The super.

Three thousand branches, 15.5 million customers and 32.7% annual net profits growth in 2004. Marcio Cypriano, president of Brazilian banking behemoth Bradesco knocks on wood: "Thank God the bank is doing well." He also presides over the Brazilian Banking Federation, Febraban, an experience he compares to being a building manager. "Everybody wants something, but their contributions are very small." LATIN TRADE Brazil Editor Carlos Adese spoke with Cypriano at Bradesco's headquarters in Osasco, near Sao Paulo about interest rates, international expansion and a second Lula administration.

According to Febraban, the benchmark Selic rate will hit 17% by the end of 2005. Don't you think that the government is overdoing its inflation strategy?

It is a tool the Central Bank uses, and it will not cease to do so. The inflation goal must be achieved, and the interest rate is a very important part of the government's plan. Our expectation is that the rate will start to drop beginning in August and end the year at something around 17%.

Many people in the private sector say that the banks are in fact helped by Brazil's interest rates, among the highest in the world. What is your view?

That's nonsense, because a high interest rate is not important to the banks. But, unfortunately, that is a common sentiment. With lower interest rates, the default rate is much lower and the level of credit transactions is higher. For the banks, it is important to increase the level of transactions. If we can manage to lend more money, we increase our chances of making much more money.

The growth in credit for ordinary individuals is the banks' latest big bet. Why now?

Because the purchasing power of ordinary people is increasing, and there was a very strong, repressed demand to finance vehicles, goods, and such. That's why Bradesco made several agreements with the retail sector, like we did with Casas Bahia. Financing for individuals last year grew by 35.5% compared to 2003.

Does Bradesco have foreign expansion plans?

What we have abroad meets the needs of our clients. We are in New York, the Cayman Islands, Luxembourg and the Bahamas, and all the needs of our private clients, exporters and importers are met within that existing structure.

And in Latin America?

We have a small operation in Argentina that we started when the country's problems had already begun, and the idea is not to expand further in Latin America. There's still a lot of room to grow inside Brazil. Considering the economically active population of the country--about 90 million people--only half of them have a bank account. That shows that we still have a lot of serious growth potential.

What do you make of the Lula administration?

It has been excellent. The fulfillment of his responsibilities and the way he has kept up everything that was done during previous governments was a nice surprise. His is a pragmatic government. [Economy] Minister [Antonio] Palocci was a good hire, and we are very pleased. When I say "we," I mean Brazilian people in a general sense and not just the financial system. Sometimes people say that the financial system is protected, and that's not true. [Lula] has been very good for the country. Perhaps what is lacking is more definition among the regulatory agencies regarding infrastructure investments. We cannot continue with infrastructure problems in roads, ports, and so on because it's hard on the country. During the soybean harvest there is a 100-kilometer line of trucks waiting at the Paranagua port. It's absurd. I think that the government has to focus more on making public-private partnerships in order to encourage infrastructure investments.

What will be the impact of the real's revaluation?

Anyone who owes in dollars will be very happy; a declining dollar is a big problem for exporters. The country grew a lot last year, basically due to exports. We are working with a forecast of an average dollar value of 2.80 until the end of 2005. At that rate, it's still a good deal for exporters.

Presidential elections are coming in 2006. Do you fear any negative effects in the economy?

I don't believe that anything very different will happen in 2006. I have no doubt that, the way things are, Lula's government will be easily reelected. think we will have [after the elections] another four years of growth, and maintenance of the status quo.