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ACQUISITION OF BANKBOSTON’S OPERATIONS IN LATIN AMERICA

ACQUISITION OF BANKBOSTON’S OPERATIONS IN LATIN AMERICA. May 2, 2006. The Acquisition Agreement.

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ACQUISITION OF BANKBOSTON’S OPERATIONS IN LATIN AMERICA

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  1. ACQUISITION OF BANKBOSTON’S OPERATIONSIN LATIN AMERICA May 2, 2006

  2. The Acquisition Agreement • Banco Itaú Holding Financeira S.A. (ITAÚ) and Itaúsa – Investimentos Itaú S.A. (ITAÚSA) announce today that they have entered into an agreement with Bank of America Corporation (BAC) dated 05-01-2006 which involves: • The acquisition of BankBoston (BKB) in Brazil by ITAÚ pursuant to the issuance of 68,518 thousand new non-voting ITAÚ shares, equal to an approximate 5.8% share of ITAÚ’s total capital; • The exclusive right for ITAÚ to acquire BKB’s operations in Chile and Uruguay, as well as certain other financial assets owned by clients of Latin America. The largest stock swap ever to be completed in the Brazilian financial services industry

  3. Acquired Businesses Bank of America Corporation Option Option Option OCA Uruguay Credit Cards BKB Chile BKB Brazil BKB Uruguay Premier Corporate Middle & Small

  4. Price and Transaction Structure • The acquisition of BKB Brazil will be effected in stock pursuant to the issuance of non-voting ITAÚ shares, equal to an approximate 5.8% share of ITAÚ’s total capital (68,518 thousand new shares of ITAÚ). Based on the non-voting shares average price on 04-28-06, these newly-issued shares would be valued at R$ 4.5 billion. • The same transaction structure is expected for the remaining acquisitions and the amounts involved will be generally in line with their respective asset bases vis-à-vis BKB Brazil.

  5. Recent Acquisitions in Shares in Brazil Source: Merrill Lynch

  6. Considerations Regarding BAC’s Investment in ITAÚ • BAC will appoint one member of ITAU’s Board of Directors; • The acquisition will involve the issuance of new non-voting ITAÚ shares, will not give rise to preemptive subscription rights on the part of ITAÚ’s current shareholders; • BAC does not have a Right of First Refusal, but will have tag along rights, in the event of a change of control at ITAÚ; • BAC shall not increase its stake above 20% of the issued and outstanding capital of ITAÚ in the future; • Shares issued in connection with this acquisition are subject to a 3-year lock-up period and, after this period, the sale of these shares in the market is limited to 15% of the average daily volume or block trade; • ITAÚ has a Right of First Offer should BAC decide to sell its stake.

  7. BKB Brazil Ranked 13th by the Central Bank of Brazil Market Share 12-31-05 Assets (R$ MM) 22,603 1.4% Loans (includes sureties and endorsements)(R$ MM) 11,639 1.4% Deposits (R$ MM) 5,911 0.6% 26,014 3.3% Assets under Management (R$ MM) 2,124 Shareholders’ Equity(R$ MM) # of Employees 4,800 # of Clients (thousands) 203 Present in Brazil since 1947 # of Branches 66 Source: BKB Publication, BAC, Central Bank of Brazil and Market Share taken from ANBID – Mar/05

  8. BKB Brazil - Segmentation Banking Revenues (BR) (*) Number of Clients High Net Worth Individuals Middle Market 38% 31% Corporate 31% Position: Dec.05 (*) Banking Revenues = Financial Margins + Service Fees

  9. Client Overlap / Opportunities Clients whose limits should be reduced according to information on the largest clients

  10. Relevant Aspects • Leadership position among private banks in assets under management, custody, high net worth individual and corporate segments; • Significant economies of scale in the large corporate and middle market segments; • Acquisition of a premium credit card client base; • Opportunity to expand into foreign markets in which ITAÚ does not currently have a presence. I T A Ú ITAÚand BAC will explore mutual cooperation opportunities to benefit their clients • Will become a shareholder of ITAÚ, thus maintaining an important presence in the region, through a significant investment in a leading bank; • Will appoint one member of ITAÚ’s Board of Directors. B A C

  11. Important Highlights • Maintenance of BKB’s branches, which are highly regarded for their superior facilities, and integration with the Itaú Personnalité segment (no intention to shut down branches); • The ITAÚ brand will be extended to the acquired businesses; • ITAÚ will add a set of highly qualified professionals to its current structure. ITAÚ will continue to strengthen its tradition of providing differentiated service to its customers in the various market segments

  12. BKB Chile (Exclusive Option) BankBoston Chile 12-31-05 Assets (R$ MM) 5,330 Deposits (R$ MM) 3,490 Loans (R$ MM) 3,578 Shareholders’ Equity (R$ MM) 872 Investment Grade Baa1 from Moody´s # of Branches 44 # of Clients (thousands) 58 Parity CLP 514.21 / US$ 1.00 e R$ 2.2407 / US$1.00 as of 12-31-05 Source: BAC

  13. BKB Uruguay (Exclusive Option) BankBoston Uruguay 12-31-05 Assets (R$ MM) 1,844 Deposits (R$ MM) 1,510 Loans (R$ MM) 503 Shareholders’ Equity (R$ MM) 125 # of Branches 15 372,000 clients Market Share 50% 12-31-05 OCA Assets (R$ MM) 239 Loans (R$ MM) 160 Shareholders’ Equity (R$ MM) 55 # of Branches 23 Parity UYU 24.17 / US$ 1.00 e R$ 2.2407 / US$ 1.00 as of 12-31-05 Source: BAC

  14. Pro Forma Analysis PRO FORMA R$ BILLION INFORMATION AS OF 12-31-05 ITAÚ BKB Brazil BKB Foreign Combined ITAÚ + BKB % Assets 151.2 22.6 7.4 181.2 19.8 % 67.8 11.6 4.2 83.6 23.4% Loans (*) Deposits 52.0 5.9 5.0 62.9 21.0% 120.3 26.0 22.4 168.7 40.3% Assets Under Management 15.6 2.1 1.1 18.9 21.6% Shareholders’ Equity (*) Includes sureties and endorsements

  15. Pro Forma Analysis (Continued) PRO FORMA INFORMATION AS OF 12-31-05 ITAÚ BKB Brazil BKB Foreign Combined ITAÚ + BKB % 51,036 4,800 2,200 58,036 13.7% # of Employees 16,649 203 450 17,303 3.9% # of Clients (thousands) 2,391 66 82 2,539 6.2% # of Branches 50.3% 77.3% 78.0% 52.7% 2.4 bps Efficiency Ratio (*) 17.0% 14.7% 15.8% 16.7% -0.3 bps Basle Ratio (*) Adjusted for BKB Brazil hedge transactions

  16. BKB earnings requirements to avoid dilution in 2005 ITAÚ BKB Brazil ITAÚ + BKB Fiscal Year 2005 Required Net Income (R$ MM) 5,251 325 5,576 Shares Outstanding (mm) 1,107.7 68.5 1,176.2 EPS (R$/share) 4.74 4.74 4.74 ROE (%p.a.) 33.7% 13.4% ROA (%p.a.) 3.5% 1.4% Efficiency Ratio 50.3% 77.3% In light of its scale, ITAÚ is in a position to make this acquisition EPS accretive in a short period of time.

  17. Accounting Effects • It is management’s intention to effect the write-off of the goodwill amount resulting from this transaction in the fiscal year of 2006. It is estimated that ITAÚ’s net income will be reduced by R$ 2.2 billion, net of taxes, as a result of the amortization of goodwill. The amount of dividends/interest on own capital to be distributed to the pro forma ITAÚ shareholder base for the fiscal year 2006 will not be impacted by this amortization of goodwill and should, therefore, be higher than those paid out in 2005; • The transaction is expected to be EPS accretive in the second half of 2007; • The Basle Ratio, pro forma for the acquisition, will equal approximately 16.7%.

  18. Impact of the Transaction on Itaúsa • Decline in stake in ITAÚ from 48.2% to 45.4% (R$ 0.4 billion); • Gain from the equity method due to capital increase at ITAÚ (R$ 2.0 billion); • Negative impact of goodwill amortization at ITAÚ (R$ 1.0 billion); • ESTIMATED POSITIVE NET EFFECT ON NET INCOME (R$ 0.6 BILLION).

  19. Disclaimer This presentation contains forward-looking statements. These statements may include the plans and objectives of management for future operations and financial objectives, loan portfolio growth, and availability of funds. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors that could cause actual results to differ materially include the uncertainties of economic, competitive, and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately, and many of which are beyond the control of the Bank. Although the Bank believes that the assumptions underlying the forward-looking statements included herein are reasonable, any of the assumptions could be inaccurate and therefore there can be no assurance that the forward-looking statements included herein will prove to be accurate. Therefore, the inclusion of such information should not be regarded as a representation by the Bank or any other person that the objectives and plans of the Bank will be achieved.

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