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2Q04 Earnings

2Q04 Earnings. highlights. R$ 227.4 bi. Total Assets - Largest Bank in Brazil. R$ 116.9 bi. Leadership in Assets Under Management. R$ 83.1 bi. Leadership in loan Portfolio. R$ 152.9 bi. Leadership in Total Funding. 20.1 million. Customer Base. 6.5 million. Customers in BB’s Internet.

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2Q04 Earnings

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  1. 2Q04 Earnings

  2. highlights R$ 227.4 bi Total Assets - Largest Bank in Brazil R$ 116.9 bi Leadership in Assets Under Management R$ 83.1 bi Leadership in loan Portfolio R$ 152.9 bi Leadership in Total Funding 20.1 million Customer Base 6.5 million Customers in BB’s Internet 38,153 Largest ATM network in Latin America 13,908 Largest network service in the country 17.8% BB leads ANBID rank

  3. result building up Spread Reduction Increase of Allowance for Loan Losses Credit Delinquency under control Growth of the Retail Credit Portfolio Increase in Service Fees Reduction of Income Tax and Social Contribution expenses Increase of Administrative Costs

  4. solid results Income Statement - with reallocations Change % Change % Quarterly Flow Half Yearly Flow 2Q03 1Q04 2Q04 /2Q03 1H03 1H04 /1H03 R$ million Gross Financial Margin 3,524 3,829 3,925 11.4 7,441 7,754 4.2 Provision for NPL (863) (901) (903) 4.7 (1,499) (1,804) 20.4 Net Financial Margin 2,661 2,929 3,022 13.5 5,942 5,950 0.1 Service Fees 1,343 1,553 1,643 22.3 2,561 3,195 24.8 Turnover Tax Expenses (241) (284) (323) 33.8 (473) (607) 28.3 Contribution Margin 3,763 4,197 4,341 15.4 8,030 8,538 6.3 Administrative Expenses (2,466) (2,735) (3,093) 25.4 (5,175) (5,828) 12.6 Commercial Income 1,297 1,462 1,248 (3.8) 2,855 2,710 (5.1) Operating Income 1,016 1,227 1,003 (1.3) 2,261 2,230 (1.4) Income before Profit Sh. Taxes Ext. Items 1,058 1,242 1,043 (1.4) 2,353 2,285 (2.9) Income Tax and Social Contribution (519) (370) (200) (61.5) (1,205) (570) (52.7) Profit sharing (49) (41) (140) 186.6 (68) (181) 164.3 Recurrent Result 490 831 703 43.3 1,079 1,534 42.1 - Extraordinary items 109 (215) 102 (6.7) (0) (113) Net Income 600 616 805 34.2 1,079 1,421 31.7 EPS - R$ 0.82 0.84 1.10 34.2 1.47 1.94 31.7 22.7 22.9 5.3 ROE - % (Annualized) 24.8 21.3 27.7 - - ROA - % (Annualized) 1.2 1.1 1.4 - - - - - - - Interest on Equity - R$ 322 450 39.8

  5. new environment, new challenge R$ million 2Q03 2Q04 Abs. Chg. Chg. % 1H03 1H04 Abs. Chg. Chg. % Volume: Assets – Permanent ¹ 198,267 219,318 21,051 10.6 201,172 224,132 22,960 11.4 Gross Financial Margin 7,441 401 313 3,524 3,925 11.4 7,754 4.2 Spread - % ² 3.6988 1.7774 1.7896 0.0122 3.4597 (0.2391) Annualized Spread - % ² 7,5345 7,0392 (0,4953) Change G.F.M. (Distribution) 401 313 Gain/(Loss) with volume 3,898 374 8,290 849 Gain/(Loss) with spread 3,548 24 6,960 (481) Gain/(Loss) with volume and spread 3 (55) ¹ Average Balance ² Gross Financial Margin / (Assets - Permanent) Analysis of volume and spread - Quarter Analysis of volume and spread - Half Spread - % Spread - % 2Q04 - 1.7896 1H03 - 3.6988 24 3 (481) (55) 2Q03 - 1.7774 1H04 - 3.4597 3,524 374 7,441 849 Volume - R$ million Volume - R$ million 2Q04 - 219,318 1H04 - 224,132 1H03 - 201,172 2Q03 - 198,267 Gain/(Loss) due to Spread Gain/(Loss) due to Volume and Spread Gain/(Loss) due to Volume

  6. new environment, new challenge Spread analysis - % Nominal Spread Weighted Spread 1H03 2H03 1H04 1H03 2H03 1H04 . Rate 3.7 3.7 3.5 3.7 3.7 3.5 . Credit Operations 6.4 6.2 6.5 1.8 1.9 2.0 . Individuals 19.5 19.0 18.9 1.0 1.0 1.1 . Corporate 3.8 4.1 4.6 0.5 0.5 0.6 . Agribusiness 3.2 3.1 2.7 0.3 0.3 0.3 . Other Operations (0.6) (0.7) 1.2 0.0 0.0 0.0 . Funding 1.2 1.1 0.8 1.2 1.1 0.8 . Other 0.7 0.7 0.6 0.7 0.7 0.6 Portfolio Mix - % 1H04 1H03 2H03 29.3 30.8 28.9 30.2 30.5 29.7 39.9 41.0 39.9 Credit Operations Funding Other

  7. margin growth guaranteed by business diversification Change % Change % Quarterly Flow Half Yearly Flow 2Q03 1Q04 2Q04 /2Q03 1H03 1H04 /1H03 R$ million Gross Financial Margin 3,524 3,829 3,925 11.4 7,441 7,754 4.2 Provision for NPL (863) (901) (903) 4.7 (1,499) (1,804) 20.4 Net Financial Margin 2,661 2,929 3,022 13.5 5,942 5,950 0.1 Service Fees 1,343 1,553 1,643 22.3 2,561 3,195 24.8 Turnover Tax Expenses (241) (284) (323) 33.8 (473) (607) 28.3 Contribution Margin 3,763 4,197 4,341 15.4 8,030 8,538 6.3 Change % Change % Quarterly Flow Half Yearly Flow 2Q03 1Q04 2Q04 /2Q03 1H03 1H04 /1H03 R$ million Service revenues 1,343 1,553 1,643 22.3 2,561 3,195 24.8 Customer Relationship Fees 402 481 510 26.7 789 991 25.6 Asset Management Fees 183 234 242 32.2 350 476 36.0 Credit Operations 137 147 161 18.1 248 308 24.4 Collection 120 150 157 30.8 227 307 35.2 Services to Related Companies 38 39 39 1.0 60 78 28.8 Third Party Revenue and Payments 95 106 104 9.1 182 209 15.0 Credit Cards 115 129 141 23.1 222 270 21.8 Others 253 268 289 14.3 484 557 15.1

  8. 18.7 18.9 19.0 20.2 19.9 customers’ loyalty and asset management leadership Customer Base - in million 326 321 309 300 296 20.1 19.3 18.8 17.0 16.7 Asset Management - R$ billion 2Q03 3Q03 4Q03 1Q04 2Q04 Service Fees + GFM / Customer - R$ ¹ ¹ Customer base average of the last 4 quarters 116.9 116.0 102.7 91.8 83.2 2Q03 3Q03 4Q03 1Q04 2Q04 Market Share - %

  9. cost structure suitable with business generation Change % Change % Quarterly Flow Half Yearly Flow 2Q03 1Q04 2Q04 /2Q03 1H03 1H04 /1H03 R$ million Contribution Margin 3,763 4,197 4,341 15.4 8,030 8,538 6.3 Administrative Expenses (2,466) (2,735) (3,093) 25.4 (5,175) (5,828) 12.6 Commercial Income 1,297 1,462 1,248 (3.8) 2,855 2,710 (5.1) Change % Change % Quarterly Flow Half Yearly Flow 2Q03 1Q04 2Q04 /2Q03 1H03 1H04 /1H03 R$ million Administrative Expenses (2,466) (2,735) (3,093) 25.4 (5,175) (5,828) 12.6 Other Administrative Expenses (955) (1,126) (1,381) 44.7 (2,125) (2,507) 18.0 Other Tax Expenses (30) (34) (37) 22.9 (61) (72) 18.6 Personnel Expenses (1,481) (1,574) (1,675) 13.1 (2,990) (3,249) 8.7 Salaries (764) (721) (831) 8.8 (1,402) (1,552) 10.7 Benefits (170) (182) (191) 12.3 (328) (374) 13.9 Social Charges (293) (269) (312) 6.3 (532) (581) 9.1 Training (8) (6) (11) 36.5 (13) (17) 31.7 Honorary of Directors and Councilmen (1) (1) (2) 50.0 (3) (3) 19.6 Provisions for Employees Expenses (111) (273) (206) 84.9 (345) (479) 38.6 Provisions for Labor Suits (73) (60) (49) (33.1) (265) (109) (58.9) Labor Suits (60) (61) (73) 22.1 (101) (134) 32.9

  10. cost structure suitable with business generation Productivity Ratios Assets per work force - R$ thousand 2,534 2,503 2,455 2,376 2,280 2Q03 3Q03 4Q03 1Q04 2Q04 Customers per work force Employees per branche ¹ 217 17,5 17,4 17,3 17,3 17,3 209 206 188 185 2Q03 3Q03 4Q03 1Q04 2Q04 2Q03 3Q03 4Q03 1Q04 2Q04 ¹ Branch, Advanced Service Post and Banking Service Post

  11. 2.8 2.8 2.6 2.4 2.3 13.9 13.5 13.2 12.9 12.8 2Q03 3Q03 4Q03 1Q04 2Q04 cost structure suitable with business generation Points of Service - in thousands 5.0 5.0 4.7 4.4 4.3 Human Resources - in thousands Points of Service Credit Operations / Points of Service - R$ million 92,606 92,347 90,821 90,255 90,531 81,936 81,795 80,640 79,474 79,710 10,670 10,781 10,821 10,552 10,181 2Q03 3Q03 4Q03 1Q04 2Q04 Deposits + Assets under Manag. / Employee - R$ million Total Employees Interns

  12. productivity equation completed by technology Automatization 2Q03 - % 2Q04 - % 7.2 6.4 13.1 86.9 15.0 86.4 86.3 52.5 85.2 51.2 85.0 16.6 15.0 Electronic Transactions / Total Transactions - % 11.1 11.9 3Q03 4Q03 1Q04 2Q04 2Q03 ATM Internet Financial Manager Cashier POS and Others Efficiency Ratio % - YTD Coverage Ratio % - YTD Administrative Expenses / Operational Income Service Income / Personnel Expenses 98.6 98.4 85.7 85.1 82.8 56.6 56.1 56.3 55.4 54.2 2Q04 2Q03 3Q03 4Q03 1Q04 2Q04 2Q03 3Q03 4Q03 1Q04

  13. 9.1 13.6 13.3 19.2 18.9 35.4 30.7 34.4 29.4 30.2 27.5 30.5 28.1 28.8 28.5 5.1 3.9 4.6 3.9 4.1 23.0 21.5 19.2 19.1 18.0 2Q03 3Q03 4Q03 1Q04 2Q04 Other Assets Tax Credit Credit Operations and Leasing Securities Portfolio Liquid Assets except Securities 152.9 150.6 141.3 30.3 29.4 28.9 27.6 26.4 21.2 49.7 46.8 7.7 6.2 41.5 5.4 46.1 37.1 40.3 the bank that invests the most in Brazil Change % 2Q03 1Q04 2Q04 /2Q03 /1Q04 R$ million Total Assets 205,762 231,107 227,374 10.5 (1.6) Liquid Assets except Securities 18,648 43,612 30,316 62.6 (30.5) Securities Portfolio 72,746 67,875 69,855 (4.0) 2.9 Credit Operations and Leasing 56,686 66,461 69,247 22.2 4.2 Tax Credit 10,433 9,116 8,971 (14.0) (1.6) Other Assets 47,249 44,044 48,986 3.7 11.2 Total Liabilities 205,762 231,107 227,374 10.5 (1.6) Deposits 99,881 110,219 115,795 15.9 5.1 Other Liabilities 95,009 108,202 98,716 3.9 (8.8) Shareholders’ Equity 10,872 12,686 12,864 18.3 1.4 Asset Composition - % Market Funding - R$ billion Interbank Deposits Saving deposits Demand Deposits Time Deposits Money Market Borrowing Total 2Q03 1Q04 2Q04

  14. 29.9% 38.5% 61.5% 70.1% liquidity preserved Securities Portfolio Change % 2Q03 1Q04 2Q04 /2Q03 /1Q04 R$ million Securities Portfolio 72,746 67,875 69,855 (4.0) 2.9 Available for trading 2,104 12,338 11,998 470.1 (2.8) Available for sale 42,515 30,266 31,008 (27.1) 2.5 Held to maturity 27,640 24,959 25,146 (9.0) 0.7 Derivatives 487 331 1,702 249.8 414.2 Securities Portfolio Maturity - % 0.7 0.6 1.7 2.1 1.8 2Q04 2Q03 8.7 10.6 10.7 9.3 12.6 67.3 70.5 69.3 64.1 72.0 21.6 21.4 19.5 18.9 16.7 2Q03 3Q03 4Q03 1Q04 2Q04 1 - 3 years 3 - 5 years Up to 1 year 1 to 5 years 5 to 10 years Over 10 years

  15. well balanced credit portfolio 2Q04 - Balance R$ 83.1 billion Credit Portfolio 1.9% 13.3% 23.0% 10.6% 1Q04 - Balance R$ 79.6 billion 2.0% 12.6% 22.3% 20.4% 30.8% 10.3% 2Q03 - Balance R$ 68.7 billion 20.2% 2.8% 12.3% 32.5% 20.8% 11.0% 21.8% 31.3% Retail Commercial Agribusiness Foreign Trade Abroad Others

  16. increase with responsibility Credit Portfolio by Risk Level Shares % - 2Q04 6.4 4.8 2.5 1.7 0.5 16.1 14.9 11.3 8.0 16.4 15.0 30.4 89.5 83.3 83.1 79.1 78.7 58.3 Retail Commercial Agribusiness Foreign Trade BB NFS AA-B C-D E-H

  17. 80.0 80.0 70.0 70.0 60.0 60.0 50.0 50.0 40.0 40.0 30.0 30.0 20.0 20.0 10.0 10.0 - - AA A B C D E F G H AA A B C D E F G H 80.0 70.0 80.0 60.0 70.0 50.0 60.0 40.0 50.0 30.0 40.0 20.0 30.0 10.0 20.0 - 10.0 AA A B C D E F G H - AA A B C D E F G H increase with responsibility Credit Portfolio by Risk Level - % Credit Portfolio Commercial and Foreign Trade Portfolio 2Q03 2Q04 2Q03 2Q04 Retail Agribusiness 2Q03 2Q04 2Q03 2Q04

  18. 5.3 5.2 5.1 5.0 Overdue Loans / Credit Portfolio - % 4.7 Overdue Loans + 15 days / Credit Portfolio 5.1 5.1 5.0 Overdue Loans + 60 days / Credit Portfolio 4.8 4.6 3.2 3.2 3.2 3.2 3.0 2Q03 3Q03 4Q03 1Q04 2Q04 delinquency under control 2Q03 3Q03 4Q03 1Q04 2Q04 R$ million (A) Allowance for Loan Losses - Quarterly (863) (747) (827) (901) (903) (B) Allowance for Loan Losses - 12 Months (3,188) (3,101) (3,072) (3,337) (3,378) (C) Allowance for Loan Losses - 12 Months ¹ (3,188) (3,101) (3,072) (3,600) (3,786) (D) Loan Portfolio 68,662 72,601 77,636 79,647 83,131 (E) Average Portfolio - 3 Months 67,125 70,484 76,550 78,823 82,283 (F) Average Portfolio - 12 Months 63,572 66,163 69,702 73,245 77,035 Expenses / Portfolio (A/E) - % 1.3 1.1 1.1 1.1 1.1 Expenses / Portfolio (B/F) - % 5.0 4.7 4.4 4.6 4.4 Expenses / Portfolio (C/F) - % 5.0 4.7 4.4 4.9 4.9 ¹ With Extraordinary Items 5.0 4.7 4.6 4.4 4.4 2.1 2.0 1.7 1.8 1.8 1.3 1.1 1.1 1.1 1.1 2Q03 3Q03 4Q03 1Q04 2Q04 Expenses / Portfolio - % annualized ¹ Expenses / Portfolio (A/E) - % ² Expenses / Portfolio (C/F) - % ³ ¹ Expenses and average portfolio of the last 12 months ² Expenses and average portfolio of the quarter ³ Effective losses and average portfolio of the last 12 months

  19. ability to increase businesses with customers Change % R$ million 2Q03 1Q04 2Q04 /2Q03 /1Q04 Risk weighted Assets 105,974 119,691 119,966 13.2 0.2 Required Shareholders’ Equity 12,350 13,646 13,929 12.8 2.1 Required on weighted assets 11,657 13,166 13,196 13.2 0.2 Required on swap 166 150 152 (8.5) 1.3 Required on exchange exp - - - - - Required on Interest on Equity 528 331 581 10.1 75.7 Referential Shareholders’ Equity 15,479 17,740 18,299 18.2 3.2 Level I 10,847 12,336 12,702 17.1 3.0 Mark-to-Market - securities and derivatives (194) 127 (51) (73.6) (140.5) 20% Tax Credit realizable after 5 years - (326) (137) - (58.0) Level II 4,632 5,405 5,597 20.8 3.6 Surplus / shareholders’ equity deficit 3,128 4,094 4,371 39.7 6.8 Surplus / leverage deficit 28,439 37,220 39,733 39.7 6.8 Coefficient K % 13.8 14.3 14.5 Level I 9.7 9.9 10.1 Level II 4.1 4.4 4.4 Capital Adequacy - % 14.5 14.3 14.3 13.8 13.7 4.2 4.4 4.4 4.1 4.0 11.0 Level I 10.1 9.9 10.1 9.7 9.7 Level II 2Q03 3Q03 4Q03 1Q04 2Q04

  20. Solution in insurance and pension plan Equity in the earnings of associated and subsidiaries Quarterly Flow Change % Half Yearly Flow Change % 2Q03 1Q04 2Q04 /2Q03 1H03 1H04 /1H03 R$ thousand Equity Income 46,161 47,728 61,604 33.5 97,363 109,333 12.3 Service Fees - Commission 29,532 41,982 44,534 50.8 57,589 86,515 50.2 Service Fees – Asset Management 17,950 15,648 17,037 (5.1) 26,674 32,685 22.5 Insurance Added Value 93,643 105,358 123,175 31.5 181,626 228,533 25.8 Combined Ratio Evolution 90.2 89.1 87.1 85.8 83.4 12.2 12.0 12.7 12.2 12.3 19.4 19.0 17.7 18.0 17.4 58.6 58.1 55.7 56.6 53.8 2Q03 3Q03 4Q03 1Q04 2Q04 Administrative Expenses / Earned Premiums - % Expenses with Market / Earned Premiums - % Retained claims / Earned Premiums - %

  21. 32.55 31.67 29.84 2Q03 4Q03 2Q04 Market recognition Capitalization and Income 2Q03 3Q03 4Q03 1Q04 2Q04 Market Capitalization - R$ million 9,582 11,712 17,568 17,041 16,470 Free Float Capitalization - R$ million 694 848 1,272 1,234 1,192 Dividends Income / Interest on Equity - R$ million 322 - 424 - 450 Book Value per Share - R$ 14.85 15.97 16.63 17.33 17.57 Net Income per Share - R$ 0.82 0.91 0.87 0.84 1.10 Payout Ratio - % Market Ratios 7.38 6.77 6.05 5.00 4.20 1.44 1.34 1.28 1.00 0.88 2Q03 3Q03 4Q03 1Q04 2Q04 Price / Income 12 months Price / Book Value

  22. For further information access www.bb.com.br/ri Investor Relations Division SBS - Quadra 1 - Bloco C - Ed. Sede III - 17° floor 70073-901 - Brasília (DF) Phone: 55 (61) 310.5920 Fax: 55 (61) 310.3735 www.bb.com.br ri@bb.com.br Disclaimer- This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it’s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management’s belief, it also involves imprecision and high difficult risks to be foreseen, consequently, it may conduct to a different result than the one anticipated here. These expectations are highly depended on market conditions, on the Brazilian economic performance, on the sector and the international market. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation.

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