Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____
Report on Economic and
Financial
Analysis
September 2004
Index | 2003 | 2004 | ||||
2nd Quarter |
3rd Quarter |
Accumulated to September | 2nd Quarter |
3rd Quarter |
Accumulated to September | |
CDI | 5.78 | 5.61 | 18.06 | 3.67 | 3.86 | 11.72 |
IBOVESPA | 15.07 | 23.42 | 42.08 | (4.49) | 9.92 | 4.54 |
USD - Commercial rate | (14.35) | 1.79 | (17.26) | 6.84 | (8.01) | (1.06) |
IGP-M | (0.35) | 1.14 | 7.10 | 3.95 | 3.25 | 10.26 |
IPCA - IBGE | 1.43 | 1.32 | 8.05 | 1.60 | 1.94 | 5.49 |
TJLP | 2.87 | 2.87 | 8.62 | 2.35 | 2.35 | 7.29 |
TR | 1.31 | 1.29 | 3.93 | 0.42 | 0.57 | 1.35 |
Collective labor agreement (*) | - | 12.60 | 12.60 | - | 8.50 | 8.50 |
Closing Price | ||||||
USD - Commercial rate - sell (in reais) | 2.8720 | 2.9234 | 2.9234 | 3.1075 | 2.8586 | 2.8586 |
Sovereign risk (points) | 788 | 695 | 695 | 646 | 466 | 466 |
SELIC Central Bank reference rate COPOM (% p.a.) | 26.00 | 20.00 | 20.00 | 16.00 | 16.25 | 16.25 |
Prefixed BMF rate 1 yr. (% p.a.) | 22.00 | 18.10 | 18.10 | 17.02 | 17.40 | 17.40 |
(*) | Increase proposed in 2004. |
Deposits | 2003 | 2004 | ||
2ndQuarter | 3rdQuarter | 2ndQuarter | 3rdQuarter | |
Demand deposits (1) | 60 | 45 | 45 | 45 |
Additional (2) | 8 | 8 | 8 | 8 |
Time deposits (3) | 15 | 15 | 15 | 15 |
Additional (2) | 8 | 8 | 8 | 8 |
Savings deposits (4) | 20 | 20 | 20 | 20 |
Additional (2) | 10 | 10 | 10 | 10 |
(1) | Cash deposit - no remuneration. |
(2) | Cash deposit - SELIC rate. |
(3) | Deposit in Government Securities. |
(4) | Cash deposit - Reference Rate (TR) + interest of 6.17% p.a. |
Items | 2003 | 2004 | ||
2nd Quarter | 3rd Quarter | 2nd Quarter | 3rd Quarter | |
Income tax | 25 | 25 | 25 | 25 |
Social contribution | 9 | 9 | 9 | 9 |
PIS (1) | 0.65 | 0.65 | 0.65 | 0.65 |
COFINS (2) | 3 | 4 | 4 | 4 |
Legal reserve on net income | 5 | 5 | 5 | 5 |
Maximum fixed assets (3) | 50 | 50 | 50 | 50 |
Minimum capital Basel (4) | 11 | 11 | 11 | 11 |
(1) | The rate applicable to non-financial and similar companies is 1.65% (non-cumulative PIS). |
(2) | The rate applicable to financial and similar companies was increased to 4% in September 2003 and for other companies to 7.60% in February 2004 (non-cumulative COFINS). |
(3) | On reference equity. |
(4) | Reference equity may not be lower than 11% of weighted assets. |
Forward-Looking Statements
This Report on Economic and Financial Analysis contains forward-looking statements relating to our business which are based on managements current expectations, estimates and projections about future events and financial trends which could affect our business. Words such as: believes, anticipates, plans, expects, intends, aims, evaluates, predicts, foresees, projects, guidelines, should and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks and uncertainties which are difficult to predict and which could be beyond our control. Furthermore, certain forward-looking statements are based on assumptions which future events may prove to be inaccurate. Therefore, actual results may differ materially from the plans, objectives, expectations, projections and intentions expressed or implied in such forward-looking statements.
Factors which could cause actual results to differ materially include, among others, changes in regional, national and international commercial and economic conditions; inflation rates, increases in customer default and any other delays in credit operations; increases in the allowance for loan loss; loss of funding capacity; loss of clientele or revenues; our capacity to sustain and improve performance; changes in interest rates which could, among others, have an adverse effect on our margins; competition in the banking sector, in financial services, credit card services, insurance, asset management and other related sectors; government regulations and fiscal matters; disputes or adverse legal proceedings or ruling; as well as credit risks and other loan and investment activity risks.
Accordingly, the reader should not place undue reliance on these forward-looking statements. In all cases, these forward-looking statements are valid only as at the date they are made. Except as required under applicable legislation, we assume no obligation whatsoever to update these statements, whether as a result of new information, future events or any other motive.
Contents
Certain figures
included in this document have been subject to rounding
adjustments.
Accordingly, figures shown as totals in certain tables may not be an
arithmetic
aggregation of the figures which precede them.
1 - Bradesco Line by Line
Highlights
2004 | Accumulated to September | |||||
2nd Quarter | 3rd Quarter | % Variation | 2003 | 2004 | % Variation | |
Financial margin | 3,081 | 3,304 | 7.2 | 9,135 | 9,715 | 6.3 |
Provision for loan losses | 514 | 478 | (7.0) | 1,998 | 1,553 | (22.3) |
Commission and fees | 1,375 | 1,455 | 5.8 | 3,282 | 4,149 | 26.4 |
Insurance premiums, private pension plans and savings bonds | 2,989 | 3,464 | 15.9 | 8,291 | 9,447 | 13.9 |
Personnel expenses | 1,234 | 1,273 | 3.2 | 3,507 | 3,684 | 5.0 |
Other administrative expenses | 1,216 | 1,225 | 0.7 | 3,486 | 3,649 | 4.7 |
Operating income | 621 | 1,163 | 87.3 | 2,667 | 2,583 | (3.1) |
Net income | 641 | 752 | 17.3 | 1,591 | 2,002 | 25.8 |
2004 | September | |||||
June | September | % Variation | 2003 | 2004 | % Variation | |
Total assets | 176,254 | 179,703 | 2.0 | 164,363 | 179,703 | 9.3 |
Securities | 56,212 | 58,155 | 3.5 | 47,906 | 58,155 | 21.4 |
Credit operations | 58,402 | 59,976 | 2.7 | 52,776 | 59,976 | 13.6 |
Permanent assets | 5,271 | 5,030 | (4.6) | 5,069 | 5,030 | (0.8) |
Total deposits | 64,133 | 64,787 | 1.0 | 58,346 | 64,787 | 11.0 |
Borrowings and onlendings | 16,817 | 16,715 | (0.6) | 15,186 | 16,715 | 10.1 |
Technical reserves | 29,478 | 31,585 | 7.1 | 24,461 | 31,585 | 29.1 |
Stockholders equity | 13,650 | 14,678 | 7.5 | 12,967 | 14,678 | 13.2 |
Common Stock | Preferred Stock | Total | |
Number of shares held at December 31, 2003 (*) | 79,836,525 | 78,693,936 | 158,530,461 |
Shares acquired and not canceled | (386,082) | (4) | (386,086) |
Number of shares held at September 30, 2004 | 79,450,443 | 78,693,932 | 158,144,375 |
2004 | Accumulated to September | |||||
2nd Quarter | 3rd Quarter | % Variation | 2003 | 2004 | % Variation | |
Net income per share | 4.05 | 4.75 | 17.3 | 10.03 | 12.66 | 26.2 |
Dividends/JCP per share ON (net of income tax) | 1.664 | 1.702 | 2.3 | 5.179 | 5.032 | (2.8) |
Dividends/JCP per share PN (net of income tax) | 1.831 | 1.872 | 2.2 | 5.697 | 5.535 | (2.8) |
Net book value (ON and PN) | 86.30 | 92.81 | 7.5 | 81.76 | 92.81 | 13.5 |
Average last day price (ON) | 115.36 | 118.43 | 2.7 | 94.70 | 118.43 | 25.1 |
Average last day price (PN) | 142.63 | 150.00 | 5.2 | 117.20 | 150.00 | 28.0 |
Market value of stockholders equity (in millions of reais) (*) | 20,404 | 21,213 | 4.0 | 16,810 | 21,213 | 26.3 |
2003 | 2004 | |||||
2nd Quarter | 3rd Quarter | Accumulated to September | 2nd Quarter | 3rd Quarter | Accumulated to September | |
Net income | 519 | 564 | 1,591 | 641 | 752 | 2,002 |
Equity in the earnings of associated companies | 28 | (7) | 26 | (122) | 3 | (119) |
Allowance for loan losses | 587 | 603 | 1,998 | 514 | 478 | 1,553 |
Technical reserves | 1,465 | 1,625 | 4,946 | 1,392 | 2,019 | 4,941 |
(Reversal of) allowance for mark-to-market | 16 | (1) | 30 | - | - | (4) |
Depreciation and amortization | 150 | 179 | 470 | 143 | 134 | 421 |
Amortization of goodwill | 62 | 62 | 862 | 226 | 188 | 501 |
Other | 12 | (22) | (5) | (43) | 20 | (17) |
Total | 2,839 | 3,003 | 9,918 | 2,751 | 3,594 | 9,278 |
2003 | 2004 | |||||
2nd Quarter | 3rd Quarter | Accumulated to September | 2nd Quarter | 3rd Quarter | Accumulated to September | |
ADDED VALUE (A+B+C) | 2,192 | 2,395 | 6,840 | 2,311 | 2,702 | 7,398 |
A - Gross profit from financial intermediation | 2,028 | 2,555 | 7,137 | 2,567 | 2,826 | 8,162 |
B - Commissions and fees | 1,083 | 1,182 | 3,282 | 1,375 | 1,455 | 4,149 |
C - Other operating expenses | (919) | (1,342) | (3,579) | (1,631) | (1,579) | (4,913) |
DISTRIBUTION OF ADDED VALUE (D+E+F+G) | 2,192 | 2.395 | 6,840 | 2,311 | 2,702 | 7,398 |
D - Employees | 923 | 1,094 | 2,878 | 995 | 1,030 | 2,968 |
E - Government | 750 | 737 | 2,371 | 675 | 920 | 2,428 |
F - JCP/Dividends to stockholders (paid and accrued) | 343 | 367 | 1,000 | 325 | 333 | 985 |
G - Reinvestment of profits | 176 | 197 | 591 | 316 | 419 | 1,017 |
2004 | Accumulated to September | |||
2nd Quarter | 3rd Quarter | 2003 | 2004 | |
Return on stockholders equity (total) | 20.1 | 22.1 | 16.7 | 18.6 |
Return on stockholders equity (average) | 20.5 | 23.3 | 18.2 | 20.0 |
Return on total assets (total) | 1.5 | 1.7 | 1.3 | 1.5 |
Stockholders equity to total assets | 7.7 | 8.2 | 7.9 | 8.2 |
Capital adequacy ratio (Basel) - financial consolidated | 18.1 | 19.9 | 18.4 | 19.9 |
Capital adequacy ratio (Basel) - total consolidated | 15.7 | 17.0 | 15.9 | 17.0 |
Permanent assets to stockholders' equity financial consolidated | 41.4 | 42.7 | 44.3 | 42.7 |
Permanent assets to stockholders' equity - total consolidated | 26.1 | 24.2 | 29.9 | 24.2 |
Efficiency ratio (accumulated over the prior 12-month period) | 60.1 | 58.3 | 55.9 | 58.3 |
2004 | September | |||||
June | September | % Variation | 2003 | 2004 | % Variation | |
Managed funds in millions of reais | 86,816 | 90,171 | 3.9 | 76,602 | 90,171 | 17.7 |
Number of employees | 74,784 | 74,227 | (0.7) | 77,154 | 74,227 | (3.8) |
Number of branches | 3,054 | 3,049 | (0.2) | 3,033 | 3,049 | 0.5 |
Checking account holders million | 15.4 | 15.3 | (0.6) | 14.4 | 15.3 | 6.3 |
Debit and credit card base - million | 43.5 | 45.2 | 3.9 | 39.1 | 45.2 | 15.6 |
Profitability
Bradesco reported net income of R$ 2,002 million, for the first nine months of 2004, up by 25.8%, compared to the same period in 2003. Stockholders equity was R$ 14.678 million at September 30, 2004, an increase of 13.2% compared to the prior-year. The return on stockholders equity (ROE) was 18.6%. Assets totaled R$ 179,703 million at the end of September 2004, a growth rate of 9.3% compared to the balance at the same date in 2003. Return on total assets (RO) for the first nine months of 2004 was 1.5% per annum.
Third-quarter consolidated net income was R$ 752 million, up by R$ 111 million, or 17.3% compared to second-quarter results (2Q04). Annualized return on stockholders equity (ROE) was 22.1% for the quarter and return on total assets (ROA) was 1.7%.
3Q04 was marked by the good performance of revenues comprising financial margin, especially non-interest income which totaled R$ 504 million, up by R$ 380 million, compared to 2Q04, mainly due to increased gains with securities (TVM) and treasury operations, as well as credit recovery improvements, in line with a more favorable economic environment. We also highlight the increase in commissions and fees, up by 5.8% compared to 2Q04, in particular, income on credit operations and fund management.
The improved credit portfolio scenario, in sync with our ongoing selective credit granting policy, was mirrored by improved portfolio risk ratings and the lower provision for loan loss recorded in the amount of R$ 36 million for the quarter, totaling R$ 1,553 million for the first nine months of 2004.
The Operating Efficiency Ratio (accumulated over the prior 12 months) in 3Q04 was 58.3%, down by 0.4% compared to 2Q04, after adjustments for extraordinary events, evidencing the strong commitment of the entire Bradesco management to the strict control of expenses and growing revenues for the quarter.
Comparative Statement of Income - In millions of reais
Accumulated to September 2003 |
Accumulated to September 2004 |
% Variation |
2nd Quarter 2004 |
3rd Quarter 2004 |
% Variation | |
Income from lending and trading activities | 20,087 | 20,001 | (0.4) | 7,720 | 5,525 | (28.4) |
Credit operations | 9,126 | 9,629 | 5.5 | 3,659 | 2,870 | (21.6) |
Leasing operations | 229 | 215 | (6.1) | 57 | 73 | 28.1 |
Securities | 5,098 | 4,163 | (18.3) | 2,121 | 362 | (82.9) |
Financial income on insurance, private pension plans and savings bonds | 3,948 | 3,763 | (4.7) | 1,181 | 1,337 | 13.2 |
Derivative financial instruments | 46 | 709 | 1,441.3 | (69) | 582 | (943.5) |
Foreign exchange transactions | 543 | 663 | 22.1 | 502 | - | (100.0) |
Compulsory deposits | 1,097 | 859 | (21.7) | 269 | 301 | 11.9 |
Expenses | 12,950 | 11,839 | (8.6) | 5,153 | 2,699 | (47.6) |
Deposits | 7,930 | 6,776 | (14.6) | 3,030 | 1,292 | (57.4) |
Price-level restatement and interest on technical reserves for insurance, private pension plans and savings bonds | 2,419 | 2,294 | (5.2) | 699 | 943 | 34.9 |
Borrowings and onlendings | 593 | 1,203 | 102.9 | 905 | (18) | (102.0) |
Leasing operations | 10 | 13 | 30.0 | 5 | 4 | (20.0) |
Provision for loan losses | 1,998 | 1,553 | (22.3) | 514 | 478 | (7.0) |
Income on financial intermediation | 7,137 | 8,162 | 14.4 | 2,567 | 2,826 | 10.1 |
Other operating income (expenses) | (4,470) | (5,579) | 24.8 | (1,946) | (1,663) | (14.5) |
Commissions and fees | 3,282 | 4,149 | 26.4 | 1,375 | 1,455 | 5.8 |
Income from insurance premiums, private pension plans and savings bonds | 8,291 | 9,447 | 13.9 | 2,989 | 3,464 | 15.9 |
Insurance premiums retained | 4,067 | 4,663 | 14.7 | 1,525 | 1,673 | 9.7 |
Private pension plan contributions | 3,382 | 3,744 | 10.7 | 1,068 | 1,453 | 36.0 |
Income on savings bonds | 842 | 1,040 | 23.5 | 396 | 338 | (14.6) |
Variation in technical reserves for insurance, pension plans and savings bonds | (2,527) | (2,647) | 4.7 | (693) | (1,076) | 55.3 |
Variation in technical reserves for insurance | (199) | (160) | (19,6) | (70) | (112) | 60.0 |
Variation in technical reserves for pension plans | (2,271) | (2,441) | (7.5) | (617) | (974) | 57.9 |
Variation in technical reserves for savings bonds | (57) | (46) | (19.3) | (6) | 10 | (266.7) |
Claims - insurance operations | (3,061) | (3,842) | 25.5 | (1,282) | (1,328) | 3.6 |
Savings bond draws and redemptions | (798) | (932) | 16.8 | (346) | (313) | (9.5) |
Insurance and pension plan selling expenses | (553) | (633) | 14.5 | (205) | (216) | 5.4 |
Insurance product selling expenses | (446) | (517) | 15.9 | (167) | (177) | 6.0 |
Pension plan selling expenses | (107) | (116) | 8.4 | (38) | (39) | 2.6 |
Expenses with pension plan benefits and redemptions | (1,406) | (1,620) | 15.2 | (590) | (497) | (15.8) |
Personnel expenses | (3,507) | (3,684) | 5.0 | (1,234) | (1,273) | 3.2 |
Other administrative expenses | (3,486) | (3,649) | 4.7 | (1,216) | (1,225) | 0.7 |
Tax expenses | (761) | (1,053) | 38.4 | (343) | (374) | 9.0 |
Equity in the earnings of associated companies | (26) | 119 | (557.7) | 122 | (3) | (102.5) |
Other operating income | 1,954 | 888 | (54.6) | 280 | 351 | 25.4 |
Other operating expenses | (1,872) | (2,122) | 13.4 | (803) | (628) | (21.8) |
Operating income | 2,667 | 2,583 | (3.1) | 621 | 1,163 | 87.3 |
Non-operating income | (768) | (343) | (55.3) | (202) | (130) | (35.6) |
Income before taxes and profit sharing | 1,899 | 2,240 | 18.0 | 419 | 1,033 | 146.5 |
Provision for income tax and social contribution | (301) | (233) | (22.6) | 225 | (279) | (224.0) |
Minority interest in subsidiaries | (7) | (5) | (28.6) | (3) | (2) | (33.3) |
Net income | 1,591 | 2,002 | 25.8 | 641 | 752 | 17.3 |
Return on stockholders equity (%) annualized | 16.7 | 18.6 | - | 20.1 | 22.1 | - |
Analysis of the Statement of Income In millions of reais
Income from Credit and Leasing Operations
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
9,345 | 9,831 | 5.2 | 3,711 | 2,939 | (20.8) | |
Income
was up mostly as a result of: (i) the increase in the volume
of the credit portfolio, which totaled R$ 60.0 billion, particularly
in the consumer customer segment, up by 26.8%, as compared to the corporate
segment up by 8.5%, reflecting the small demand for credit by the latter;
(ii) negative exchange variation of 1.1% for the nine-month period through
September 2004 (period/04), compared to negative exchange variation of
17.3% in the nine-month period through September 2003 (period/03), impacting
foreign-currency indexed and/or denominated operations, which comprise
12.5% of the portfolio (not considering advances on foreign exchange
contracts ACC which
comprise 9.4% of the portfolio and whose results impact the foreign
exchange transactions account); offset substantially by: (iii) falling
average interest rates in line with the variation in CDI of 18.1% for
period/03 as compared to 11.7% for period/04.
|
The variation was mainly due to: (i) negative exchange variation of 8.0% in 3Q04, against positive exchange variation of 6.8% in 2Q04, impacting foreign-currency indexed and/or denominated operations, comprising
12.5% of the portfolio (not considering advances on foreign exchange contracts ACC which comprise 9.4% of the portfolio and whose results impact the foreign exchange transactions account); partially offset by:
(ii) increase in the credit portfolio balance, particularly the 4.8% increase for the quarter in the consumer customer segment, compared to a growth rate of 1.8% in the corporate customer segment, partially
affected by foreign-currency indexed and/or denominated operations.
| |||||
Results of Securities (TVM) and Derivative Financial Instrument Operations
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
5,144 | 4,872 | (5.3) | 2,052 | 944 | (54.0) | |
The variation for the period is mainly due to: (i) falling average interest rates for the period; (ii) decrease in non-interest income of R$ 315 in period/04 against R$ 520 in period/03, as a result of less gains on
securities and treasury transactions, offset substantially by: (iii) negative exchange variation of 1.1% in period/04, against negative exchange variation of 17.3% in period/03, impacting foreign-currency-indexed and or
denominated securities, which comprise 17.8% of the portfolio; and (iv) increase in the average
volume of the securities portfolio, particularly federal government
securities.
|
This decrease reflects mainly:(i) negative exchange variation of 8% in 3Q04, against positive exchange variation of 6.8% in 2Q04, impacting foreign currency-indexed and or denominated securities, which comprise
17.8% of the total portfolio; partially offset by: (ii) increase in
non-interest income of R$ 216 in 3Q04 compared to R$ (6) in 2Q04, as a result
of increased gains with securities and treasury operations.
| |||||
Financial Income on Insurance, Private Pension Plans and Savings Bonds
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
3,948 | 3,763 | (4.7) | 1,181 | 1,337 | 13.2 | |
During the period, there was an increase in the average volume of the securities portfolio, comprising federal government securities, related to technical reserves,
especially PGBL and VGBL products. However, overall results were down mainly due to: (i) the decrease in average interest rates, especially CDI, from 18.1% in period/03
to 11.7% for period/04; partially offset by: (ii)
variation in the IGP-M index, of 7.1% for period/03, against 10.3% in 2004.
|
Results were up mainly due to: (i) the increase in the average volume of the securities portfolio for the quarter, comprising federal government securities, as a result
of the increase in the sale of supplementary pension plans and insurance policies, especially PGBL and VGBL, partially offset by: (ii) less variation in the IGP-M index,
from 3.3% in 3Q04, against 4% in 2Q04.
| |||||
Results of Foreign Exchange Transactions
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
543 | 663 | 22.1 | 502 | - | (100.0) | |
During the period, there was an increase in the volume of the foreign exchange portfolio. Considering the adjustments to foreign funding expenses used to finance
import/export transactions (Note 13 to the financial statements), results would present a decrease from R$ 247 in period/03 to R$ 143 in period/04, affected by falling
average fx portfolio interest rates (spread).
|
The volume of the fx portfolio for the quarter presents a decrease, when measured in reais, mainly as a result of negative exchange variation of 8% in 3Q04. Considering
the adjustments to foreign funding expenses used to finance import/export transactions,
results would present increases of R$ 35 and R$ 45 in 2Q04 and 3Q04, respectively.
| |||||
Results of Compulsory Deposits
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
1,097 | 859 | (21.7) | 269 | 301 | 11.9 | |
The
decrease for the period reflects: (i) drop in the SELIC rate
from 18.1% for period/03 to 11.7% for period/04, used to remunerate the
additional compulsory deposit; (ii) the decrease in the TR reference
rate used to remunerate compulsory savings account deposits, from 3.9%
in period/03 to 1.4% for period/04, partially offset by: (iii) the increase
in the average volume of deposits for the period.
|
This increase was mainly due to: (i) increase in the SELIC rate from 3.7% in 2Q04 to 3.9% in 3Q04, which is used to remunerate the additional compulsory deposit;
(ii) the increase in the TR reference rate used to remunerate compulsory savings account deposits, from 0.4% in 2Q04 to 0.6% for 3Q04, partially offset by: (iii)
the increase in the average volume of deposits for the quarter.
| |||||
Interest and Charges on Deposits
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
7,930 | 6,776 | (14.6) | 3,030 | 1,292 | (57.4) | |
The decrease mainly reflects: (i) falling average interest rates, in line with the variation in the CDI
from 18.1% in period/03 against 11.7% in period/04, impacting expenses for time deposits and purchase
and sale commitments third-party portfolio - R$ 1,050 and R$ 623 respectively, partially offset by:
(ii) greater expense for securities abroad - R$ 928, generated by negative exchange variation of 1.1% in
period/04 as compared to negative exchange variation of 17.3% in period/03; and (iii) increase in the
average volume of funding for the period.
|
The decrease in this expense mainly reflects negative exchange variation of 8% in 3Q04, compared to
positive exchange variation of 6.8% in 2Q04, impacting securities and other funds obtained abroad by
Bradesco - R$ 2,051, which was partially offset by increased expense for purchase and sale commitments and
time deposits of R$ 148 and R$ 130, respectively, as a result of an increase in interest rates, in line
with the variation in the CDI of 3.7% in 2Q04 to 3.9% in 3Q04.
| |||||
Price-level Restatement and Interest on Technical Reserves for Insurance, Private Pension Plans and Savings Bonds
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
2,419 | 2,294 | (5.2) | 699 | 943 | 34.9 | |
The decrease mainly reflects (i) the fall in average interest rates, in line with the variation in the CDI
rate of 18.1% for period/03 as compared to 11.7% for period/04; offset by: (ii) the increase in the
average volume of technical reserves, for insurance, private pension plans and premium bonds,
particularly PGBL and VGBL products and (iii) the improved accounting policies in period/04, with R$ 171,
recorded in this account rather than in Variation in technical reserves for insurance, private pension
plans and savings bonds pursuant to prior policy.
|
The variation was mainly due to growth from: (i) the increase in sales of supplementary pension plans and
insurance policies, particularly PGBL and VGBL; (ii) the improved accounting policies in 3Q04, with
R$ 171, recorded in this account rather than in Variation in technical reserves for insurance, private
pension plans and savings bonds pursuant to prior policy; partially offset by: (iii) less variation in
the IGP-M, from 3.3% in 3Q04 against 4% in 2Q04, one of the indexes used to remunerate technical reserves
for insurance, private pension plans and savings bonds.
| |||||
Expenses for Borrowings and Onlendings
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
593 | 1,203 | 102.9 | 905 | (18) | (102,0) | |
The increase reflects negative exchange variation of 17.3% in period/03, against negative exchange
variation of 1.1% in period/04, impacting borrowings and onlendings indexed and/or denominated in foreign
currency, as well as the increase in local funding through onlendings from BNDES/FINAME.
|
This decrease reflects negative exchange variation of 8% in 3Q04 against positive exchange variation of
6.8% in 2Q04, impacting borrowings and onlendings indexed and/or denominated in foreign currency.
| |||||
Financial Margin
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
9,135 | 9,715 | 6.3 | 3,081 | 3,304 | 7.2 | |
The variation for the period was mainly due to: (i) increase in interest income - R$ 1,024, comprising
the effect of appreciation of the real in period/03 (17.3%) compared with period/04 (1.1%) - R$ 510 and
growth in the average volume of business - R$ 514; (ii) financial expenses recorded formerly in the
Variation in technical reserves for insurance, private pension plans and savings bonds account - R$
171; and (iii) decrease in non-interest income - R$ 273, mainly due to lower gains on securities and
treasury transactions for period/04.
|
The variation for the quarter was mainly due to: (i) increase in interest income - R$ 14, comprising
growth in the average volume of business - R$ 111 and the drop in spread - R$ 97; (ii) financial expenses
recorded formerly in the Variation in technical reserves for insurance, private pension plans and
savings bonds account - R$ 171; and (iii) increase in non-interest income - R$ 380, derived from the
increase in gains on securities and treasury transactions and credit recoveries in 3Q04.
| |||||
Expenses for Provision for Loan Losses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
1,998 | 1,553 | (22.3) | 514 | 478 | (7.0) | |
Excluding additional provisions - R$ 318 in period/03 and R$ 54 in period/04, the decrease in expenses for
PDD in the amount of R$ 181, was mainly due to our ongoing selective credit granting policy and
tool/instrument enhancements, reflected in the improvement of our credit portfolio risk ratings. In
September 2003 and September 2004, our AA to C rated portfolio comprised 90.4% and 91.6% respectively of
our total portfolio.
|
Excluding additional provisions - R$ 8 in 3Q04 and R$ 20 in 2Q04, the decrease in expenses for PDD in the
amount of R$ 24, was mainly due to our ongoing selective credit granting policy and tool/instrument
enhancements, reflected in the improvement of our credit portfolio risk ratings. In June 2004 and
September 2004, our AA to C rated portfolio comprised 91.3% and 91.6% respectively of our total
portfolio.
| |||||
Income on Commissions and Fees
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
3,282 | 4,149 | 26.4 | 1,375 | 1,455 | 5.8 | |
Growth for the period is derived substantially from the increase in the average volume of transactions and
number of customers, as well as the readjustment of certain fees during the period, especially: (i) fund
management - R$ 248; (ii) credit operations - R$ 162; (iii) checking accounts - R$ 158; and (iv) income on
cards R$ 125; and (v) consortium purchase plan management R$ 46.
|
Growth for the quarter was mainly due to the increase in the average volume of transactions, with: (i)
credit operations - R$ 27; (ii) fund management - R$ 21; (iii) collection R$9; and (iv) checking account
R$ 8.
| |||||
Income from Insurance Premiums, Private Pension Plans and Savings Bonds
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
8,291 | 9,447 | 13.9 | 2,989 | 3,464 | 15.9 | |
The variation
for the period is detailed below:
|
The
variation for the quarter is detailed below:
| |||||
a) Insurance Premiums Retained
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
4,067 | 4,663 | 14.7 | 1,525 | 1,673 | 9.7 | |
The variation for the period was mainly due to growth in sales of Health (corporate) - R$ 335, Auto -
R$ 136 and Vida - R$ 116 products.
|
The increase for the third quarter was mainly due to growth in sales of Auto - R$ 61 and Health
(corporate) - R$ 58.
| |||||
b) Private Pension Plan Contributions
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
3,382 | 3,744 | 10.7 | 1,068 | 1,453 | 36.0 | |
The variation for the period was substantially due to: (i) growth in VGBL product sales - R$ 382; (ii)
receipt of the transfer of the Previllares supplementary pension plan portfolio - R$ 117; e partially
offset by (iii) lower PGBL product sales -R$ 123.
|
The growth for the quarter was substantially derived from; (i) growth in VGBL product sales - R$ 332;
(ii) receipt of the transfer of the Previllares supplementary pension plan portfolio - R$ 117; partially
offset by (iii) lower PGBL product sales - R$ 31.
| |||||
c) Income on Savings Bonds
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
842 | 1,040 | 23.5 | 396 | 338 | (14.6) | |
This
variation reflects the increase in sales and re-investment of bonds maturing during the period.
|
The variation
is partly due to the decrease in the
re-investment of bonds matured in 3Q04.
| |||||
Variation in Technical Reserves for Insurance, Pension Plans and Savings Bonds
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(2,527) | (2,647) | 4.7 | (693) | (1,076) | 55.3 | |
The
variation for the period is detailed below:
|
The
variation for the quarter is detailed below:
| |||||
a) Variation in Technical Reserves for Insurance
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(199) | (160) | (19.6) | (70) | (112) | 60.0 | |
Variations in technical reserves for insurance are directly related to the production of premiums in their
respective effective periods. In period/04, the most significant variation occurred as a result of the
lower reserve recorded in the Auto line - R$ 41.
|
Variations in technical reserves for insurance are directly related to the production of premiums in
their respective effective periods. In 3Q04, the most significant amount was recorded in the Auto line -
R$ 40.
| |||||
b) Variation in Technical Reserves for Pension Plans
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(2,271) | (2,441) | 7.5 | (617) | (974) | 57.9 | |
Variations
in technical reserves are directly related to the production
of premium and contributions in diverse selling periods, against
benefits and redemptions. During the period, reserves were recorded
in VGBL and traditional products - R$ 351 and R$ 787, respectively,
offset by a lower reserve recorded for the PGBL product - R$
797 and by the improved accounting policies in period/04, with
R$ 171, recorded in
Price-level restatement and interest on technical reserves for insurance,
private pension plans and savings bonds rather than in this account.
|
Variations in technical reserves are directly related to the production of premium and contributions in
diverse selling periods, against benefits and redemptions. During the quarter, reserves were recorded,
mainly, in VGBL and traditional products - R$ 326 and R$ 272, respectively, offset by a lower reserve
recorded for the PGBL product - R$ 70 and improved accounting policies in 3Q04, with R$ 171, recorded
in Price-level restatement and interest on insurance, private pension plans and savings bonds rather
than in this account.
| |||||
c) Variation in Technical Reserves for Savings Bonds
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(57) | (46) | (19.3) | (6) | 10 | (266.7) | |
The variations in technical reserves are directly related to income on savings bonds, against related
draws.
|
The variations in technical reserves are directly related to income on savings bonds, against related
draws.
| |||||
Claims - Insurance Operations
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(3,061) | (3,842) | 25.5 | (1,282) | (1,328) | 3.6 | |
The increase in expense with claims for the period was mainly due to: (i) improved calculation of the
provision for claims incurred but not reported (IBNR) during the period, used to analyze the movement of
claims for a period of 54 months rather than 12, as in prior periods, which resulted in the recording of
an extraordinary reserve of R$ 276; (ii) an amount of R$ 74, arising from civil contingencies related to
insurance operations which were recorded in 2Q04 in Other operating expenses; and (iii) the increase in
indemnities in Health, Auto and Life lines - R$ 393, compatible with earned premium growth.
|
Excluding the extraordinary reserves in 2Q04 R$ 145, recorded as a result of improved calculation of
IBNR and in 3Q04 - R$ 74, arising from civil contingencies related to insurance operations which were
recorded in 2Q04 in Other operating expenses, the amounts of retained claims would be R$ 1,137 and
R$ 1,254, respectively, compatible with earned premium growth.
| |||||
Savings Bond Draws and Redemptions
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(798) | (932) | (16.8) | (346) | (313) | (9.5) | |
The increase for the period is due to increased provision recorded for redemptions and draws - R$ 134, as
a result of increased sales of savings bonds.
|
The decrease in this expense for the quarter is due mostly to decreased provision recorded for redemptions
- R$ 40, as a result of the decreased volume of sales of savings bonds in 3Q04 as compared to 2Q04.
| |||||
Insurance and Pension Plan Selling Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(553) | (633) | 14.5 | (205) | (216) | 5.4 | |
The variation for the period is detailed below:
|
The variation for the quarter is detailed below:
| |||||
a) Insurance Product Selling Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(446) | (517) | 15.9 | (167) | (177) | 6.0 | |
The increase in selling expenses for the period occurred mainly in Auto - R$ 28, Life - R$ 24 and Health
line R$ 13 products, in line with the ratio of selling expenses to earned premium.
|
The increase in selling expenses for the period occurred mainly in the Auto - R$ 4, Life - R$ 4 and Health
- R$ 2 lines, even though the ratio of selling expenses to earned premium decreased for the quarter.
| |||||
b) Pension Plan Selling Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(107) | (116) | 8.4 | (38) | (39) | 2.6 | |
The increase in these expenses for the period reflects substantially the growth in VGBL product sales.
|
Expenses for the quarter remained practically stable.
| |||||
Expenses with Pension Plan Benefits and Redemptions
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(1,406) | (1,620) | 15.2 | (590) | (497) | (15.8) | |
The variation for the period was mainly due to the increase in the payment of benefits and redemptions of
traditional private pension plans - R$ 170.
|
The decrease in these expenses for the quarter mainly reflects a lower volume of traditional private
pension plan redemption payments in 3Q04 compared to 2Q04 - R$ 113.
| |||||
Personnel Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(3,507) | (3,684) | 5.0 | (1,234) | (1,273) | 3.2 | |
The variation for the period reflects for the most part: (i) the effect of the collective bargaining
agreement (12.6%) and single payment bonus R$ 171, appropriated in Sept/03 and R$ 279 which impacted
period/04; (ii) the effect of the provision recorded for the proposed collective bargaining agreement
(8.5%) in Sept/04 R$ 69 ; (iii) increased expenses for labor claims R$ 40; and (iv) consolidation of BBV
Banco, Zogbi and BEM - R$ 186. Disregarding the above events the decrease in payroll would amount to
R$ 225 for the period, mainly as a result of the synergy following the merger of banks acquired.
|
The variation was mainly due to: (i) payroll decrease as a result of the synergy following the merger of
banks acquired; partially offset by: (ii) the provision recorded for the proposed collective bargaining
agreement (8.5%) in Sept/04, with an impact of R$ 69.
| |||||
Other Administrative Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(3,486) | (3,649) | 4.7 | (1,216) | (1,225) | 0.7 | |
The increase for the period was mainly due to consolidation of BBV Banco, Zogbi and BEM R$ 208, acquired
in 2004.
|
The variation for the quarter was mainly due to the increase in expense for : (i) transport - R$ 12; (ii)
communications - R$ 4; offset by: (iii) decrease in expenses with leased assets - R$ 7.
| |||||
Tax Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(761) | (1,053) | 38.4 | (343) | (374) | 9.0 | |
This variation was substantially generated by: (i) the increase in expenses for COFINS - R$ 197, as a
result of the rise in the calculation base rate from 3% to 4% in September 2003, as well as an increase in
taxable income; (ii) the increase in expenses for ISS - R$ 47, as a result of a change in legislation; and
(iii) increased expense for CPMF - R$ 29.
|
The increase for the quarter was mainly generated by an increase in expenses for COFINS - R$ 33, which is
compatible with the growth in taxable income during the quarter.
| |||||
Equity in the Earnings of Associated Companies
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(26) | 119 | (557.7) | 122 | (3) | (102.5) | |
The variation was mainly derived from improved results in associated companies for period/04, which
include R$ 79 of non-recurring income in associated Insurance Group companies.
|
The variation was mainly derived from improved results in associated companies determined in 2Q04, which
include R$ 79 of non-recurring income in associated Insurance Group companies.
| |||||
Other Operating Income
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
1,954 | 888 | (54.6) | 280 | 351 | 25.4 | |
The variation for the period was mainly derived from: (i) reversal of provisions for exchange variation -
R$ 504 and other operating provisions - R$ 334, in period/03; and (ii) decrease as a result of the
non-consolidation of Latasa following disposal in period/03 - R$ 123.
|
The variation for the quarter reflects the reversal of other operating provisions, in particular, the
reversal of tax contingencies.
| |||||
Other Operating Expenses
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(1,872) | (2,122) | 13.4 | (803) | (628) | (21.8) | |
The increase was generated in particular: (i) by the growth in operating provisions/other R$ 219; (ii) the
increase in sundry losses (discounts granted on credit operations and fraud) R$ 128; (iii) greater
expenses for amortization of goodwill, as a result of the operations of BBV Banco, Zogbi and BEM - R$ 83;
and partially offset by: (iv) less financial expense R$ 233.
|
The variation was mainly due to the addition to provisions for civil contingencies arising from insurance
operations - R$ 109, in 2Q04. In 3Q04, R$ 74 of this provision was reversed and allocated to the Claims
insurance operations account. Disregarding these factors, there was almost no variation in this account.
| |||||
Operating Income
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
2,667 | 2,583 | (3.1) | 621 | 1,163 | 87.3 | |
The variation for the period was due to: (i) increase in income on commissions and fees - R$ 867; (ii)
increase in financial margin - R$ 580; (iii) less expenses for provision for loan losses - R$ 445; (iv)
increase in equity and earnings in associated companies - R$ 145; partially offset by: (v) decrease in
operating revenue (net of expenses) R$ 1,315; (vi) increase in the personnel and administrative expenses
- R$ 340; (vii) decrease in the margin of contribution of insurance, private pension plan and savings bond
operations - R$ 173; and (viii) increased tax expense - R$ 292.
|
The variation for the quarter was derived from: (i) increase in financial margin - R$ 223; (ii) increase
in the margin of contribution of insurance, private pension plan and savings bond operations R$ 161;
(iii) less operating expenses (net of revenues) R$ 246; increase in commissions and fees R$ 80; (v)
less expenses for provision for loan losses - R$ 36; partially offset by: (vi) decrease in equity and
earnings in associated companies - R$ 125; (vii) increased personnel and administrative expenses - R$ 48;
(viii) increased tax expense -R$ 31.
| |||||
Non-operating Income
Accumulated to September | 2004 | ||||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | ||
(768) | (343) | (55.3) | (202) | (130) | (35.6) | ||
The variation for the period mainly reflects extraordinary amortization of goodwill - R$ 681 for
period/03; offset by extraordinary amortization of goodwill in period/04 - R$ 237.
|
The variation for the quarter reflects substantially: (i) extraordinary amortization of goodwill - R$ 135
in 2Q04 compared to R$ 102 in 3Q04 and the increase in non-operating provisions recorded in 2Q04.
| ||||||
Income Tax and Social Contribution
Accumulated to September | 2004 | |||||
2003 | 2004 | % Variation | 2nd Quarter | 3rd Quarter | % Variation | |
(301) | (233) | (22,6) | 225 | (279) | (224,0) | |
The variation in the expense for income tax and social contribution, for the period, reflects tax charges
on pre-tax income, after additions and exclusions, as described in Note 35 to the financial statements.
|
The variation in this expense for the quarter, reflects the increase in income before income tax and
social contribution, as well as the effect of exchange gain (loss) and equity accounting, which totaled -
R$ 142 in 2Q04 and R$ (127) in 3Q04.
| |||||
Comparative Balance Sheet - In millions of reais
ASSETS | September | September | % | June | September | % |
2003 | 2004 | Variation | 2004 | 2004 | Variation | |
Current assets and long-term receivables | 159,294 | 174,673 | 9.7 | 170,983 | 174,673 | 2.2 |
Funds available | 2,234 | 2,386 | 6.8 | 2,222 | 2,386 | 7.4 |
Interbank investments | 28,558 | 25,126 | (12.0) | 20,529 | 25,126 | 22.4 |
Securities and derivative financial instruments | 47,906 | 58,155 | 21.4 | 56,212 | 58,155 | 3.5 |
Interbank and interdepartmental accounts | 13,253 | 15,336 | 15.7 | 14,683 | 15,336 | 4.4 |
Restricted deposits: | ||||||
Brazilian Central Bank | 12,069 | 14,244 | 18.0 | 13,637 | 14,244 | 4.5 |
Other | 1,184 | 1,092 | (7.8) | 1,046 | 1,092 | 4.4 |
Credit and leasing operations | 41,863 | 49,859 | 19.1 | 47,488 | 49,859 | 5.0 |
Credit and leasing operations | 45,845 | 53,832 | 17.4 | 51,511 | 53,832 | 4.5 |
Allowance for loan and leasing losses | (3,982) | (3,973) | (0.2) | (4,023) | (3,973) | (1.2) |
Other receivables and assets | 25,480 | 23,811 | (6.6) | 29,849 | 23,811 | (20.2) |
Foreign exchange portfolio | 11,926 | 8,960 | (24.9) | 15,126 | 8,960 | (40.8) |
Other receivables and assets | 13,724 | 15,059 | 9.7 | 14,913 | 15,059 | 1.0 |
Allowance for losses | (170) | (208) | 22.4 | (190) | (208) | 9.5 |
Permanent assets | 5,069 | 5,030 | (0.8) | 5,271 | 5,030 | (4.6) |
Investments | 504 | 971 | 92.7 | 1,006 | 971 | (3.5) |
Property and equipment in use and leased assets | 2,613 | 2,288 | (12.4) | 2,326 | 2,288 | (1.6) |
Deferred charges | 1,952 | 1,771 | (9.3) | 1,939 | 1,771 | (8.7) |
Deferred charges | 555 | 541 | (2.5) | 540 | 541 | 0.2 |
Goodwill on acquisition of subsidiaries, net of amortization | 1,397 | 1,230 | (12.0) | 1,399 | 1,230 | (12.1) |
Total | 164,363 | 179,703 | 9.3 | 176,254 | 179,703 | 2.0 |
LIABILITIES | September | September | % | June | September | % |
2003 | 2004 | Variation | 2004 | 2004 | Variation | |
Current and long-term liabilities | 151,256 | 164,907 | 9.0 | 162,500 | 164,907 | 1.5 |
Deposits | 58,346 | 64,787 | 11.0 | 64,133 | 64,787 | 1.0 |
Demand deposits | 11,240 | 14,782 | 31.5 | 13,541 | 14,782 | 9.2 |
Savings deposits | 20,897 | 23,186 | 11.0 | 22,457 | 23,186 | 3.2 |
Interbank deposits | 411 | 14 | (96.6) | 47 | 14 | (70.2) |
Time deposits | 25,798 | 26,805 | 3.9 | 28,088 | 26,805 | (4.6) |
Deposits received under security repurchase agreements | 23,069 | 21,551 | (6.6) | 16,746 | 21,551 | 28.7 |
Funds from issuance of securities | 7,895 | 6,116 | (22.5) | 7,080 | 6,116 | (13.6) |
Securities issued abroad | 7,008 | 5,227 | (25.4) | 5,989 | 5,227 | (12.7) |
Other resources | 887 | 889 | 0.2 | 1,091 | 889 | (18.5) |
Interbank and interdepartmental accounts | 1,474 | 1,739 | 18.0 | 1,090 | 1,739 | 59.5 |
Borrowings and onlendings | 15,186 | 16,715 | 10.1 | 16,817 | 16,715 | (0.6) |
Borrowings | 8,123 | 8,695 | 7.0 | 8,895 | 8,695 | (2.2) |
Onlendings | 7,063 | 8,020 | 13.5 | 7,922 | 8,020 | 1.2 |
Derivative financial instruments | 331 | 308 | (6.9) | 785 | 308 | (60.8) |
Technical reserves for insurance, private pension plans and savings bonds | 24,461 | 31,585 | 29.1 | 29,478 | 31,585 | 7.1 |
Other liabilities | 20,493 | 22,106 | 7.9 | 26,371 | 22,106 | (16.2) |
Foreign exchange portfolio | 5,966 | 3,974 | (33.4) | 8,750 | 3,974 | (54.6) |
Taxes and social security contributions, social and statutory payables | 4,912 | 5,208 | 6.0 | 4,771 | 5,208 | 9.2 |
Subordinated debt | 3,482 | 6,089 | 74.9 | 6,181 | 6,089 | (1.5) |
Sundry | 6,133 | 6,835 | 11.4 | 6,669 | 6,835 | 2.5 |
Deferred income | 30 | 44 | 46.7 | 38 | 44 | 15.8 |
Minority interest in subsidiaries | 111 | 74 | (33.3) | 66 | 74 | 12.1 |
Stockholders equity | 12,967 | 14,678 | 13.2 | 13,650 | 14,678 | 7.5 |
Total | 164,363 | 179,703 | 9.3 | 176,254 | 179,703 | 2.0 |
Equity Analysis - In millions of reais
Funds Available
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
2,234 | 2,386 | 6.8 | 2,222 | 2,386 | 7.4 | |
This increase reflects the increase in the volume of local currency cash funds R$ 377, offsetting the
decrease in the volume of foreign currency cash funds - R$ 225.
|
This variation was due mainly to the increase in the volume of foreign currency cash funds - R$ 163.
| |||||
Interbank Investments
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
28,558 | 25,126 | (12.0) | 20,529 | 25,126 | 22.4 | |
The variation for the period reflects: (i) the decrease in the third-party portfolio and own portfolio
positions of open market investments, down by R$ 5,096 and R$ 1,131, respectively; partially offset by:
(ii) the increase in interbank deposits up by R$ 2,795.
|
The increase for the quarter is mainly due to the increase in the third-party portfolio and own portfolio
positions of open market investments, up by R$ 2,202 and R$ 1,090 respectively, and interbank deposits -
R$ 1,356.
| |||||
Securities (TVM) and Derivative Financial Instruments
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
47,906 | 58,155 | 21.4 | 56,212 | 58,155 | 3.5 | |
The increase for the period is due substantially to: (i) additional funds derived from the increase in
funding, particularly technical reserves for insurance, private pension plans and savings bonds, as well
as issuance of subordinated debit and mitigated in part by: (ii) negative exchange variation of 2.2% for the
period/03 to period/04, impacting foreign-currency indexed and/or denominated securities, which comprise
17.8% of the portfolio; and (iii) the redemption/maturity of securities during the period.
|
The variation is mainly due to: (i) additional funds derived from the increase in funding, particularly
technical reserves for insurance, private pension plans and savings bonds; partially offset by (ii)
negative exchange variation of 8% for the quarter, impacting foreign-currency indexed and/or denominated
securities, which comprise 17.8% of the portfolio; and (iii) the redemption/maturity of securities during
the quarter.
| |||||
Interbank and Interdepartmental Accounts
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
13,253 | 15,336 | 15.7 | 14,683 | 15,336 | 4.4 | |
The variation for the period reflects the increase in compulsory Brazilian Central Bank (BACEN) deposits,
as a result of the increase in the volume of demand and savings deposits which grew 31.5% and 11.0%,
respectively.
|
The increase for the quarter reflects the growth in compulsory BACEN deposits, as a result of the increase
in the volume of demand and savings deposits which grew 9.2% and 3.2%, respectively.
| |||||
Credit and Leasing Operations
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
52,776 | 59,976 | 13.6 | 58,402 | 59,976 | 2.7 | |
The growth was mainly due to: (i) the individual customer segment with a growth rate of 26.8%, in
particular, vehicle products up by 43.6% and Personal Credit, up by 45.7%, reflecting increased
consumer confidence in the present economic scenario. Among corporate customers, the growth rate of 8.5%
reflects the reduced demand in this segment, mainly as a result of excess liquidity of major
corporations. In this segment, we highlight the rural credit product, up by 37.2%, due to the increase
in production and price recovery of the majority of products, in both foreign and domestic markets; and
prices in the ; (ii) consolidation of Banco Zogbi and Banco BEM; (iii) contract adjustments; partially
offset by: (iv) negative exchange variation of 2.2% for period/03 to period/04, affecting
foreign-currency indexed and/or denominated contracts, comprising 21.9% of the total portfolio; and (v)
contract settlements.
N.B. Includes advances on foreign exchange contracts and other receivables and does not include the allowance for loan losses, as described in Note 12 to the financial statements. |
This growth was mainly due to: (i) increase in the balance of the credit portfolio, especially the 4.8%
increase for the quarter in the individual customer segment, in particular vehicle products up by 9.5%
and Personal Credit, up by 9.3%, while the corporate customer segment was up by 1.8% partially
affected by its participation in foreign-currency indexed and/or denominated operations; (ii) contract
adjustments; and mitigated in part by: (iii) negative exchange variation of 8.0% in 3Q04, affecting
foreign-currency indexed and/or denominated contracts, comprising 21.9% of the total portfolio; and (iv)
contract settlements.
N.B. Includes advances on foreign exchange contracts and other receivables and does not include the allowance for loan losses, as described in Note 12 to the financial statements. | |||||
Allowance for Loan Losses (PDD)
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
(4,151) | (4,181) | 0.7 | (4,213) | (4,181) | (0.8) | |
The balance of PDD remained practically stable for the period, evidencing the excellent quality of the
Banks credit portfolio. We noted that the ratio of total PDD to the credit portfolio dropped from 7.9% in
September/03 to 7.0% in September/04, and the ratio of allowance coverage to the abnormal course credit
portfolio, rated from D to H, increased from 142.1% in September/03 to 165.1% in September/04. These
ratios evidence the improvement in credit portfolio quality, as a result of our safe, selective and
consistent credit granting strategy. During the period, R$ 2,004 was recorded, R$ 2,051 was written off
and R$ 77 was added from acquisitions. Additional allowance over minimum requirements increased from R$ 822 in
September/03 to R$ 913 in September/04.
|
The balance of PDD remained practically stable for the quarter, evidencing the excellent quality of the
Banks credit portfolio. We noted that the ratio of total PDD to the credit portfolio dropped from 7.2% in
June/04 to 7% in September/04, and the ratio of allowance coverage to the abnormal course credit
portfolio, rated from D to H, increased from 159.0% in June/04 to 165.1% in September/04. These ratios
evidence the improvement in credit portfolio quality, as a result of our safe, selective and consistent
credit granting strategy. During the quarter, R$ 478 was recorded and R$ 510 was written off. Additional
allowance over minimum requirements increased from R$ 905 in June/04 to R$ 913 in September/04.
| |||||
Other Receivables and Assets
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
24,886 | 23,493 | (5.6) | 29,407 | 23,493 | (20.1) | |
This variation is mainly due to: (i) the decrease in fx portfolio volume R$ 2,965; partially mitigated
by: (ii) the increase in credit card transactions during the period.
N.B. This total is less (net of corresponding PDD) an amount of R$ 595 in September/03 and R$ 318 in September/04, allocated to the Credit Operations and Leasing Operations and Allowance for loan losses accounts. |
This variation mostly reflects: (i) the decrease in fx portfolio volume R$ 6,166.
N.B. This total is less (net of corresponding PDD) an amount of R$ 442 in June/04 and R$ 318 in
September/04, allocated to the Credit Operations and Leasing Operations and Allowance for loan losses
accounts.
| |||||
Permanent Assets
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | ||
5,069 | 5,030 | (0.8) | 5,271 | 5,030 | (4.6) | ||
The variation mainly reflects: (i) transfer of the investment in Banco Espírito Santo (BES) from current
to permanent assets R$ 356; (ii) goodwill on the acquisition of Banco Zogbi and Banco BEM; partially
offset by: (iii) sale of permanent assets in Latasa - R$ 306, following its sale in December/03; and (iv)
amortization of goodwill in subsidiaries R$ 675, of which R$ 355 was amortized on an extraordinary basis
during the period.
|
The variation for the quarter was substantially due to amortization of goodwill in subsidiaries -
R$ 188, of which R$ 102 was amortized on an extraordinary basis.
| ||||||
Demand Deposits
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
11,240 | 14,782 | 31.5 | 13,541 | 14,782 | 9.2 | |
The increase for the period is principally due to the growing number of individual customers, as well as
the increase in funds deposited by corporate entities.
|
The increase for the quarter is principally due to the increase in funds deposited by corporate
entities.
| |||||
Savings Deposits
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
20,897 | 23,186 | 11.0 | 22,457 | 23,186 | 3.2 | |
This growth reflects substantially: (i) 8.3% remuneration (TR + 0.5% p.m.) for the period on deposits;
(ii) increase in the number of customers; offset by: (iii) withdrawals during the period.
|
This growth reflects substantially: (i) 2.1% remuneration (TR + 0.5% p.m.) for the quarter on deposits;
(ii) increase in average volume; offset by: (iii) withdrawals during the quarter.
| |||||
Time Deposits
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
25,798 | 26,805 | 3.9 | 28,088 | 26,805 | (4.6) | |
This increment is due to: (i) remuneration recognized for the period; (ii) increased volume of deposits by
institutional investors; and (iii) net of redemptions during the period.
|
This decrease is due to: (i) the volume of funds redeemed by institutional investors; partially offset by
(iii) remuneration recognized for the quarter.
| |||||
Interbank Deposits
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
411 | 14 | (96.6) | 47 | 14 | (70.2) | |
The variation for the period is due to decreased funding between national financial system institutions.
|
The oscillation for the quarter is due to decreased funding between national financial system institutions.
| |||||
Deposits Received under Security Repurchase Agreements
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
23,069 | 21,551 | (6.6) | 16,746 | 21,551 | 28.7 | |
The variation in this account balance for the period was due mostly to: (i) decrease in the third-party
portfolio R$ 5,161; partially offset by: (ii) increase in own portfolio R$ 3,540.
N.B. Includes investment fund and managed portfolio resources invested in purchase and sale commitments with Banco Bradesco, the investors in which are subsidiary companies included in the consolidated financial statements in the amounts of R$ 10,512 (September/03) and R$ 8,518 (September/04). |
The variation in this account balance for the quarter was mostly due to increases in the own and
third-party portfolios of R$ 2,720 and R$ 2,085, respectively.
N.B Includes investment fund and managed portfolio resources invested in purchase and sale commitments with Banco Bradesco, the investors in which are subsidiary companies included in the consolidated financial statements in the amounts of R$ 8,537 (June/04) and R$ 8,518 (September/04). | |||||
Funds from Acceptance and Issuance of Securities
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
7,895 | 6,116 | (22.5) | 7,080 | 6,116 | (13.6) | |
The decrease is due to the redemption of securities issued broad (Eurobonds) matured and not renewed
during the period, as well as negative exchange variation of 2.2% for the period.
|
The decrease is due to the redemption of securities issued abroad (Eurobonds) matured and not renewed
during the quarter, as well as negative exchange variation of 8% for the quarter.
| |||||
Interbank and Interdepartmental Accounts
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
1,474 | 1,739 | 18.0 | 1,090 | 1,739 | 59.5 | |
The variation reflects mainly the increased volume of foreign currency money orders in September/04 as
compared to September/03.
|
The variation reflects mainly the increased volume of foreign currency money orders in September/04 as
compared to June/04.
| |||||
Borrowings and Onlendings
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
15,186 | 16,715 | 10.1 | 16,817 | 16,715 | (0.6) | |
The variation is due mainly to: (i) the increase in the volume of funds obtained in Brazil via onlendings
from BNDES/FINAME; and (ii) new funding transactions abroad, partially offset by: (iii) negative exchange
variation of 2.2% for period/03 to period/04, affecting the foreign borrowings and onlendings account,
whose transactions are indexed and/or denominated in foreign currency.
|
The decrease for the quarter is mainly due to: (i) negative exchange variation of 8.0% in 3Q04,
affecting the foreign borrowings and onlendings account, whose transactions are indexed and/or
denominated in foreign currency; and partially offset by: (ii) interest appropriated for the quarter.
| |||||
Other Liabilities and Derivative Financial Instruments
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
26,992 | 28,032 | 3.9 | 33,415 | 28,032 | (16.1) | |
The increase was due mostly to: (i) new issuance of subordinated debt in foreign currency; offset by
(ii) decrease in the volume of the fx portfolio; and (iii) negative exchange variation of 2.2% for the
period.
N.B. Excludes advances on foreign exchange contracts of R$ 6,168 and R$ 5,618, allocated to the specific account in credit operations in September/03 and September/04, respectively. |
The variation for the quarter reflects substantially: (i) the decrease in the volume of the fx portfolio
- R$ 4,776; and (ii) negative exchange variation of 8.0% for 3Q04.
N.B. Excludes advances on foreign exchange contracts of R$ 6,259 and R$ 5,618, allocated to the specific account in credit operations in June/04 and September/04, respectively. | |||||
Technical Reserves for Insurance, Private Pension Plans and Savings Bonds
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
24,461 | 31,585 | 29.1 | 29,478 | 31,585 | 7.1 | |
The increase for the period reflects mainly the increased sales of private supplementary pension plans and
insurance policies, in particular, PGBL and VGBL products, for which reserves were accordingly recorded.
|
The growth for the quarter is substantially due to the increased sales of private supplementary pension
plans and insurance policies, in particular, PGBL and VGBL products, for which reserves were accordingly
recorded.
| |||||
Minority Interest in Subsidiaries
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | |
111 | 74 | (33.3) | 66 | 74 | 12.1 | |
The decrease for the period was due to the sale of our stake in Sete Quedas Empreendimentos Imobiliários e
Participações Ltda.
|
This variation reflects minority interest in the increased results determined for 3Q04.
| |||||
Stockholders Equity
September/2003 | September/2004 | % Variation | June/2004 | September/2004 | % Variation | ||
12,967 | 14,678 | 13.2 | 13,650 | 14,678 | 7.5 | ||
This variation is due to: (i) appropriation of net income for the period - R$ 2,718; (ii) increase in the
mark-to-market adjustment reserve of securities and derivatives - R$ 378; (iii) others - R$ 3; offset by:
(iv interest attributed to own capital, paid and accrued - R$ 1,332; and (v) acquisition of own shares -
R$ 56.
|
This variation is due to: (i) appropriation of net income for 3Q04 - R$ 752; (ii) increase in the
mark-to-market adjustment reserve of securities and derivatives - R$ 612; offset by: (iii) interest
attributed to own capital, paid and accrued - R$ 333 and (iv acquisition of own shares - R$ 3.
| ||||||
2 Main Statement of Income Information
Consolidated Statement of Income In thousands of reais
9 months | ||||||
2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |
Income from lending and trading activities | 20,001,283 | 27,529,706 | 31,913,379 | 21,411,673 | 15,519,008 | 18,286,815 |
Credit operations | 9,629,398 | 12,294,528 | 15,726,929 | 11,611,236 | 7,787,745 | 9,602,701 |
Leasing operations | 215,294 | 307,775 | 408,563 | 420,365 | 512,962 | 730,929 |
Securities transactions | 4,162,688 | 7,328,805 | 9,527,663 | 7,367,600 | 6,122,486 | 5,875,823 |
Financial income on insurance, private pension plans and savings bonds | 3,763,277 | 5,359,939 | 3,271,913 | - | - | - |
Derivative financial instruments | 708,965 | 55,192 | (2,073,247) | (270,572) | - | - |
Foreign exchange transactions | 662,657 | 797,702 | 4,456,594 | 2,045,092 | 872,234 | 1,776,925 |
Compulsory deposits | 859,004 | 1,385,765 | 594,964 | 237,952 | 223,581 | 300,437 |
Expenses | 11,839,195 | 17,201,888 | 23,259,783 | 13,312,726 | 9,132,137 | 12,821,198 |
Interest and charges on: | ||||||
Deposits | 6,776,173 | 10,535,497 | 10,993,327 | 6,986,027 | 5,521,407 | 4,954,854 |
Price-level restatement and interest on technical reserves for insurance, private pension plans and savings bonds | 2,293,659 | 3,120,342 | 2,241,283 | - | - | - |
Borrowings and onlendings | 1,203,254 | 1,083,379 | 7,194,161 | 4,316,682 | 2,158,725 | 5,819,063 |
Leasing operations | 13,192 | 12,981 | 12,486 | - | 93 | 18,852 |
Provision for loan losses | 1,552,917 | 2,449,689 | 2,818,526 | 2,010,017 | 1,451,912 | 2,028,429 |
Income from financial intermediation | 8,162,088 | 10,327,818 | 8,653,596 | 8,098,947 | 6,386,871 | 5,465,617 |
Other operating income (expenses) | (5,579,130) | (6,774,710) | (6,343,850) | (5,324,166) | (4,647,041) | (4,404,370) |
Commissions and fees | 4,148,774 | 4,556,861 | 3,711,736 | 3,472,560 | 3,042,699 | 2,099,937 |
Income on insurance premiums, private pension plans and savings bonds | 9,447,520 | 11,726,088 | 10,134,873 | 8,959,259 | 6,919,942 | 5,975,488 |
Variation in technical reserves for insurance, private pension plans and savings bonds | (2,647,145) | (3,670,163) | (2,784,647) | (3,492,217) | (3,001,118) | (2,341,648) |
Claims - insurance operations | (3,841,992) | (3,980,419) | (3,614,963) | (3,251,706) | (2,511,146) | (2,532,768) |
Savings bond draws and redemptions | (931,517) | (1,099,554) | (720,932) | (744,402) | (355,243) | (311,403) |
Insurance and pension plan selling expenses | (633,248) | (762,010) | (667,527) | (689,352) | (645,020) | (635,351) |
Expenses with pension plan benefits and redemptions | (1,619,539) | (2,362,771) | (1,688,639) | (1,369,424) | (912,784) | (557,608) |
Personnel expenses | (3,684,584) | (4,779,491) | (4,075,613) | (3,548,805) | (3,220,607) | (2,783,627) |
Other administrative expenses | (3,648,632) | (4,814,230) | (4,028,377) | (3,435,759) | (2,977,665) | (2,566,657) |
Tax expenses | (1,052,952) | (1,054,397) | (847,739) | (790,179) | (670,138) | (651,801) |
Equity in the earnings of associated companies | 118,560 | 5,227 | 64,619 | 70,764 | 156,300 | 127,100 |
Other operating income | 887,869 | 2,163,639 | 1,320,986 | 1,326,459 | 902,807 | 1,069,562 |
Other operating expenses | (2,122,244) | (2,703,490) | (3,147,627) | (1,831,364) | (1,375,068) | (1,295,594) |
Operating income | 2,582,958 | 3,553,108 | 2,309,746 | 2,774,781 | 1,739,830 | 1,061,247 |
Non-operating income (expenses), net | (342,963) | (841,076) | 186,342 | (83,720) | (123,720) | (224,874) |
Income before taxes and profit sharing | 2,239,995 | 2,712,032 | 2,496,088 | 2,691,061 | 1,616,110 | 836,373 |
Provision for income tax and social contribution | (232,229) | (396,648) | (460,263) | (502,257) | (258,776) | 307,186 |
Non-recurring/extraordinary income | - | - | - | - | 400,813 | - |
Minority interest in subsidiaries | (5,368) | (9,045) | (13,237) | (18,674) | (17,982) | (38,753) |
Net income | 2,002,398 | 2,306,339 | 2,022,588 | 2,170,130 | 1,740,165 | 1,104,806 |
Return on stockholders' equity | 18.59% | 17.02% | 18.65% | 22.22% | 21.50% | 16.32% |
2004 | 2003 | 2002 | ||||||
3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | |
INCOME FROM LENDING AND TRADING ACTIVITIES | 5,525,100 | 7,719,563 | 6,756,620 | 7,443,322 | 7,911,617 | 5,096,140 | 7,078,627 | 3,083,730 |
Credit operations | 2,870,585 | 3,659,023 | 3,099,790 | 3,169,261 | 3,504,644 | 2,685,193 | 2,935,430 | 1,519,950 |
Leasing operations | 73,467 | 56,715 | 85,112 | 78,660 | 85,952 | 65,777 | 77,386 | 74,886 |
Securities transactions | 361,241 | 2,120,909 | 1,680,538 | 2,230,775 | 2,312,036 | 995,040 | 1,790,954 | (712,805) |
Financial income on insurance, private pension plans and savings bonds | 1,337,097 | 1,181,151 | 1,245,029 | 1,411,927 | 1,334,756 | 1,172,214 | 1,441,042 | 1,398,046 |
Derivative financial instruments | 582,105 | (68,697) | 195,557 | 8,877 | 33,158 | (360,489) | 373,646 | 307,885 |
Foreign exchange transactions | (746) | 502,246 | 161,157 | 254,543 | 275,508 | 168,153 | 99,498 | 169,630 |
Compulsory deposits | 301,351 | 268,216 | 289,437 | 289,279 | 365,563 | 370,252 | 360,671 | 326,138 |
EXPENSES | 2,699,294 | 5,152,601 | 3,987,300 | 4,251,574 | 5,357,189 | 3,068,353 | 4,524,772 | 721,442 |
Interest and charges on: | ||||||||
Deposits | 1,291,812 | 3,029,988 | 2,454,373 | 2,605,171 | 3,434,326 | 1,826,314 | 2,669,686 | (5,216) |
Price-level restatement and interest on technical reserves for insurance, private pension plans and savings bonds | 942,651 | 698,695 | 652,313 | 701,184 | 761,148 | 755,950 | 902,060 | 978,809 |
Borrowings and onlendings | (18,123) | 905,617 | 315,760 | 490,305 | 555,389 | (103,670) | 141,355 | (834,266) |
Leasing operations | 4,585 | 4,747 | 3,860 | 3,398 | 3,187 | 3,194 | 3,202 | 3,204 |
Provision for loan losses | 478,369 | 513,554 | 560,994 | 451,516 | 603,139 | 586,565 | 808,469 | 578,911 |
INCOME FROM FINANCIAL INTERMEDIATION | 2,825,806 | 2,566,962 | 2,769,320 | 3,191,748 | 2,554,428 | 2,027,787 | 2,553,855 | 2,362,288 |
OTHER OPERATING INCOME (EXPENSES) | (1,663,296) | (1,945,378) | (1,970,456) | (2,305,000) | (1,887,139) | (1,168,690) | (1,413,881) | (1,703,272) |
Commissions and fees | 1,454,636 | 1,375,202 | 1,318,936 | 1,274,590 | 1,182,359 | 1,082,637 | 1,017,275 | 991,101 |
Income on insurance premiums, private pension plans and savings bonds | 3,464,550 | 2,989,637 | 2,993,333 | 3,434,634 | 2,873,832 | 2,728,022 | 2,689,600 | 3,243,557 |
Variation in technical reserves for insurance, private pension plans and savings bonds | (1,076,201) | (693,433) | (877,511) | (1,143,458) | (863,897) | (708,447) | (954,361) | (1,484,011) |
Claims - insurance operations | (1,328,082) | (1,281,728) | (1,232,182) | (920,068) | (1,066,766) | (1,055,767) | (937,818) | (937,460) |
Savings bond draws and redemptions | (312,043) | (346,151) | (273,323) | (301,838) | (283,009) | (282,275) | (232,432) | (169,295) |
Insurance and pension plan selling expenses | (215,775) | (205,157) | (212,316) | (208,229) | (190,761) | (182,499) | (180,521) | (179,671) |
Expenses with pension plan benefits and redemptions | (496,399) | (590,492) | (532,648) | (955,812) | (555,691) | (461,256) | (390,012) | (508,501) |
Personnel expenses | (1,273,981) | (1,233,345) | (1,177,258) | (1,272,063) | (1,306,415) | (1,147,838) | (1,053,175) | (1,047,093) |
Other administrative expenses | (1,225,032) | (1,215,747) | (1,207,853) | (1,328,021) | (1,232,599) | (1,152,697) | (1,100,913) | (1,111,005) |
Tax expenses | (373,965) | (343,100) | (335,887) | (293,466) | (254,650) | (238,429) | (267,852) | (257,997) |
Equity in the earnings of associated companies | (3,708) | 122,309 | (41) | 30,723 | 7,218 | (27,989) | (4,725) | 32,855 |
Other operating income | 350,660 | 279,688 | 257,521 | 209,159 | 422,630 | 855,810 | 676,040 | (70,632) |
Other operating expenses | (627,956) | (803,061) | (691,227) | (831,151) | (619,390) | (577,962) | (674,987) | (205,120) |
OPERATING INCOME | 1,162,510 | 621,584 | 798,864 | 886,748 | 667,289 | 859,097 | 1,139,974 | 659,016 |
NON-OPERATING INCOME (EXPENSES), NET | (129,249) | (202,568) | (11,146) | (73,495) | 9,854 | (95,872) | (681,563) | 54,804 |
INCOME BEFORE TAXES AND PROFIT SHARING | 1,033,261 | 419,016 | 787,718 | 813,253 | 677,143 | 763,225 | 458,411 | 713,820 |
PROVISION FOR INCOME TAX AND SOCIAL CONTRIBUTION | (278,499) | 224,907 | (178,637) | (95,620) | (111,614) | (242,190) | 52,776 | 5,271 |
MINORITY INTEREST IN SUBSIDIARIES | (2,413) | (2,587) | (368) | (2,496) | (1,638) | (1,325) | (3,586) | (21,058) |
NET INCOME | 752,349 | 641,336 | 608,713 | 715,137 | 563,891 | 519,710 | 507,601 | 698,033 |
Results by Business Segment - In millions of reais
Amounts Accumulated from January to September | |||||||
Financial | Insurance Group | Other Activities | Amount Eliminated | Consolidated Bradesco | |||
Local | Foreign | Local | Foreign | ||||
Income from financial intermediation | 6,298 | 373 | 1,476 | 1 | 11 | 3 | 8,162 |
Other operating income (expenses) | (5,160) | (98) | (901) | (1) | 3 | (3) | (6,160) |
Commissions and fees | 3,675 | 14 | 224 | - | 528 | (292) | 4,149 |
Personnel expenses | (3,123) | (17) | (371) | (1) | (172) | - | (3,684) |
Other administrative expenses | (3,406) | (59) | (400) | (1) | (133) | 350 | (3,649) |
Other revenue (expenses) | (2,306) | (36) | (354) | 1 | (220) | (61) | (2,976) |
Net income accumulated to September 2004 | 1,138 | 275 | 575 | - | 14 | - | 2,002 |
Net income accumulated to September 2003 | 918 | 164 | 451 | 2 | 56 | - | 1,591 |
Composition of Income - %
Increase in the Main Statement of Income Items
Accumulated over the first nine months of 2004 as compared to the same period in 2003 In millions of reais
(*) Composition:
Premiums and contributions, net of variations in technical reserves for
insurance, private pension plans and savings bonds, less claims, redemptions, benefits
and commissions, not including financial income on insurance activities and
price-level restatement and interest on technical reserves which are included in
financial margin.
(**) Mainly reversal of provision for exchange variation of R$ 504
and other operating provisions of R$ 334.
3Q04 in relation to 2Q04 - In millions of reais
(*) | Composition: Premiums and contributions, net of variations in technical reserves for insurance, private pension plans and savings bonds, less claims, redemptions, benefits and commissions, not including financial income on insurance activities and price-level restatement and interest on technical reserves which are included in financial margin. |
Increase in Financial Margin Items plus Exchange Adjustment
Accumulated over the first nine months of 2004 as compared to the same period in 2003 In millions of reais
3Q04 in relation to 2Q04 - In millions of reais
(1) | Includes income on credit operations + income on leasing operations + income on foreign exchange transactions (Note 13a). |
(2) | Includes interest and charges on deposits, excluding expenses for purchase and sale commitments + expenses for borrowings and onlendings + income on compulsory deposits + adjustments to income on foreign exchange transactions (Note 13a). |
(3) | Includes income on securities transactions, less expenses with purchase and sale commitments + financial income on insurance, private pension plans and savings bonds + income on derivative financial instruments + adjustments to income on foreign exchange transactions (Note 13a). |
(4) | Includes price-level restatement and interest on technical reserves for insurance, private pension plans and savings bonds. |
Analysis of the Adjusted Financial Margin and Average Rates
Credit Operations x Income
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
Credit operations | 43,575 | 48,814 | 48,460 | 51,270 |
Leasing operations | 1,496 | 1,400 | 1,364 | 1,402 |
Advances on foreign exchange contracts | 5,799 | 6,031 | 6,162 | 5,938 |
1 - Total Average balance (quarterly) | 50,869 | 56,245 | 55,986 | 58,610 |
2 - Income (*) | 9,430 | 9,891 | 3,704 | 2,983 |
3 - Average return annualized exponentially (2/1) | 25.5% | 24.1% | 29.2% | 22.0% |
(*) | Includes income from credit operations, net results from leasing operations and adjusted results on foreign exchange transactions (Note 13a). |
Securities x Income on Securities Transactions
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
Securities | 40,534 | 55,329 | 54,679 | 57,184 |
Interbank investments | 23,609 | 24,153 | 19,881 | 22,827 |
Subject to repurchase agreements | (17,998) | (21,543) | (15,915) | (19,149) |
Derivative financial instruments | (389) | (371) | (562) | (546) |
4 Total - Average balance (quarterly) | 45,755 | 57,568 | 58,083 | 60,316 |
5 Income on securities transactions (net of expenses for repurchase agreements) (*) | 6,133 | 6,266 | 2,582 | 1,509 |
6 Average rate annualized exponentially (5/4) | 18.3% | 14.8% | 19.0% | 10.4% |
(*) | Includes financial income on insurance, private pension plans, savings bonds, derivative financial instruments and foreign exchange adjustments (Note 13a). |
Total Assets x Income from Financial Intermediation
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
7 - Total assets - Average balance (quarterly) | 151,659 | 173,255 | 168,610 | 177,979 |
8 - Income from financial intermediation | 20,086 | 20,001 | 7,720 | 5, 525 |
9 - Average rate annualized exponentially (8/7) | 18.0% | 15.7% | 19.6% | 13.0% |
Funding x Expenses
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
Deposits | 56,601 | 61,532 | 61,660 | 64,460 |
Funds from acceptance and issuance of securities | 5,435 | 6,651 | 6,821 | 6,598 |
Interbank and interdepartmental accounts | 1,744 | 1,580 | 1,135 | 1,415 |
Subordinated debt | 3,383 | 5,602 | 5,661 | 6,135 |
10 - Total funding - average balance (quarterly) | 67,163 | 75,366 | 75,277 | 78,608 |
11 - Expenses (*) | 3,881 | 3,584 | 2,138 | 218 |
12 - Average rate annualized exponentially (11/10) | 7.8% | 6.4% | 11.9% | 1.1% |
(*) | Funding expenses without repurchase agreements less income on compulsory deposits and foreign exchange adjustments (Note 13a). |
Technical Reserves for Insurance, Private Pension Plans and Savings Bonds x Expenses
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
13 Technical reserves for insurance, private pension plans and savings bonds - Average balance (quarterly) | 21,850 | 28,855 | 28,713 | 30,532 |
14 Expenses (*) | 2,419 | 2,294 | 699 | 943 |
15 Average rate annualized exponentially (14/13) | 15.0% | 10.7% | 10.1% | 12.9% |
(*) | Price-level restatement and interest on technical reserves for insurance, private pension plans and savings bonds. |
Borrowings and Onlendings (Local and Foreign) x Expenses
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
Borrowings | 8,663 | 8,152 | 8,345 | 8,795 |
Onlendings | 6,943 | 7,883 | 7,971 | 7,971 |
16 - Total borrowings and onlendings - Average balance (quarterly) | 15,607 | 16,036 | 16,316 | 16,766 |
17 - Expenses for borrowings and onlendings (*) | 128 | 564 | 369 | 26 |
18 - Average rate annualized exponentially (17/16) | 1.1% | 4.7% | 9.4% | 0.6% |
(*) | Includes foreign exchange adjustments (Note 13a). |
Total Assets x Financial Margin
In millions of reais | Accumulated to September 2003 | Accumulated to September 2004 | 2nd Qtr. 2004 |
3rd Qtr. 2004 |
19 - Total assets - Average balance (quarterly) | 151,659 | 173,255 | 168,610 | 177,979 |
20 - Financial margin (*) | 9,135 | 9,715 | 3,081 | 3,304 |
21 - Average rate annualized exponentially (20/19) | 8.1% | 7.5% | 7.5% | 7.6% |
(*) | Income from financial intermediation excluding provision for loan losses (PDD). |
Financial Market Indicators
Analysis of Financial Margin
Banco Bradescos consolidated financial margin totaled R$ 9,715 million for the nine-month period accumulated to September 2004, up by 6.3% as compared to the same period in 2003 (R$ 9,135 million).
The increase of R$ 1,024 million in interest income comprised growth of R$ 514 million in average business volume and R$ 510 million as effects of appreciation of the real in period/03 (17.3%) compared to period/04 (1.1%). This variation was offset by financial expenses recorded formerly in the Variation in technical reserves for insurance, private pension plans and savings bonds account of R$ 171 million. However, results of non-interest income decreased margin by R$ 273 million, following a decrease in gains on securities and treasury transactions, totaling a positive variation of R$ 580 million between amounts accumulated to September 2004 and for the same period in 2003.
In 3Q04, financial margin totaled R$ 3,304 million, compared to R$ 3,081 million in 2Q04, i.e. up by 7.2% or R$ 223 million. Compared to the prior quarter, interest income was up by R$ 14 million, as a result of growth in the volume of operations in the amount of some R$ 111 million and a drop in spread of R$ 97 million. Interest income was affected by financial expenses of R$ 171, recorded formerly in the Variation in technical reserves for insurance, private pension plans and savings bonds account. On the other hand, non-interest income had a positive effect on margin of R$ 380 million, as a result of the strongly positioned securities portfolio and the sound recovery of credits in 3Q04.
The average financial margin rate annualized (obtained by dividing the result of financial margin by the average balance of total assets) was up by 0.1 percentage point from 7.5% in 2Q04 to 7.6% in 3Q04. However, there is a decrease of 0.6 percentage points if we compare the accumulated rate to September 2004 (7.5%) with the same period in 2003 (8.1%). This downturn was influenced in particular by the sharp fall in the interest rate (CDI) used to remunerate own working capital, funding and float, considering that up to September 2003, CDI annualized was 24.9%, compared to 15.9% for the same period in 2004.
We highlight the following items responsible for generating financial margin:
- | Credit operations, particularly, in the individual customer segment, up by 4.8% for 3Q04, with increases in the Vehicle and Personal Loan products of 9.5% and 9.3%, respectively. |
Comparing the balance at September 2004 with the same month in 2003, the individual customer segment was up by 26.8%, with increases of 43.6% in Auto Financings and 45.7% in Personal Credits. We stress that this increment was partially affected by the acquisitions of Banco Zogbi and Banco BEM in 2004.
The improving economic scenario and the increase in consumer confidence, as well as the supply of products designed to meet different customer profiles, were decisive factors in this segments good performance.
We also stress that Bradesco is improving the quality of its credit granting process to guarantee minimum risk of loss.
- | Insurance area transactions also contributed to financial margin, as a result of the good performance recorded by insurance, private pension plan and savings bond activities, mainly as a result of the increase in sales of supplementary pension plans (PGBL and VGBL) and insurance policies with the corresponding amounts recorded as reserves, since between the second and third quarters, the average volume of technical reserves grew by 7.1%, from R$ 29,478 million in June 2004 to R$ 31,585 million in September 2004 and by 29.1% compared with the same period in 2003. |
- | Emphasis should also be given to the performance of demand and savings account deposits, between June 2004 and September 2Q04, up by 9.2% and 3.2% respectively. Comparing the growth of the closing balances at September 2003 and 2004, demand deposits were up by some 31.5% and savings deposits by 11%. |
Provision for Loan Losses (PDD)
Movement of Allowance for Loan Losses - In millions of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Opening balance | 3,902 | 4,109 | 3,665 | 4,192 | 4,213 | 4,059 |
Amount recorded for the period | 587 | 603 | 1,998 | 514 | 478 | 1,553 |
Amount written off for the period | (551) | (561) | (1,683) | (493) | (510) | (1,508) |
Balance derived from acquired institutions | 171 | - | 171 | - | - | 77 |
Closing balance | 4,109 | 4,151 | 4,151 | 4,213 | 4,181 | 4,181 |
Specific provision | 2,006 | 1,939 | 1,939 | 1,876 | 1,885 | 1,885 |
Generic provision | 1,286 | 1,390 | 1,390 | 1,432 | 1,383 | 1,383 |
Additional provision | 817 | 822 | 822 | 905 | 913 | 913 |
Credit recoveries | 117 | 138 | 351 | 124 | 228 | 458 |
Allowance for Loan Losses (PDD) on Credit and Leasing Operations - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
Allowance for loan losses - PDD (A) | 4,109 | 4,151 | 4,213 | 4,181 |
Credit operations (B) | 53,048 | 52,776 | 58,402 | 59,976 |
PDD on credit operations (A/B) | 7.7% | 7.9% | 7.2% | 7.0% |
Ratio of PDD Coverage to Abnormal Course Credits (D to H)
In millions of reais | ||||
2003 | 2004 | |||
June | September | June | September | |
Total provisions (1) | 4,109 | 4,151 | 4,213 | 4,181 |
Abnormal course credits (D to H) (2) | 2,871 | 2,922 | 2,649 | 2,533 |
PDD coverage ratio (1/2) | 143.1% | 142.1% | 159.0% | 165.1% |
Commissions and Fees
In millions of reais | ||||||
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Checking account | 264 | 287 | 796 | 316 | 324 | 954 |
Cards | 193 | 203 | 598 | 241 | 241 | 723 |
Fund management | 131 | 163 | 401 | 212 | 233 | 649 |
Collection | 146 | 155 | 440 | 151 | 160 | 461 |
Credit operations | 143 | 149 | 420 | 195 | 222 | 582 |
Interbank charges | 61 | 65 | 189 | 63 | 67 | 192 |
Collection of taxes | 45 | 48 | 138 | 49 | 50 | 150 |
Custody and brokerage services | 19 | 21 | 55 | 26 | 24 | 73 |
Consortium purchase plan management | 4 | 8 | 12 | 20 | 23 | 58 |
Other | 77 | 83 | 233 | 102 | 111 | 307 |
Total | 1,083 | 1,182 | 3,282 | 1,375 | 1,455 | 4,149 |
Administrative and Personnel Expenses
In millions of reais | ||||||
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Third-party services | 193 | 214 | 583 | 218 | 216 | 630 |
Communications | 151 | 163 | 463 | 155 | 159 | 476 |
Depreciation and amortization | 138 | 137 | 403 | 118 | 118 | 359 |
Financial system services | 85 | 92 | 260 | 102 | 101 | 300 |
Publicity and advertising | 81 | 83 | 233 | 86 | 88 | 285 |
Transport | 87 | 91 | 258 | 88 | 100 | 282 |
Leasing | 62 | 79 | 209 | 83 | 76 | 236 |
Rents | 67 | 72 | 206 | 75 | 73 | 223 |
Data processing | 65 | 73 | 199 | 71 | 70 | 199 |
Maintenance and repairs | 61 | 60 | 174 | 68 | 69 | 197 |
Materials | 43 | 47 | 129 | 35 | 36 | 109 |
Water, electricity and gas | 28 | 27 | 83 | 31 | 30 | 95 |
Travel | 15 | 17 | 46 | 13 | 14 | 41 |
Other | 77 | 78 | 240 | 73 | 75 | 217 |
Administrative expenses | 1,153 | 1,233 | 3,486 | 1,216 | 1,225 | 3,649 |
Remuneration | 577 | 632 | 1,734 | 613 | 636 | 1,863 |
Single payment bonus (*) | - | 98 | 98 | - | 14 | 14 |
Benefits | 240 | 265 | 706 | 243 | 257 | 736 |
Social charges | 206 | 196 | 587 | 229 | 228 | 683 |
Employee profit sharing | 38 | 48 | 128 | 39 | 43 | 127 |
Training | 20 | 16 | 46 | 11 | 15 | 37 |
Labor/other | 67 | 51 | 208 | 99 | 80 | 224 |
Personnel expenses | 1,148 | 1,306 | 3,507 | 1,234 | 1,273 | 3,684 |
Total administrative and personnel expenses | 2,301 | 2,539 | 6,993 | 2,450 | 2,498 | 7,333 |
(*) | In 2004, the single payment bonus refers to the proposed additional food basket. |
Operating Efficiency
In millions of reais | ||||||
Year | September/2004(*) | |||||
1999 | 2000 | 2001 | 2002 | 2003 | ||
Personnel expenses | 2,784 | 3,221 | 3,549 | 4,076 | 4,780 | 4,957 |
Employee profit sharing | (104) | (112) | (160) | (140) | (171) | (170) |
Other administrative expenses | 2,567 | 2,978 | 3,436 | 4,028 | 4,814 | 4,976 |
Total (1) | 5,247 | 6,087 | 6,825 | 7,964 | 9,423 | 9,763 |
Financial margin = Gross income from financial intermediation less PDD | 7,494 | 7,839 | 10,109 | 11,472 | 12,778 | 13,358 |
Commissions and fees | 2,100 | 3,043 | 3,473 | 3,712 | 4,557 | 5,424 |
Income from insurance premiums, private pension plans and savings bonds | 5,975 | 6,920 | 8,959 | 10,135 | 11,726 | 12,881 |
Variation in technical reserves for insurance, pension plans and savings bonds | (2,342) | (3,001) | (3,492) | (2,785) | (3,670) | (3,790) |
Claims - insurance operations and savings bond draws and redemptions | (2,844) | (2,866) | (3,996) | (4,336) | (5,080) | (5,995) |
Insurance and pension plan selling expenses | (635) | (645) | (689) | (667) | (762) | (841) |
Expenses with pension plan benefits and redemptions | (558) | (913) | (1,370) | (1,689) | (2,363) | (2,577) |
Subtotal | (404) | (505) | (588) | 658 | (149) | (322) |
Equity in the earnings of associated companies | 127 | 156 | 71 | 65 | 5 | 150 |
Other operating expenses | (1,296) | (1,376) | (1,831) | (3,148) | (2,704) | (2,953) |
Other operating income | 1,070 | 903 | 1,326 | 1,321 | 2,164 | 1,097 |
Total (2) | 9,091 | 10,060 | 12,560 | 14,080 | 16,651 | 16,754 |
Efficiency ratio (%) = (1/2) | 57.7 | 60.5 | 54.3 | 56.6 | 56.6 | 58.3 |
(*) | Amounts accumulated over prior 12-month period. |
Operating Efficiency Ratio (%)
In 2Q04, results were impacted negatively as a result of additional provisions, mainly relating to IBNR and labor and civil contingencies. Disregarding these extraordinary events, the Operating Efficiency Ratio (accumulated for the 12-month period) would be 58.7% rather than 60.1%.
The Operating Efficiency Ratio (accumulated for the 12-month period) in 3Q04 was 58.3%, down by 0.4% as compared to the prior quarter adjusted by extraordinary events, prompted mainly by the combination of the strong commitment of the entire Bradesco management to the strict control of expenses and the increase in revenue for the quarter, especially in financial margin and commissions and fees.
The strict control of expenses, enhanced as a result of the creation of the Expenditure Appraisal Committee in March 2004, as well as the synergy process of acquired institutions, have had a positive effect on the Operating Efficiency Ratio.
Another initiative adopted for rationalizing expenditure was the implementation of the PROGRAMA BIS - DE OLHO NA ECONOMIA, exclusively focused on economic ideas and suggestions.
Other Indicators
Other Indicators
3 Main Balance Sheet Information
Consolidated Balance Sheet - In thousands of reais
September | December | ||||||
ASSETS | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |
Current assets and long-term receivables | 174,673,737 | 171,141,348 | 137,301,711 | 105,767,892 | 90,693,025 | 75,136,910 | |
Funds available | 2,386,029 | 2,448,426 | 2,785,707 | 3,085,787 | 1,341,653 | 827,329 | |
Interbank investments | 25,125,701 | 31,724,003 | 21,472,756 | 3,867,319 | 2,308,273 | 2,590,599 | |
Open market investments | 18,279,891 | 26,753,660 | 19,111,652 | 2,110,573 | 1,453,461 | 1,890,828 | |
Interbank deposits | 6,848,497 | 4,970,343 | 2,370,345 | 1,760,850 | 854,815 | 699,771 | |
Provision for losses | (2,687) | - | (9,241) | (4,104) | (3) | - | |
Securities and derivative financial instruments | 58,154,659 | 53,804,780 | 37,003,454 | 40,512,688 | 33,119,843 | 29,196,857 | |
Own portfolio | 48,943,603 | 42,939,043 | 29,817,033 | 27,493,936 | 21,743,924 | 20,950,342 | |
Subject to repurchase agreements | 2,624,914 | 5,682,852 | 1,497,383 | 9,922,036 | 10,822,637 | 5,987,713 | |
Subject to negotiation and intermediation of securities | - | - | - | 526,219 | 9,394 | 157 | |
Restricted deposits - Brazilian Central Bank | 3,920,427 | 3,109,634 | 3,536,659 | 1,988,799 | 421,727 | 2,359,466 | |
Privatization currencies | 73,773 | 88,058 | 77,371 | 25,104 | 9,526 | 7,241 | |
Subject to collateral provided | 1,185,998 | 1,752,882 | 1,836,169 | 715,858 | 783,501 | 449,536 | |
Derivative financial instruments | 584,317 | 232,311 | 238,839 | 581,169 | - | - | |
Allowance for mark-to-market | - | - | - | (740,433) | (670,866) | (557,598) | |
Unrestricted notes | 821,627 | ||||||
Interbank accounts | 15,236,591 | 14,012,837 | 12,943,432 | 5,141,940 | 5,060,628 | 6,454,553 | |
Unsettled payments and receipts | 638,390 | 20,237 | 16,902 | 10,118 | 6,920 | 7,635 | |
Restricted deposits: | |||||||
- Brazilian Central Bank | 14,244,337 | 13,580,425 | 12,519,635 | 4,906,502 | 4,848,668 | 6,184,959 | |
- National Treasury - Rural funding | 578 | 578 | 578 | 712 | 660 | 599 | |
- National Housing System - SFH | 320,955 | 391,871 | 374,177 | 217,518 | 197,191 | 142,653 | |
Interbank onlendings | - | - | - | - | 2,024 | 116,733 | |
Correspondent banks | 32,331 | 19,726 | 32,140 | 7,090 | 5,165 | 1,974 | |
Interdepartmental accounts | 99,863 | 514,779 | 191,739 | 176,073 | 111,636 | 49,018 | |
Internal transfer of funds | 99,863 | 514,779 | 191,739 | 176,073 | 111,636 | 49,018 | |
Credit operations | 48,508,061 | 42,162,718 | 39,705,279 | 35,131,359 | 30,236,106 | 21,535,633 | |
Credit operations: | |||||||
- Public sector | 623,495 | 186,264 | 254,622 | 199,182 | 275,479 | 154,266 | |
- Private sector | 51,757,706 | 45,768,970 | 42,842,693 | 37,689,671 | 32,244,482 | 22,848,128 | |
Allowance for loan losses | (3,873,140) | (3,792,516) | (3,392,036) | (2,757,494) | (2,283,855) | (1,466,761) | |
Leasing operations | 1,351,242 | 1,306,433 | 1,431,166 | 1,567,927 | 1,914,081 | 1,712,343 | |
Leasing receivables: | |||||||
- Public sector | - | - | 45 | 138 | 160 | 800 | |
- Private sector | 2,892,388 | 2,859,533 | 3,141,724 | 3,248,050 | 3,813,369 | 3,515,396 | |
Unearned lease income | (1,441,224) | (1,438,534) | (1,560,278) | (1,557,642) | (1,760,305) | (1,490,803) | |
Allowance for leasing losses | (99,922) | (114,566) | (150,325) | (122,619) | (139,143) | (313,050) | |
Other receivables | 22,665,995 | 24,098,765 | 20,690,054 | 15,685,433 | 16,226,725 | 12,420,787 | |
Receivables on guarantees honored | 434 | 624 | 1,577 | 1,131 | 2,020 | - | |
Foreign exchange portfolio | 8,960,299 | 11,102,537 | 10,026,298 | 5,545,527 | 6,417,431 | 3,375,563 | |
Income receivable | 242,843 | 331,064 | 249,849 | 187,910 | 191,873 | 109,734 | |
Negotiation and intermediation of securities | 85,323 | 602,543 | 175,185 | 761,754 | 497,655 | 839,758 | |
Specific credits | - | - | - | 146,919 | 124,776 | 206,952 | |
Insurance premiums receivable | 961,615 | 889,358 | 718,909 | 995,662 | 818,773 | 994,718 | |
Sundry | 12,623,797 | 11,324,857 | 9,640,966 | 8,107,714 | 8,258,402 | 7,021,988 | |
Allowance for other losses | (208,316) | (152,218) | (122,730) | (61,184) | (84,205) | (127,926) | |
Other assets | 1,145,596 | 1,068,607 | 1,078,124 | 599,366 | 374,080 | 349,791 | |
Other assets | 523,128 | 575,182 | 679,515 | 415,484 | 409,771 | 406,910 | |
Allowance for losses | (255,587) | (245,373) | (243,953) | (164,290) | (171,876) | (166,447) | |
Prepaid expenses | 878,055 | 738,798 | 642,562 | 348,172 | 136,185 | 109,328 | |
Permanent assets | 5,029,761 | 4,956,342 | 5,483,319 | 4,348,014 | 4,185,458 | 5,186,682 | |
Investments | 970,926 | 862,323 | 512,720 | 884,773 | 830,930 | 2,453,425 | |
Investments in associated companies: | |||||||
- Local | 471,130 | 369,935 | 395,006 | 742,586 | 689,002 | 2,044,120 | |
Other investments | 863,376 | 857,985 | 439,342 | 452,871 | 525,316 | 753,901 | |
Allowance for losses | (363,580) | (365,597) | (321,628) | (310,684) | (383,388) | (344,596) | |
Property and equipment in use | 2,263,225 | 2,291,994 | 2,523,949 | 2,152,680 | 2,017,093 | 1,683,069 | |
Buildings in use | 1,368,973 | 1,398,735 | 1,748,409 | 1,475,581 | 1,491,847 | 1,415,720 | |
Other fixed assets | 3,512,586 | 3,480,636 | 3,459,950 | 2,988,008 | 2,705,577 | 2,285,918 | |
Accumulated depreciation | (2,618,334) | (2,587,377) | (2,684,410) | (2,310,909) | (2,180,331) | (2,018,569) | |
Leased assets | 24,581 | 34,362 | 34,323 | 46,047 | 10,688 | 17,026 | |
Leased assets | 66,216 | 63,812 | 51,198 | 51,214 | 19,421 | 18,451 | |
Accumulated depreciation | (41,635) | (29,450) | (16,875) | (5,167) | (8,733) | (1,425) | |
Deferred charges | 1,771,029 | 1,767,663 | 2,412,327 | 1,264,514 | 1,326,747 | 1,033,162 | |
Organization and expansion costs | 1,220,472 | 1,124,058 | 1,037,559 | 874,970 | 731,717 | 477,058 | |
Accumulated amortization | (679,317) | (572,620) | (568,525) | (481,127) | (391,417) | (190,510) | |
Goodwill on acquisition of subsidiaries, net of amortization | 1,229,874 | 1,216,225 | 1,943,293 | 870,671 | 986,447 | 746,614 | |
T O T A L | 179,703,498 | 176,097,690 | 142,785,030 | 110,115,906 | 94,878,483 | 80,323,592 | |
September | December | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |
Current and long-term liabilities | 164,907,794 | 162,406,307 | 131,652,394 | 100,199,709 | 86,654,746 | 73,249,480 | |
Deposits | 64,786,810 | 58,023,885 | 56,363,163 | 41,083,979 | 36,468,659 | 34,723,630 | |
Demand deposits | 14,781,735 | 12,909,168 | 13,369,917 | 8,057,627 | 7,500,518 | 6,803,429 | |
Savings deposits | 23,186,217 | 22,140,171 | 20,730,683 | 18,310,948 | 17,835,745 | 17,244,520 | |
Interbank deposits | 14,267 | 31,400 | 23,848 | 40,446 | 568,416 | 468,950 | |
Time deposits | 26,804,591 | 22,943,146 | 22,238,715 | 14,674,958 | 10,563,980 | 10,206,731 | |
Deposits received under security repurchase agreements | 21,551,113 | 32,792,725 | 16,012,965 | 14,057,327 | 12,108,350 | 7,814,288 | |
Own portfolio | 5,820,361 | 6,661,473 | 915,946 | 12,178,855 | 10,696,199 | 5,973,260 | |
Third-party portfolio | 15,628,952 | 17,558,740 | 12,188,054 | 1,878,472 | 1,412,151 | 1,841,028 | |
Unrestricted portfolio | 101,800 | 8,572,512 | 2,908,965 | - | - | - | |
Funds from issuance of securities | 6,115,921 | 6,846,896 | 3,136,842 | 4,801,410 | 4,111,171 | 4,628,344 | |
Exchange acceptances | - | - | 1,214 | - | - | - | |
Mortgage notes | 889,114 | 1,030,856 | 384,727 | 780,425 | 741,248 | 452,379 | |
Debentures | - | 7,291 | 100,369 | 48,921 | 1,039 | 1,043,125 | |
Securities issued abroad | 5,226,807 | 5,808,749 | 2,650,532 | 3,972,064 | 3,368,884 | 3,132,840 | |
Interbank accounts | 322,154 | 529,332 | 606,696 | 192,027 | 107,129 | 59,607 | |
Interbank onlendings | - | - | - | - | - | - | |
Correspondent banks | 171,619 | 159,098 | 35,686 | 4,519 | 1,059 | 10,016 | |
Interdepartmental accounts | 150,535 | 370,234 | 571,010 | 187,508 | 106,070 | 49,591 | |
Third-party funds in transit | 1,417,570 | 1,782,068 | 1,337,729 | 762,505 | 904,188 | 879,592 | |
Borrowings | 1,417,570 | 1,782,068 | 1,337,729 | 762,505 | 904,188 | 879,592 | |
Local borrowings - official institutions | 8,694,942 | 7,223,356 | 9,390,630 | 7,887,154 | 6,463,555 | 4,864,414 | |
Local borrowings - other institutions | 1,648 | 2,070 | 3,368 | 2,979 | 9,737 | 10,178 | |
Foreign borrowings | 11,784 | 4,010 | 216,812 | 230,468 | 170,775 | 138,279 | |
Local onlendings - official institutions | 8,681,510 | 7,217,276 | 9,170,450 | 7,653,707 | 6,283,043 | 4,715,957 | |
National Treasury | 7,969,414 | 7,554,266 | 7,000,046 | 5,830,633 | 5,096,604 | 4,123,486 | |
National Bank for Economic and Social Development (BNDES) | 57,950 | 51,398 | 62,187 | - | - | - | |
Federal Savings Bank (CEF) | 3,568,367 | 3,403,462 | 3,437,319 | 3,067,220 | 2,589,284 | 1,650,243 | |
Government Agency for Machinery and Equipment Financing (FINAME) | 399,298 | 459,553 | 453,803 | 433,381 | 405,264 | 388,109 | |
Other institutions | 3,939,822 | 3,638,966 | 3,045,176 | 2,321,508 | 2,090,374 | 2,064,153 | |
Foreign onlendings | 3,977 | 887 | 1,561 | 8,524 | 11,682 | 20,981 | |
Foreign onlendings | 50,855 | 17,161 | 47,677 | 316,283 | 108,178 | 185,774 | |
Derivative financial instruments | 50,855 | 17,161 | 47,677 | 316,283 | 108,178 | 185,774 | |
Technical reserves for insurance, private pension plans and savings bonds | 308,046 | 52,369 | 576,697 | 111,600 | - | - | |
Other liabilities | 31,584,982 | 26,408,952 | 19,155,479 | 13,853,426 | 10,338,065 | 7,563,919 | |
Collection of taxes and other contributions | 22,105,987 | 21,175,297 | 18,024,470 | 11,303,365 | 10,948,847 | 8,406,426 | |
Foreign exchange portfolio | 1,211,707 | 130,893 | 108,388 | 181,453 | 128,785 | 113,693 | |
Social and statutory payables | 3,974,239 | 5,118,801 | 5,002,132 | 1,343,769 | 2,439,657 | 1,029,963 | |
Taxes and social security contributions | 737,548 | 851,885 | 666,409 | 572,265 | 560,533 | 603,405 | |
Negotiation and intermediation of securities | 4,470,918 | 4,781,458 | 4,376,031 | 3,371,127 | 3,094,628 | 2,665,681 | |
Subordinated debt | 6,089,471 | 4,994,810 | 3,321,597 | 969,842 | - | - | |
Sundry | 5,547,973 | 4,701,492 | 4,440,439 | 3,557,524 | 4,132,849 | 3,079,557 | |
Deferred income | 44,032 | 31,774 | 15,843 | 9,020 | 34,632 | 17,543 | |
Deferred income | 44,032 | 31,774 | 15,843 | 9,020 | 34,632 | 17,543 | |
Minority interest in subsidiary companies | 73,965 | 112,729 | 271,064 | 139,231 | 96,903 | 287,350 | |
Stockholders' equity | 14,677,707 | 13,546,880 | 10,845,729 | 9,767,946 | 8,092,202 | 6,769,219 | |
Capital: | |||||||
- Local residents | 6,343,955 | 6,343,955 | 4,960,425 | 4,940,004 | 5,072,071 | 4,206,644 | |
-Foreign residents | 656,045 | 656,045 | 239,575 | 259,996 | 74,429 | 58,856 | |
Unpaid capital | - | - | - | - | (400,500) | (465,500) | |
Capital reserves | 10,645 | 8,665 | 7,435 | 7,435 | 19,002 | 5,643 | |
Revenue reserves | 7,084,529 | 6,066,640 | 5,715,317 | 4,614,110 | 3,403,020 | 2,963,576 | |
Mark-to-market adjustment - securities and derivatives | 638,628 | 478,917 | 9,152 | - | - | - | |
Treasury stock | (56,095) | (7,342) | (86,175) | (53,599) | (75,820) | - | |
Stockholders' equity managed by the parent company | 14,751,672 | 13,659,609 | 11,116,793 | 9,907,177 | 8,189,105 | 7,056,569 | |
T O T A L | 179,703,498 | 176,097,690 | 142,785,030 | 110,115,906 | 94,878,483 | 80,323,592 | |
Balance Sheet by Currency and Exchange Exposure at September 30, 2004 - In millions of reais
Balance Sheet | Currency | ||
Local | Foreign (1) (2) | ||
ASSETS | |||
Current and long-term receivables | 174,673 | 144,625 | 30,048 |
Funds available | 2,386 | 1,955 | 431 |
Interbank investments | 25,126 | 19,730 | 5,396 |
Securities and derivative financial instruments | 58,155 | 48,865 | 9,290 |
Interbank and interdepartmental accounts | 15,336 | 15,328 | 8 |
Credit and leasing operations | 49,859 | 42,418 | 7,441 |
Other receivables and assets | 23,811 | 16,329 | 7,482 |
Permanent assets | 5,030 | 4,597 | 433 |
Investments | 971 | 541 | 430 |
Property and equipment in use and leased assets | 2,288 | 2,285 | 3 |
Deferred charges | 1,771 | 1,771 | - |
Total assets | 179,703 | 149,222 | 30,481 |
LIABILITIES | |||
Current and long-term liabilities | 164,907 | 138,401 | 26,506 |
Deposits | 64,787 | 61,663 | 3,124 |
Deposits received under security repurchase agreements | 21,551 | 19,300 | 2,251 |
Funds from issuance of securities | 6,116 | 889 | 5,227 |
Interbank and interdepartmental accounts | 1,740 | 464 | 1,276 |
Borrowings and onlendings | 16,715 | 7,474 | 9,241 |
Derivative financial instruments | 308 | 308 | - |
Technical reserves for insurance, private pension plans and savings bonds | 31,585 | 31,561 | 24 |
Other liabilities | |||
- Subordinated debt | 6,089 | 2,963 | 3,126 |
- Other | 16,016 | 13,779 | 2,237 |
Deferred income | 44 | 44 | - |
Minority interest in subsidiaries | 74 | 74 | - |
Stockholders' equity | 14,678 | 14,678 | - |
Total | 179,703 | 153,197 | 26,506 |
Net position of assets and liabilities | 3,975 | ||
Net position of derivatives (2) | (3,781) | ||
Other memorandum accounts, net (3) | (404) | ||
Net exchange position (liability) | (210) | ||
(1) | Amounts expressed and/or indexed mainly in USD. |
(2) | Excluding operations maturing in D +1, to be settled in currency at September 30, 2004 price levels. |
(3) | Leasing commitments and others are controlled in memorandum accounts. |
Total assets by currency
Balance Sheet by Maturity at September 30, 2004 - In millions of reais
Up to 30 days |
From 31 to 180 days | From 181 to 360 days | More than 360 days | Indeterminate | Total | |
ASSETS | ||||||
Current assets and long-term receivables | 104,470 | 18,798 | 14,430 | 36,975 | - | 174,673 |
Funds available | 2,386 | - | - | - | - | 2,386 |
Interbank investments | 23,570 | 502 | 387 | 667 | - | 25,126 |
Securities and derivative financial instruments(1) | 41,121 | 840 | 3,741 | 12,453 | - | 58,155 |
Interbank and interdepartmental accounts | 15,042 | 6 | 8 | 280 | - | 15,336 |
Credit and leasing operations | 8,959 | 16,420 | 8,745 | 15,735 | - | 49,859 |
Other receivables and assets | 13,392 | 1,030 | 1,549 | 7,840 | - | 23,811 |
Permanent assets | 57 | 284 | 342 | 2,766 | 1,581 | 5,030 |
Investments | - | - | - | - | 971 | 971 |
Property and equipment in use and leased assets | 20 | 98 | 118 | 1,442 | 610 | 2,288 |
Deferred charges | 37 | 186 | 224 | 1,324 | - | 1,771 |
Total | 104,527 | 19,082 | 14,772 | 39,741 | 1,581 | 179,703 |
LIABILITIES | ||||||
Current and long-term liabilities | 94,702 | 14,723 | 9,775 | 45,707 | - | 164,907 |
Deposits(2) | 41,195 | 4,517 | 4,959 | 14,116 | - | 64,787 |
Deposits received under security repurchase agreements | 19,290 | 635 | 247 | 1,379 | - | 21,551 |
Funds from the acceptance and issuance of securities | 249 | 2,725 | 217 | 2,925 | - | 6,116 |
Interbank and interdepartmental accounts | 1,740 | - | - | - | - | 1,740 |
Borrowings and onlendings | 1,766 | 5,215 | 3,639 | 6,095 | - | 16,715 |
Derivative financial instruments | 276 | 4 | 19 | 9 | - | 308 |
Technical reserves for insurance, private pension plans and savings bonds (2) | 19,504 | 980 | 291 | 10,810 | - | 31,585 |
Other liabilities: | ||||||
- Subordinated debt | 114 | 24 | - | 5,951 | - | 6,089 |
- Other | 10,568 | 623 | 403 | 4,422 | - | 16,016 |
Deferred income | 44 | - | - | - | - | 44 |
Minority interest in subsidiaries | - | - | - | - | 74 | 74 |
Stockholders' equity | - | - | - | - | 14,678 | 14,678 |
Total | 94,746 | 14,723 | 9,775 | 45,707 | 14,752 | 179,703 |
Accumulated net assets in 2004 | 9,781 | 14,140 | 19,137 | 13,171 | - | - |
Accumulated net assets in 2003 | 14,690 | 19,810 | 22,053 | 11,970 | - | - |
(1) | Investment fund applications are classified as up to 30 days. |
(2) | Demand and savings account deposits and technical reserves for insurance and private pension plans, comprising VGBL and PGBL products, are classified as up to 30 days without considering average historical turnover. |
Total Assets by Maturity
Securities - In millions of reais
Consolidated Portfolio Composition by Issuer at September 30, 2004 (1)
Securities (1) | Up to 30 days |
From 31 to 180 days | From 181 to 360 days | More than 360 days | Market/Book value (4), (5) and (6) | Restated cost value | Mark-to-market adjustment |
GOVERNMENT SECURITIES | 1,396 | 4,618 | 7,083 | 25,907 | 39,004 | 38,879 | 125 |
Financial Treasury Notes | 643 | 2,235 | 2,017 | 10,868 | 15,763 | 15,771 | (8) |
Federal Treasury Notes | 210 | 479 | 57 | 8,332 | 9,078 | 9,092 | (14) |
National Treasury Bonds | 200 | 1,881 | 4,958 | 58 | 7,097 | 7,099 | (2) |
Brazilian foreign debt notes | 198 | - | - | 6,522 | 6,720 | 6,571 | 149 |
Central Bank Notes | - | - | - | 55 | 55 | 56 | (1) |
Other | 145 | 23 | 51 | 72 | 291 | 290 | 1 |
CORPORATE BONDS | 3,156 | 2,609 | 262 | 4,606 | 10,633 | 9,798 | 835 |
Certificates of Bank Deposit | 292 | 2,399 | 52 | 1,117 | 3,860 | 3,860 | - |
Debentures | 105 | 11 | 61 | 1,354 | 1,531 | 1,562 | (31) |
Shares | 2,257 | - | - | - | 2,257 | 1,368 | 889 |
Corporate bonds abroad | 39 | 36 | 66 | 1,402 | 1,543 | 1,507 | 36 |
Derivative financial instruments | 319 | 146 | 70 | 49 | 584 | 594 | (10) |
Other | 144 | 17 | 13 | 684 | 858 | 907 | (49) |
PURCHASE AND SALE COMMITMENTS(3) | - | 2,329 | 2,597 | 3,592 | 8,518 | 8,518 | - |
Total at September 30, 2004 | 4,552 | 9,556 | 9,942 | 34,105 | 58,155 | 57,195 | 960 |
Total at September 30, 2003 | 3,148 | 3,165 | 7,581 | 34,011 | 47,905 | 47,297 | 608 |
Composition by Maturity at September 30, 2004
Securities (1) | Up to 30 days |
From 31 to 180 days | From 181 to 360 days | More than 360 days | Market/Book value (4), (5) and (6) | Restated cost value | Mark-to-market adjustment |
Trading securities (2) | 2,013 | 8,926 | 9,748 | 22,222 | 42,909 | 42,952 | (43) |
Financial Treasury Notes | 569 | 1,990 | 1,970 | 10,237 | 14,766 | 14,768 | (2) |
Purchase and Sale Commitments (3) | - | 2,329 | 2,597 | 3,592 | 8,518 | 8,518 | - |
National Treasury Bonds | 200 | 1,875 | 4,958 | 58 | 7,091 | 7,093 | (2) |
Federal Treasury Notes | 210 | 268 | 57 | 4,575 | 5,110 | 5,128 | (18) |
Debentures | 16 | 11 | - | 922 | 949 | 949 | - |
Certificates of Bank Deposit | 130 | 2,395 | 47 | 1,094 | 3,666 | 3,666 | - |
Brazilian foreign debt notes | 36 | - | - | 862 | 898 | 876 | 22 |
Shares | 560 | - | - | - | 560 | 560 | - |
Other | 292 | 58 | 119 | 882 | 1,351 | 1,394 | (43) |
Securities available for sale (2) | 2,181 | 399 | 124 | 7,463 | 10,167 | 9,154 | 1,013 |
Brazilian foreign debt notes | 124 | - | - | 4,333 | 4,457 | 4,330 | 127 |
Shares | 1,697 | - | - | - | 1,697 | 808 | 889 |
Corporate bonds abroad | 10 | 1 | - | 1,076 | 1,087 | 1,043 | 44 |
National Treasury Bonds | 73 | 224 | 47 | 630 | 994 | 1,000 | (6) |
Federal Treasury Notes | - | 126 | - | 714 | 840 | 836 | 4 |
Debentures | 89 | - | 61 | 431 | 581 | 612 | (31) |
Brazilian foreign debt notes | 161 | 5 | 4 | 23 | 193 | 193 | - |
Other | 27 | 23 | 12 | 256 | 318 | 332 | (14) |
Securities held to maturity (7) | 39 | 85 | - | 4,371 | 4,495 | 4,495 | - |
Federal Treasury Notes | - | 85 | - | 3,043 | 3,128 | 3,128 | - |
Brazilian foreign debt notes | 38 | - | - | 1,327 | 1,365 | 1,365 | - |
Other | 1 | - | - | 1 | 2 | 2 | - |
Derivative financial instruments | 319 | 146 | 70 | 49 | 584 | 594 | (10) |
Total at September 30, 2004 | 4,552 | 9,556 | 9,942 | 34,105 | 58,155 | 57,195 | 960 |
Total at September 30, 2003 | 3,148 | 3,165 | 7,581 | 34,011 | 47,905 | 47,297 | 608 |
Derivative financial instruments (Liabilities) | |||||||
Total at September 30, 2004 | (276) | (4) | (19) | (9) | (308) | (307) | (1) |
Total at September 30, 2003 | (206) | (18) | (23) | (84) | (331) | (302) | (29) |
(1) | Investments in fund quotas were distributed based on the securities comprising their portfolios maintaining the fund category classification. |
(2) | Securities of Banco BEM, in the amount of R$ 521 million, mainly financial treasury notes, classified as securities held to maturity, were reclassified at June 30, 2004, R$ 499 million of which to trading securities, decreasing results by R$ 7 million, net of tax effects and R$ 22 million to securities available for sale, decreasing the specific stockholders equity account by R$ 4 million, net of tax effects. In Banco Zogbi, equity securities in the amount of R$ 5 million, classified as trading securities, were transferred to securities available for sale, pursuant to BACEN Circular 3068/2001, in line with the portfolio profile of Banco Bradesco, the new parent company. |
(3) | Investment fund and managed portfolio resources invested in purchase and sale commitments with Banco Bradesco, the investors in which are subsidiary companies, included in the consolidated financial statements. |
(4) | The number of days to maturity was based on the maturity of the securities, regardless of accounting classification. |
(5) | This column reflects book value subsequent to mark-to-market adjustment, except for securities held to maturity, the market value of which is higher than purchase cost by R$ 884 million (September 2003 - R$ 448 million). |
(6) | The market value of securities is determined based on the market price practiced on the balance sheet date. In the event no market prices are available, amounts are estimated based on the prices quoted by dealers, on price definition models, quotation models or quotations for instruments with similar characteristics. |
(7) | In compliance with the provisions of Article 8 of BACEN Circular 3068/2001, Bradesco declares that it has both the financial capacity and the intention to hold to maturity the securities classified in the securities held to maturity category. This financial capacity is evidenced in Note 7, which presents the maturities of asset and liability operations at the base date of September 30, 2004. |
Summary of the Classification of Securities at September 30, 2004
Financial | Insurance/ Savings Bond |
Private Pension Plan | Other Activities | Total | % | |
Trading securities | 13,826 | 4,722 | 24,280 | 81 | 42,909 | 73.80 |
Securities available for sale | 7,195 | 1,459 | 1,492 | 21 | 10,167 | 17.47 |
Securities held to maturity | 1,452 | - | 3,043 | - | 4,495 | 7.73 |
Derivative financial instruments | 584 | - | - | - | 584 | 1.00 |
Total at September 30, 2004 | 23,057 | 6,181 | 28,815 | 102 | 58,155 | 100.00 |
Total at September 30, 2003 | 21,285 | 4,302 | 22,185 | 133 | 47,905 | |
Classification of Securities by Segment %
Credit Operations
We present below the composition of the credit portfolio by type of operation and economic activity sector.
By Type of Operation - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
Discount of trade receivables and other loans | 24,826 | 24,481 | 25,731 | 26,818 |
Financings | 16,082 | 15,721 | 18,815 | 19,608 |
Rural and agribusiness loans | 4,007 | 4,204 | 5,613 | 5,955 |
Leasing operations | 1,521 | 1,439 | 1,352 | 1,451 |
Advances on foreign exchange contracts | 5,814 | 6,168 | 6,259 | 5,618 |
Credit operations - Subtotal | 52,250 | 52,013 | 57,770 | 59,450 |
Other receivables | 798 | 763 | 632 | 526 |
Total credit operations | 53,048 | 52,776 | 58,402 | 59,976 |
Sureties and guarantees recorded in memorandum accounts | 5,581 | 6,433 | 6,751 | 6,960 |
By Economic Activity Sector - In millions of reais
2004 | ||||
June | % | September | % | |
Public Sector | 608 | 1.0 | 625 | 1.0 |
Private Sector | 57,794 | 99.0 | 59,351 | 99.0 |
Manufacturing | 18,530 | 31.8 | 18,458 | 30.8 |
Commerce | 8,698 | 14.9 | 9,544 | 15.9 |
Financial intermediation | 657 | 1.1 | 355 | 0.6 |
Services | 10,989 | 18.8 | 11,203 | 18.7 |
Agriculture, livestock raising, fishing, forest development and management |
1,092 | 1.9 | 1,103 | 1.8 |
Individuals | 17,828 | 30.5 | 18,688 | 31.2 |
Total | 58,402 | 100.0 | 59,976 | 100,0 |
By Segment
At the end of the third quarter of 2004, 99.0% of the credit portfolio was directed to the private sector, remaining stable as compared with the prior quarter. By economic activity sector, manufacturing maintained the majority of credit volume, with a 30.8% share of total operations, particularly food and beverage, steel, metal products and mechanics. Credits directed to the service sector, including financial intermediaries, comprised 19.3%, whereas commerce and farming/livestock activities recorded a 15.9% and 1.8% portfolio share, respectively. Loans to consumers comprised 31.2% of the portfolio.
Portfolio Performance
The balance of credit operations in 3Q04 was compatible with economic activity for the quarter, reflecting the continued dynamic export performance and recovery of internal demand, strengthened by the expansion of income and employment, and recovery of consumer customer payment capacity.
As a result, the balance of Bradescos consolidated credit portfolio at September 30, totaled R$ 60.0 billion, an increase of 2.7%, as compared to June 30, or 13.6% when analyzed over the prior 12-month period.
For 4Q04, the rhythm of economic growth is expected to be maintained, especially considering seasonal year-end factors, with the increases in internal demand and private investment reflected in credit expansion.
Composition of the Credit Portfolio by Risk Levels
The classification and quality of the credit portfolio by risk level, at the end of September 2004, improved in comparison with the second quarter of 2004. AA to C rated operations, classified by BACEN as normal course operations, totaled 91.6% of portfolio balance, maintaining the trend for improvement, while 2.9% of operations were classified at risk administration level D and will remain so until this risk is reduced or guarantees with greater liquidity are obtained. Only 5.5% were considered to be abnormal course operations, subject to partial loss after the application of customary recovery procedures. The maintenance of these rates reflects the Banks permanent use and enhancement of credit assessment and monitoring instruments.
By Rating In millions of reais
Risk Level | Portfolio Balance |
Accumulated Percentage (1) |
Minimum Requirement | Additional Allowance (4) | Existing Allowance | |||
Specific (2) | Generic (3) | Total | ||||||
Past Due | Falling Due | |||||||
AA | 15,957 | 26.6 | - | - | - | - | - | - |
A | 23,117 | 65.1 | - | - | 115 | 115 | 68 | 183 |
B | 6,061 | 75.3 | 1 | 5 | 55 | 61 | 21 | 82 |
C | 9,789 | 91.6 | 6 | 16 | 272 | 294 | 368 | 662 |
Subtotal | 54,924 | 91.6 | 7 | 21 | 442 | 470 | 457 | 927 |
D | 1,765 | 94.5 | 14 | 22 | 141 | 177 | 221 | 398 |
E | 385 | 95.2 | 35 | 35 | 45 | 115 | 62 | 177 |
F | 579 | 96.1 | 61 | 65 | 163 | 289 | 89 | 378 |
G | 354 | 96.7 | 83 | 63 | 102 | 248 | 84 | 332 |
H | 1,969 | 100.0 | 1,015 | 464 | 490 | 1,969 | - | 1,969 |
Total at September 30, 2004 |
59,976 | - | 1,215 | 670 | 1,383 | 3,268 | 913 | 4,181 |
Total at June 30, 2004 |
58,402 | - | 1,146 | 730 | 1,432 | 3,308 | 905 | 4,213 |
(1) | On total portfolio. |
(2) | For operations with installments overdue by more than 14 days. |
(3) | Recorded based on the customer/transaction classification. |
(4) | The additional provision is recorded based on management's experience and expected collection of the credit portfolio to determine the total allowance deemed sufficient to cover specific and general portfolio risks, as well as the provision calculated based on risk level ratings and the corresponding minimum provision requirements established by CMN Resolution 2682. The additional provision per customer was classified in the above table according to the corresponding risk levels. |
The volume of the allowance for loan losses in September 2004 totaled R$ 4,181 million, corresponding to 7.0% of total credit operations. However, of this amount, only 45.1% effectively comprises overdue operations (past due and falling due), and the remaining portion is recorded as a precaution only, based on the customers' internal classification (33.1%) or to cover specific and general portfolio risks (21.8%).
Credit Portfolio by Maturity - in millions of reais
The maturity of the normal course credit portfolio evidences a concentration of short-term credits, with 40.7% maturing in up to 90 days. However, over the prior 12-month period, operation terms have gradually lengthened, as a result of economic stability.
Movement of the Portfolio between September 2003 and 2004
The performance of the consolidated credit portfolio over the prior twelve months up to September 2004, despite the low level of economic activity, evidences the maintenance of the quality of the assets, in particular as a result of new borrowers, corresponding to an increase of 17.1%, compared to the balance of the credit portfolio up to September 2003.
Portfolio Movement between September 2003 and 2004
Borrowers remaining from September 2003 |
New borrowers between September 2003 and 2004 |
Total credit at September 2004 | ||||
Level | In millions reais | % | In millions reais | % | In millions reais | % |
AA to C | 46,318 | 90.9 | 8,606 | 95.2 | 54,924 | 91.6 |
D | 1,658 | 3.3 | 107 | 1.2 | 1,765 | 2.9 |
E to H | 2,960 | 5.8 | 327 | 3.6 | 3,287 | 5.5 |
Total | 50,936 | 100.0 | 9,040 | 100.0 | 59,976 | 100.0 |
As a result, the quality of the credits granted to new borrowers during the year has proved satisfactory and accordingly the percentage of credit operations classified as normal course (from AA to C) maintained its customary high level, totaling 91.6% at the end of September 2004, compared to 91.3% at the end of June 2004 and 90.4% in September 2003.
Concentration of Credit Portfolio In millions of reais
2003 | 2004 | |||||||
June | % | September | % | June | % | September | % | |
Largest borrower | 784 | 1.5 | 771 | 1.5 | 779 | 1.3 | 931 | 1.6 |
10 largest borrowers | 4,871 | 9.2 | 5,060 | 9.6 | 5,536 | 9.5 | 5,746 | 9.6 |
20 largest borrowers | 7,926 | 14.9 | 8,111 | 15.4 | 8,497 | 14.5 | 8,803 | 14.7 |
50 largest borrowers | 13,265 | 25.0 | 13,500 | 25.6 | 14,028 | 24.0 | 14,196 | 23.7 |
100 largest borrowers | 17,305 | 32.6 | 17,493 | 33.1 | 18,234 | 31.2 | 18,062 | 30.1 |
Credit Portfolio Indicators
To facilitate the analysis of the Bank's credit portfolio performance, we present below a comparative summary of the main parameters, based on the rules established by BACEN for recording provisions.
In millions of reais | ||||
2003 | 2004 | |||
Items | June | September | June | September |
Total Credit Operations | 53,048 | 52,776 | 58,402 | 59,976 |
- Consumer | 14,406 | 14,740 | 17,828 | 18,688 |
- Corporate | 38,642 | 38,036 | 40,574 | 41,288 |
Existing Allowance | 4,109 | 4,151 | 4,213 | 4,181 |
- Specific | 2,006 | 1,939 | 1,876 | 1,885 |
- Generic | 1,286 | 1,390 | 1,432 | 1,383 |
- Additional | 817 | 822 | 905 | 913 |
Specific Allowance/Existing Allowance (%) | 48.8 | 46.7 | 44.5 | 45.1 |
Existing Allowance/Total Credit Operations (%) | 7.7 | 7.9 | 7.2 | 7.0 |
Normal Course Operations (from AA to C)/Total Credit Operations (%) | 90.2 | 90.4 | 91.3 | 91.6 |
Operations under risk management (D)/Total Credit Operations (%) | 3.4 | 2.8 | 2.8 | 2.9 |
Abnormal Course Operations (from E to H)/Total Credit Operations (%) | 6.4 | 6.8 | 5.9 | 5.5 |
Credit Operations (D) | 1,841 | 1,460 | 1,629 | 1,765 |
Existing Allowance (D) | 520 | 413 | 374 | 398 |
Allowance/Credit Operations (D) (%) | 28.2 | 28.3 | 23.0 | 22.5 |
Credit Operations (from E to H) | 3,375 | 3,580 | 3,464 | 3,287 |
Existing Provision (from E to H) | 2,939 | 3,027 | 2,966 | 2,856 |
Allowance/Credit Operations (from E to H) (%) | 87.1 | 84.6 | 85.6 | 86.9 |
The figures at the end of September 2004 continue to confirm the low credit risk of the Bradesco portfolio, as a result of its comfortable coverage levels and moreover that the Organization's credit granting strategy is being applied on a secure, selective and consistent basis.
Funding
Deposits by Maturity - In millions of reais
2004 | ||||||
June | September | |||||
Days to maturity | Total | Up to 30 days |
From 31 to 180 days |
From 181 to 360 days |
More than 360 days |
Total |
Demand | 13,541 | 14,782 | - | - | - | 14,782 |
Savings | 22,456 | 23,186 | - | - | - | 23,186 |
Interbank | 47 | 14 | - | - | - | 14 |
Time | 28,089 | 3,213 | 4,517 | 4,959 | 14,116 | 26,805 |
Total | 64,133 | 41,195 | 4,517 | 4,959 | 14,116 | 64,787 |
Demand Deposits - In billions of reais
Checking Accounts - Million
Increase in Checking Accounts - million
Consumer and Corporate Customers September 2004
Savings Accounts
The balance of Bradesco Organization Savings Accounts totaled R$ 23.2 billion in deposits at the end of the third quarter of 2004, corresponding to a 19.1% market share of the Brazilian Savings and Loan System (SBPE).
Savings Account Deposits - In billions of reais
Share of SBPE (Brazilian Savings and Loan System) - %
Savings Accounts - Million
Asset Management
Bradesco ranked Best Fund Manager for the third time in a row
Bradesco was rated Brazils Best Fund Manager for the third time running according to a study carried out by Guia Exames Best Investment Funds, organized by Exame magazine in partnership with the Study Center maintained by Fundação Getúlio Vargas.
Net assets - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
Investment funds | 60,949 | 67,552 | 78,059 | 80,852 |
Managed portfolios | 9,279 | 9,050 | 8,757 | 9,319 |
Total | 70,228 | 76,602 | 86,816 | 90,171 |
Distribution of Assets - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
Investment funds - fixed return | 59,063 | 65,272 | 75,580 | 78,148 |
Investment funds - floating rate | 1,886 | 2,280 | 2,479 | 2,704 |
Total | 60,949 | 67,552 | 78,059 | 80,852 |
Fixed return customer portfolios | 6,648 | 6,372 | 6,561 | 6,742 |
Floating rate customer portfolios | 2,631 | 2,678 | 2,196 | 2,577 |
Total | 9,279 | 9,050 | 8,757 | 9,319 |
Total fixed-return funds | 65,711 | 71,644 | 82,141 | 84,890 |
Total floating-rate funds | 4,517 | 4,958 | 4,675 | 5,281 |
Total | 70,228 | 76,602 | 86,816 | 90,171 |
Total Volume of Managed Assets according to ANBIDs Global Ranking - In millions of reais
Number of Funds, Portfolios and Quotaholders at September 30, 2004
Number | Quotaholders | |
Investment funds | 499 | 2,738,046 |
Customer portfolios | 106 | 361 |
Total | 605 | 2,738,407 |
4 Operating Companies
Bradesco Insurance Group
Insurance Companies
Consolidated Balance Sheet - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 26,800 | 29,156 | 35,090 | 37,873 |
Securities | 24,451 | 26,735 | 32,470 | 35,157 |
Insurance premiums receivable | 874 | 817 | 880 | 844 |
Other receivables | 1,475 | 1,604 | 1,740 | 1,872 |
Permanent assets | 970 | 956 | 1,036 | 1,016 |
Total | 27,770 | 30,112 | 36,126 | 38,889 |
LIABILITIES | ||||
Current and long-term liabilities | 24,819 | 26,819 | 32,231 | 34,551 |
Tax, civil and labor contingencies | 866 | 895 | 1,120 | 1,065 |
Payables on insurance, private pension plans and savings bonds | 454 | 452 | 680 | 696 |
Other liabilities | 767 | 1,011 | 953 | 1,205 |
Technical reserves for insurance | 1,864 | 1,949 | 2,335 | 2,477 |
Technical reserves for private pension plans | 19,170 | 20,733 | 25,134 | 27,059 |
Technical reserves for savings bonds | 1,698 | 1,779 | 2,009 | 2,049 |
Minority interest | 45 | 45 | 35 | 36 |
Stockholders equity of the parent company | 2,906 | 3,248 | 3,860 | 4,302 |
Total | 27,770 | 30,112 | 36,126 | 38,889 |
Consolidated Statement of Income - In millions of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Income on insurance premiums, private pension plans and premium bonds | 2,729 | 2,873 | 8,291 | 2,989 | 3,464 | 9,447 |
Variation in technical reserves | (763) | (952) | (2,755) | (693) | (1,077) | (2,647) |
Commission and fees | 41 | 52 | 128 | 73 | 83 | 224 |
Retained claims | (1,046) | (1,069) | (3,062) | (1,291) | (1,338) | (3,867) |
Expenses for premium bond draws and redemptions | (282) | (283) | (797) | (346) | (313) | (932) |
Expenses for private pension plan benefits and redemptions | (464) | (558) | (1,421) | (581) | (486) | (1,594) |
Selling expenses | (184) | (194) | (560) | (206) | (216) | (637) |
Other operating income (expenses) | 13 | (1) | 15 | (113) | 46 | (72) |
Personnel and administrative expenses | (246) | (238) | (708) | (277) | (244) | (768) |
Tax expenses | (22) | (16) | (59) | (36) | (32) | (97) |
Financial results | 405 | 624 | 1,596 | 469 | 405 | 1,462 |
Operating income (expense) | 181 | 238 | 668 | (12) | 292 | 519 |
Non-operating income | (22) | 12 | (12) | (27) | 18 | (17) |
Equity in the earnings of subsidiary and associated companies | (16) | 34 | 7 | 158 | (1) | 174 |
Minority interest | - | - | - | 2 | - | 3 |
Income before taxes and contributions | 143 | 284 | 663 | 121 | 309 | 679 |
Taxes and contributions on income | (49) | (92) | (224) | 90 | (108) | (103) |
Net income | 94 | 192 | 439 | 211 | 201 | 576 |
Performance Ratios - %
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Claims ratio (1) | 81.3 | 78.6 | 78.5 | 87.3 | 84.2 | 84.6 |
Selling ratio (2) | 12.4 | 12.4 | 12.4 | 12.3 | 12.0 | 12.3 |
Combined ratio (3) | 107.4 | 106.0 | 106.0 | 122.4 | 99.4 | 110.6 |
Expanded combined ratio (4) | 99.2 | 92.6 | 95.7 | 113.6 | 88.6 | 100.3 |
Administrative expense ratio (5) | 13.8 | 13.6 | 13.5 | 14.3 | 12.9 | 13.1 |
(1) | Retained claims/earned premiums. |
(2) | Selling expenses/earned premiums. |
(3) | (Retained claims + selling expenses + administrative costs + taxes + other operating expenses)/earned premiums. |
(4) | (Retained claims + selling expenses + administrative costs + taxes + other operating expenses)/(earned premiums + financial result). |
(5) | Administrative expenses/earned premiums. |
Insurance Premiums - Market Share (%)
Up to August 2004, Bradesco Seguros secured R$ 7.2 billion in premiums and maintained its industry leadership with a 25% market share. The insurance sector obtained a total of R$ 28.8 billion in premiums through August 2004.
Growth in Technical
Reserves
In millions of reais
Growth in Guaranteeing
Assets of Technical Reserves
In millions
of reais
Earned Premiums by Insurance Line - In millions of reais
2003 | 2004 | |||||
Line | 2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September |
Health | 630 | 661 | 1,909 | 710 | 792 | 2,231 |
Auto/RCF(a) | 346 | 349 | 1,022 | 393 | 413 | 1,198 |
Life/AP(b)/VGBL(c) | 196 | 242 | 626 | 257 | 268 | 778 |
Basic Lines | 89 | 86 | 258 | 90 | 90 | 275 |
DPVAT(d) | 25 | 22 | 84 | 28 | 26 | 88 |
Total | 1,286 | 1,360 | 3,899 | 1,478 | 1,589 | 4,570 |
(a) | Optional third-party liability. |
(b) | Personal accident. |
(c) | Long-term life products. |
(d) | Compulsory vehicle insurance. |
In September of 2004, the Companys earned premiums grew by 17.2% compared to the same period in 2003.
Earned Premiums by Line - %
Retained Claims by Insurance Line - In millions of reais
2003 | 2004 | |||||
Line | 2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September |
Health | 588 | 604 | 1,714 | 660 | 734 | 2,056 |
Auto/RCF | 270 | 275 | 794 | 381 | 357 | 1,067 |
Life/AP | 110 | 129 | 350 | 172 | 164 | 507 |
Basic Lines | 56 | 40 | 134 | 57 | 61 | 166 |
DPVAT | 22 | 21 | 70 | 21 | 22 | 71 |
Total | 1,046 | 1,069 | 3,062 | 1,291 | 1,338 | 3,867 |
Retained Claims by Insurance Line (%)
Selling Expenses by Insurance Line - In millions of reais
2003 | 2004 | |||||
Line | 2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September |
Health | 19 | 20 | 58 | 23 | 25 | 71 |
Auto/RCF | 64 | 64 | 189 | 71 | 77 | 219 |
Life/AP | 61 | 68 | 191 | 69 | 72 | 220 |
Basic Lines | 16 | 16 | 47 | 19 | 17 | 54 |
Total | 160 | 168 | 485 | 182 | 191 | 564 |
Selling Expenses by Insurance Line (%)
Number of Policyholders - Thousand
Up to September 2004, the average number of customers grew by 15.3% compared to the same period in 2003.
In comparison with the same period in 2003, Bradesco Saúde maintained its outstanding market position, especially in the corporate health insurance segment (source: ANS). Brazilian consumers are increasingly convinced that Health and Dental Insurance are the best alternatives for meeting their medical, hospital and dental care needs. At present, Bradesco Saúde has more than 2.5 million customers.
The increasing number of policyholders employed by micro, small and medium companies, as well as major corporations that have contracted Bradesco Saúde, confirms the insurance companys high level of expertise and personalization in Corporate Insurance services, a distinct advantage in the Supplementary Health Insurance market.
Almost 12 thousand companies in Brazil have acquired Bradesco Health Insurance. Out of Brazils 100 largest companies in terms of billings, 33 are Bradesco clients in the Health and Dental Health lines and out of the countrys 50 largest companies, 28% are Bradesco Saúde clients. (source: Exame Magazines Biggest and Best List, July 2004).
Finally, emphasis should also be given to the user-friendly nature of the Bradesco Saúde Portal (www.bradescosaude.com.br), which, in addition to providing information on available products, also offers access to a number of services for policyholders, prospects and brokers.
Through August 2004, the Bradesco Insurance Group maintained its position as one of the main players in the Brazilian Basic Line Insurance market, with a significant 10.6% share of total market billings in this area.
In the Corporate Risk area, Bradesco maintained its position among Brazils largest insurance companies.
In particular, emphasis should be given to the successful launching of Bradesco FLIGHT INSURANCE, which after only 6 months, has already secured R$ 6 million in premiums, for some 70 aircraft.
Another highlight during the nine-month period was the launching of the SIGA Transport (Integrated Policy Management System) website, in March 2004, the wide market acceptance of which has given Bradesco a marked advantage in terms of negotiating power.
In the mass market insurance segment, focusing on the consumer and small and medium corporate segments, Bradesco maintained a significant number of customers, in particular, for the Bradesco Bilhete Residencial product, with 589,572 homes insured.
In the pursuit to always offer our customers best quality services, the launching of our new products made a substantial contribution to the results achieved during the period.
In the Auto/RCF line, the market was affected by intense competition, aggravated by slacking vehicle sales. During the period, we maintained our technically correct pricing policy, guaranteeing balanced portfolio results. Emphasis should also be given to the launching of our new pricing policy based on the policyholders specific characteristics and maintenance of the differentiated services which add value to our products, such as discounts given through the nationwide customer service networks and autoglass repair, as well as the increase in the number of relationships with brokers which are carried out exclusively online via the Internet.
Bradescos market share of the Auto/RCF portfolio up to August, 2004 was 16.3%.
Awards/Recognition
Bradesco Seguros
1. In April, Bradesco Seguros was rated among the 100 largest investors in this area for 2003, according to research carried out in Brazil by Info magazine. Indiana Seguros, another Bradesco Insurance Group company, was also highlighted in the 2004 edition of Brazils 100 most wired companies.
2. Bradesco Seguros was the brand name preferred by consumers in the southern state of Rio Grande do Sul. This preference was revealed in May 2004 in the sixth edition of the poll Decision-maker Brands, prepared by the Jornal do Comércio, a regional newspaper specialized in business and economy, in partnership with Instituto Qualidata. Bradesco was rated preferred insurance company by 13.2% of those interviewed.
3. The Bradesco Insurance website is 3-time champion award winner at the iBEST awards, considered Brazils equivalent to the Internet Oscar. In May, at the awards ceremony held in São Paulo, the insurance company was voted winner by popular jury in the "Insurance" category.
4. Bradesco Seguros won the Segurador Brasil award in the Best Institutional Campaign and Arts and Culture Support Highlight categories. These awards were given in June by Brasil/Notícias Editora e Comunicação Empresarial, publishers of the Planeta Seguros magazine.
5. Bradesco Seguros was rated best company in the vehicle insurance line according to the "Gazeta Mercantil Financial Report prepared in partnership with the consultancy Austin Rating in June. The report was prepared based on data for 2003.
6. Bradesco Seguros won the insurance "Market Award" ("Prêmio Mercado de Seguros"), in June, given by the Seguro Total magazine in the "Excellence in Total Premiums" category.
7. Bradesco Seguros sponsors the DellArte series of International Concerts held at the Municipal Theater in Rio de Janeiro. The following concerts were held up to September 2004:
- Nelson Freire
(pianist) April 7.
- Italian Concert May 17.
- Academie Für Alte Musik June
22.
- Emma Kirkby & The Romantic Chamber Group of London July 29.
- Quartet
Herold August 23.
- Les Arts Florissants September 29.
Bradesco Saúde
1. In May, Bradesco Saúde was announced winner of the Prêmio Segurador Brasil award in the Excellence in Health Insurance category. This award is given by Brasil/Notícias Editora e Comunicação Empresarial, publishers of the Planeta Seguros magazine.
2. Bradesco Saúde won the Hospital Best award in the Health Operator of the Year category, according to a poll carried out among innumerous physicians and other health professionals nationwide. The poll was organized by Simonsen e Associados. The first edition of this award held in June is an initiative of the Brazilian Association of Health Marketing (Associação Brasileira de Marketing em Saúde).
Vida e Previdência (Private Pension Plan Companies)(1)
Bradesco Vida e Previdência is specialized in the preparation, implementation and administration of individual and corporate retirement, pension and savings plans, as well as life insurance. As a result of its solid structure, innovative product policy and trusted market standing, Bradesco maintained its leadership of all segments in which it operates and presented excellent results for the period in this economic sector, which is among the most dynamic in Brazil.
Balance Sheet - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 20,783 | 22,719 | 27,008 | 29,454 |
Funds available | 24 | 36 | 29 | 41 |
Interbank investments | 19 | 19 | - | - |
Securities | 20,355 | 22,197 | 26,489 | 28,826 |
Insurance operations and other receivables | 385 | 467 | 490 | 587 |
Permanent assets | 256 | 253 | 1,063 | 1,194 |
Total | 21,039 | 22,972 | 28,071 | 30,648 |
LIABILITIES | ||||
Current and long-term liabilities | 19,695 | 21,404 | 26,017 | 28,171 |
Tax and social security contingencies | 402 | 503 | 554 | 704 |
Operating liabilities for insurance and private pension | 91 | 124 | 256 | 331 |
plans | ||||
Other liabilities | 32 | 44 | 73 | 77 |
Technical reserves | 19,170 | 20,733 | 25,134 | 27,059 |
Stockholders' equity | 1,344 | 1,568 | 2,054 | 2,477 |
Total | 21,039 | 22,972 | 28,071 | 30,648 |
In August 2004, the Previllares private pension plan portfolio in the amount of R$ 117 million and the pending approval life insurance portfolio of Bradesco Auto/RE Companhia de Seguros (formerly União Novo Hamburgo de Seguros S.A.) in the amount of R$ 67 million, were transferred to Bradesco Vida e Previdência.
Statement of Income - In millions of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Retained premiums | 187 | 210 | 593 | 224 | 266 | 717 |
Variations in premium reserves | (19) | (5) | (48) | (4) | (25) | (39) |
Earned premiums | 168 | 205 | 545 | 220 | 241 | 678 |
Retained claims | (103) | (117) | (329) | (125) | (138) | (424) |
Expenses with benefits - VGBL | - | - | - | (10) | (11) | (26) |
Selling expenses - insurance | (43) | (45) | (135) | (50) | (55) | (162) |
Other operating income (expenses) | 35 | 45 | 116 | 49 | 75 | 188 |
Income from contributions and VGBL | 1,206 | 1,348 | 3,767 | 1,396 | 1,810 | 4,670 |
Variation in technical reserves and VGBL | (669) | (821) | (2,494) | (617) | (973) | (2,440) |
Expenses with benefits/matured plans | (463) | (559) | (1,422) | (581) | (486) | (1,594) |
Expenses for redemptions VGBL | (138) | (200) | (385) | (330) | (357) | (926) |
Selling expenses - pension plans and VGBL | (35) | (39) | (109) | (36) | (39) | (114) |
Administrative expenses | (47) | (53) | (148) | (50) | (62) | (168) |
Tax expenses | (5) | (3) | (11) | (13) | (12) | (32) |
Financial income | 973 | 1,081 | 3,295 | 988 | 1,117 | 3,112 |
Financial expenses | (736) | (701) | (2,261) | (691) | (926) | (2,251) |
Equity income and expenses | 2 | 4 | 7 | 167 | 58 | 227 |
Non-operating income (expense) | (1) | 4 | 4 | - | 3 | 5 |
Income before taxes and contributions | 144 | 149 | 440 | 317 | 245 | 743 |
Taxes and contributions on income | (42) | (42) | (132) | (49) | (64) | (173) |
Net income | 102 | 107 | 308 | 268 | 181 | 570 |
(1) | Includes Bradesco Vida e Previdência S.A. and from June 2003, Alvorada Vida S.A. (formerly BBV Previdência e Seguradora Brasil S.A.). |
Bradesco Vida e Previdência adopted a number of measures during the period designed to decrease expenses. As a result of these efforts, the percentage of administrative expenses for income on premiums and contributions decreased from 3.4%, up to September 2003 to 3.1% up to September 2004.
Furthermore, we highlight the decrease in selling expenses comprising 5.1% of income on premiums and contributions up to September 2004 compared to 5.6% for the same period in 2003.
The following stockholdings influenced the composition of results accumulated to September 2004:
In thousands of reais | |
Bradesco Capitalização S.A. | 141,369 |
IRB - Brasil Resseguros S.A. | 27,522 |
Other investments | 52,626 |
Total | 221,517 |
Income from Plans and VGBL - Market Share (%)
Bradesco Vida e Previdência is Brazils sole leader in complementary pension plans and VGBL, with a 34.7% share of the market, more than double that held by its nearest rival. Up to September 2004, plan income totaled R$ 4.670 billion, a 24.0% growth rate compared to the same period in 2003.
Life Insurance Premiums Market Share (%)
Income on premiums retained of R$ 717 million accumulated up to September 2004 guaranteed Bradescos leadership of the market with a 15.0% share. We highlight during the period the Vida Segura Bradesco and Vida Máxima Mulher Bradesco, products which strengthen the strategy designed to offer products to different market segments and facilitate access to life insurance to lower income bracket consumers.
Increase in Technical Reserves In millions of reais
Total technical reserves in September 2004 of R$ 27,059 million comprise R$ 18,386 million for supplementary pension plans, R$ 7,853 million for VGBL, R$ 748 million for life and personal accident, R$ 67 million for DPVAT and R$ 5 million for retrocession.
Growth in Guaranteeing Assets of Technical Reserves In millions of reais
The continuing increase in revenues and appropriate investment policy adjustments prompted a significant growth in the investment portfolios of Bradesco Vida e Previdência, thereby guaranteeing full coverage of technical reserves.
Pursuant to new legislation (SUSEP/DECON/GAB Circular Letter 5/04 of July 16, 2004), only the volume of guaranteeing assets necessary for covering technical reserves may be held under custody.
Pension Plan and VGBL Investment Portfolios Market Share (%)
In August, the investment portfolios totaled R$ 28,226 million, comprising almost half of market resources.
Participants
Increase in Number of Participants thousand
The strength of the Bradesco Brand, its commitment to innovation and the adoption of appropriate pricing and management policies, prompted a continuing growth in the number of customers, which is nearing 1.5 million.
Policyholders
Increase in Life Insurance Policyholders thousand
Savings Bond Companies (1)
Balance Sheet - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 1,946 | 2,152 | 2,683 | 2,813 |
Securities | 1,871 | 2,059 | 2,596 | 2,719 |
Accounts receivable and other receivable | 75 | 93 | 87 | 94 |
Permanent assets | 294 | 329 | 201 | 205 |
Total | 2,240 | 2,481 | 2,884 | 3,018 |
LIABILITIES | ||||
Current and long-term liabilities | 1,906 | 2,033 | 2,416 | 2,413 |
Tax and labor contingencies | 195 | 238 | 174 | 177 |
Other liabilities | 13 | 16 | 233 | 187 |
Technical reserves | 1,698 | 1,779 | 2,009 | 2,049 |
Stockholders' equity | 334 | 448 | 468 | 605 |
Total | 2,240 | 2,481 | 2,884 | 3,018 |
Statement of Income - In millions of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Income from savings bonds | 301 | 292 | 842 | 396 | 338 | 1.039 |
Variation in technical reserves | (14) | (42) | (55) | (7) | 10 | (46) |
Redemption of bonds | (282) | (283) | (797) | (346) | (313) | (932) |
Bonds redeemed | (279) | (277) | (783) | (336) | (298) | (896) |
Winning bonds | (3) | (6) | (14) | (10) | (15) | (36) |
Other operating income (expenses) | - | (1) | (2) | - | (1) | - |
Financial income, net | 81 | 110 | 249 | 71 | 60 | 237 |
Administrative expenses/taxes | (20) | (18) | (55) | (28) | (22) | (69) |
Equity results | 6 | 35 | 43 | 26 | 4 | 32 |
Non-operating income | - | 1 | 1 | - | - | 1 |
Income before taxes and contributions | 72 | 94 | 226 | 112 | 76 | 262 |
Taxes and contributions on income | (21) | (20) | (60) | (27) | (24) | (76) |
Net income | 51 | 74 | 166 | 85 | 52 | 186 |
(1) | Includes: Bradesco Capitalização and Atlântica Capitalização (formerly BCN Capitalização). |
Bradesco Capitalizaçãos outstanding position in the premium bond market is the result of its transparent operating policy, which is focused on the deployment of products in line with potential consumer demand.
The company holds a leadership position in two Brazilian states, according to the latest figures for August, 2004 published by SUSEP. The companys market share was as follows: 35.4% in Amazonas and 26.5% in São Paulo.
In pursuit of a bond which is suited to its customers different profiles and budgets, a number of products were developed varying in accordance with the type of payment (single or monthly), contribution terms, regularity of draws (weekly or monthly) and related prize amounts. This phase brought the general public closer and consolidated the success of the popular Pé Quente (Lucky Bond) savings bond series.
Bradesco Capitalização was the first private savings bond company in Brazil to receive ISO 9002 certification and in December 2002 this certificate was upgraded to the 2000 Version ISO 9001:2000. This certification from Fundação Vanzolini attests to the management quality of Bradesco savings bonds and confirms the principles on which their creation was based: good products, good services and continuous growth.
Income from Plans - Market Share (%)
Technical Reserves - Market Share (%)
Growth in Technical Reserves - In millions of reais
Bradesco Capitalizaçãos fast-growing volume of technical reserves totaled R$ 2.0 billion in September 2004, a growth rate of 15.2% compared to the same period in 2003. According to data for August 2004 published by SUSEP, the company has 22.8% of the total market volume of technical reserves.
These results transmit confidence and confirm the companys financial soundness and capacity to honor the commitments assumed with its customers.
Growth in Assets Guaranteeing Technical Reserves - In millions of reais
Number of Customers - Thousand
As a result of its customer loyalty building policy, focused on quality customer service and the offer of innovative products, the number of Bradesco Capitalização customers totaled more than 2.7 million at the end of 3Q04.
Outstanding Savings Bonds - Thousand
Outstanding Savings Bonds with Transfer of Draw Participation Rights - Thousand
Total Outstanding Savings Bonds - Thousand
The outstanding savings bond portfolio also presented a significant increase of 112.81% compared to the same period in 2003, with more than 45 million outstanding bonds. Of this amount, 90.2% are certificates with Transfer of Draw Participation Rights, which were sold via partnership agreements with companies in different market segments, including Bradesco Cartões, Bradesco Vida e Previdência, Banco Finasa etc. Since the purpose of this type of savings bond certificate is to add value to partners products or to provide incentives for customer payments, these are low-priced bonds sold with reduced terms and grace periods and at a lower unit purchase price.
The number of traditional bonds comprising 9.8% of the total portfolio, dropped slightly, as a result of the offer of single and monthly payment bonds at higher sales prices.
Awards
In June, Bradesco Capitalização won the Insurance Market Award in the Best Savings Bond Companycategory, organized by Seguro Total magazine.
Banco Finasa
Consolidated Balance Sheet - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 4,260 | 4,841 | 7,037 | 7,652 |
Funds available | - | 3 | 5 | 8 |
Interbank investments | 28 | 25 | 111 | 37 |
Securities and derivative financial instruments | 14 | 15 | 68 | 78 |
Interbank accounts | 42 | 20 | 29 | 30 |
Credit and leasing operations | 4,041 | 4,595 | 6,482 | 7,129 |
Allowance for loan losses | (133) | (134) | (227) | (233) |
Other receivables and other assets | 268 | 317 | 569 | 603 |
Permanent assets | 11 | 12 | 361 | 343 |
Total | 4,271 | 4,853 | 7,398 | 7,995 |
LIABILITIES | ||||
Current and long-term liabilities | 3,988 | 4,557 | 7,023 | 7,551 |
Demand, time and interbank deposits | 3,624 | 4,128 | 6,479 | 7,025 |
Deposits received under security repurchase agreements and funds from the issuance of securities | 3 | 3 | - | - |
Interbank accounts | 2 | - | 3 | 2 |
Borrowings and onlendings | 101 | 124 | 55 | 51 |
Derivative financial instruments | 81 | 92 | 241 | 203 |
Other liabilities | 177 | 210 | 245 | 270 |
Deferred income | 22 | 18 | 30 | 35 |
Stockholders equity | 261 | 278 | 345 | 409 |
Total | 4,271 | 4,853 | 7,398 | 7,995 |
Consolidated Statement of Income - In millions of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Income from lending and trading activities | 395 | 408 | 1,165 | 594 | 590 | 1,667 |
Expenses for lending and trading activities | (237) | (239) | (689) | (300) | (333) | (895) |
Gross profit from financial intermediation | 158 | 169 | 476 | 294 | 257 | 772 |
Other operating income (expenses), net | (115) | (133) | (355) | (160) | (160) | (449) |
Operating income | 43 | 36 | 121 | 134 | 97 | 323 |
Non-operating income (expenses), net | (3) | - | (5) | (6) | 1 | (5) |
Income before taxes and contributions | 40 | 36 | 116 | 128 | 98 | 318 |
Taxes and contributions on income | (14) | (13) | (40) | (6) | (34) | (72) |
Net income | 26 | 23 | 76 | 122 | 64 | 246 |
Profile
Banco Finasa operates in the retail sector, financing new and used vehicles, consumer durables, clothing, footwear and services, as well as personal loans, through Finasa Promotora de Vendas and from February 16, 2004, also through Promovel Empreendimentos e Serviços, which is Banco Zogbis sales promotion company. Banco Zogbi was acquired by the Bradesco Organization, through Banco Finasa on November 6, 2003, together with Promovel, Zogbi Leasing and Zogbi Distribuidora de Títulos e Valores Mobiliários.
At the end of September 2004, Banco Finasa operated through 121 Branches distributed nationwide (Finasa Promotora de Vendas 52 and Zogbi Promovel 69), 31,046 registered service outlets, including 13,270 new and used vehicle dealerships and 17,776 stores selling different types of goods and services.
Customers served totaled some 1,835 thousand (Banco Finasa 1,071 thousand and Banco Zogbi 764 thousand).
Measured by Austin Rating, Banco Finasa obtained the maximum AAA rating for financial soundness and a Low Risk long-term rating.
Operating Performance
At September 30, 2004, consolidated assets totaled R$ 8.0 billion, a growth rate of 8.1% compared to June 2004 and 64.7% compared to September 2003. Credit operations, before the allowance for loans losses, totaled R$ 7.1 billion, a growth rate of 10.0% compared to June 2004 and 55.2% as compared to the same period in 2003. Of this total, R$ 6.6 billion comprised the new and used auto financing portfolio, compared to R$ 6.0 billion at June 30, 2004 and R$ 4.5 billion in September 2003.
Auto-financing production for 3Q04 totaled R$ 1.6 billion and R$ 4.4 billion for the period between January and September, a growth rate of 59.8% as compared to the same period in 2003. During the nine-month period, operations for the financing of other assets and services totaled R$ 626.0 million, compared to R$ 110.8 million for the same period in 2003 and a personal loans were granted in the amount of R$ 114.6 million, compared to R$ 5.0 million, in the prior period, including in 2004 production in Banco Zogbi.
Banco Finasa reported third-quarter net income of R$ 63.7 million, totaling R$ 245.5 million for the nine-month period. Stockholders equity at September 30, 2004 increased to R$ 408.7 million.
We stress that income in the amount of R$ 18.1 million was recorded for 3Q04, derived from the mark-to-market (MTM) adjustment of swap transactions, in compliance with Central Bank Circular 3082, which totaled R$ 98.0 million for the period from January to September. These transactions are designed to hedge overall credit operations and were entirely successful from an economic viewpoint. However, from a formal standpoint, these transactions are not acceptable as hedges pursuant to the aforementioned legislation. As a result, the asset transactions to which they are a counter entry receive a different accounting treatment, ie, they are adjusted based on the rates established in the corresponding contracts, whereas swaps are marked to market.
Net income for the period is comprised as follows:
In millions of reais | ||||||
2004 | ||||||
1st Half | 3rd Qtr. | Accumulated to September | ||||
Net income before MTM - SWAP | 101.9 | 45.6 | 147.5 | |||
Mark-to-market effect - SWAP | 79.9 | 18.1 | 98.0 | |||
Net income | 181.8 | 63.7 | 245.5 | |||
Moreover, we stress that expenses for amortization and provision for goodwill on investments made in 2004 totaled R$ 11.6 million for the second quarter and R$ 34.2 million for the first nine months of the year.
Leasing Companies
At September 30, 2004, the Bradesco Organization had the following leasing companies: Bradesco Leasing S.A. Arrendamento Mercantil, formerly Potenza Leasing S.A. Arrendamento Mercantil, Alvorada Leasing Brasil S.A. Arrendamento Mercantil, formerly BBV Leasing Brasil S.A. Arrendamento Mercantil and Zogbi Leasing S.A. Arrendamento Mercantil.
Balance Sheet in Aggregate - In millions of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 4,950 | 4,989 | 5,259 | 4,737 |
Funds available | 6 | 6 | 1 | 1 |
Interbank investments | 3,081 | 2,105 | 2,325 | 2,257 |
Securities and derivative financial instruments | 12 | 1,096 | 1,273 | 618 |
Leasing operations | 1,477 | 1,405 | 1,271 | 1,348 |
Allowance for leasing losses | (127) | (122) | (107) | (95) |
Other receivables and other assets | 501 | 499 | 496 | 608 |
Permanent assets | 40 | 40 | 37 | 485 |
Total | 4,990 | 5,029 | 5,296 | 5,222 |
LIABILITIES | ||||
Current and long-term liabilities | 3,012 | 2,994 | 3,060 | 3,131 |
Interbank deposits | 117 | 3 | - | - |
Securities received under security repurchase agreements and funds received from issuance of securities | 1,523 | 1,593 | 1,766 | 1,834 |
Borrowings and onlendings | 256 | 256 | 203 | 191 |
Derivative financial instruments | 10 | 10 | 15 | 11 |
Subordinated debt | 635 | 635 | 623 | 624 |
Other liabilities | 471 | 497 | 453 | 471 |
Stockholders' equity | 1,978 | 2,035 | 2,236 | 2,091 |
Total | 4,990 | 5,029 | 5,296 | 5,222 |
Statement of Income - In millions of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Income from lending and trading activities | 242 | 283 | 723 | 426 | 257 | 1,098 |
Expenses for lending and trading activities | (132) | (161) | (378) | (324) | (191) | (819) |
Gross profit from financial intermediation | 110 | 122 | 345 | 102 | 66 | 279 |
Other operating income (expenses), net | (12) | (20) | (57) | (25) | 8 | (31) |
Operating income | 98 | 102 | 288 | 77 | 74 | 248 |
Non-operating income | - | - | 3 | - | (5) | (4) |
Income before taxes and contributions | 98 | 102 | 291 | 77 | 69 | 244 |
Tax and contributions on income | (34) | (33) | 34 | (24) | (15) | (76) |
Net income | 64 | 69 | 325 | 53 | 54 | 168 |
Corporate Restructuring
Bradesco made the following changes to the organizational structure of the Leasing companies:
- In July, BancoCidade Leasing Arrendamento Mercantil S.A. was merged into Banco Alvorada S.A.
- In September Bradesco BCN Leasing S.A. Arrendamento Mercantil was merged into Bradesco Leasing S.A. Arrendamento Mercantil (formerly Potenza Leasing).
Leasing Performance - Consolidated Bradesco
Bradesco's leasing operations are carried out through Bradesco Leasing S.A. Arrendamento Mercantil and Banco Finasa S.A.
At September 30, 2004, leasing operations brought to present value totaled R$ 1.451 billion, with a balance of R$ 18.4 million receivable in operating leases.
According to the Brazilian Association of Leasing Companies (ABEL), the Bradesco Organization leasing companies are sector leaders, with a 12.3% share of this market (base date: July 2004). This sound performance is rooted in its Branch Network integrated operations and the maintenance of its diversified business strategies in various market segments, in particular, the implementation of operating agreements with major industries, mainly in the heavy vehicle and machinery/equipment sectors.
The following pie graph presents the composition of Bradesco's consolidated leasing portfolio by types of asset.
Portfolio by Types of Asset at September 30, 2004
Bradesco Consórcios (Consortium Purchase System)
Administradora (management company)
Balance Sheet - In thousands of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 22,521 | 19,956 | 47,501 | 61,552 |
Funds available | - | - | - | 8 |
Securities | 18,853 | 17,335 | 45,765 | 60,217 |
Other receivables | 3,668 | 2,621 | 1,736 | 1,327 |
Permanent assets | 726 | 731 | 800 | 770 |
Total | 23,247 | 20,687 | 48,301 | 62,322 |
LIABILITIES | ||||
Current and long-term liabilities | 11,446 | 6,456 | 14,336 | 15,055 |
Amounts refundable to former groups now closed | 5,090 | 5,292 | 5,650 | 5,749 |
Other liabilities | 6,356 | 1,164 | 8,686 | 9,306 |
Stockholders equity | 11,801 | 14,231 | 33,965 | 47,267 |
Total | 23,247 | 20,687 | 48,301 | 62,322 |
Statement of Income - In thousands of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Income on commission and fees | 3,820 | 8,437 | 12,451 | 20,023 | 22,935 | 58,293 |
Taxes payable | (280) | (591) | (902) | (1,183) | (1,370) | (3,457) |
Financial income | 510 | 560 | 1,438 | 1,263 | 1,780 | 3,962 |
Administrative expenses (including personnel expenses) | (1,461) | (1,790) | (4,967) | (2,443) | (2,522) | (6,898) |
Selling expenses | (1,231) | (2,993) | (8,025) | (5,194) | (4,550) | (11,830) |
Other operating (expenses) income | 50 | 37 | 57 | 120 | 210 | 377 |
Income before taxes and contributions | 1,408 | 3,660 | 52 | 12,586 | 16,483 | 40,447 |
Taxes and contributions on income | (521) | (1,239) | (123) | (2,657) | (3,181) | (7,789) |
Net income (loss) | 887 | 2,421 | (71) | 9,929 | 13,302 | 32,658 |
Quarterly Results 2003 and 2004 In thousands of reais
Consortium Groups
Balance Sheet - In thousands of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 19,342 | 49,809 | 164,330 | 201,818 |
Amount offset | 1,465,378 | 2,750,813 | 5,499,952 | 6,189,691 |
Total | 1,484,720 | 2,800,622 | 5,664,282 | 6,391,509 |
LIABILITIES | ||||
Current and long-term liabilities | 233 | 1,595 | 21,626 | 30,923 |
Stockholders equity | 19,109 | 48,214 | 142,704 | 170,895 |
Amount offset | 1,465,378 | 2,750,813 | 5,499,952 | 6,189,691 |
Total | 1,484,720 | 2,800,622 | 5,664,282 | 6,391,509 |
Operations
At September 30, 2004, a total of 108 thousand consortium quotas had been sold, with billings in excess of R$ 3.3 billion, 17,349 participants had been selected by bid or draw and 10,537 items had been delivered to members comprising 564 groups. 78 new groups were formed in the third quarter of 2004.
The company uses all the facilities offered by the Bradesco Organization customer service network to commercialize the products offered, a distinct market advantage responsible for the rapid growth presented by the consortium purchase system segment. The extensive nature and security associated with the Bradesco brand name also favors the expansion of consortium plan sales.
Mission
The companys mission is to manage consortium plans and groups for consumer and corporate purchasers regardless of whether they are Bradesco account holders or not, and to operate in the car, truck, tractor and combine harvester segment, as well as in real estate, maintaining excellent standards in the quality of the services offered and in consortium system practice, pursuant to regulations determined by the Brazilian Central Bank and in line with the Bradesco Organizations philosophy.
Segmentation
The Bradesco Organizations entry into this segment is part of its strategy to offer the most complete range of product and services possible to its customers.
Providing all income brackets with the opportunity to purchase items through the consortium quota system, filling a market lacuna at accessible prices, especially considering, as regards the countrys present housing deficit, real estate products.
Representation
Within this segment, Bradesco plays a central role in providing Brazilians with the opportunity to acquire consumer durables and real estate. In this sector consumers can acquire apartments, houses, building plots or commercial offices.
From January to September 2004, Bradesco Consórcios sold a total of 62,751 quotas, with billings of R$ 1.7 billion. Of this total, 36,015 are vehicle quotas, followed by 25,784 in real estate quotas sold during the period.
Quotas sold in 2004
Market leadership
Bradesco Consórcios maintained its leadership of the real-estate segment, according to information published by the Brazilian Central Bank, in August, with 36,001 active quotas.
This leadership position is the result of the efforts and motivation of our sales teams and the distribution force of our customer service network.
Quotas sold in 3Q03 and 3Q04
Quotas sold and accumulated to September 2003 and 2004
Total outstanding real-estate quotas in 2004
Number of active participants comprising the 10 largest real-estate consortium administrators (*)
Bradesco S.A. - Corretora de Títulos e Valores Mobiliários
Balance Sheet In thousands of reais
2003 | 2004 | |||
June | September | June | September | |
ASSETS | ||||
Current assets and long-term receivables | 153,910 | 188,853 | 128,999 | 110,193 |
Funds available | 10 | 6 | 38 | 27 |
Interbank investments and securities | 88,530 | 96,730 | 69,514 | 73,695 |
Other receivables and other assets | 65,370 | 92,117 | 59,447 | 36,471 |
Permanent assets | 18,908 | 19,753 | 22,154 | 23,058 |
Total | 172,818 | 208,606 | 151,153 | 133,251 |
LIABILITIES | ||||
Current and long-term liabilities | 79,006 | 109,212 | 77,818 | 56,872 |
Other liabilities | 79,006 | 109,212 | 77,818 | 56,872 |
Stockholders' equity | 93,812 | 99,394 | 73,335 | 76,379 |
Total | 172,818 | 208,606 | 151,153 | 133,251 |
Statement of Income - In thousands of reais
2003 | 2004 | |||||
2nd Qtr. | 3rd Qtr. | Accumulated to September | 2nd Qtr. | 3rd Qtr. | Accumulated to September | |
Income from lending and trading activities | 4,583 | 4,943 | 13,979 | 2,557 | 2,741 | 7,796 |
Gross profit from financial intermediation | 4,583 | 4,943 | 13,979 | 2,557 | 2,741 | 7,796 |
Other operating income (expenses), net | 1,142 | 1,088 | 2,543 | 1,162 | 1,209 | 7,484 |
Operating income | 5,725 | 6,031 | 16,522 | 3,719 | 3,950 | 15,280 |
Non-operating income (expense) | (1) | (390) | (391) | 2 | - | 2 |
Income before taxes and contributions | 5,724 | 5,641 | 16,131 | 3,721 | 3,950 | 15,282 |
Taxes and contributions on income | (1,898) | (2,051) | (5,569) | (1,234) | (1,341) |