Fitch Affirms Ratings of Banco do Brasil S.A

Business Wire, July 29, 2005

SAO PAULO, Brazil & NEW YORK -- Fitch Ratings, the international rating agency, has today affirmed Banco do Brasil S.A.'s (Banco do Brasil) long-term foreign and local currency ratings at 'BB-' and 'BB', respectively; the short-term foreign and local currency ratings at 'B'; the individual rating at 'C/D'; and the support rating at '4'. At the same time, Fitch affirms the long and short-term national ratings of, respectively, 'AA(bra)' and 'F1 (bra)'. The Outlook of the long-term ratings remains Stable.

Banco do Brasil's foreign currency ratings are at the sovereign ceiling, while the long-term local currency rating is above the sovereign, reflecting the bank's status in the Brazilian financial system, its increasing commercial and administrative independence of the federal government in recent years, and the market's perception of Banco do Brasil as a safe heaven in times of stress. The national ratings on Banco do Brasil also reflect the bank's ownership structure, while the individual rating mirrors its market leadership in several sectors and the continuous improvement of its financial profile since June 2001, with the bank becoming more competitive, even in comparison with large private banks. The rating also reflects the low quality of its capital due to the high (though declining) level of tax credits, its increased volume of subordinated debt, and the consequent low volume of Tier I capital. In addition, it reflects Fitch's expectations regarding the deferred assets reduction and the effect of this on future profits.

Fitch will publish a full analytical report on Banco do Brasil shortly.

Note to Editors:

Fitch Support Ratings for Banks: Fitch's support ratings for banks deal with the question of whether a bank would receive support from its owners or from the state if it were to get into difficulty. These ratings are not debt ratings but rather, respectively, an assessment of the intrinsic strength of a bank and of any level of outside support that may, or may not, be available to it.

Fitch's national ratings provide a relative measure of creditworthiness for rated entities in countries where the sovereign's foreign and local currency ratings are below 'AAA'. National ratings are not internationally comparable since the best relative risk within a country is rated 'AAA', and other credits are rated only relative to this risk. They are signified by the addition of an identifier, for the country concerned, such as 'AAA (bra)' for national ratings in Brazil.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.