8 th Annual Latin America Conference London, September 12-13, 2005 Alfredo Setubal Investor Relations Director Silvio de Carvalho Executive Director

1 Agenda  Brazilian Economy  Brazilian Banking System  Highlights  Strategy and In-depth Results  Performance of the Shares

2 Brazilian Macroeconomic Scenario  Floating exchange rate and outstanding adjustment in external accounts  Monetary policy: inflation expectation and growth  Fiscal policy: accomplishment of fiscal targets, even without IMF surveillance  Credit expansion: public sector crowding out  Baseline scenario  Brazil: towards investment grade

3 Recent overvaluation of the real Aug Jan-84Jan-85Jan-86Jan-87Jan-88Jan-89Jan-90Jan-91Jan-92Jan-93Jan-94Jan-95Jan-96Jan-97Jan-98Jan-99Jan-00Jan-01Jan-02Jan-03Jan-04Jan-05 Effective basket92-93 averageR$/US$Euro Collor- Itamar Period Pegged currency Floating exchange rate Plano Real 3.2 Real exchange rate

4 Trade surplus continues to widen Trade surplus – accumulated in 12-months US$ billion Source: Central Bank of Brazil

5 Inflation target Source: IBGE CPI inflation and core inflation (% y-o-y)

6 Inflationary expectations converging back toward the target Median of market expectations for IPCA (%) Source: Focus Survey/Central Bank of Brazil Apr/04 May/04 Jun/04 Jul/04 Aug/04 Sep/04 Oct/04 Nov/04 Dec/04 Jan/05 Feb/05Mar/05 Apr/05 May/05 Jun/05 Jul/05 Aug/

7 Growth resumption and recent convergence towards potential growth GDP Growth accumulated in 4 quarters Fixed Investment/GDP (%) - Prices as of the previous year average 2005: 19.4% average 2004: 18.8% Source:IBGE and Banco Itaú´s projection

8 Primary surplus since 1998 Fiscal policy stance Source: Central Bank of Brazil

9 Increase in the private investment/GDP (%) Source: Central Bank of Brazil Total Credit and Public Sector Debt Jul-94 Nov-94 Mar-95 Jul-95 Nov-95 Mar-96 Jul-96 Nov-96 Mar-97 Jul-97 Nov-97 Mar-98 Jul-98 Nov-98 Mar-99 Jul-99 Nov-99 Mar-00 Jul-00 Nov-00 Mar-01 Jul-01 Nov-01 Mar-02 Jul-02 Nov-02 Mar-03 Jul-03 Nov-03 Mar-04 Jul-04 Nov-04 Mar-05 % GDP % GDP Net public debtTotal credit Jun/05

10 Baseline scenario Hypothesis:  Exchange rate: remains constant in real terms, taking into account the difference between Brazil’s CPI (IPCA) inflation and US PPI inflation  Inflation expectations: 5.55% in 2005, 5.0% in 2006 and 4.5% in 2007 (Focus Survey on July 29, 2005)  Interest rate path: compatible with limiting aggregate demand acceleration in order to bring inflation back to the target path  Primary budget surplus: constant at 4.25% of GDP  GDP linear growth trend: 3.0% in 2005 and 3.5% in 2006 and 2007

11 Investment grade The external indicators project the possibility of Brazil reaching an investment grade rating in 2007 (D/X = external debt/current account receipts equal to 1) Fiscal indicators lag behind, but by 2007 there is a chance that debt as % of GDP be in clear declining trend, qualifying Brazil to that rating US$ billion Primary surplus (% GDP)4.38%4.60%4.25% Public debt / GDP 57.2%51.8%52.3%53.8%51.8%48.9%46.7%44.7% Current account Total external debt (with inter cia) Gross Reserves Real GDP growth0.5%4.9%3.1%2.3%4.1%3.6%2.9%3.0% D/X Moody's

12 Agenda  Brazilian Economy  Brazilian Banking System  Highlights  Strategy and In-depth Results  Performance of the Shares

13 Brazilian Banking System Macro CharacteristicsMicro Scenario  Huge fixed costs  Cost reduction / efficiency  Strongly capitalized  Room for growth in credit  Satisfactory level of provisioning  Conservative approach  Advanced risk management  Advanced banking supervision; preparation for Basel II  Importance of banking service fees  Specific for each segment  Profitable  Target: to keep profitability in lower margins scenario  Oriented to services  Intensive use of technology, focused on self-service and Internet  All bills are paid in the banks  Huge transaction volumes  High spreads  Falling due to decline in interest rates  Dimension  Differentiated needs  High reserve requirements  High impact over spreads

14  Declining Interest Rates x Increasing Loan Demand: New Revenue Dynamics  Growing Fee Earnings and Tighter Cost Control To Offset Lower Treasury Gains  Focus on Higher-Yielding Consumer Finance and SME Lending  Efforts of Client Acquisition and Gains of Scale  Government Still Attracts Large Portions of the System ’ s Liquidity; Gradual Replacement of Bonds By Loans  Public Sector Banks Still Dominant: 45% of Deposits  More Aggressive Competition, Not Price Wars Current Scenario

15 1.Citigroup 2.JP Morgan Chase 3.HSBC Holdings 4.Bank of America Corp. 5.Crédit Agricole Groupe 6.Royal Bank of Scotland 7.Mitsubishi Tokyo 8.Mizuho Financial Group 9.HBOS 10.BNP Paribas 19. UBS 93. State Bank of India 94. Banco Itaú 95. Erste Bank 107. Bradesco 133. Banco do Brasil 167. Unibanco December 2004 Assets 1,484 1,157 1,277 1,110 1,243 1, , ,234 1, US$ Billion 2 nd 7 th 4 th 10 th 5 th 9 th 12 th 3 rd 19 th 6 th 1 st 84 th 187 th 69 th 143 rd 131 st 251 st Rank BIS 11.9 % 12.2 % 12.0 % 11.6 % 10.4 % 11.7 % 11.8 % 11.9 % 11.8 % 10.3 % 13.6 % 13.1 % 20.6 % 10.7 % 18.8 % 13.7 % 16.3 % Index SE (1) US$ Billion ROA % 303 rd 745 th 373 rd 229 th 603 rd 458 th 695 th 675 th 465 th 606 th 700 th 407 th 18 th 647 th 219 th 200 th 125 th Rank (*) Source: The Banker Top July/05 (1) Stockholders’ Equity (Tier One Capital) 1.63 % 0.54 % 1.38 % 1.91 % 0.84 % 1.19 % 0.62 % 0.68 % 1.17 % 0.84 % 0.62 % 1.31 % 5.66 % 0.76 % 1.96 % 2.1 % 2.5 % The Banker Top 1000

16 Capital (Tier One) / Assets (%) Source: THE BANKER - Top 1000 – July 2005

17 Agenda  Brazilian Economy  Brazilian Banking System  Highlights  Strategy and In-depth Results  Performance of the Shares

% +17.2% +20.3% Highlights Assets (R$ Billion) Credit Operations (R$ Billion) Stockholders’ Equity (R$ Billion) Net Income (R$ Million) +35.6%

% +27.6% +13.4% +29.2% Highlights Net Income (R$ Million) Non-interest Expenses (R$ Million) Banking Service Fees (R$ Million) Net Interest Margin (R$ Million)

20 Obs: Annualized quarterly indexes. Highlights ROE (%) ROA (%) BIS Ratio (%) Efficiency Ratio (%)

21 (*) Without Credicard and FIC employees. Highlights Branches+CSBs Internet Banking Clients (In million) ATMs Employees (*)

22 Agenda  Brazilian Economy  Brazilian Banking System  Highlights  Strategy and In-depth Results  Performance of the Shares

23 Highlights 3. Additional Provisions:  Maintenance of Exceeding Provision for Loan Losses of R$ 1,150 million;  Maintenance of Additional Provision for Securities Portfolio of R$ 400 million; 1. Results:  2 nd Q/05: Net Income of R$ 1,333 million with an increase of 16.8% q-o-q; ROE annualized of 40.5%;  1 st Sem/05: Net Income of R$ 2,475 million with an increase of 35.6% compared with 1 st Sem/04; ROE annualized of 35.6%; 4. Delinquency: Nonperforming Loans Ratio in 3.0%; 2. Growth of Credit Portfolio of 2.9% in the quarter and 10.1% in the semester:  Personal Credit:Quarter: 9.6%; Semester 33.9%  Vehicles: Quarter: 12.8%; Semester 32.4% 5. Solvency Ratio:  Maintenance of the high ratio of 18.3%, even after buyback of preferred shares PN totaling R$ 559 million on the quarter.

24 Itaú CorporationItaucredItaú BBAItaubanco Segmentation

25 Itaú ItaucredItaú BBAItaubanco Banking Credit Cards Insurance, Pens. Plans and Capitalization Resources Managed Segmentation Corporation

26 Exposure – Loans and Securities (*) Rural and Mortgage Loans – Loans linked to the availability of Demand deposits and Savings deposits.

27 CAGR: 22.0% CAGR: 22.4% R$ Million Credit Portfolio (*) On June 30, 2005.

28 Change in the mix of the Credit Portfolio Restricted Loans Individuals Small and Medium- sized companies Corporate Loans In % % Jun/ %

29 We are not expecting an ongoing improvement in these indicators, because of the focus on credit products with higher margins, but, at the same time, with a higher credit risk. Nonperforming Loans Ratio and Coverage Ratio

30 Securities Adjust. market value Additional Provision Total (*) Values differ from the one published in note “Market Value” because they are net of the additional provision for securities. Additional Provision for Loan Losses (PDD) Financial Instruments: Market vs. Recorded Value (*) Conservative Accounting Practices R$ 491 million R$ 400 million R$ 3.6 billion Jun. 30, 2005 R$ 1.15 billion R$ 1.60 billion R$ 733 million R$ 400 million R$ 3.8 billion Dec. 31, 2004 R$ 1.0 bilhão R$ 1.67 bilhão R$ 510 million R$ 600 million R$ 3.8 billion Jun. 30, 2004 R$ 1.0 bilhão R$ 1.66 billion

31 Service Fees (1)Mutual Funds and Consortium. R$ Million

32 Financial Instruments – Market Value (1) Tax effects not considered. (2) Includes unrealized minority interest gains in Equity of R$ 336 millions in March/05. R$ Million

33 Highlights of Pro Forma Segments (*) Including Endorsements and Sureties. R$ Million Note: The Consolidated figures do not represent the sum of the parts because certain intercompany transactions were eliminated only at the Consolidated level.

34 Consolidated Net Income Diversification of Income sources Not dependent only on interest rates R$ Million

35 Credit Cards R$ Million (Except where indicated)

36 Insurance, Pension Plans and Capitalization R$ Million

37 Assets under Management and Technical Provisions Growth of 18.1% in the volume of Funds and Portfolios under Management and 34.4% in the volume of Technical Provisions in relation to Jun/2004 R$ Billion Technical Provisions of Insurance, Pension Plans and Capitalization Volume of Mutual Funds and Portfolios under Management

38 Itaú CorporationItaucredItaú BBAItaubanco Corporate Operation Segmentation

39 Itaú BBA Pro Forma R$ Million

40 Strategy – Corporate Segment  Itaú BBA: wholesale bank integrated into a financial conglomerate;  Business environment: declining spreads, increasing competition and limited client base;  Goal: maintain current profitability levels going forward despite expected lower margins in credit;  How: offset lower credit spread gains by increasing non-credit related revenues, currently representing already 51% of all client-related revenues (*), through:  Cross-selling – explore further synergies with Itaú by broadening the offering of treasury products (hedging, swaps, structured, etc.) and day-to-day cash products (payroll, collections, etc.);  Investment banking – leverage our leading position in fixed income to build a broader investment banking platform in equities and M&A. Itaú BBA is uniquely positioned to reap the benefits of an anticipated significant expansion in capital markets, fueled by expected lower interest rates and the potential future upgrade of Brazil to investment grade status. Investment Banking currently accounts for 5% of Itaú BBA client-related revenues (*). Our goal, 5 years out, is to increase its share to 15% to 20% of such revenues. (*) Client-related revenues include only revenues derived from operations carried out directly with our clients, thus not including revenues arisen from treasury transactions and own capital remuneration.

41 Itaú CorporationItaucredItaú BBAItaubanco FIC 50% CBD 50% Itaú FAI 50% LASA 50% Itaú Own stores 100% Itaú Payroll Credit  Fináustria  Itaucred Vehicles  Banco Fiat  Intercap Vehicle Credit Cards non customers  50% Credicard Credit for Individuals

42 Taií  New Brand Name (Itaú-based).  Focus on lower income consumers.  Proprietary platform.  Uses the Itaú ATM network.  Diversifies credit-related revenues.  Responsive and efficient.  Expansion of Focus on direct consumer credit  Long term partnership: 20 years, and renewal option  Operating Management under the responsibility of Itaú  Exclusivity in exploitation of financial products and services to retailers’ customers Retail partnerships CBD and LASA Credit for Individuals

43 Estimated Expansion 2004 CSBs752 FIC (CBD)+265 FAI (LASA) *+180 Physical Distribution Estimated YE 2005 Branches2, Personnalité Branches ATMs20, Taií Stores Total +694 * Total Stores Jun/ , , Investment expected for 2005: R$ 48.3 million +5,000 employees – basically, sales promoters In the next two years, operations Taií, FIC-CBD, FAI-LASA and Credicard are expected to aggregate 6 million customers to Itaú´s base.

million Own Credit Cards (Private Label) Currently FIC (CBD) FAI (LASA)186 thousand 480 thousand Credit Cards FIC (CBD) FAI (LASA)- - Personal Loan Contracts FIC (CBD) FAI (LASA)137 thousand 580 thousand Consumer Credit Contracts FIC (CBD) FAI (LASA)32 thousand 4.7 millionTotal In Quantities Financial Products (*) Quantities above refer to the most recent data available at the time of the association start-up: for FAI (LASA), data refer to September 2004 and for FIC (CBD), March 2004.

45 8,0268,259 8,674 9,077 10,680 In Thousand Market Share: 21.3% Leader in Brazil Credit Card Base Increase in Participation on Credicard 11,066 11,802

46 Agenda  Brazilian Economy  Brazilian Banking System  Highlights  Strategy and In-depth Results  Performance of the Shares

47 Evolution of Earnings per Share and Dividends per Share (*) CAGR = 28.6% R$ (*) Before 2004 per lot of thousand shares and after 2004 per share, since in 2004 a reverse split of shares was carried out. CAGR = 26.2% Dividends per Share (*)Earnings per Share (*)

48 Highlight: Increase in monthly payments from R$ 0.17 to R$ 0.21 per share on May 2005 Evolution of Dividends

49 (*) Annualized Evolution of ROE (%)

50  Consistence of the strong financial performance and increase in operational efficiency;  Strategy of growth of credit for small and medium companies;  Maintenance of conservative policy of provisioning;  Changes in assets mix, reducing the volatility. March 2005  Long and consistent record of performance in volatile scenarios;  Quality of Equity;  Significative international presence reducing the internal volatility;  Strong capitalization and provisions. Itaú became the best rated bank in Brazil by Moody´s (among 23 banks evaluated) and by Fitch Ratings (46 banks evaluated). April 2005 Main Competitive Differentials: Ratings Upgrade

51 Public Company Award 2004 – Apimec (Brazilian Association of Capital Markets Professionals and Analysts - 3 rd time) Best Financial Strength and Individual ratings among Brazilian Banks – Moody´s and Fitch Best Bank in Brazil – Euromoney (8 th consecutive year) and Global Finance (2 nd consecutive year) The Most Ethical and Best Managed Bank in Latin America – Latin Finance / Management & Excellence Best Corporate Governance / Best Annual Report / Best IR Website / Best IR Officer in Brazil – Investor Relations Magazine Brazil Awards Public Company Seal 2004 – Animec (Brazilian Association of Capital Markets Investors - 2 nd time) Best Retail Financial Conglomerate and Best Insurance Company – FGV/Conjuntura Econômica RiskBank Award – Category Large Retail Bank (Hors Concours status) 33 Recent Recognitions

52 Perspectives for 2005 Expansion of points of sale in 694 new units, being 116 Itaú branches, 12 Personnalité branches, 121 Taií, 265 FIC (CBD) and 180 FAI (LASA); Continuity of growth in credit portfolio of 20-25%; Focus in consumer credit (Taií, FIC CBD, FAI LASA, Vehicles); Credit Cards: Credicard operations; Focus in the efficiency ratio (50%).

53 US$ Russian Crisis Real Devaluation Mexican Crisis Asian Crisis Argentine Crisis Attack to WTC Itaú (1) Itaú (2) Ibov. 10 years 24.27%19.73% 10.55% 5 years 20.11%15.86%2.78% 12 months %98.32%56.61% Annual Average Appreciation in US$ Election Period Preferred Shares Appreciation – in US$ Evolution of US$ 100 Invested from June/95 to June/05 (1) With dividends reinvestment (2) Without dividends reinvestment

8 th Annual Latin America Conference London, September 12-13, 2005 Alfredo Setubal Investor Relations Director Silvio de Carvalho Executive Director