an estimate for December 2003:

|                    | Accountsreceivable | Accounts payable | Service fee revenues | Loan contracts/Foreign borrowings | Expense with FundManagement fee
|------------------- | ------------------ | ---------------- | -------------------- | --------------------------------- | -------------------------------
|                    |                    |                  |                      |                                   |                                
|                    | 2003               | 2002             | 2003                 | 2002                              | 2003                           
|                   
|Redecard S.A.       | -                  | 4,900            | 1,922,889            | 1,396,234                         | 24,542                         
|                   
|FNC Comércio e     
|Participações Ltda. | -                  | -                | -                    | -                                 | 15,256                         
|                   
|Itaucard           
|Financeira S.A.     | -                  | 14,589           | -                    | -                                 | 102,432                        
|                   
|Orbitall Serv. e   
|Process. de        
|Informações        
|Comerciais Ltda.    | -                  | 2,599            | 52,957               | -                                 | 17,859                         
|                   
|Citibank NA         | -                  | -                | -                    | -                                 | -                              
|Citibank S.A.       | 1,242              | 1,415            | -                    | -                                 | -                              
|Banco Itaú S.A.     | -                  | -                | -                    | -                                 | -                              

11 Other information

|a. | The
expense with the provision for doubtful credits can be summarized as follows:
|-- | ---------------------------------------------------------------------------------

|                                     | 2003      | 2002      | 2001     
|------------------------------------ | --------- | --------- | ---------
|                                    
|Written-off credits                  | 320,955   | 438,640   | 380,093  
|Constitution/(reversal) of provision | 32,207    | (131,492) | 121,162  
|Credit right cession (note 11f)      | -         | 91,484    | -        
|Other expenses with credit           | 20,644    | 26,753    | 29,339   
|Credit recovery                      | (102,390) | (116,301) | (136,083)
|                                     |           |           |          
|                                     | 271,416   | 309,084   | 394,511  
|                                     |           |           |          

|b. |  | Guarantees
pledged to cardholders for credit to financial institutions associated with the system
amounted to R$871,210 (R$737,871 in 2002 and R$1,056,141 in 2001).
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c. |  | Tax,
labor and civil litigation are provisioned for based on the opinion of external legal
counsel,  in an amount considered  sufficient to cover expected losses.  These provisions
are classified          as long-term liabilities.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|d. |  | The
non-operating  results are composed,  mainly, of income  from/profit on disposal of
permanent assets - R$2,016 (R$282 in 2002 and R$776 in 2001),  disposal of trademarks
and patents - R$0          (R$23,569 in 2002 and R$0 in 2001), reversal of provision
for losses on assets - R$1,119 (expense of R$7,329 in 2002 and R$3,566 in 2001) and
other income -          R$1,375 (R$553 in 2002 and R$813 in 2001).
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|e. |  | In
2003,  Instituto  Credicard developed 2 programs,  Jovens Escolhas em Rede com o Futuro -
an educational  program focused on the training of young adults,  carried out in
partnership with 13          NGOs (Non  Governamental  Organization)  in the states of
Bahia,  São Paulo and Rio de Janeiro - and Conta Comigo - a program for mobilizing and
 strengthening  educational  programs aimed  primarily at          adolescents and young
adults. In addition,  Instituto  Credicard  supports the following  projects:  a) Se
Liga Pernambuco,  in Pernambuco,  b) Amem, in São Paulo and c) Banco na Escola, a
volunteer          program in São Paulo. The total investment made by Credicard in the
year was R$1,450 (R$1,290 in 2002 and R$1,290 in 2001).
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|f. |  | In
2003 Credicard  transferred the transactions  corresponding to the base of cards sold by
Citibank.  The assets and liabilities  assumed by Citibank as a result of this transfer
 amounted to R$212,147,  as well as R$49,527 in  guarantees  made to
 cardholders  of credit to the  financial  institutions  associated  with the system.
 During the last  quarter of 2002,  Credicard  transferred  the          transactions
 corresponding to the base of cards 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 of credit to the
financial institutions associated with the system (cardholders, establishments, banks,
credit card issuers, etc).
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|g. |  | Prior-year
 adjustments:  In 2002, Credicard obtained a 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 the 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.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---



Exhibit 1.1(FREE
TRANSLATION)

UNIBANCO
          - UNIÃO
  DE BANCOS BRASILEIROS S.A.

CORPORATE BY-LAWS

CHAPTER I

Name, Head Office, Purpose and Term

Article 1:UNIBANCO-UNIÃO DE BANCOS BRASILEIROS S.A., with
  head offices and legal venue in the City of São Paulo, State of São
  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$5,000,000,000.00 (five
  billion reais) 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
  75,565,816,851 (seventy-five billion, five hundred and sixty-five million,
  eight hundred and sixteen thousand, eight hundred and fifty-one) are common
  shares and 65,320,016,467 (sixty-five billion, three hundred twenty million,
sixteen thousand, four hundred and sixty-seven ) 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; and

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; and

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) under 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 only 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 form UNITS, with due regard to the ratio mentioned in First Paragraph
  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 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:

1 st ) 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
    formation 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 nd) 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
      12The 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 eight (8) 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
  one Vice-Chairman, 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 First Paragraph of Article 23;

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 44;

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,
  the Board of Officers and of the Audit Committee, within 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 44;

h) appoint a replacement for the President, for the members of the Board of
  Officers, the Board of Directors and the Audit Committee, in the cases established
on this By-laws;

i) authorize, whenever it deems necessary, on the cases not established on
  this By-laws, 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, taking in consideration the
  recommendation of the Audit Committee, under the terms of item (b), Article
38;

o) decide upon the purchase of shares issued by UNIBANCO, subject to the Third
Paragraph of Article 4;

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 4;

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.

u) deliberate upon the promotion of the defense, in judicial and administrative
  actions proposed by third parties against the management of UNIBANCO, the members
  of the Audit Committee, the members of the Audit Board, if on duty, and employees
  that legally act by delegation of the management, during or after the term
  of their respective mandates, arising from the legal acts of management practiced
  in the exercise of their attributions, being entitled to contract insurance
  to cover the procedural expenses, attorney's fees and damages awarded due to
such claims.

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 sub-item II of Article
19, the replacements for the Vice-Chairman 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-Chairman
    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-Chairman, individually, or by any two members
of the Board of Directors jointly.

Second ParagraphThe 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 ParagraphThe 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:

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 Director appointed by the Chairman
of the Board of Directors;

III all
other Directors by a replacement appointed by the Board of Directors;

IV - 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 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 150
  (one hundred and fifty) members, resident in the Country, shareholders or not,
  elected by the Board of Directors, with a term of office of 1 (one) year, eligible
for reelection, being:

a) 1 (one) President;

d) up to 10 (ten) Executive Vice Presidents and Vice Presidents;

c) up to 139 (one hundred thirty nine) Executive Officers, Officers and Deputy
Officers;

First Paragraph:- The President, the Executive Vice Presidents, the
  Vice Presidents and the Executive Officers shall compose the Board of Executive
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.

Third Paragraph: -Until
    07.01.2004, the Board Of Officers will have 1 (one) Executive President  Retail
  Banking Group, and after this date this position shall be extinguished;

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 44;

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 Deputy
Officers;

f) to care for the improvement of the members of management, following up
on their professional performance and development.

Article 22: It is incumbent upon the President:

I - to guide the management of the social business, supervising the works
  of the Board of Executive Officers, in order to assure the full implementation
and execution of the policies and guidelines set by the Board of Directors;

II - coordinating the activities of the Executive Vice Presidents and the
Vice Presidents, and follow-up their respective performance;

III - reaching decisions within his authority;

IV - reaching
    decisions with urgent character, within the competence of the Board of Executive
    Directors, "ad referendum" of
such Board.

Article 23:It is incumbent upon the Executive Vice-Presidents and
upon the Vice-Presidents:

I  the management and supervision of the areas assigned as set forth in item "j" or
in the sole paragraph of the Article 16;

II  the
    supervision and coordination of the performance of the Executive Officers,
    Officers and Deputy Officers which are under their direct supervision and
the following-up of their respective performance;

III - reaching decisions within his authority;

First Paragraph:In accordance with the policies, directives and parameters
  established by the Board of Directors, it is jointly incumbent upon the President,
the Executive Vice-Presidents and the Vice-Presidents, jointly:

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 care for the improvement of the members of management, following up
on their professional performance and development.

Second ParagraphThe jointly decisions of the President, the Executive
  Vice-Presidents and the Vice-Presidents shall be taken by a majority of votes
  in the presence of at least half of its elected members. The President shall
  be entitled, in addition to his own vote, to the casting vote in case of a
tie.

Article 24: It is incumbent upon the Executive Officers and to the
Officers:

I  the
    management and supervision of the areas which shall be assigned to them by
the Board of Director and/or by the Board of Executive Officers; and

II  the
    supervision and coordination of the performance of the Officers and Deputy
Officers which are under their direct supervision.

Article 25:It is incumbent upon the Deputy 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
    replacement of the President shall be appointed by the Board of Directors,
as set forth in item h of Article 16;

I - the duties of the Executive Vice-Presidents and of the Vice Presidents
  shall be performed by a replacement appointed, from among the elected Executive
Officers, by the President;

III - the duties of the Executive Officers shall be performed by a replacement
  appointed, from among the elected Officers, by the President jointly with the
  Executive Vice President or with the Vice President responsible of the supervision
of the Executive Officer replaced, depending on the case.

IV - the duties of the Officers and the Deputy Officers shall be performed
  by a replacement appointed, from among the elected Officers, by Executive Officer
  responsible of the supervision of the Officer or of the Deputy Officer replaced,
as from the case.

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 the President or by any of the Executive Vice-Presidents or the
  Vice-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 Executive Officers shall be taken by the majority
    of votes of the members of the Board of Executive Officers, with 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 him;

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;

c)UNIBANCO's participation in auction processes;

d) UNIBANCO'S representation in Shareholders Meetings of Companies in which
UNIBANCO holds share participation; and

e) UNIBANCO's representation before public bodies, provided that no assumption
of responsibilities or obligations by the Company is implied.

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; and

c) cases in which the attorney-in-fact is a legal entity.

SECTION III

Provisions Applying to the Board of Directors, to the Board
of Officers and to the Audit Committee

Article 29:-The Shareholders Meeting and the Board of Directors
  may, respectively, abstain from electing Directors, members of the Audit Committee
  and of the Board of Officers, whenever the lower limits set forth in this By-laws
in law have been fulfilled.

Article 30:-The holding a position on the Board of Directors,
  on the Board of Officers and on the Audit Committee 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, the Board of Officers
  and the Audit Committee shall be invested in their positions by having their
  respective terms of office recorded in the Book of Minutes of the Meetings
  of the Board of Directors, of the Board of Officers and of the Audit Committee,
  respectively, which terms of office shall also be recorded in the cases of
replacement specified in Articles 19, 26 and 37.

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, of the Board
  of Officers and of the Audit Committee 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,
    for the Board of Officers and for the Audit Committee, in accordance with
item f of Article 16.

CHAPTER V

Audit
Committee

Article 34:- The
    Audit Committee shall have a minimum of 3 (three) and a maximum of 5 (five)
    effective members, elected by the Shareholders Meeting for a maximum of a
5 (five) year term.

First Paragraph:- The Audit Committee shall have one Chairman chosen
by the Board of Directors.

Second Paragraph:-At least one member of the Audit Committee must
  have proved accounting or related financial management expertise, that qualifies
him as an audit committee financial expert.

Third Paragraph:-The members of the Audit Committee may be Directors.

Fourth Paragraph:-This Audit Committee shall be a single committee
for the entire Conglomerate Unibanco, as set forth in law.

Article 35:-For holding the position of member of the
  Audit Committee, the basic requirements for holding such position shall be
  observed, as well as the legal bars applicable.

Sole Paragraph:-The duty of the member of the Audit Committee may
not be delegated.

Article 36:-The
    Shareholders Meeting shall establish the global compensation for the Audit
    Committee, and the compensation for each of its members shall be established
    in accordance with the provisions of item f of
  Article 16.

First Paragraph:-The member of the Audit Committee is not allowed
  to receive any other kind of compensation from the Conglomerate's companies
  or from its affiliated companies, except for those to which he is entitled
  to as member of the Audit Committee.

Second Paragraph: In case the member of the Audit Committee is also
  a Director of any of the companies of the Conglomerate Unibanco or of its affiliated
  companies, he shall choose for which of those positions compensation he wishes
  to receive.

Article 37:-Exception made to the cases to which the law establishes
  special procedures, the replacement of the members of the Audit Committee shall
  be made as follows:

a) in case of temporary replacement, the Chairman of the Audit Committee shall
  be replaced by the member appointed by him;

b) in case of replacement due to a vacancy, the Chairman and the members shall
  be replaced by the member appointed by the Board of Directors.

Sole Paragraph:-The replacement appointed 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.

Article 38:- It is incumbent upon the Audit Committee:

a) To establish and, whenever deemed necessary, to change its administrative
  structure and internal rules, and submit it to the approval of UNIBANCO's Board
  of Directors;

b) To
    appoint, "ad referendum" of
    the Board of Directors of each company of the Conglomerate Unibanco, when
    applicable, the Company to be hired to render independent auditing services,
  as well as, if it deems necessary, the replacement of such render;

c) To review, previously to its publication, the semiannual financial statements,
  including the explanatory notes, the management reports and the independent
  auditor's technical report of each one of the companies of The Conglomerate
  Unibanco;

d) To analyze the effectiveness of the internal and the independent audit;

e) To analyze the compliance, by the management of each of the companies of
  the Conglomerate Unibanco, when applicable, of the recommendations made by
  the internal or by the independent auditor;

f) To establish and to disclose procedures to the reception and treatment
  of information regarding the non compliance with laws and regulations applicable
  to the Conglomerate Unibanco, in addition to the internal rules and codes,
  including the ones which sets forth specific procedures for the protection
  of the provider and of the confidentiality of the information, as well as the
  procedures for the reception and treatment of information regarding to the
  accounting reports;

g) To meet ordinarily on a quarterly basis with the Board of Officers, with
  the independent audit and with the internal audit of each company of The Conglomerate
  Unibanco, in order to verify the compliance with its recommendations or queries,
  including those regarding the planning of the respective audit works. Such
  meetings shall be recorded in minutes.

h) To meet with the Audit Board, if in duty, and with the Board of Directors
  of the companies of The Conglomerate Unibanco, by their request, to discuss
  the policies, practices and procedures identified upon matters within their
  incumbency;

i) To recommend, to the Board of Officers of the companies of The Conglomerate
  Unibanco, when applicable, corrections or improvements of policies, practices
  and procedures identified upon matters within their incumbency;

j) Other attributions necessary for the compliance with law and regulation,
  in addition to those that the Audit Committee itself understands to be relevant
  to ensure:

> (i) the independence of the external auditors;
>   (ii) the adequacy and effectiveness of the internal controls; or
>   (iii) the accuracy of the financial statements.

Article 39:- It is incumbent upon the Chairman of the Audit Committee:

I - chair the meetings of the Audit Committee, with authority to appoint any
  of the members of said Committee to do so in his stead;

II - appoint any of the members of the Audit Committee to replace him in his
  absences, vacations, leaves or occasional impediments;

III - determine the agenda of the Committee's meetings.

Article 40:-The Audit Committee shall meet ordinarily on a quarterly
  basis and, extraordinarily, whenever corporate interests so require.

First Paragraph:- The meetings of the Audit Committee may be called
  by any member of the Audit Committee.

Second Paragraph:- The decisions of the Audit Committee shall be taken
  by a majority of votes in the presence of at least half of its 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 Audit Committee.

Article 41:-The members may be dismissed at any time by decision taken
  by the Shareholders Meetings.

CHAPTER VI

The Audit Board

Article 42:- 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 their
  compensation.

Third Paragraph: The term of office of the members of the Audit Board
  shall end at the Annual Shareholders Meeting following its institution.

CHAPTER VII

Fiscal Year, Financial Statements, Reserves and Dividends

Article 43 - The fiscal year shall begin on the 1 st day of January
  and shall end on December 31 st of each year.

Article 44: - 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) accumulated 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:- The
    company may further declare, by decision of the Board of Directors, pursuant
    to item "e" of Article 16 of the
  By-laws, to prepare extraordinary balance sheets and distribute dividends in
  shorter terms, as part of the annual dividend, provided that the total amount
  of dividends distributed at each semester of the financial year does not exceed
  the amount of the Capital Reserves.

Eighth 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 26, 1995, including those paid to the account
  of profits or reserves mentioned in the Sixth Paragraph of this article.

CHAPTER
VIII

Liquidation

Article 45: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
IX

General
Provisions

Article 46: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 47: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
X

Transitory Provisions

Article 48: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 reais 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 constituted 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.

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.



Exhibit 1.2(FREE
TRANSLATION)

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 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 31,514,587,519 (thirty-one billion, five hundred and fourteen million,
  five hundred and eighty-seven thousand, five hundred and nineteen) are common
  shares, and 52,815,888,777 (fifty-two billion, eight hundred and fifteen million,
  eight hundred and eighty-eight thousand, seven hundred and seventy-seven) are
  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, and up to 120,000,000,000 (one hundred and twenty billion) shall be
  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 participate of the dividend to be distributed, which
  shall be equivalent to 100% (one hundred per cent) of the net profits of the
  fiscal year, accrued in cash, calculated pursuant to Article 202 of Law 6.404,
  of 15.12.1976, with the wording given by Law 10.303, of 31.10.2001, and the
  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 equity value of the share, resulting
  in a priority annual dividend of three percent (3%) of the equity value of
  the share, whichever is greater;

b. in
    case of splitting or combination of preferred shares, the dividend set forth
    in item a (i)
    above, shall be settled in accordance with the new number of shares of this
  class;

c. - priority in the reimbursement of capital, in case the company is liquidated,
  up to the amount represented by such share class in the capital stock;

d. - participation,
    under the same conditions as the 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 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 natioal market, or in the international market, provided
  that in these 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 preferred share,
  represented by UNITS. In the event that there is a share split carried out
  exclusively by 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
  form 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 preferred share represented by a UNIT. In the event of
  a combination or cancellation of shares carried out exclusively by 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 preferred shares, to be paid
  up upon the delivery of the preferred or common UNIBANCO shares, with due regard
  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 part, in addition to the preferred
  shares issued by HOLDINGS, preferred shares issued by UNIBANCO, which are a
  part of HOLDINGS' assets, in a number sufficient to form 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 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 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 joint ventures 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 semi-annual 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 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 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 Officers in the cases provided for herein;

g) authorize, whenever deemed necessary, the representation of HOLDINGS by
  a sole member of the Board of 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 Officers as
  well as to determine their duties;

i) supervise the actions of the Board of 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 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 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 Officers to do so in his stead;

d) provide guidance to the Corporate President regarding the rights of partner
  as provided for in Fifth 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 Officers

Article 20: The Board of 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 Officers the management
  and administration of the company's business, The Board of Officers they may
  carry out all transactions and perform all acts related to HOLDINGS' objectives,
  and their responsibilities are:

a) to cause semi-annual 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 Officers;

II - provide guidance to the management and operation of the company's businesses,
  supervising the work of the Board of 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 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 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 Officers, the substitute shall be elected by the Board
  of Directors.

Article 25:The Board of 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 Officers.

Second Paragraph: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. 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 Officers' Meetings.

Article 26:The active and passive representation of HOLDINGS shall
  be exercised by the members of the Board of Officers.

First Paragraph:The following shall require the joint signatures of
  two members of the Board of 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 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 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 Officers

Article 27:The Shareholders' Meeting and the Board of Directors
  may abstain from electing Directors and members of the Board of 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 Officers shall not
  require the pledging of a bond.

Article 29:The members of the Board of Directors and of
  the Board of 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 Officers.

Article 30:The members of the Board of Directors and of
  the Board of 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 Officers.

CHAPTER V

The
Audit Board

Article 32:HOLDINGS shall have an Audit Board 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 Board 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 Board is requested shall elect its members and determine their
  remuneration.

Third Paragraph:The term of office of the members of the Audit Board
  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 Board,
  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.

Sole Paragraph: -Moreover, HOLDINGS may, through a decision of the
  Board of Directors, draw up extraordinary balance sheets and distribute interim
  dividends in shorter periods, on account of the annual dividend, provided that
  the total amount of dividends paid in each semester of the fiscal year do not
  exceed the capital reserves amount.

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
  Board, 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 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 shares, in the cases that it
  is ensured by law, shall be equal to the equity value of shares, calculated
  on the basis of the balance sheet drawn up in accordance with the form set
  forth by 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 thousand) 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 ° 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.



Exhibit 8.1

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 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 HIPOTECÁRIA
UNIBANCO-RODOBENS (formerly, UNIBANCO DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA.) 11                       | Brazil         
|CONABINU PARTICIPAÇÕES LTDA.                                                                                                               | 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         
|E-PLATFORM VENTURE PARTNERS EMPREENDIMENTOS E PARTICIPAÇÕES S.A.                                                                           | 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. 12                                                                                                | 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         
|FORTALEZA S.A. EMPREENDIMENTOS IMOBILIÁRIOS                                                                                                | Brazil         
|GARANTECH GARANTIA SERVIÇOS SC LTDA.                                                                                                       | Brazil         
|HIPERCARD DISTRIBUIDORA DE CARTÕES DE CRÉDITO LTDA.                                                                                        | Brazil         
|INTERBANCO S.A.                                                                                                                            | Paraguay       
|INTERCHANGE SERVIÇOS S.A.                                                                                                                  | Brazil         
|UNIBANCO INVESTSHOP - CORRETORA DE VALORES MOBILIÁRIOS E CÂMBIO S.A.
(formerly, INVESTSHOP CORRETORA DE VALORES MOBILIÁRIOS E CÂMBIO S.A.) | Brazil         
|INVESTSHOP PARTICIPAÇÕES LTDA. 13                                                                                                          | Brazil         
|LATOSOL EMPREENDIMENTOS E PARTICIPAÇÕES S.A.                                                                                               | Brazil         
|LUIZACRED S.A. SOCIEDADE DE
CRÉDITO, FINANCIAMENTO E INVESTIMENTO (formerly, FMX S.A. SOCIEDADE DE CRÉDITO, FINANCIAMENTO E INVESTIMENTO)  | Brazil         
|MARCEP CONSULTORIA, ESTUDOS E PLANEJAMENTO LTDA.                                                                                           | Brazil         
|MARCEP INTERNATIONAL TRADE FINANCE LTD.                                                                                                    | Cayman Islands 
|MEGBENS ADMINISTRAÇÃO DE BENS LTDA.                                                                                                        | Brazil         
|MICROINVEST S.A.  SOCIEDADE DE CRÉDITO AO MICROEMPREENDEDOR                                                                               | Brazil         
|NET ONE CORRETORA DE SEGUROS LTDA. 13                                                                                                      | Brazil         
|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. 10                                                                                                      | Brazil         
|PHENIX PARTICIPAÇÕES LTDA.                                                                                                                 | Brazil         
|PHENIX SEGURADORA S.A.                                                                                                                     | 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 
|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 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. 9                                                                                             | Brazil         
|UNIBANCO RODOBENS ADMINISTRADORA DE CONSÓRCIOS LTDA.                                                                                       | Brazil         
|UNIBANCO SAÚDE LTDA. 10                                                                                                                    | 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     
|UNICARD BANCO MÚLTIPLO S.A. (formerly, BANCO BANDEIRANTES S.A) 8                                                                           | Brazil         
|UNICORP BANK & TRUST LTD.                                                                                                                  | Cayman Islands 
|UNIPART PARTICIPAÇÕES INTERNACIONAIS LTD.                                                                                                  | Cayman Islands 
|UNIPART B2B INVESTMENTS S.L.                                                                                                               | Spain          
|VIDA NETWORK SAÚDE LTDA. 10                                                                                                                | Brazil         
|WALE S.A. DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS                                                                                   | Brazil         

|1 | Bandeirantes
Administradora de Cartões de Crédito e Assessoria Ltda. was merged into Banco Credibanco
S.A. on January 31, 2003, but such merge is still pending filing with the Registrar of
Companies in 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 | Since
April 30, 2003, the corporate name of Banco Bandeirantes S.A was amended to Unicard
Banco Múltiplo S.A. Notwithstanding the foregoing, such amendment is still pending
filing with the Registrar of Companies in Brazil.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9 | This
company was merged into Unibanco-União de Bancos Brasileiros S.A on April 30, 2004, but
such merger is still pending approval of the Central Bank of Brazil.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|10 | Vida
Network Saúde Ltda., Unibanco Saúde Ltda. and PAC- Prestadora de Serviços Ltda.
were merged into Unibanco AIG Seguros S.A on February 27, 2004, but such mergers are
still pending approval of the Superintendence of Private Insurance (SUSEP).
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11 | The
corporate name of Unibanco Distribuidora de Títulos e Valores Mobiliários Ltda. was
amended to Companhia Hipotecária Unibanco-Rodobens on May 8, 2004, but such amendment
is still pending the approval of the Central Bank of Brazil.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12 | Finanserv
Serviços Administrativos Ltda. was merged into Unibanco Representações e Participações
Ltda. on August 8, 2003, but such merger is still pending filing with the Registrar of
Companies in Brazil.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13 | Net
One Corretora de Seguros Ltda. was merged into Investshop Participações, which
corporate name was amended to Net One Administradora e Corretora de Seguros Ltda. Such
merger and amendment are still pending filing with the Registrar of Companies in Brazil.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---



Exhibit 12.1

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 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 report;
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial
        information included in this report, fairly present in all material respects
        the financial condition, results of operations and cash flows of the company
    as of, and for, the periods presented in this report;                      
|   |                                                                                                                                                                                                                                                                                                                               
|4. | The company's other certifying officers and I are responsible for establishing
        and maintaining disclosure controls and procedures (as defined in Exchange
    Act Rules 13a-15(e) and 15d-15(e)) for the company and have:                                                                                            
|   |                                                                                                                                                                                                                                                                                                                               

(a)      Designed
    such disclosure controls and procedures, or caused such disclosure controls
    and procedures to be designed under our supervision, to ensure that material
    information relating to the company, including its consolidated subsidiaries,
    is made known to us by others within those entities, particularly during
  the period in which this report is being prepared;

(b)      Evaluated
    the effectiveness of the company's disclosure controls and procedures and
    presented in this report our conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by this report
  based on such evaluation; and

(c)      Disclosed
    in this report any change in the company's internal control over financial
    reporting that occurred during the period covered by the annual report that
    has materially affected, or is reasonably likely to materially affect, the
  company's internal control over financial reporting; and

|5. | The company's
        other certifying officers and I have disclosed, based on our most recent
        evaluation of internal control over financial reporting, to the company's
        auditors and the company's board of directors (or persons performing
    the equivalent functions):
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a)      All
    significant deficiencies and material weaknesses in the design or operation
    of internal control over financial reporting which are reasonably likely
    to adversely affect the company's ability to record, process, summarize and
report financial information; and

(b)      Any
    fraud, whether or not material, that involves management or other employees
    who have a significant role in the company's internal control over financial
  reporting.

Dated: June 28, 2004

| | 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 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 report;
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial
        information included in this report, fairly present in all material respects
        the financial condition, results of operations and cash flows of the company
    as of, and for, the periods presented in this report;                      
|   |                                                                                                                                                                                                                                                                                                                               
|4. | The company's other certifying officers and I are responsible for establishing
        and maintaining disclosure controls and procedures (as defined in Exchange
    Act Rules 13a-15(e) and 15d-15(e)) for the company and have:                                                                                            
|   |                                                                                                                                                                                                                                                                                                                               

(a)      Designed
    such disclosure controls and procedures, or caused such disclosure controls
    and procedures to be designed under our supervision, to ensure that material
    information relating to the company, including its consolidated subsidiaries,
  is made known to us by others within those entities, particularly during the
period in which this report is being prepared;

(b)      Evaluated
    the effectiveness of the company's disclosure controls and procedures and
    presented in this report our conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by this report
  based on such evaluation; and

(c)      Disclosed
    in this report any change in the company's internal control over financial
    reporting that occurred during the period covered by the annual report that
    has materially affected, or is reasonably likely to materially affect, the
  company's internal control over financial reporting; and

|5. | The company's other certifying officers and I have disclosed,
        based on our most recent evaluation of internal control over financial
        reporting, to the company's auditors and the company's board of directors
    (or persons performing the equivalent functions):
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a)       All
  significant deficiencies and material weaknesses in the design or operation
  of internal control over financial reporting which are reasonably likely to
  adversely affect the company's ability to record, process, summarize and report
  financial information; and

(b)       Any
  fraud, whether or not material, that involves management or other employees
  who have a significant role in the company's internal control over financial
  reporting.

Dated: June 28, 2004

| | By: | /s/ Joaquim Francisco de Castro Neto                          
| | --- | --------------------------------------------------------------
| |     | Name: Joaquim Francisco de Castro Neto                        
| |     | Title: Executive President of the Retail
        Banking Group

---



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 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 report;
|   |                                                                                                                                                                                                                                                                                                                 
|3. | Based on my knowledge, the financial statements, and other financial information
  included in this report, fairly present in all material respects the financial
  condition, results of operations and cash flows of the company as of, and for,
  the periods presented in this report;                      
|   |                                                                                                                                                                                                                                                                                                                 
|4. | The company's other certifying officers and I are responsible for establishing
  and maintaining disclosure controls and procedures (as defined in Exchange
  Act Rules 13a-15(e) and 15d-15(e)) for the company and have:                                                                                      
|   |                                                                                                                                                                                                                                                                                                                 

(a)      Designed
    such disclosure controls and procedures, or caused such disclosure controls
    and procedures to be designed under our supervision, to ensure that material
    information relating to the company, including its consolidated subsidiaries,
  is made known to us by others within those entities, particularly during the
  period in which this report is being prepared;

(b)      Evaluated
    the effectiveness of the company's disclosure controls and procedures and
    presented in this report our conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by this report
  based on such evaluation; and

(c)      Disclosed
    in this report any change in the company's internal control over financial
    reporting that occurred during the period covered by the annual report that
    has materially affected, or is reasonably likely to materially affect, the
  company's internal control over financial reporting; and

|5. | The company's other certifying officers and I have disclosed, based on   our most recent evaluation of internal control over financial reporting, to
    the company's auditors and the company's board of directors (or persons performing
    the equivalent functions):
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a)      All
    significant deficiencies and material weaknesses in the design or operation
    of internal control over financial reporting which are reasonably likely
    to adversely affect the company's ability to record, process, summarize and
  report financial information; and

(b)      Any
    fraud, whether or not material, that involves management or other employees
    who have a significant role in the company's internal control over financial
  reporting.

Dated: June 28, 2004

| | By: | /s/ Israel Vainboim                                                     
| | --- | ------------------------------------------------------------------------
| |     | Name: Israel Vainboim                                                   
| |     | Title:
                Executive President (principal executive officer)

---



Exhibit 12.2

CERTIFICATION

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 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 report;
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial
        information included in this report, fairly present in all material respects
        the financial condition, results of operations and cash flows of the company
    as of, and for, the periods presented in this report;                      
|   |                                                                                                                                                                                                                                                                                                                               
|4. | The company's other certifying officers and I are responsible for establishing
        and maintaining disclosure controls and procedures (as defined in Exchange
    Act Rules 13a-15(e) and 15d-15(e)) for the company and have:                                                                                            
|   |                                                                                                                                                                                                                                                                                                                               

(a)      Designed
    such disclosure controls and procedures, or caused such disclosure controls
    and procedures to be designed under our supervision, to ensure that material
    information relating to the company, including its consolidated subsidiaries,
  is made known to us by others within those entities, particularly during the
period in which this report is being prepared;

(b)      Evaluated
    the effectiveness of the company's disclosure controls and procedures and
    presented in this report our conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by this report
  based on such evaluation; and

(c)      Disclosed
    in this report any change in the company's internal control over financial
    reporting that occurred during the period covered by the annual report that
    has materially affected, or is reasonably likely to materially affect, the
  company's internal control over financial reporting; and

|5. | The company's other certifying officers and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the company's auditors and the company's board of directors (or persons
    performing the equivalent functions):
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a)      All
    significant deficiencies and material weaknesses in the design or operation
    of internal control over financial reporting which are reasonably likely
    to adversely affect the company's ability to record, process, summarize and
report financial information; and

(b)      Any
    fraud, whether or not material, that involves management or other employees
    who have a significant role in the company's internal control over financial
  reporting.

Dated: June 28, 2004

| | By: | /s/ Geraldo Travaglia Filho                                                         
| | --- | ------------------------------------------------------------------------------------
| |     | Name: Geraldo Travaglia Filho                                                       
| |     | Title:
                Corporate Executive Officer


 (principal

financial officer)

---



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 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 report;
|   |                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial information
  included in this report, fairly present in all material respects the financial
  condition, results of operations and cash flows of the company as of, and for,
  the periods presented in this report;                    
|   |                                                                                                                                                                                                                                                                                                               
|4. | The company's other certifying officers and I are responsible for establishing
  and maintaining disclosure controls and procedures (as defined in Exchange
  Act Rules 13a-15(e) and 15d-15(e)) for the company and have:                                                                                    
|   |                                                                                                                                                                                                                                                                                                               

(a)      Designed
    such disclosure controls and procedures, or caused such disclosure controls
    and procedures to be designed under our supervision, to ensure that material
    information relating to the company, including its consolidated subsidiaries,
  is made known to us by others within those entities, particularly during the
  period in which this report is being prepared;

(b)      Evaluated
    the effectiveness of the company's disclosure controls and procedures and
    presented in this report our conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by this report
  based on such evaluation; and

(c)      Disclosed
    in this report any change in the company's internal control over financial
    reporting that occurred during the period covered by the annual report that
    has materially affected, or is reasonably likely to materially affect, the
  company's internal control over financial reporting; and

|5. | The company's other certifying officers and I have disclosed,
        based on our most recent evaluation of internal control over financial
        reporting, to the company's auditors and the company's board of directors
    (or persons performing the equivalent functions):
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(a)      All
    significant deficiencies and material weaknesses in the design or operation
    of internal control over financial reporting which are reasonably likely
    to adversely affect the company's ability to record, process, summarize and
report financial information; and

(b)      Any
    fraud, whether or not material, that involves management or other employees
    who have a significant role in the company's internal control over financial
  reporting.

Dated: June 28, 2004

| | By: | /s/ Geraldo Travaglia Filho                                  
| | --- | -------------------------------------------------------------
| |     | Name: Geraldo Travaglia Filho                                
| |     | Title:
                Officer (principal financial officer )

---



Exhibit 13.1

CERTIFICATION 
  Pursuant to 18 United States Code § 1350

The
undersigned hereby certifies that to his knowledge the Annual Report on Form
20-F of Unibanco  União de Bancos Brasileiros S.A. (the Company)
for the fiscal year ended December 31, 2003 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 28, 2004























A signed
original of this written statement required by Section 906 of the Sarbanes-Oxley
Act of 2002 , 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 of the Sarbanes-Oxley Act
of 2002 , 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 Annual Report on Form
20-F of Unibanco  União de Bancos Brasileiros S.A. (the Company)
for the fiscal year ended December 31, 2003 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 28, 2004























A signed
original of this written statement required by Section 906 of the Sarbanes-Oxley
Act of 2002 , 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 of the Sarbanes-Oxley Act
of 2002 , 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 Annual Report on Form 20-F of Unibanco  União
de Bancos Brasileiros S.A. (the Company) for the fiscal year ended December
31, 2003 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: Corporate Executive


 Officer (principal financial officer )
      Date: June 28, 2004























A signed
original of this written statement required by Section 906 of the Sarbanes-Oxley
Act of 2002 , 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 of the Sarbanes-Oxley Act
of 2002 , 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 Annual Report on Form 20-F of Unibanco
Holdings S.A. (the Company) for the
fiscal year ended December 31, 2003 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 (principal executive officer)
      Date: June 28, 2004























A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 , 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 of the Sarbanes-Oxley
Act of 2002 , 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 Annual Report on Form 20-F of Unibanco
Holdings S.A. (the Company) for the
fiscal year ended December 31, 2003 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 (principal financial officer )
      Date: June 28, 2004























A signed original of this written statement required by Section
906 of the Sarbanes-Oxley Act of 2002 , 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 of the Sarbanes-Oxley
Act of 2002 , 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.