Banco Popular Inc. to Be Important Investor in UBCI, S.A, Holding Company of Cuscatlan Group.

NEW YORK & SAN SALVADOR, El Salvador -- In April 2005, Grupo Popular de Puerto Rico (GPPR) and Grupo Cuscatlan signed an investment agreement through which GPPR will invest US$125 million to acquire 19.99% of the common stock of Corporacion UBC Internacional, S.A. (UBCI). The inclusion of GPPR as a shareholder of Grupo Cuscatlan should bring commercial opportunities to the latter through the sharing of their clients' databases and access to new markets. Additionally, Cuscatlan should benefit from the experience of Popular in its main market and in the United States.

The transaction will take place through a common stock issuance by UBCI that will be acquired by Popular International Bank, Inc. Before the transaction takes place, all the required regulatory approvals, including the one granted by the Federal Reserve (U.S.), must be obtained. It is expected that the proceeds from this issuance will be used by UBCI to capitalize some subsidiaries within the region or for further expansion, in addition to the scheduled dividend distribution for UBCI stockholders. Due to the intended use of the proceeds, Fitch considers that in the medium term this transaction will not result in a substantial enhancement to the capital position of UBCI or to any of the rated subsidiaries, thus this operation should not have an immediate effect on ratings. Fitch affirms the international ratings of 'BB' (long-term), 'B' (short-term), Individual 'D' and Support '5', with a Negative Rating Outlook, currently assigned to Banco Cuscatlan de El Salvador, S.A. and its subsidiaries.

With US$4,527 million in assets as of March 31, 2005, UBCI is the second biggest financial group in terms of assets in Central America and Panama. UBCI has been incorporated in accordance to the Law of the Republic of Panama and operates under the General Law of Stock Corporations of the Republic of Panama. The entity initiated operations as a holding company in 2001 and has a controlling position in Inversiones Financieras Cuscatlan, S.A. (El Salvador), Corporacion Accionaria UBC, S.A. (Costa Rica), Grupo Cuscatlan Guatemala, S.A. (Guatemala), Grupo Cuscatlan Panama, S.A. (Panama), Banco Cuscatlan Honduras, S.A. (Honduras), and a minor banking concern in the British Virgin Islands. Through an important M&A strategy, and supported by the perceived value of the franchise, UBCI has expanded its presence throughout the Central American region in the recent past, and has thus diversified its sources of income.

Popular Inc., the main financial corporation in Puerto Rico and the 29th largest bank in the U.S. financial system, has a Fitch rating of 'A' (long-term). With more than 111 years of activity, the institution has US$44,402 million in total assets.

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.