OPERATING SEGMENTS |
The Company operates mainly
in the banking and insurance segments. Our banking operations include operations in the retail, middle-market and corporate sectors, lease,
international bank operations, investment bank operations and as a private bank. The Company also conducts banking segment operations
through its branches located throughout the country, in branches abroad and through subsidiaries as well as by means of shareholding interests
in other companies. Additionally, we are engaged in insurance, supplemental Pension Plans and capitalization bonds through our subsidiary,
Bradesco Seguros S.A. and its subsidiaries.
The following segment information
was prepared based on reports made available to Management to evaluate performance and make decisions regarding the allocation of resources
for investments and other purposes. Our Management uses accounting information prepared in accordance with the accounting practices adopted
in Brazil applicable to institutions authorized to operate by Central Bank for the purposes of making decisions about allocation of resources
to the segments and assessing their performance. The information of the segments shown in the following tables considers the specific
procedures and other provisions of the Brazilian Financial Institutions Accounting Plan which includes the proportional consolidation
of associates and joint ventures and the non-consolidation of exclusive funds.
The main assumptions for the
segmentation of income and expenses include (i) surplus cash invested by the entities operating in insurance, supplemental pension and
capitalization bonds are included in this segment, resulting in an increase in net interest income; (ii) salaries and benefits and administrative
costs included in the insurance, supplemental pension and capitalization bonds segment consist only of cost directly related to these
operations, and (iii) costs incurred in the banking operations segment related to the infrastructure of the branch network and other general
indirect expenses have not been allocated between segments.
Our operations are substantially
conducted in Brazil. Additionally, we have one branch in New York, one branch in Grand Cayman, and one branch in London, mainly to complement
our banking services and assist in import and export operations for Brazilian customers. Moreover, we also have subsidiaries abroad, namely:
Banco Bradesco Europa S.A. (Luxembourg), Bradesco North America LLC (New York), Bradesco Securities, Inc. (New York), Bradesco Securities
UK Limited (London), Cidade Capital Markets Ltd. (Grand Cayman), Bradesco Securities Hong Kong Limited (Hong Kong), Bradesco Trade Services
Limited (Hong Kong), Bradescard Mexico, Sociedad de Responsabilidad Limitada (Mexico) and Bradesco Bac Florida Bank.
No revenue from transactions
with a single customers or counterparty represented 10% of the Company’s revenue in the year ended on December 2022 and 2021.
Information by operating segment, reviewed
All transactions between operating
segments are conducted on an arm’s length basis, with intra-segment revenue and costs being eliminated in “Other operations,
adjustments and eliminations”. Income and expenses directly associated with each segment are included in determining business-segment
performance.
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On December 31, 2022 - R$ thousands |
Banking |
Insurance, pension and capitalization bonds |
Other Activities |
Eliminations |
Managerial Income Statement |
Proportionately consolidated (1) |
Consolidation adjustments (2) |
Adjustments (3) |
Consolidated in accordance with IFRS |
Revenue from financial intermediation |
151,198,428 |
36,250,128 |
400,777 |
(1,121,214) |
186,728,119 |
(2,624,549) |
(2,167,017) |
23,976,721 |
205,913,274 |
Expenses from financial intermediation (4) |
(81,330,918) |
(29,163,334) |
(22) |
1,121,214 |
(109,373,060) |
484,249 |
4,765,294 |
(27,187,737) |
(131,311,254) |
Financial margin |
69,867,510 |
7,086,794 |
400,755 |
- |
77,355,059 |
(2,140,300) |
2,598,277 |
(3,211,016) |
74,602,020 |
Expected Credit Loss Associated with Credit Risk expense |
(31,525,873) |
- |
- |
- |
(31,525,873) |
43,142 |
- |
7,696,293 |
(23,786,438) |
Gross income from financial intermediation |
38,341,637 |
7,086,794 |
400,755 |
- |
45,829,186 |
(2,097,158) |
2,598,277 |
4,485,277 |
50,815,582 |
Other income from insurance, pension plans and capitalization bonds |
- |
7,425,337 |
- |
35,507 |
7,460,844 |
- |
- |
661,773 |
8,122,617 |
Fee and commission income and income from banking fees |
33,802,362 |
1,701,005 |
7,274 |
(36,169) |
35,474,472 |
(4,977,457) |
(1,976,003) |
(1,386,805) |
27,134,207 |
Personnel expenses |
(20,321,773) |
(2,377,250) |
(4,284) |
- |
(22,703,307) |
763,928 |
- |
256,023 |
(21,683,356) |
Other administrative expenses (5) |
(20,949,621) |
(1,635,857) |
(7,895) |
530,420 |
(22,062,953) |
1,035,520 |
(594,059) |
(1,552,247) |
(23,173,739) |
Tax expenses |
(6,880,656) |
(1,188,335) |
(18,530) |
- |
(8,087,521) |
521,838 |
- |
- |
(7,565,683) |
Share of profit (loss) of associates and jointly controlled entities |
107,424 |
125,038 |
- |
- |
232,462 |
1,170,081 |
- |
(46,617) |
1,355,926 |
Other operating income / expenses |
(8,457,925) |
(500,429) |
(5,254) |
(1,342,588) |
(10,306,196) |
1,736,829 |
(28,215) |
(2,746,029) |
(11,343,611) |
Operating profit/(loss) |
15,641,448 |
10,636,303 |
372,066 |
(812,830) |
25,836,987 |
(1,846,419) |
- |
(328,625) |
23,661,943 |
Non-operating income/(expense) |
426,197 |
127,478 |
- |
- |
553,675 |
(5,669) |
- |
- |
548,006 |
Income Tax/Soc. Contrib. and non-controlling interests |
(2,112,804) |
(4,248,857) |
(109,659) |
812,830 |
(5,658,490) |
1,852,088 |
- |
813,649 |
(2,992,753) |
Net Income for the year ended on December 31, 2022 |
13,954,841 |
6,514,924 |
262,407 |
- |
20,732,172 |
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485,024 |
21,217,196 |
Total assets |
1,571,006,747 |
371,322,607 |
3,871,114 |
(115,953,851) |
1,830,246,617 |
(10,617,211) |
(40,304,939) |
20,291,208 |
1,799,615,675 |
Investments in associates and joint ventures |
68,419,475 |
2,950,880 |
1,191 |
(67,811,381) |
3,560,165 |
5,481,876 |
- |
(71,528) |
8,970,513 |
Total liabilities |
1,384,018,647 |
338,204,857 |
154,249 |
(48,142,468) |
1,674,235,285 |
(10,617,211) |
(40,304,939) |
17,561,276 |
1,640,874,411 |
(1) Refers to: consolidation adjustments,
originating from proportionally consolidated companies (Grupo Cielo, Grupo Alelo, Crediare, etc.) for management purposes;
(2) Consolidation adjustments originating
from the “non-consolidation” of exclusive funds;
(3) Adjustments due to the differences of
the accounting standards used in the management reports and in the financial statements of the Company that were prepared in accordance
with IFRS. The main adjustments refer to the expected loss for financial assets, business models, and effective interest rates and business
combinations;
(4) Includes, in the Consolidated Financial
Statements, the balances referring to “Net gains / (losses) on financial assets and liabilities at fair value through profit or
loss”, “Net gains / (losses) on financial assets at fair value through other comprehensive income” and “Net gains
/ (losses) from operations in foreign currency”; and
(5) Includes, in the Consolidated Financial
Statements, the balances referring to depreciation and amortization.
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On December 31 2021 - thousand R$ |
Banking |
Insurance, pension and capitalization bonds |
Other Activities |
Eliminations |
Managerial Income Statement |
Proportionately consolidated (1) |
Consolidation adjustments (2) |
Adjustments (3) |
Consolidated in accordance with IFRS |
Revenue from financial intermediation |
98,849,913 |
20,204,517 |
159,242 |
(186,196) |
119,027,476 |
(612,023) |
1,135,111 |
5,892,867 |
125,443,431 |
Expenses from financial intermediation (4) |
(34,560,608) |
(13,192,413) |
(752) |
211,047 |
(47,542,726) |
161,179 |
1,335,070 |
(9,074,846) |
(55,121,323) |
Financial margin |
64,289,305 |
7,012,104 |
158,490 |
24,851 |
71,484,750 |
(450,844) |
2,470,181 |
(3,181,979) |
70,322,108 |
Expected Credit Loss Associated with Credit Risk expense |
(15,500,157) |
- |
- |
- |
(15,500,157) |
72,047 |
- |
5,813,901 |
(9,614,209) |
Gross income from financial intermediation |
48,789,148 |
7,012,104 |
158,490 |
24,851 |
55,984,593 |
(378,797) |
2,470,181 |
2,631,922 |
60,707,899 |
Other income from insurance, pension plans and capitalization bonds |
- |
5,177,940 |
- |
13,385 |
5,191,325 |
- |
- |
1,503,053 |
6,694,378 |
Fee and commission income and income from banking fees |
31,866,568 |
1,779,999 |
767,505 |
(605,756) |
33,808,316 |
(4,229,902) |
(2,049,179) |
(1,496,228) |
26,033,007 |
Personnel expenses |
(18,425,804) |
(2,040,452) |
(386,462) |
67 |
(20,852,651) |
671,693 |
- |
167,266 |
(20,013,692) |
Other administrative expenses (5) |
(19,676,660) |
(1,494,814) |
(779,724) |
1,128,510 |
(20,822,688) |
1,488,706 |
(361,913) |
(2,070,160) |
(21,766,055) |
Tax expenses |
(6,340,354) |
(983,979) |
(112,654) |
- |
(7,436,987) |
608,530 |
- |
- |
(6,828,457) |
Share of profit (loss) of associates and jointly controlled entities |
7,505 |
98,692 |
38,192 |
- |
144,389 |
719,746 |
- |
(442,631) |
421,504 |
Other operating income / expenses |
(13,689,730) |
(721,996) |
166,027 |
(561,057) |
(14,806,756) |
643,235 |
(59,089) |
2,063,496 |
(12,159,114) |
Operating profit/(loss) |
22,530,673 |
8,827,494 |
(148,626) |
- |
31,209,541 |
(476,789) |
- |
2,356,718 |
33,089,470 |
Non-operating income/(expense) |
(308,942) |
36,765 |
18 |
- |
(272,159) |
35,056 |
- |
- |
(237,103) |
Income Tax/Soc. Contrib. and non-controlling interests |
(5,522,891) |
(3,520,279) |
51,476 |
- |
(8,991,694) |
441,733 |
- |
(921,602) |
(9,471,563) |
Net Income for the year ended on December 31, 2021 |
16,698,840 |
5,343,980 |
(97,132) |
- |
21,945,688 |
- |
- |
1,435,116 |
23,380,804 |
Total assets on December 31, 2021 |
1,485,771,990 |
342,175,848 |
5,495,625 |
(138,226,247) |
1,695,217,216 |
(10,413,213) |
(31,138,435) |
21,906,625 |
1,675,572,193 |
Investments in affiliates and joint venture on December 31, 2021 |
70,811,964 |
2,640,563 |
405,587 |
(71,396,385) |
2,461,729 |
5,132,515 |
- |
(36,678) |
7,557,566 |
Total liabilities on December 31, 2021 |
1,303,885,088 |
308,096,509 |
1,300,120 |
(66,829,862) |
1,546,451,855 |
(10,413,213) |
(31,138,435) |
20,443,279 |
1,525,343,486 |
(1) Refers to: consolidation adjustments,
originating from proportionally consolidated companies (Grupo Cielo, Grupo Alelo, Crediare, etc.) for management purposes;
(2) Consolidation adjustments originating
from the “non-consolidation” of exclusive funds;
(3) Adjustments due to the differences of
the accounting standards used in the management reports and in the financial statements of the Company that were prepared in accordance
with IFRS. The main adjustments refer to the expected loss for financial assets, business models and effective interest rate and business
combinations;
(4) Includes, in the Consolidated Financial
Statements, the balances referring to “Net gains / (losses) on financial assets and liabilities at fair value through profit or
loss”, “Net gains / (losses) on financial assets at fair value through other comprehensive income” and “Net gains
/ (losses) from operations in foreign currency”; and
(5) Icludes, in the Consolidated Financial
Statements, the balances referring to depreciation and amortization.
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On December 31, 2020 - R$ thousands |
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Banking |
Insurance, pension and capitalization bonds |
Other Activities |
Eliminations |
Managerial Income Statement |
Proportionately consolidated (1) |
Consolidation adjustments (2) |
Adjustments (3) |
Consolidated in accordance with IFRS |
Revenue from financial intermediation |
74,335,609 |
22,444,253 |
109,663 |
(111,074) |
96,778,451 |
484,720 |
(3,521,128) |
4,687,074 |
98,429,117 |
Expenses from financial intermediation (4) |
(23,937,104) |
(18,341,232) |
(455) |
118,931 |
(42,159,860) |
(40,645) |
1,051,877 |
(7,427,059) |
(48,575,687) |
Financial margin |
50,398,505 |
4,103,021 |
109,208 |
7,857 |
54,618,591 |
444,075 |
(2,469,251) |
(2,739,985) |
49,853,430 |
Expected Credit Loss Associated with Credit Risk expense |
(25,268,087) |
- |
- |
- |
(25,268,087) |
(104,072) |
- |
5,826,884 |
(19,545,275) |
Gross income from financial intermediation |
25,130,418 |
4,103,021 |
109,208 |
7,857 |
29,350,504 |
340,003 |
(2,469,251) |
3,086,899 |
30,308,155 |
Other income from insurance, pension plans and capitalization bonds |
- |
8,074,969 |
- |
23,773 |
8,098,742 |
- |
- |
- |
8,098,742 |
Fee and commission income and income from banking fees |
30,307,248 |
1,875,701 |
448,292 |
(203,830) |
32,427,411 |
4,031,391 |
2,164,111 |
(13,686,459) |
24,936,454 |
Personnel expenses |
(17,714,158) |
(1,903,919) |
(174,340) |
62 |
(19,792,355) |
(631,755) |
- |
1,458,633 |
(18,965,477) |
Other administrative expenses (5) |
(19,349,706) |
(1,524,278) |
(340,464) |
674,656 |
(20,539,792) |
(1,442,189) |
218,055 |
358,770 |
(21,405,156) |
Tax expenses |
(5,476,957) |
(1,038,918) |
(74,502) |
- |
(6,590,377) |
(541,474) |
- |
1,082,949 |
(6,048,902) |
Share of profit (loss) of associates and jointly controlled entities |
(271) |
98,937 |
16,222 |
- |
114,888 |
(634,424) |
- |
964,394 |
444,858 |
Other operating income / expenses |
(15,634,441) |
(1,033,754) |
102,438 |
(502,518) |
(17,068,275) |
(678,421) |
87,085 |
4,861,111 |
(12,798,500) |
Operating profit/(loss) |
(2,737,867) |
8,651,759 |
86,854 |
- |
6,000,746 |
443,131 |
- |
(1,873,703) |
4,570,174 |
Non-operating income/(expense) |
(284,469) |
(197,204) |
1,100 |
- |
(480,573) |
(14,306) |
- |
- |
(494,879) |
Income Tax/Soc. Contrib. and non-controlling interests |
14,508,637 |
(3,425,110) |
(57,123) |
- |
11,026,404 |
(428,825) |
- |
1,361,087 |
11,958,666 |
Net Income for the year ended on December 31, 2020 |
11,486,301 |
5,029,445 |
30,831 |
- |
16,546,577 |
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(512,616) |
16,033,961 |
Total assets on December 31, 2020 |
1,435,481,875 |
338,923,828 |
5,658,304 |
(135,259,892) |
1,644,804,115 |
(9,364,134) |
(44,400,937) |
13,614,746 |
1,604,653,790 |
Investments in affiliates and joint venture on December 31, 2020 |
77,091,501 |
1,856,796 |
60,271 |
(77,139,456) |
1,869,112 |
5,177,598 |
- |
340,130 |
7,386,840 |
Total liabilities on December 31, 2020 |
1,291,779,235 |
338,923,828 |
5,658,304 |
(135,259,892) |
1,501,101,475 |
(9,364,134) |
(44,400,937) |
11,200,012 |
1,458,536,416 |
(1) Refers to: consolidation adjustments,
originating from proportionally consolidated companies (Grupo Cielo, Grupo Alelo, Crediare, etc.) for management purposes;
(2) Consolidation adjustments originating
from the “non-consolidation” of exclusive funds;
(3) Adjustments due to the differences of
the accounting standards used in the management reports and in the financial statements of the Company that were prepared in accordance
with IFRS. The main adjustments refer to the expected loss for financial assets, business models and effective interest rate and business
combinations;
(4) Includes, in the Consolidated Financial
Statements, the balances referring to “Net gains / (losses) on financial assets and liabilities at fair value through profit or
loss”, “Net gains / (losses) on financial assets at fair value through other comprehensive income” and “Net gains
/ (losses) from operations in foreign currency”; and
(5) Icludes, in the Consolidated Financial
Statements, the balances referring to depreciation and amortization.
As shown in the table and note
(3) above, the adjustments arising from the differences between the criteria, procedures and rules used to prepare the operating segments
in accordance with the accounting practices adopted in Brazil applicable to institutions authorized to operate by Bacen and the international
accounting standard, in accordance with the pronouncements issued by the IASB, the main ones being: (i) expected losses on financial assets
- R$(1,118) thousand (2021 – R$(1,074) thousand and 2020 – R$(1,201) thousand); (ii) business models - R$273 thousand (2021
– R$(67) thousand and 2020 – R$1,253 thousand); (iii) effective interest rate - R$416 thousand (2021 – R$(442) thousand
and 2020 – R$(1,815) thousand); and (iv) business combination – R$4,431 thousand (2021 – R$4,240 thousand and 2020 –
R$3,680 thousand). On December 31, 2022, after adjustments, shareholders' equity under BRGAAP R$154,263 thousand became IFRS R$158,265
thousand.
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