Fitch Assigns International Ratings to Banco da Amazonia.

SAO PAULO -- Fitch Ratings, the international rating agency, has today assigned the following international ratings to Banco da Amazonia S.A. (Basa):

-- Individual 'D';

-- Long-term foreign and local currency 'BB-';

-- Short-term foreign and local currency 'B'.

At the same time, the agency affirmed Basa's support rating of '4' and the long-term and short-term national ratings of 'A+(bra)' and 'F1(bra)', respectively. The Rating Outlook for all of the long-term ratings is Stable.

The long-term ratings assigned to Basa reflect control by the National Treasury and the bank's major importance to Brazil's North Region, which compensate for its outdated technology and controls, deficiencies that are being corrected by current management. The individual rating includes an ambitious strategic planning, which foresees sizable loan growth, in addition to its traditional development lending products. Market risk is modest, and the high risk of its development credit is minimized by the continued support of the federal government, which has successively restructured the maturities of rural lending using resources of the Constitutional Financing Fund of the North (FNO), which represents the bulk of the bank's credit risk. The foreign and local currency ratings are at Brazil's sovereign ceiling.

Basa plays a major role in the development of the Amazon Region, being responsible for 52% of the loans conceded in the region in 2003. It benefits from being the manager of the FNO and administrator of the Amazon Investment Fund (Finam), whose administration and delcredere fees are intended to compensate for the risk assumed in development credit, a consequence of the bank's social function. Basa's objective, as well as its main challenge, is to expand the volume of resources available for the economic and social development of the North Region at acceptable loan loss levels. To do so, its current management, which took office in mid-2003, has undertaken a broad restructuring with the assistance of consultants, beginning with renovation of its technology platform, needed to unify the bank's systems base. The bank is intensifying operations with its customer base, offering higher spread commercial products, and intends to increase its network to 140 branches to improve coverage in its vast business region.

Earnings, excluding 2001 when the federal government cleaned up the bank, have been good for a development bank, but substantially supported by gains on its securities (70% of June 2004 assets). The bank has endeavored to increase its higher margin commercial lending, selecting amongst its development customers with a better track record, seeking to compensate for the decline in securities gains due to the lower, albeit still high, local interest rates. Consolidated pro forma lending (i.e. bank and FNO), being 94.5% related to development activities and 89% using FNO resources, grew 18% in the first half of 2004 to BRL6,156 billion. Basa shares 50% of the risk on 52% of the FNO loans (BRL5,481 million), with 14.9% classified in the lowest risk ratings 'D-H', not unusual for a development bank and significantly benefiting from the successive restructurings under the aegis of official laws. Basa's portfolio quality has fluctuated considerably in recent years. Due to the bank's need for more adequate credit systems, the Central Bank requested a preventive reserving of a number of loans, with those in ratings 'D-H' increasing to 25.3% of the total at June 2003. With implantation of the controls, this ratio improved to 4.7% at June 2004, better than the financial system's average. Coverage for loan losses (97.5% of the bank's 'D-H' loans) strictly adheres to local rules. Basa also has provisions equal to 13.2% of its portfolio that shares risk with the FNO (equivalent to 88.1% of the 'D-H' loans for which Basa is responsible at the FNO).

Basa, founded in 1942, is 96.92% controlled by the federal government. A publicly traded company, it acts as the development bank for Brazil's North Region, focusing mainly on small rural producers and micro and small companies. It has 106 outlets, including 88 branches.

Note to Editors:

Fitch support and individual ratings for banks: Fitch's Individual ratings assess how a bank would be viewed if it were entirely independent and could not rely on external support. Its 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.