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Delivering growth and value Business Unit Brazil of C&CC June 14, 2004 Fabio Barbosa SEVP - CEO of BU Brazil
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Delivering growth and value

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Delivering growth and value. Business Unit Brazil of C&CC. Fabio Barbosa SEVP - CEO of BU Brazil. June 14, 2004. Table of Contents. Current Brazilian Business Environment Overview of ABN AMRO Brazil Overview C&CC Brazil Financial Performance - PowerPoint PPT Presentation
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Page 1: Delivering growth and value

Delivering growth and valueBusiness Unit Brazil of C&CC

June 14, 2004

Fabio BarbosaSEVP - CEO of BU Brazil

Page 2: Delivering growth and value

0 2

Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004 / 2005

Appendices

Table of Contents

Page 3: Delivering growth and value

0 3

Dec 05 forecast

BRL/USD (eop) 3.25 (maintained)

IPCA 12M4.5% (revised from 5.1%)

Commitment to orthodox monetary policy has enabled stability to return

The inflationary pressures due to the exchange rate overshooting receded significantly and are expected to stabilize along 2004

0

2

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-04

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Sep

-04

Nov

-04

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

IPCA (% , 12 months) BRL / USD

IPC

A%

forecast

BR

L / U

SD

Sources: Brazilian Central Bank, IBGE, ABN AMRO

Dec 04 forecast

BRL/USD (eop) 3.05 (maintained)

IPCA 12M 6.8% (revised from 6.0%)

Page 4: Delivering growth and value

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The current account is now well under control

Sources: Brazilian Central Bank

-25000

-20000

-15000

-10000

-5000

0

5000

10000

15000

20000

25000

30000

35000

Jan-

02

Feb

-02

Mar

-02

Apr

-02

May

-02

Jun-

02

Jul-0

2

Aug

-02

Sep

-02

Oct

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Nov

-02

Dec

-02

Jan-

03

Feb

-03

Mar

-03

Apr

-03

May

-03

Jun-

03

Jul-0

3

Aug

-03

Sep

-03

Oct

-03

Nov

-03

Dec

-03

Jan-

04

Feb

-04

Mar

-04

Apr

-04

Current Account Balance Trade Balance

The current account accumulated a USD5.8 billion surplus in 12 months ended in April (1.1% GDP). From 1999 to April 2004, the current account adjustment was equivalent to USD31.1 billion (5.8% GDP) driven mainly by exports.

US

D b

illio

n

Page 5: Delivering growth and value

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The surplus of the current account allows to repay the IMF debt

Sources: Brazilian Central Bank, ABN AMRO

Balance of Payments - Financing Needs

2002 2003 2004FTrade Balance 13.1 24.8 27.8Current Account -7.7 4.1 6.3Amortization Medium and Long Term Debt -31.1 -27.2 -38.7 Short Term Debt -2.0 -3.5 -1.2Total external financing needs -40.8 -26.6 -33.6Foreign Direct Investment 16.6 10.1 12.0New Issuance 18.6 23.0 26.3Sources of financing 35.2 33.1 38.3IMF Support 11.5 4.8 -4.4 Amortization -4.6 -12.8 -4.4 Issuance 16.0 17.6 0.0Gross Reserves (-/+ = decrease/increase) 1.9 11.5 -0.7 Net Reserves (IMF agreement) 14.2 17.4 22.7

In USD billion

Page 6: Delivering growth and value

0 6

Source: Brazilian Central Bank

Market volatility does not reflect Brazil’s ability to withstand shocks

FX Denominated Debt / Total Debt

14

17

20

23

26

29

32

35

38

41

Ja

n-0

2

Ma

r-0

2

Ma

y-0

2

Ju

l-0

2

Se

p-0

2

No

v-0

2

Ja

n-0

3

Ma

r-0

3

Ma

y-0

3

Ju

l-0

3

Se

p-0

3

No

v-0

3

Ja

n-0

4

Ma

r-0

4

FX Indexed Debt/Total Debt

%

Brazil is in much better shape to deal with adverse external factors, compared to mid-90s and early 00s

… and currently.. Capital Markets Reform

Floating FX regime

Social Security Reform

Fiscal Responsibility Law

New Payments System

Page 7: Delivering growth and value

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The government controls a comfortable majority in Parliament

Source: Santa Fé, ABN AMRO

Governing Coalition in the House (votes)

Oct-03 Apr-04

I. Left-wing 154 148

II. Center, center-right 235 234

(I + II) Governing Coalition 389 382

Share in House 76% 74%

PT 93 90

PT share of Governing Coalition 24% 24%

Oct-03 Apr-04

I. Left-wing 24 18

II. Center, center-right 27 28

(I + II) Governing Coalition 51 46

Share in Senate 63% 57%

PT 14 13

PT share of Governing Coalition 27% 28%

Governing Coalition in the Senate (votes)

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Public support for the government remains high

Mar 03 Jun 03 Dec 03 Feb 04 Mar 04 May 04

Approves 79 78 70 65 60 60

Disapproves 12 13 21 24 31 32

Don't know 9 9 9 11 10 8

Favorable - Unfavorable 67 65 49 41 29 28

Mar 03 Jun 03 Dec 03 Feb 04 Mar 04 May 04

Good/excellent 45 52 41 40 35 35

Regular 34 36 42 41 43 44

Bad/negative 8 7 13 15 19 20

Don't know 13 6 4 4 3 2

Favorable - Unfavorable 37 44 28 25 15 15

Source: CNT / Sensus, ABN AMRO

Source: CNT / Sensus, ABN AMRO

Government’s Approval Rating (%)

President Lula’s Approval Rating (%)

Still high approval rating

Approval ratings have fallen, but are still at respectable levels

Page 9: Delivering growth and value

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Continuous effort to complete reforms

Revision of mortgage legal framework

New regulation to reduce number of court actions against the

financial system regarding principal and interest

New Bankruptcy Law

Judiciary reform

Public and Private Partnership regulation

Power sector framework

Restored finance and strong government will facilitate reforms

Page 10: Delivering growth and value

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-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

%QoQ %QoQ annualized

%QoQ 1.40% 1.00% 0.30% 1.10% 1.00% -0.50%-0.90%-0.40% 0.70% 1.20% 0.10% -1.20%-0.90%0.50% 1.50% 1.60%

%QoQ annualized 5.60% 4.20% 1.30% 4.30% 4.10% -2.00%-3.70%-1.50% 2.80% 4.80% 0.60% -4.70%-3.60%2.00% 6.00% 6.60%

Mar-00

Jun-00

Sep-00

Dec-00

Mar-01

Jun-01

Sep-01

Dec-01

Jun-02

Sep-02

Dec-02

Mar-03

Jun-03

Sep-03

Dec-03

Mar-04

As a result, steady GDP growth seems to be finally achievable

GDP started to recover in Q303 albeit at a slower pace than expected. Recovery has been led by the manufacturing sector, responding to lower interest rates and robust external demand

Sources: IBGE

Page 11: Delivering growth and value

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Source: Brazilian Central Bank, IBGE, ABN AMRO

forecast

IPC

A% S

elic%

Central Bank will likely continue to gradually ease monetary policy in 2004, reducing interest rates with caution and assessing recovery of economic activity

0

2

4

6

8

10

12

14

16

18

20

Jan-

02

Mar

-02

May

-02

Jul-0

2

Sep

-02

Nov

-02

Jan-

03

Mar

-03

May

-03

Jul-0

3

Sep

-03

Nov

-03

Jan-

04

Mar

-04

May

-04

Jul-0

4

Sep

-04

Nov

-04

0

5

10

15

20

25

30

IPCA (%, 12months) Selic (%, p.a.)

Dec 05 forecast

Selic (eop) 12% pa (maintained)

IPCA 12M 4.5% (revised from 5.1%)

Expected decline in inflation will allow further interest rate cuts

Dec 04 forecast

Selic (eop) 14.5% pa (revised from 13.5%)

IPCA 12M6.8% (revised from 6.0%)

Page 12: Delivering growth and value

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13% 15%25%

66%

141% 144% 149%

Mexico Argentina Brazil Chile USA UK NL

Total Credit to Private Sector / GDP1

Sources: World Bank, European Union Web site, IBGE

Declining interest rates will enable significant volume growth in the still underdeveloped Brazilian banking market;

The penetration of total credit shows a large long term growth potential

Economic stability and low interest rates will unleash the growth potential

2002

2003

1Q04

365

395

408

Credit to the Private Sector *

* does not include external financing to the private sector

+13%

+8%

+1.5%

PeriodEOP Balance

in BRL billion

Growth

nominal

Source: Brazilian Central Bank, ABN AMRO

Page 13: Delivering growth and value

0 13

Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004 / 2005

Appendices

Table of Contents

Page 14: Delivering growth and value

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Training Competitive market conditions Engagement in decision-

making process

Sustainability Model

Client knowledge

Segmentation

Since the acquisition of Banco Real we have updated our IT infrastructure to competitive standards

Spreading ABN AMRO

Corporate Values Respect Professionalism Integrity Teamwork

ABN AMRO Brazil is a client led institution

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Leveraging the local, regional and international presence to serve clients

Retail Banking

Consumer Finance

Commercial Banking

Insurance

Wholesale Banking

Asset Management

Largest foreign institution by branches, loans and deposits

Largest car financier in Brazil

Maintains relationship with +2500 companies

7th largest insurer; 5th largest pension fund by reserves

Relationship with +400 largest corporation in Brazil

4th largest privately owned; R$25.1 bio in AUM as of Mar 04

All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC

ABN AMRO has leading positions and strong market shares in the full range of financial services

Page 16: Delivering growth and value

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Leveraging on business units to grow the franchise

Payroll

Commercial and Wholesale

Retail

2

3

1

Mini Branch

Cross-sellingof financial

services, loan and investment

productsCurrent Accounts

Acquisition -Individuals and

Suppliers (SMEs)

Payroll Loans

2

3

1

Mini Branch

Main banker

Higher entry barrier

Capturing of Value Chain

opportunities through closer

client knowledge and Supplier

relations

As of 1Q04

• 34% of individuals current accounts were from Payrolls

• 29% of individual current accounts were from Mini Branches

Page 17: Delivering growth and value

0 17

Total Assets Total Loans

Net Income

Average inflationin period: 8.3% pa

The performance has been very good notwithstanding economic difficulties

22,26027,514

36,952

55,424 55,644

31,811

Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Mar-04

9,57711,701

17,359

27,236 27,286

14,065

Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Mar-04

298349

1,137

649

420

784

1,208 203

7

91

Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Mar-03 Mar-04

in BRL millionin BRL million

in BRL million

All data in this slide are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC

Cayman Effect (negative)

57

Cayman Effect (positive)336

Annual CGR 25.6%

Annual CGR 29.9%

Page 18: Delivering growth and value

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Results are underpinned by good efficiency ratiosOn a standalone basis ABN AMRO showed a significantly lower efficiency ratio in 2003 (55.7% w/o Sudameris), the integration of Sudameris impacts this ratio temporarily.

Efficiency Ratio

All figures based on Brazilian GAAP as published by each institution

65.0

%

55.9

%

56.8

%

55.7

%63.8

%

57.8

%

52.4

%

56.8

%

57.6

%

49.5

% 56.0

%

56.8

%

57.3

%

50.8

%

55.0

%

58.1

%

ABN AMRO Bradesco Itau Unibanco

Dec-01 Dec-02 Dec-03 Mar-04

61.5% 70.6% 76.8%

Dec-02 Dec-03 Mar-04

ABNAMROFee Revenue/ Personnel Expenses

Page 19: Delivering growth and value

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The franchise continues to deliver high ROE

24.6%

18.5%

31.8%

13.6%15.9%

20.8%19.1%

31.2%

ABN AMRO Bradesco Itau Unibanco

1Q03 1Q04

All figures based on Brazilian GAAP as published by each institution

Page 20: Delivering growth and value

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Retail is a key growth engine of the franchise ABN AMRO is stronger in the southeast, the wealthiest and most populated region of Brazil. Our strategy is to focus on this region and on the major Brazilian cities.

1 Bradesco

2 Itau

3 ABN AMRO

4 Santander*

5 HSBC*

6 Unibanco

5,167

3,172

1,947

1,909

1,516

1,279

Ranking Dec 03 Branch Network (includes Mini Branches)

* June 2003 figuresMini Branches: Branches in company premises

C&CC Revenue Breakdown

27%

55%

12%

5%

Retail Consumer Finance Commercial Banking Other

Page 21: Delivering growth and value

0 21

BR

L bi

llion

Consolidated Credit Portfolio(per business)

The growth of the retail loan book has been robust and relatively cycle proof

All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Dec-02 Dec-03 Mar-04

Commercial and Wholsale Consumer Finance Retail

+97%

+5%

+61%

Retail

Consumer Finance

Commercial and Wholesale

w/ SudamerisGrowth 1Q04/1Q03

+31%

Stable

-5%

w/o Sudameris

Page 22: Delivering growth and value

0 22

100

284

562

951

Classic Special Premium SMEs

This performance is due to above average acquisition of wealthy clients

62%54%

24%30%

13% 16%

2002 2003

Classico Especial Premium

ABN AMRO Individual Clients Acquisition (per segment)

83%

13%4%

Market Structure - Bankarized Individuals

Average Account Revenue(per segment)

Index: Average Revenue Classic Account = 100

Page 23: Delivering growth and value

0 23

Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004 / 2005

Appendices

Table of Contents

Page 24: Delivering growth and value

0 24

mill

ion

clie

nts

5.66.2

6.8 7.1

8.3

Dec-99 Dec-00 Dec-01 Dec-02 Dec-03

Since the acquisition of Banco Real the client base increased by nearly 50%

Besides the strong organic growth, Sudameris acquisition has accelerated the process

Page 25: Delivering growth and value

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The desired critical mass has been reached with the Sudameris dealABN AMRO is the 4th largest privately owned Brazilian bank by total loans and assets, and 3rd by deposits

Top Privately Owned Banks

Figures in Brazilian GAAP

Loansin BRL billion

Assetsin BRL billion

Depositsin BRL billion

Dec. 03 Dec. 033 Dec. 033Mar 04 Mar 04 Mar 04

54.3 176.1 58.054.9 161.0 59.2

38.7 118.7 36.738.9 127.0 34.6

27.9 69.9 25.427.3 71.5 27.4

27.2 55.4 26.727.3 55.6 26.1

16.3 58.9 18.00NA NA NA

1 Bradesco

2 Itau

3 Unibanco

4 ABN AMRO

5 Santander

All figures based on Brazilian GAAP as published by each institution

Page 26: Delivering growth and value

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21%

49% 46%

27%

29%29%23%

15% 16%28%

10%7%

Sudameris AAR Total

Classico Especial Premium SMEs

Client BaseJan 2004

Financial assets are concentrated in a small percentage of the population. The wealthiest 2% hold almost half of net financial assets.

51%

22% 26%

Individual Clients - MixJan 2004

50%

32%

18%

Sudameris added more scale in wealthy retail clients and SMEs

Page 27: Delivering growth and value

0 27

Our retail growth strategy consists in providing differentiated services

Page 28: Delivering growth and value

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Our retail model is relationship driven

Focus:1. Tailoring offers to needs and

potential of all segments2. Strengthening customer

relationships3. Managing ‘migration’ from

segment to segment over client’s lifetime

4. Growth in Especial and PJ5. Efficiency in Classico6. “Aspiration” in Premium

Especial

Clássico

Premium

LowerR$0–700

UpperR$2001-4000

PremiumR$4001–8000

Van GoghR$8001+

Selected Payroll to all Segments

Sole Proprietors PJ (up to R$20m)

PJ (up to R$100k)

Un

ive

rsity

Stu

de

nts

UpperR$701-1200

LowerR$1201–2000

Near-term growth potential

Page 29: Delivering growth and value

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Relationship’s costs and revenues have to be calibrated

Classico(Low-income)

Especial(MassAffluent)

Premium(Affluent)

Lower PJ(Small SME)

Banking Needs

Credit for consumption Credit for daily expenses Savings/transactional product

Credit for asset building Credit for consumption Credit for daily expenses Savings/transactional product

Investment to generateand maintain value

Investment for consumption Reserve for extra spending Health protection

Short-term credit products Some use of transaction

products (supplier payment) Similar financial needs

of Individual

Demographic

Monthly income ofR$0-1.2k

Individuals withrestricted financialaccess; low potentialsocial mobility

Monthly income ofR$1.2-4.0k

Middle-class andmass affluent

Monthly income of>R$4k

High social class,mature, and wealthy

Annual revenue of<R$0.5m

Small, informalcompanies or one-person proprietorships

Segment Descriptions3

53%

40%

6%2%

0

10

20

30

40

50

60

70

80

90

Individuals

Individuals Market Structure1,2

Individuals (m)

26%

29%

45%

0

50

100

150

200

Financial Assets

Premium(Affluent)

Especial(Mass Affluent)

Classico(Low-Income)

Unbankarized

Financial Assets (R$m)

SME Market Structure

SME 3

SME 2

SME 1(With at least oneemployee)

SME 1(Sole Proprietorship)

Unbankarized

No. ofCompanies (m)

0.1

0.3

1.5

0.2

2.2

% of Total

2.3%

7.0%

34.9%

4.7%

51.2%

AnnualRevenue (R$m)

5.0 - 20.0

0.5 - 5.0

< 0.5

< 0.5

< 0.51. Deposits + Investments - Credit Outstanding = Net Financial Assets; 2. Booz Allen & Hamilton Estimates. MfV Analysis; 3. Banco Real Segments - market segment definitions differ slightly

Page 30: Delivering growth and value

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Our service offer calibrated to our clients needs

Classico(Low Income)

Especial(Mass Affluent)

Premium/Van Gogh(Affluent)

PJ(SME)

To

“In-line with market” product and service offer Limited product range; debit card, instalment credit, and

savings account (w/ limited additions for Upper/ University) Direct channels with Greeters; access to staffed Call

Center for questions; and informative communication

Proactive relationship managers with a higher manager toclient ratio and trained managers, assistants and greeters

Proactive and frequent offer in every direct channel,branches and direct mailing

Delivery by ATM’s, Call Center, Internet, Banco24Horas,checkbook and branches

Debit cards as a foundation of the offer

“In-line with market” product and service offer Training, developing and hiring managers observing a new,

higher manager to clients ratio Branch rebuilding or remodelling to deliver select number

of “Van Gogh” and “Premium” Branches Specialised managers with clear responsibility and

accountability; specialised Call Center support

Explicit segmentation and focus on high potential clients(R$100k + turnover)

Automated credit tools and proactive direct channelavailability (lower PJ)

“Better than market” product and service offer Broad range of products including

multifunction cards, check books, etc. Full branch and channel access served by

assistants and managers

Core product vehicles include Realmaster,RealParcelado, and credit cards

Full branch access served by managers Full channel access

“Lower than market” product and service offer Core product vehicles include Realmaster and

RealParcelado Full branch access served by managers Full channel access

No explicit segmentation Package discounts by investment level Exclusive area in branch served by managers

From

These changes: 1) Bring products and services in-line with customer expectations and market2) Strengthen relationship management capabilities

Page 31: Delivering growth and value

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Credit cards is a key product for the mass affluentABN AMRO (including Sudameris) has a market share of 6.5% of the credit card transaction volume and 4% of the cards in force, therefore has a higher than average utilisation ratio and a solid base for growth

# of Cards Transaction Volume

Source: ABECS, Mastercard, Visa market research

Itau12.6%Bradesco

13.7%

Unicard7.9%

Santander4.2%

HSBC3.6%

Other15.4%

Credicard19.0%

Bco. Brasil16.9%

ABN AMRO6.7%

Credicard16.1%

Bco. Brasil12.9%

Itau12.9%

Bradesco12.4%

Unicard10.2%

Santander5.9%

ABN AMRO4.0%

HSBC3.7%

Other21.9%

Page 32: Delivering growth and value

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Credit cards have a significant growth potential

1.00

1.50

2.00

2.50

Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04

500

550

600

Mar-03 Jun-03 Dec-03 Mar-04

Transaction Volume# Credit Cards

BR

L m

illio

n

...and a solid base for growth

All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC

mill

ion

Page 33: Delivering growth and value

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Debit cards enable to generate volumes with our retail client base

4.8

5.5

4.8

5.0

5.3

5.5

5.8

Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04

# Debit Cards

BrazilDebit cards have grown faster than other electronic payment methods, largely due to low income bankarization. 2003 transaction volume was up 59%

ABN AMRODebit card business grew 63% in 2003, exceeding the debit market growth ratio, reducing check processing costs

Source: Visane, ABN AMRO

mill

ion

Page 34: Delivering growth and value

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We have created a true multi-channel platform to best serve our clients

Direct Channels include: call center, Internet, ATMs

Direct Channels/ Total Transactions74% in 1Q04 (up from 50% in 1998)

Branch Transactions/ Total Transactions21% in 1Q04 (down from 23% in 4Q01)

Direct Channel Availability99% in 1Q04 (up from 97% in 4Q01)

Internet UsersIndividuals 34% in 1Q04 (up from 17% in 4Q01) Corporates 79%in 1Q04 (up from 17% in 4Q01)

Page 35: Delivering growth and value

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Distribution and differentiation have become key competitive advantages

Created in 2002 by the Financial Executives Magazine, e-finance award is intended recognize the most prominent financial institutions in the implementation of infra-structure

solutions, IT and telecom applications

2003 categories:2003 categories: Internet Banking, Business Platform, Outsourcing Strategy, Internet Banking, Business Platform, Outsourcing Strategy, Branch BackOffice SolutionsBranch BackOffice Solutions

2004 categories: Retail Internet Banking, New Call Center Technologies, 2004 categories: Retail Internet Banking, New Call Center Technologies, Mobile Mini BranchMobile Mini Branch

Reliability

Transparency

Accessability

Driver of client satisfaction for mass affluent and client profitability for low income

Page 36: Delivering growth and value

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Our strategy and employees have created a valuable brand

Ranking “MOST VALUABLE BRAZILIAN BRANDS”Ranking “MOST VALUABLE BRAZILIAN BRANDS”

Source: Interbrand - Dinheiro Publication

Page 37: Delivering growth and value

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Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004 / 2005

Appendices

Table of Contents

Page 38: Delivering growth and value

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The current performance is impacted by the integration of Sudameris

All data in this slide are in Dutch GAAP in BRL for C&CC Brazil

Figures in Dutch GAAP

in BRL million 1Q2003 4Q2003*

Revenues 1,284 1,562

Expenses (814) (1,115)

Operating Profit 469 447

Provisions (149) (222)

Oper. Profit before Taxes 320 225

5.9%

17.5%

6.8%

28%

Taxes (88) 20

Cayman Effects 57 11

Efficiency Ratio 61.7% 69.5%

1Q04/ 4Q031Q2004

1,654

(1,129)

525

(237)

288

(49)

(7)

66.7%

28.8%

38.7%

11.9%

59.1%

-10%

1Q04/ 1Q03

1.3%

Net Profit 172 204 198 15.1%

Page 39: Delivering growth and value

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Spreads are declining but volumes are growing

Relative Spreads

0.60

0.70

0.80

0.90

1.00

1.10

1.20

2001

Q1

Q2

Q3

Q4

2002

Q1

Q2

Q3

Q4

2003

Q1

Q2

Q3

Q4

2004

Q1E

Q2E

Q3E

Q4E

2005

AV

G

3-Q

ua

rte

r M

ov

ing

Av

era

ge

, Q

1 2

00

1 =

1.0

0

Personal Loans Auto Loans Mortgages

Cards Overdrafts Loan Products

Assets

0

5,000

10,000

15,000

20,000

2001

Q1

Q2

Q3

Q4

2002

Q1

Q2

Q3

Q4

2003

Q1

Q2

Q3

Q4

2004

Q1E

Q2E

Q3E

Q4E

2005

AV

G

R$

mil

lio

n

Overdrafts Personal Loans

Auto Loans Other Products - PJ

Though spreads have declined, volumes have sustained solid growth and are expected to grow further

Page 40: Delivering growth and value

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The integration is going smoothly and delivers the expected synergies

$0.0 $14.1$37.4 $45.0

$83.6$120.7

$300.0

Oct

-03

No

v-0

3

De

c-0

3

Jan

-04

Fe

v-0

4

Ma

r-0

4

Jun

-04

Se

p-0

4

De

c-0

4

Ma

r-0

5

Jun

-05

Se

p-0

5

De

c-0

5

Total Synergies CapturedBRL million

Integration plans are being executed by 18 Integration Fronts (8 already completed)

Integration process is on track with BRL120.7 mio synergies captured as of Mar 2003 (annualised cost reduction)

53%of annualised cost reduction is related to FTE reduction and the balance related to other expenses

Actual

Planned

Page 41: Delivering growth and value

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Sudameris Acquisition & Integration

ABN AMRO acquired 94.57% of Banco Sudameris Brasil S.A. in a R$ 2.2 billion

transaction: R$ 527 million cash and balance through share exchange for ABN

AMRO Real shares (11.58%)

Estimated synergies: R$ 300 mln p.a. starting in 2005

Global integration plan designed June 2003 along with due diligence

Creation of 18 working fronts, of which 8 have fully executed, 6 depend on other

migrations (e.g. IT) and 4 are currently detailing migration.

Fronts already integrated: Audit, Asset Management, Private, Compliance,

Legal, Treasury, Insurance and Consumer Finance

Implementation started as of closing in December 2003

ABN AMRO is ahead of schedule regarding implementation, capturing synergies

both in the scope of revenues, personnel and administrative expenses

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Sudameris Acquisition & Integration

In October 2003 a career orientation program was created to support personnel

reallocation

A ‘Best Practice’ approach is being followed, e.g. for FX and Trade Finance

Sudameris’ integrated operational model will be adopted

Complementary businesses will be maintained, e.g. Sudameris retail driven equity

brokerage is already fully operational under ABN AMRO

The two banks/operations shall be fully integrated by year end 2004

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Loans / Total Assets Ratio

In a scenario of declining interest rates ABN AMRO has pursued to build on its loan portfolio, expanding client relationship and capturing cross-selling opportunities

Client led growth will continue to produce quality earnings

44.2%

40.4%

36.4%

46.4%

39.9%

34.1%35.5%

47.0%

35.6%34.6%

30.8%

32.6%

49.1%

38.2%

30.6%

49.1%

ABN AMRO Bradesco Itau Unibanco

Dec-01 Dec-02 Dec-03 Mar-04

All figures based on Brazilian GAAP as published by each institution

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Non-performing Loans >90 days

The expansion of the lending business was implemented with no prejudice to asset quality; performance of the the loan portfolio is fully within market standards.

Growth will be value creative as a result of sound credit policies

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04

Market ABN AMRO

Source: Brazilian Central Bank

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0 45

Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004/ 2005

Appendices

Table of Contents

Page 46: Delivering growth and value

0 46

The Dynamics of SustainabilityGoverno

EmployeesClient

Government

MediaCommunity Suppliers

Environment

Shareholders

ABN AMRO

Labor Union

Society

ABN AMRO has a leading role in creating and delivering sustainable value

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Key Initiatives for Sustainability

Core Business Linked Initiatives New financing products directed to social and environmental projects

Assessment of the social and environmental risk of ABN AMRO clients

MicroCredit - Credit offering to population traditionally excluded by the financial sector Ethical Investment Fund investing in socially and environmentally responsible enterprises

Management Initiatives Eco-efficiency / environmental management (e.g. recycling)

Staff Diversity initiatives

Supply Chain

Engagement and mobilization of suppliers

Social and environmental criteria as a key factor in the choice of supply chain partners

Bi-annual publication of Brazilian Sustainability Report

Social Initiatives 70% of our financial donations are destined to public education and the remaining 30% to initiatives in

income generation, environment and diversity

Wherever possible, we encourage our employees to be engaged in our social action initiatives

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Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004/ 2005

Appendices

Table of Contents

Page 49: Delivering growth and value

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Outlook 2004 / 2005• Inflation under control

(IPCA forecast 6.8% 2004; 4.5% 2005)Revised from 6.0% 2004; 5.1% 2005

• Pick-up of economic growth(GDP forecast 3.7% 2004; 3.6% 2005)

• Lower foreign exchange volatility(BRL/USD forecast 3.05 eop 2004; 3.25 eop 2005)maintained

• Lower interest rates(Selic forecast 14.5% eop 2004; 12.0% eop 2005)Revised from 13.5% eop 2004; maintained for 2005

• Growing credit portfolio, offsetting lower margins and maintaining standards of credit quality (credit portfolio growth forecast for 2004 in the range of 20%)

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Thank You

Page 51: Delivering growth and value

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Current Brazilian Business Environment

Overview of ABN AMRO Brazil

Overview C&CC Brazil

Financial Performance

Sustainability

Outlook 2004 / 2005

Appendices

Table of Contents

Page 52: Delivering growth and value

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Sovereign Spread

Economic Environment

Sources: Brazilian Central Bank, Bloomberg

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Jan-

02

Mar

-02

May

-02

Jul-0

2

Sep

-02

Nov

-02

Jan-

03

Mar

-03

May

-03

Jul-0

3

Sep

-03

Nov

-03

Jan-

04

Mar

-04

May

-04

0

500

1000

1500

2000

2500

3000

BRL / USD EMBI Brazil (bps)

BR

L

EM

BI B

razil

Low international interest rates have pushed investors towards higher yield instruments. In this environment Brazil sovereign spread has been driven to historically low levels, at 500- 700 bps over Treasuries

Page 53: Delivering growth and value

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External Private Debt Rollover RateEconomic Environment

Sources: Brazilian Central Bank, ABN AMRO

66%

51%

74%

102%

133%

90%

55%

52%

29% 26%

57%

94%

81%

89%

98%

60%

40%

25%

48%

43%

45%41%

30%

36%

58%

63%

28%

67%

Jan-0

2

Mar-

02

May-0

2

Jul-02

Sep-0

2

Nov-0

2

Jan-0

3

Mar-

03

May-0

3

Jul-03

Sep-0

3

Nov-0

3

Jan-0

4

Mar-

04

External Private Debt* Rollover Rate

( * ) External private debt defined Bonds, Notes, Commercial Papers, Direct Loans and Commercial Credit

run-up to 2002 presidential elections

After a sluggish performance in 2002 external private debt* rollover picked up reflecting the renewed appetite for Brazil. The 2004 drop is a consequence of awaiting definitions with regards to international interest rates.

Page 54: Delivering growth and value

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3.96%3.45%

2.79% 2.74%

2.07%

1999 2000 2001 2002 2003

% Public Debt / Exports

Business Environment

Economic Environment

Source: Brazilian Central Bank, ABN AMRO

8.4%

6.6% 6.1% 6.6% 6.5%

8.9% 9.2%

11.4%

13.3%14.8%

15.7%14.5%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004* 2005*

% Exports/ GDP

Page 55: Delivering growth and value

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Source: ANBID

Asset ManagementOverview

Mutual FundsAUM

Market Share

1 Banco do Brasil 111.2

2 Bradesco 75.2

3 Itaú 74.6

4 CEF 27.1

5 Citibank 26.6

6 ABN AMRO 25.1

7 HSBC 24.5

8 Santander 23.6

9 Unibanco

10 BankBoston

23.0

21.9

20.8%

13.8%

14.1%

5.0%

4.9%

4.7%

4.2%

4.4%

4.6%

4.3%

ABN AMRO ranks 3rd among privately owned retail driven asset manager

as of Mar 2004

Other 103.0 19.2%

TOTAL 535.8 100%

Asset Managers in BRL billion

Page 56: Delivering growth and value

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Credit Portfolio ABN Amro and SudamerisOverview

BR

L m

illio

n

Consolidated Credit Portfolio

All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC

Source: Brazilian Central Bank, ABN AMRO

2002

2003

1Q04

365

395

408

Credit to the Private Sector *

+13%

+8%

+1.5%

PeriodEOP Balance

in BRL billion

Growth

nominal

+15%

+59%

+0.2%

Growth

ABN AMRO BRAZIL

16,560

26,287 26,337

Dec-02 Dec-03 Mar-04

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ABN AMRO consumer finance division is Brazil’s largest car financier through its Aymoré brand, driven by strong customer service. Main competitors are aggressively reducing margins in order to obtain additional market share.

Car Financing Market Share

Source: DETRAN

Consumer FinanceOverview

42.4% 38.2% 36.5%

11.2% 11.7%

14.2%16.4%

15.8%22.2% 18.0%

7.1%5.3%4.4%

10.4%8.9%4.5%

17.1%

15.8%

2001 2002 2003

ABN AMRO

Bradesco

Itau

Votorantim

Santander

Other

100%

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WEB MotorsOverview

WebMotors has 85% share of the views in the internet auto segment

4% of internet visits search for information on the auto segment

WebMotors Audience

Category #

Unique users / day 70 thousand

Unique users / month 2 million

Page views / month 28 million

Banner views / month 48 millionSource: IBOPERating

Source: ABN AMRO

Page 59: Delivering growth and value

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MortgageOverview

Source: ABECIP

2003 Market Share

631713 725

451 448

2002 2003 Mar-04

ABN AMRO Real Sudameris

in BRL million

Mortgage Balance

Historically 75% of assets are acquired through the branch network. Intermediaries such as developers and real estate brokers provide a growth platform. The Brazilian mortgage market may benefit from the new law (currently under approval) regarding statutory lien.

1,164 1,173

All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC

CEF45%

Itau15%

Bradesco15%

Santander6%

Nossa Caixa4%

Bank Boston1%Other

5%

HSBC2%

Unibanco3%

ABN AMRO4%

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Awards

Awards

Ranked among “100 Best Workplaces” in 2002 and 2003Ranked among “100 Best Workplaces” in 2002 and 2003

Ranked among “100 Best Workplaces for Women” in 2003Ranked among “100 Best Workplaces for Women” in 2003

Created in 1998 by Exame magazine the guide to identify the best

companies in People Management

Page 61: Delivering growth and value

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Cautionary Statement regarding Forward-Looking Statements

This announcement contains forward-looking statements. Forward-looking statements arestatements that are not historical facts, including statements about our beliefs and expectations.Any statement in this announcement that expresses or implies our intentions, beliefs,expectations or predictions (and the assumptions underlying them) is a forward-lookingstatement. These statements are based on plans, estimates and projections, as they are currentlyavailable to the management of ABN AMRO. Forward-looking statements therefore speak only asof the date they are made, and we take no obligation to update publicly any of them in light ofnew information or future events.

Forward-looking statements involve inherent risks and uncertainties. A number of importantfactors could therefore cause actual future results to differ materially from those expressed orimplied in any forward-looking statement. Such factors include, without limitation, the conditions inthe financial markets in Europe, the United States, Brazil and elsewhere from which we derive asubstantial portion of our trading revenues; potential defaults of borrowers or tradingcounterparties; the implementation of our restructuring including the envisaged reduction inheadcount; the reliability of our risk management policies, procedures and methods; and otherrisks referenced in our filings with the U.S. Securities and Exchange Commission. For moreinformation on these and other factors, please refer to our Annual Report on Form 20-F filed withthe U.S. Securities and Exchange Commission and to any subsequent reports furnished or filedby us with the U.S. Securities and Exchange Commission.

The forward-looking statements contained in this announcement are made as of the date hereof,and the companies assume no obligation to update any of the forward-looking statementscontained in this announcement.