This approach has enabled Itaú to participate effectively in social projects in all regions of the country.

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2 INTRODUCTION Itaú s aim in publishing its Social Balance is to illustrate the different facets of its business activities. Employee training and development and the policy of social benefits are all covered here, while in the role of corporate citizen, Itaú demonstrates its commitment to society in the way it channels resources to the social needs of the communities where it is established. In its 55 years of history, Itaú has always operated in accordance with the values of its corporate culture: respect for the human being, strict observance of the laws and regulations and the continual striving to develop its business. Launched in 2000, Itaú s Code of Ethics is one more instrument which encapsulates these values by not only providing guidance to employees in their personal and professional conduct, but also revealing details of the Code to customers and other members of the Bank s public. Itaú s role in the Ethos Institute Companies and Social Responsibility (Instituto Ethos - Empresas e Responsabilidade Social) and the support for its projects are also a reflection of Itaú s commitment to strict ethical and moral standards. In 2000, Itaú was among the top ten companies that were ranked for their activities in the social area according to the Exame Guide to Good Corporate Citizenship (Guia Exame de Boa Cidadania Corporativa). The guide is a study conducted by Exame magazine in partnership with the Ethos Institute, covering 211 companies and appraising the following items: Values and Transparency, Employees and Internal Public, Environment, Suppliers, Consumers and Customers and Community, besides Relations with the Government and Society. Created in 1993 to improve results of initiatives in the social field, the achievements of the Itaú Social Program have received recognition from the Association of Sales and Marketing Directors of Brazil (Associação dos Dirigentes de Vendas e Marketing do Brasil - ADVB). In 2000, Itaú Social was awarded the Top Social prize for the second consecutive year. The Bank also seeks to make a contribution to the educational standards of the Brazilian people by democratizing the propagation of Brazilian art and culture, thus creating citizens who are better informed and can contribute more effectively to their own personal development as well as to that of the country. The Instituto Itaú Cultural is becoming a hallmark in the cultural field. Its various activities aim to develop the talents of artists, curators and the public itself, encourage the work of new artists and new artistic languages as well as ensuring that the results of such efforts penetrate an ever broader segment of the Brazilian population.

3 ITAÚ SOCIAL PROGRAM In 1993, Itaú restructured its activities in the social field by focusing its efforts on the educational and health areas in order to achieve more effective results. Thus, the Community Support Program was born to be renamed the Itaú Social Program in Itaú Social is solidly based on the concept of partnership: through the channeling of efforts and the sharing of responsibilities and experiences, innovative and quality social projects can be brought to fruition for the benefit of society. This approach has enabled Itaú to participate effectively in social projects in all regions of the country. During the year, the Itaú Social Foundation (Fundação Itaú Social), was incorporated with assets of R$ 170 million, thus ensuring sufficient resources to support programs in the social area. In 2000, Itaú invested R$ 11.3 million in 185 projects, including the transfer to Unicef of funds raised from the sale of PIC Itaú-Unicef (an Itaú capitalization plan), worth R$ 2.1 million, for application in programs connected with education in Brazil. The Education and Participation Project is one of the principal initiatives of the Itaú Social Program, the result of a partnership with Unicef - United Nations Children s Fund and Center for Study and Research in Education, Culture and Community Action (Cenpec). The project was conceived from the conviction that the cooperation of society with the State is fundamental in the implementation of public policies, as well as in the strengthening of partnerships between different sectors of private initiative and the community. Directed at social organizations working in support of state schools located in low-income communities in outlying areas of major cities and in urban and rural areas of upstate cities, these institutions have made a valuable contribution to the education of Brazilian children and adolescents. The project includes the activities described in the following paragraphs. The Itaú-Unicef Award aims to identify, optimize the results and publicize programs that contribute to public education schemes developed by community organizations. Launched in 1995 and awarded every two years, 2001 will be the fourth time the prize has been given. On the last three occasions, various programs received the award based on the criteria of innovation, the potential for applying the ideas elsewhere and the social impact. The Regional Educators Meetings (Encontros Regionais de Educadores) have the objective of training the community educators who represent the participating entities in the Itaú-Unicef Award scheme. Three meetings have already been held, these occurring in the year when no Itaú- Unicef Award is made. Through the means of presentations, round tables and workshops, community educators from various Brazilian states participate in activities involving professional training, the discussion of different experiences and debates on specific themes. The key theme of the Meetings in 2000 was Education as a means to Social Inclusion. 2 The Itaú Social Program aims at improving, now and in the future, the profile of a society, which can and should increase the individual opportunities, as from support for basic teaching and health, two fundamental rights of the citizen

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5 In 2000, Itaú invested R$ 11.3 million in 185 community projects, the large part of which was concerned with the education of Brazilian children and adolescents In 2000, the Meetings were held in Belo Horizonte, State of Minas Gerais, Fortaleza, State of Ceará and São Paulo, with the participation of about 600 representatives of NGOs and representatives of state schools. The results of these meetings are recorded in the Education and Participation Collection publication, which is directed to educators that work in NGOs for children and adolescents from low-income families. The publication is distributed free of charge to organizations responsible for the education programs in support of state-run schools. In 2000, two new titles were added to the collection: NGO - Sport: the Citizen coming on to the Field and NGO - Art which Opens up Possibilities. Other publications making up the Collection: We, You and Your Team NGO - Your Social Function NGO - Tendencies and Necessities NGO - Your Mobilizing Action NGO - Partnership of the School NGO - Partnership of the Family NGO - Identity in Mutation NGO - Convenience Space In 2000, Itaú and Unicef created and implemented the Partnerships Program (Programa Parcerias) as part of the Education and Participation Collection. The Program is designed to create a technical and financial support network for the 30 projects selected on the basis of quality as finalists in the Itaú-Unicef Award 1999 and the contribution these make to the successful education of children and adolescents as well as their capacity for social transformation. Thanks to the financial and technical support provided, the Partnerships Program, in which 24 foundations, institutes and organizations have enrolled, has been instrumental in the introduction of courses and scholarships, the preparation of institutional material on the entities themselves and as a means of propagating the projects, among others. This coordinated effort among organizations, companies, institutions and foundations on the one hand with community entities on the other, constitutes an important strategic action in making a positive impact on social realities. Since its first edition in 1995, the Education and Participation Project has involved 1,200 NGOs, indirectly benefiting 12,000 educators and 175,000 children. Another important activity in the Itaú Social Program is the Project for the Improvement of Municipal Education, for strengthening and coordinating the various components involved in the area of municipal education. The Project provides the basis for the development of an educational policy to enable young people to complete 4

6 their primary education and successfully prepare them to become citizens. The project is aimed at representatives of municipal secretariats of education, members of educational advisory bodies and university and community representatives and is designed to train them in developing educational projects in their respective municipalities. In 2000, the Project for the Improvement of Municipal Education was active in 150 municipalities in the states of Amazonas, Roraima, Maranhão, Piauí, Ceará, Paraíba, Pernambuco, Sergipe, Alagoas and Bahia. The project involved directly more than 300 educators and indirectly about 32,000 other professionals to the benefit of 700,000 students. In the same context as Improvement of Municipal Education, the Training of Educational Managers was implemented directly in another 65 municipalities and was centered on the regional centers of Presidente Prudente, Pereira Barreto, Miracatu, Itararé and Botucatu, in the State of São Paulo. The Roots & Wings project, launched in 1995, proceeded apace in 2000, principally by using the technical material provided by the Improvement in the Municipal Education Project. To date, the project has distributed about 50,000 kits to various municipalities throughout Brazil as well as airing the details on Public Broadcasting TV Channels (TVs Educativas). Roots & Wings is the result of wide-reaching work in identifying and publicizing successful experiences in Brazilian state schools to an audience of teachers and school managers. The Health and Citizenship Project was of special note in the public health field. Under this project, 12 manuals were prepared for the training of municipal health workers and written in partnership with the Public Health Faculty of the University of São Paulo and IDS Institute for the Development of Health. The manuals cover themes such as Health Planning, Public Health Supervision, Sanitation Supervision, Management of Material Resources and Medicines and Information Systems, among others. In 2000, Health & Citizenship manuals were distributed to municipalities in all Brazilian states. Itaú also provides financial support to programs in partnership with other organizations and institutions, such as the Solidarity Training (Capacitação Solidária) and Literacy Solidarity (Alfabetização Solidária) Programs, developed by nonprofit, non-government organizations. The Solidarity Training Program (Programa Capacitação Solidária) is 5

7 The Literacy Solidarity Program is aimed at Brazilian adolescents in cities in the Northeast of the country as well as the Federal District of Brasília and in the metropolitan areas of São Paulo and Rio de Janeiro with the support of corporations, the Ministry of Education and private individuals. Itaú also supports the Friends of the School project (Amigos da Escola), an initiative of the Brazil 500 Years Project, TV Globo and the Solidarity Community, set up to contribute to the improvement of the lives of children of school age. Itaú is a participant in the Canal Futura, a TV station with 15 other leading companies and institutions. Canal Futura has been responsible for the mobilization of the community in the search for solutions to educational problems, contributing to educational qualification and access to knowledge. With favorable impacts on the quality of life in Brazil, this is a pioneer project in which the private sector has organized a TV station directed towards Education under an initiative of the Roberto Marinho Foundation. In the photos, children participating in the Citizens School and Eradication of Child Labor in the Good Future Goldfield, two of the winning programs of the Itaú-Unicef Prize 1999 tailor-made for adolescents from lowincome families with limited access to educational and technical skills programs. The courses combine the teaching of specific skills with instruction that widens the cultural and social horizons of the students. In 2000, the program selected and financed 1,227 projects involving about 36,000 students. The Speak up Brazil Program, under the Ministries of Education and Sport, has been an important channel for providing support to the public in general as well to as education specialists throughout the country. Responding to substantial demand, the Itaú Social Program provided new computer equipment for the technological modernization of the Program s Caller Service Center. With the objective of providing information and mobilizing society, Itaú has also given its support to universities and other institutions responsible for arranging various seminars and congresses that 6

8 touch on such themes as Private Social Investment, Social Responsibility of the Companies, Ethics, Funding, Partnerships and the Evaluation of Policies and Social Programs, among others. Several entities have received financial support from the Bank for health care projects. Associations and other entities providing voluntary community programs have also received financial backing and equipment from Itaú Social. Itaú Social provides support to publications and reports on such themes as the situation of young children in Brazil, education, drug prevention and books for those with sight deficiencies, among others. One of the publications that has received support is the first report entitled The Situation of Young Children in Brazil 2001, published by Unicef, which focuses on the early stage in the life of a Brazilian child (up to the age of six). This document contains a breakdown of the Brazilian states with their respective municipalities listed in accordance with the Infant Development Index - IDI, developed by Unicef, an important instrument that enables the optimum use of resources as well as allowing the municipalities to draw up policies for children in the community. Itaú supports programs that contribute to the improvement of state school education developed by community organizations, such as Unibes. In the photo, Unibes students 7

9 ITAÚ CULTURAL Created in 1987, and declared of public interest by the Federal Government, Instituto Itaú Cultural is the arm of the Itaú Group focusing on the cultural area. Banco Itaú has a long relationship with the visual arts and is permanently involved with the cultural area. Itaú s association with culture began with the acquisition of works of art and the creation of Galerias Itaú in 1971, the philosophy always being art as an instrument for encouraging the community spirit and the creation of a cultural identity. Since its foundation, the Institute chose to encourage work which helped to improve the relationship between art and technology, thus converging towards a distinctive characteristic of Banco Itaú: research and development of advanced technology. Besides its retrospective and prospective activities in the field of art, Itaú Cultural is a cultural producer and generator of information in two areas: The intense journalistic coverage, both in printed and screened form, bears witness to the way the work of Itaú Cultural is recognized throughout the country. Over the past four years, Itaú has received 29 prizes in the various categories in which it operates. OPERATING POLICY Itaú Cultural adopts a policy which is centered on three aspects: promotion, training and propagation. Promotion To provide scope for the work of new artists and new artistic languages and provide suitable conditions for their development; Training to provide conditions for the interchange of information, enabling new artists to broaden their horizons through participation in courses and workshops, etc. through contemporary culture, editing original works, in printed and electronic form and maintaining research in the field of art appreciation; Propagation to propagate information produced in a form that increasingly reaches all-embracing sections of the Brazilian population. in the technology of cultural administration, creating instruments for managing resources with transparency and efficiency. With its main center in São Paulo, Itaú Cultural has units in four other cities: Belo Horizonte, Campinas, Brasília and Penápolis. Itaú Cultural also operates through associated institutions to form a wider network for the publicizing of its activities. AREAS OF EXPRESSION Itaú Cultural seeks to promote cultural production and to collaborate in the training of those involved in this area, with its activities today focused on seven areas of expression: Visual Arts, Cinema and Video, Music, Scenic Arts, Design, Literature and the Interactive Media. 8 Itaú Cultural: a benchmark in the production and spreading reputation of Brazilian art and an outstanding figure in urban architecture

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11 TRENDS PROGRAM One of Itaú Cultural s main concerns is the future Brazilian cultural scenario. Hence, one of its most important initiatives is through programs of support for artistic production known as Itaú Cultural Trends. These programs are characterized by a nationwide identification of artistic talents, selection of the artists, different forms of promotion, propagation of artistic work (via exhibitions, performances and printed and electronic publications) and by developing the talents of selected artists, curators, cultural administrators and the public in general. the broadening of the theme to act as a stimulus for all types of artists to develop these questions further. In 1998, the theme was Journeys and Frontiers, which was then subdivided into Amazon Journeys, Urban Flows and Frontiers; in 1999, Everyday and Art, sought to develop the theme of the presence of the object in art and the insertion of works of art in utensils of daily use. In 2000, the theme Investigations displayed the work of emerging artists and illustrated the research processes involved in artistic creation. Installation of the artist Natalia Coutinho of Belém - State of Pará, one of those chosen in the Itaú Cultural Trends Program for the Visual Arts THE CURATORIAL AXIS The Curatorial Axis consists of an annually chosen theme, based on which the most varied multidisciplinary activities are developed together with the creation of interrelated cultural products. The Curatorial Axis is designed to reflect on aspects of Brazilian culture, encouraging DOCUMENTATION AND REFERENCE CENTER ITAÚ CULTURAL VIRTUAL ITAÚ CULTURAL ENCYCLOPEDIA OF THE VISUAL ARTS Since its foundation, Itaú Cultural has been responsible for developing an electronic database of Brazilian art and culture. This database has been transformed into the Documentation and Reference Center, which houses computerized archives and reference works such as books, catalogues, a library for the reading of newspapers and magazines and a media library. The activities developed under the different Trends programs as well as the curatorial axis also serve as content sources for the Documentation and Reference Center, thus making the latter more relevant to current times as well as broadening its terms of reference. The target public for the Documentation and Reference Center is largely made up of teachers, student and research workers. The Center receives on average two thousand visitors per month seeking guidance and for consultation purposes. 10

12 Educational workshops supplement the Itaú Cultural s activities has sought to expand the distribution of these goods to the public interested in Brazilian art by setting up partnerships with publishers and recording studios. All the activities promoted by Itaú Cultural are free of charge. In this way, the Institute can make its presence felt throughout the country, expanding the reach of its activities through exhibitions and shows. Today the Itaú Cultural Encyclopedia of the Visual Arts has about 3,000 biographies of Brazilian artists and 9,000 images of works of art, the result of work carried out by several groups over the last few years. The Encyclopedia aims to contribute in a meaningful and formal way to the knowledge of Brazilian art. The objective is for the encyclopedia to be the most complete in its area. The access to the Encyclopedia is made through Itaú Cultural Virtual, the most extensive site dedicated to contemporary Brazilian art with more than 10,000 documents, comprising texts, images, videos and sound track. RESEARCH AND SUPPORT ACTIVITIES Itaú Cultural places special emphasis on the partnerships with cultural and research entities which focus on Brazilian art both domestically and overseas. Such partnerships aim to encourage the exchange of knowledge, organize traveling exhibitions and promote cultural projects. PRODUCTS AND THEIR PROPAGATION Itaú Cultural s products, such as CDs, catalogues, books and videos, are distributed free of charge to institutions. Itaú EDUCATIONAL ACTIVITIES One of the objectives of the work carried out by Itaú Cultural is to produce didactic material. Exhibitions always have monitors to provide support for group or school visits; teachers are provided with copious material for use in the classroom; exhibitions are accompanied by workshop sessions for young people. Itaú Cultural is also involved in the work of expanding the range of instructional and multimedia material available in the Portuguese language. An example of this is the use of so-called Culture Boxes, in which themes connected to the visual arts are discussed through the medium of texts, photographs and videos. Additionally, on-line educational facilities allow teachers and students to interact with the texts and images contained in the Itaú Cultural Encyclopedia of Visual Arts. Since 1997, Itaú Cultural has: - expanded the Institute s area of activities to the scenic arts, music, new media vehicles and design; - created the Itaú Cultural Trends programs (to identify, support and develop artists and curators as well as stimulate public interest and promote creativity in different areas of artistic expression); - created an annual program of multidisciplinarian activities known as a thematic axis; 11

13 Itaú Cultural Encyclopedia of the Visual Arts, available at the site and the products, developed and distributed free of charge to institutions, increase the presence of Itaú Cultural throughout the country, extending the reach of its activities - increased and up-dated the Institute Data Base, which today holds biographies of painters, photographers and sculptors; - developed a website and through it, access to a list of activities involving the Institute itself as well as the Itaú Cultural Encyclopedia of Visual Arts which receives more than 70,000 monthly visits; - expanded the library transforming it into the Documentation and Reference Center, which today contains 16,000 titles on Brazilian art and culture and 1,200 videos; - promoted 471 presentations - organized 226 exhibitions and displays - presented 172 scenic and musical shows - produced 5 CD-ROMs, 77 CDs-Audio and 88 films and videos; - through the Itaú Cultural Trends programs enrolled 5,400 artists from different areas of expression, resulting in the production of 21 films and videos, 4 websites, 2 CD- ROMs and 45 expositions. In 2000, the following activities were held in each area of artistic expression: Visual Arts: - 35 exhibitions in São Paulo; Belo Horizonte, Brasília, Campinas, Penápolis (branch network); Curitiba, Recife, Fortaleza (through associations with other entities); and one international exhibition in Berlin new products - 26 events, among which presentations, workshops and seminars - Published books: Itaú Cultural Trends in the Visual Arts 1999/2000 and Engravings: Brazilian Art in the XX Century Cinema and Video cinema and video showings - 9 video productions: Meetings Series and Aspects Series of Brazilian Culture - Itaú Cultural Trends in Cinema and Video: program for support and production of documentaries focusing on Brazilian art and culture. In 1999, the program selected 16 projects in the categories of Project Development, Finalization and Emerging for production in Scenic Arts - Dance and Theatre - 43 shows - 14 events among courses and workshops, videos and presentations - Itaú Cultural Trends Dance - diagnosis of the current situation of dance in the country with data collected based on the survey of emerging productions of contemporary dance. Music - 4 Seminars - 3 CDs produced 12

14 - Publication of the book: Calendar of Sound - Hermeto Pascoal - Itaú Cultural Trends in Music - promoted a meeting between musicians, producers, researchers, media professionals and other areas and the public in general for the discussion on the trends in locally produced music and difficulties faced by Brazilian music. Five theme weeks were held: Week of Traditional Music, Week of Contemporary Music, Week of Colonial Music, Week of Erudite Music and Week of Instrumental Music. - Itaú Cultural Trends in Music made a nationwide survey of musicians, work of whom shows some connection to traditional Brazilian music. Literature - Itaú Cultural Trends Literature directed to the development of the reading public interested in establishing relationship between literature, the arts and the medias courses on the dialogue between literature and the visual arts and the new medias. - 2 books published: Trends in Literary Criticism and Other Readings. New Medias - development of the Itaú Cultural Encyclopedia of the Visual Arts - Trends in the new Medias Program - program to promote the new multimedia creators. Itaú Cultural, through the Projects Nucleus, directed to the preparation of educators and students held the following activities: - Monitoring preparation of the team to provide support to the visiting public at exhibitions - 5 ateliers - 6 courses and workshops for educators, children, adolescents and senior citizens - 6 seminars and presentations - Development of the following products: 2 Culture Boxes handouts used for teaching training, distributed in schools and/or libraries; these consisted of Laboratory Files for Artistic Appreciation Educative Resources in Arts with the themes: The Work of the Artist and Engraving; Video: Is this Art?; Remote Education Programs Numbers of Itaú Cultural in 2000: - 219,756 visitors - 863,868 site visits - 20,833 products distributed - 2,949 cultural and teaching institutions contemplated with Itaú Cultural products titles of cultural products available for distribution - 47 associated institutions - 38 supported institutions and/or partners - 10 awards received in various cultural areas Itaú Cultural Trends in Dance: the program publicizes the work of performers-creative artists throughout Brazil and creativity takes to the stage 13

15 ITAÚ NUMISMATICS - HERCULANO PIRES MUSEUM Itaú Numismatics - Herculano Pires Museum, inaugurated in October 2000, houses Banco Itaú s numismatic collection, which focuses on currency of Portuguese/ Brazilian origin with about 5,000 coins, 500 medals and 20 award decorations. The Museum aims to provide the public with a entertaining pastime through a cultural leisure pursuit with a historical and numismatic content. It also seeks to satisfy the interests of not only a non-specialist public, but also experts in the subject, attracting visitors both from the point of view of the beauty of the architectural project in which the collection is contained as well as the quality and precious nature of the collection itself. The Museum s installations use the latest in museum technology and cataloging based on observation and analysis of 14 important museums of the same type overseas. Itaú Numismatics is structured around 30 showcases comprising 15 thematic and chronological modules covering the 500 years of Brazilian History, complete with illustrations of the Brazilian urban landscape and music of the period. To further enrich the visit, the public is invited to view a video that encapsulates the History of the Country through the intermediary of its coins. Itaú has an extensive collection of coins, medals and award decorations, exhibited in the Herculano Pires Museum to both the lay and specialist public 14

16 OTHER CULTURAL AND COMMUNITY EVENTS Itaú seeks to benefit the communities where it is located by improving the quality of life of the local population. This is done through the promotion and sponsoring of cultural, sporting and general community-interest events in the various cities throughout Brazil. In 2000, the Bank invested R$ 2.8 million in these events, of which the most notable were the following: CULTURAL The 500 Years Show to commemorate the 500 years of the Discovery of Brazil held in Gameleira Park Belo Horizonte State of Minas Gerais (MG) with 27 Brazilian entertainers and in the presence of a crowd of 60,000. Bravas Gentes Brasileiras commemorative exhibition of the 500 years of the Discovery of Brazil, at the Palácio das Artes in Belo Horizonte, an historical-anthropological survey of all the peoples that inhabited the State of Minas and played a part in the formation of the Brazilian culture. This exhibition was visited by 80,000 people. Presentation of the Berlin Philharmonic Orchestra for the first time in Brazil, held in the Municipal Theatre of São Paulo, and conducted by Cláudio Abbado. The three presentations were seen by 1,580 people daily. Sponsorship of The Three Tenors : with Carreras, Plácido Domingo and Pavarotti in the Morumbi Stadium in São Paulo with an audience of 59,000. SPORTING ACTIVITIES 4 th Itaú Beach Soccer Cup in Santos State of São Paulo (SP) 8 th Itaú Peteca (shuttlecock) Cup in Uberlândia - MG, the largest national competition of its type. IV Pão de Açúcar - Itaú Triathlon Cup, held at the Cidade Universitária athletics track USP with the participation of the leading Brazilian professional and amateur athletes. Artefísica Race - Campos - State of Rio de Janeiro Sponsorship of sporting competitions in various schools for the purposes of leisure and to promote the practice of sport. COMMUNITY ACTIVITIES Botinho Project 2000 held on 20 beaches in the State of Rio de Janeiro, involving the Rio Fire Service and with the participation of 4,500 children and adolescents, this project is to encourage precautions when sea bathing as well as to instill the importance of conserving the environment. Itaú Happy Sunday events to provide leisure activities and culture to the community and held in squares in Rio de Janeiro. Agricultural Exhibitions in Bragança Paulista and São José do Rio Preto (SP). 126 th Nossa Senhora dos Navegantes Festival in Porto Alegre State of Rio Grande do Sul involving 500,000 people Bicycle Outings - held in the capital of the states of Pernambuco, Rio Grande do Norte, Espírito Santo, Mato Grosso do Sul and Presidente Prudente (SP), with the presence of about 3,000 cyclists One of the co-sponsors of the Restoration of the Historical Center of the Mackenzie Institute (dating from 1896) in São Paulo. Flower Festival - Exploflora 2000, in Holambra State of São Paulo which received 250,000 visitors. Support provided to the festivities of the Nosso Senhor do Bonfim in Salvador - BA. 14 th Festival of the Italian Immigration of Jundiaí (SP), with the income being donated to charitable organizations in the city. The Botinho Project, held on beaches in the State of Rio de Janeiro, aims at teaching children and adolescents basic notions of safety when sea bathing. It also promotes awareness for the preservation of the environment 15

17 FINANCIAL SERVICES PROVIDED TO THE COMMUNITY The network of Itaú s service points is characterized by its significant presence in all the states and territories throughout Brazil. Indeed, Itaú and its banking subsidiaries are to be found in all the main Brazilian municipalities, which represent about 82% of the country s economic potential. The distribution network comprises 2,029 branches, 851 customer-site branches and 11,375 ATMs, with 86% of the branches located in the states of São Paulo, Minas Gerais, Rio de Janeiro and Paraná. PUBLIC SECTOR ACCOUNTS COLLECTIONS AND PAYMENTS Annual Transactions Amounts Number of (in million) (R$ million) Federal Taxes ,960 State Taxes ,341 Municipality Taxes ,281 FGTS (Government Severance Indemnity Fund) INSS (Social Security) Payments ,412 Payments of INSS pensions etc ,966 Public Services Bills (1) ,571 Collection of Compulsory Insurance - DPVAT TOTAL ,675 (1) includes water/sanitation, electricity and telephone. Itaú s service points cover all of Brazil s states and territories 16

18 CUSTOMER SERVICES The Bank seeks to increase customer satisfaction and continually improve services and products and the way it communicates by facilitating contact through the call-in system (Disque Itaú) and through the Internet (Fale Conosco), and by providing specialized services to consumer protection agencies the object being in each case to achieve quality of excellence in the service rendered. In 2000, 570,682 calls were routed through the Disque Itaú and 32,298 through the Fale Conosco system. Additionally, the Bank provided 3,625 solutions to problems reported to the Independent Bodies for Consumer Protection. The services provided for customers include the technological support of the last generation for handling complaints and clearing up customer doubts Customer Relations Call Center - Disque Itaú 600,000 6, ,000 5, ,000 4, ,000 3, ,000 2, ,000 1, Information Complaints Suggestions 17

19 STAFF MANAGEMENT PERSONNEL TRAINING AND DEVELOPMENT Itaú has placed special emphasis on attracting, developing and retaining talent, conscious that one of the strong competitive differences among companies in this new millennium is to be found in human capital. In 2000 alone, the Bank hired 572 graduates selected from the best Brazilian universities (2,081 in six years). Additionally, the Bank maintains a program or employing students in their penultimate or final year before graduation, which is aimed at eventually providing a permanent career in the Organization (285 interns in six years). Those responsible for media management also take part in seminars designed to prepare them to face the constant challenges of the market. In 2000, seminars of particular note were: Challenges of Retail Banks: The New Competitive Environment - Anthony Hourihan; Emotional Competence: The Route to Victory for Business Teams - Suzy Fleury; Retaining Talents - Roger Herman; The Challenges of Organizations in the New Millennium - Marco Aurélio F. Viana; New Challenges for Administrators in the Process of Organization - Sumantra Goshal; and Innovation: A Hard Currency in Competitiveness - J. C. Benvenutti. Investments dedicated to staff training totaled R$ 33 million during the year. Itaú also invests in the academic development of its employees through the concession of more than 2,000 scholarships for graduate, postgraduate and university-level specialization courses. The Bank s in-house programs include basic training for junior positions, preparation and career development for commercial and operations managers, development of middle management and even the preparation of employees to take over key positions in the Organization through masters degree courses and MBAs at the most renowned Brazilian and overseas educational institutes. Created in 1983, about 100 employees have already participated in degree courses at foreign universities and of these 59 hold positions in senior management or directorships. Additionally, the Bank s staff participate in a continuous program of courses for recycling and updating whenever necessary. Of special note in 2000 were courses held for preparing employees at various levels of the organization hierarchy for the better understanding of the potential of the Internet and its impacts on the Bank and in relationship with the customers, a case in point being the launching of the customized Itaú-AOL service. The Itaú Center for Management Education (Centro Itaú de Educação Gerencial - Ciege) is a program with the objective of providing a broad range of information products with varied characteristics, to help employee self-development. Ciege has a collection of video and audio tapes, books, texts and kits that are designed to further the professional and personal development of the organization s executives. 18 Attraction, development and retention of talent is the order of the day at Itaú. The investments in employee training totaled R$33 million in 2000

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21 TRAINING AND DEVELOPMENT PROGRAMS NUMBER OF PARTICIPANTS SELECTION AND RECRUITMENT Training / Development Activities - class room 50,393 Training / Development - Video 39,445 ISO 9000 Policy of Quality 12,281 External Courses 8,731 Ciege Self Development 7,110 Graduation / Post-graduation and University level specialization 2,035 TOTAL 119,995 In 2000, one of the new developments implemented for recruiting human resources was the launching of the Career Opportunities Site, which up to the end of the year had received 56,000 résumés Investments in Development and Training (R$ million) Itaú also launched its Employment Program for the Handicapped, 51 employees having since been hired. The program is designed to provide opportunities for the handicapped, underlining the Bank s position of respect for people and equal rights. Guidelines under this program establish the procedures for hiring, integration and placement of the handicapped in the organization - to be conducted in the most natural manner possible and constituting an integral part of human resource administration based on four main points: - elimination of incorrect concepts and preconceived ideas; - providing the right work for the right person; - preparing the environment where the handicapped person is to work; - recruitment and also retention in the work provided to the handicapped (continuous training). Projeto Aprendiz is Itaú s partner in the publicizing of this program via the site which in turn provides access to Itaú s site ( directly at the Career Opportunities page. The Career Opportunities site was launched in 2000, having received 56,000 résumés from people interested in working for Itaú 20

22 PERFORMANCE INCENTIVES AND RECOGNITION 30 Years of Service Since 1988, the Itaú Group has held semi-annual commemorations for those employees who have completed 30 years of service with the institution. The employees - accompanied by companions/family members - travel from the four corners of Brazil for a major dinner party at which tribute is paid to their dedication to the Bank. In 2000, 227 employees were honored in this way. Performance Incentives Itaú recognizes and rewards outstanding performances of its groups and employees through an incentive system linked to the Program - AGIR Bem (Itau Management Action Program for Results) and the various commercial campaigns staged during the course of the year. The Bank provides a range of training programs from those for junior staff up to courses to prepare employees to occupy senior positions The mix of incentives, which the Bank provides, is very broad and diversified, ranging from monthly commissions for achieving sales targets to recommendations of individual staff members made by customers and prizes paid through the payroll for performance under the AGIR Bem program. Awards even include overseas trips, the top prize for exceptional performance. Additionally, prizes are paid in goods and shopping vouchers. Especially notable were bonuses received by team groups under the Results Sharing Scheme. 21

23 WORK FORCE PROFILE Number of Employees At the end of 2000, Banco Itaú and its controlled companies employed 47,524. Total remuneration (fixed, variable and results-sharing) together with labor charges and fringe benefits was R$ 2,423 million. The variable portion (profit-sharing, commissions and awards) amounted to R$ 137 million. These values indicate average remuneration and labor charges per employee of R$ 4, in the period Employees by gender 51.2% Female The numbers of male and female employees are evenly balanced at Itaú. 48.8% Male Seniority in Employment 25.6% up to 5 years 14.9% from 5 to10 years 46.6% from 10 to 20 years 12.9% more than 20 years Nearly 60% of all employees have more than ten years service in the Bank, indicating stability in labor relations and the high degree of experience of the team at Itaú. 22

24 The number of employees with a higher education has grown significantly in line with the increasing complexity of the financial system together with the Itaú s measures to attract, develop and retain talent. In 2000, 35.6% of employees had completed a graduate or postgraduate course as against only 13.3% in Academic Level of Employees 57.1% High School Education 30.9% University Education 7.3% Primary Education 4.7% Postgraduate Education The largest portion of employees (68.6%) is in the 30 to 50 years of age bracket, thus contributing their professional maturity to the development of the Bank. On the other hand, the numbers of employees in the 18 to 30 years of age group are significant at about 27%. The combined effort of people of different ages and maturities contributes to a working environment of great energy, innovation and consolidation of knowledge. Age Groups 60.4% from 30 to % from 18 to % from 45 to % 50 years or more 0.3% Up to 18 years Direct contact with the customer in the various market segments is the number one priority at Itaú. Nearly three quarters of the work force is focused on directly providing a service to customers, while only about a quarter operates in the areas of infrastructure and support. Distribution of employees per working location 66.2% Branches, Customer-site Branches (PABs) and Payment and Collection Outlets (PAPs) 26.6% Infrastructure and Support 4.5% Centralized Business Units 2.7% Boards and Remote Service Units 23

25 SOCIAL BENEFITS The Social benefits provided to employees and their dependents cover supplementary pension, food, medical and dental care, social assistance services, scholarships, leisure, sports and cultural activities, loans at subsidized rates, insurance, travel vouchers, donations and special grants besides contributions for nursery payments and baby sitters and financial aid in case of illness and funerals. In 2000, benefits amounted to R$ 376 million. Quality of Life Programs Annually, Banco Itaú holds one-week events which give employees the benefit of listening to the ideas and guidance of experts in the fields of work-place safety, prevention of illnesses and improved quality of life. The events are held in the Bank s main offices, where there are large concentrations of employees and where the Bank and its associate companies have Internal Commissions for Accident Prevention (CIPA). Below are details of the social benefits offered at the Bank s discretion - spontaneous benefits - or those which are legally obligatory or required under the Collective Labor Agreement. SPONTANEOUS BENEFITS In 2000, the Bank held events in 15 buildings, where presentations were made on Prevention of Adult Heart Disease, Stress, Oral Hygiene and AIDS/sexually transmitted diseases, as well as Talk Shows on bone disease/repetitive lesion injuries and a theatre performance with the theme Quality of Life. Supplementary Pension Plan The Supplementary Pension Plans (PAC), managed by the Itaubanco Foundation, provide a supplementary pension in the form of an income for life in addition to payments made by the Social Security System to retired people. PAC already pays benefits to 1,663 ex-employees. Medical/hospital and dental assistance Itaú provides its employees and their dependents with medical and dental care through agreements with specialized health care companies, with free choice of doctor or dentist, besides maintaining first-aid clinics for emergency attendance. During the events, temporary Health Stands are assembled and in 2000 these were used to measure the level of cholesterol and blood pressure, ophthalmologic and audiometric screening, measurement of ratio of body mass and circumference, oriental massage (Shiatsu), oriental relaxation therapy, facial treatment and podology, capillary test and test for nicotine. Health Fairs were also held in the same location in which companies involved in health and aesthetics provided guidance to visitors. 24

26 Social Service Employees can obtain guidance from the Company s social service on the following: - social problems affecting the socioeconomic balance of the employee - the appropriate utilization of resources made available by the community and by the company - sick pay advances, accident welfare grants and supplementary payments - state social security (retirement payments, pensions and annuities) - preparation of socioeconomic studies for donations, special concessions and loans. Leisure, culture, sports and recreational activities Banco Itaú provides its employees with leisure and sporting activities and opportunities for social gatherings through Vacation Resorts, Country Clubs, Small Hotels and Recreational Centers. These facilities are also available to employees as guests to spend vacations, weekends or holidays. Periodically, events are also held for the celebration of special dates, such as Mother s Day, Easter, São João festivities, New Year s Eve etc. The Bank holds annual events involving the promotion of various kinds of sporting activities, sports training and competitions aimed at engendering the team spirit. In addition, Itaú has signed agreements with various sports clubs through which employees and their families enjoy discounts on membership monthly fees. Banco Itaú promotes the following activities designed to encourage the cultural development of its employees, their family members and retired members of staff: - Libraries with an ample variety of books for lending out to employees - Contests and exhibitions - Associations with educational establishments - The Itaú Chorus, comprising employees and their family members from the São Paulo area Subsidized Loans Employees are eligible for loans at subsidized rates of interest for normal financial requirements, temporary personal cash flow problems, emergencies arising from health problems and not covered by the company medical plan and unforeseen situations, such as fires, floods, structural damage etc. Itaú provides leisure, sporting and recreational activities for its employees and their families through Vacation Resorts, Country Clubs, Small Hotels and Recreational Centers 25

27 The employees of Itaú have at their disposal a basketful of social benefits, which include supplementary pensioning, medical/hospital and dental care, subsidized loans, food and transportation among others BENEFITS REQUIRED BY LAW OR COLLECTIVE LABOR AGREEMENT Food Vouchers The Bank s employees, as well as those of its subsidiaries, enjoy subsidized purchases of food and meals through the use of vouchers, which can be used at supermarkets and restaurants. Nursery/baby-sitting services The Bank reimburses the cost of nursery/similar institutions or baby sitting services for those employees with children up to the age of 6 years and 11 months. There is no age limit for these benefits in the case of those employees with physically or mentally handicapped children. Transport Itaú also provides travel vouchers to cover part of the cost of using city public transport comprising the journey between home and work and vice versa. Social Benefits in 2000 (%) 48.2% Food 20.8% Private Pension Plan 18.9% Health 4.0% Nurseries 3.3% Transport 1.4% Insurance 3.4% Others 26

28 STATEMENT OF ADDED VALUE The consolidated statement below is an indication of the added value generated by Banco Itaú as well as the distribution between the various segments involved in the productive process comprising remuneration of labor, government and capital Value Share (%) Value Share (%) Sale of Products and services net of cost of materials, Third party services and others (A) 3,465,229 3,159,377 Result of Financial Intermediation (B) 4,307,957 3,814,293 Result of insurance operations (C) 381, ,269 Other operating revenues/expenses (D) (2,834,744) (2,135,284) Value Added (E = A + B + C + D) 5,319,956 5,119,655 Labor remuneration (F) ( * ) 2,123, ,011, Remuneration of the Government (G) 1,306, ,158, Dividends to Stockholders (H) 633, , Holding Company 628, , Minorities 4, , Reinvestment of Profits (I) 1,256, ,341, Holding Company 1,211, ,266, Minorities 44, , Distribution of Value Added (J = F + G + H + I) 5,319, ,119, (*) Does not include social security charges (R$ thousand) 27

29 INDICATORS SUMMARY CHART DESCRIPTION Value % / OI % /NR Value % / OI % /NR Calculation Basis Net revenues (NR) 4,307,957 3,814,293 Operating income (OI) 2,554,697 2,281,555 Gross payroll (GP) 2,422,728 2,285,707 Work Indicators Compulsory labor charges 465, , Education and training 33, , Profit or results sharing 112, , Other benefits 342, , TOTAL 953, , Social Indicators Taxes (excluding labor charges) 1,007, , Contributions to the community/ investments in Citizenship Education and culture 26, , Health and sanitation 2, , Sport and leisure Others 2, , TOTAL 1,038, , Staffing Indicators Total Total Number of employees at the end of the period 47,524 39,011 Number of employees hired during the period 5,327 3,189 Number of women working in the company 24,325 19,800 Percentage of supervisory positions held 12.3% (*) by women Number of handicapped employees 539 (*) (*) data unavailable. 28