2008 annual report WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Financial Indicators (R$ million) 2004 2005 2006 2007 2008 Consolidated Balance Sheet Total Assets 184,926 208,683 265,547 341,144 454,413 Loan Operations and Leasing 62,788 81,130 96,219 131,307 173,423 Securities, Derivative Financial Instruments 84,769 89,457 123,239 152,074 205,789 and Short-Term Interbank Investments Total Deposits 68,643 75,406 83,905 98,323 164,493 Demand Deposits 15,298 15,956 20,527 28,496 27,610 Time Deposits 28,459 32,837 34,925 35,717 97,414 Savings Deposits 24,783 26,201 27,612 32,813 37,769 Subordinated Debts 5,973 6,719 11,949 15,818 19,249 Technical Provision for Insurance, Private Pension 33,669 40,863 49,129 58,526 64,587 Plans and Certificated Savings Plans Shareholders’ Equity 15,215 19,409 24,636 30,357 34,257 Statement of Income (1) Net Income 3,060 5,514 6,363 7,210 7,620 Financial Margin 13,231 16,549 19,839 22,300 25,649 Gross Income from Financial Intermediation 11,189 14,042 15,427 16,802 18,362 Fee and Commission Income 5,824 7,349 8,898 10,806 11,215 Personnel Expenses 4,969 5,312 5,932 6,570 7,166 Other Administrative Expenses 4,937 5,142 5,870 6,912 8,184 Performance Ratios– Annualized (%) Return on Total Shareholders’ Equity 20.1 28.4 25.8 23.8 22.2 Return on Total Assets 1.7 2.6 2.4 2.1 1.7 Capital Adequacy Ratio (Basel) – Financial Consolidated 18.8 17.3 18.8 15.6 16.9 Efficiency Ratio (accumulated) 55.5 45.6 42.1 41.8 42.0 Coverage – Fee and Commission/Personnel Expenses 117.2 138.4 150.0 164.5 156.5 Coverage – Fee and Commission/Personnel 58.8 70.3 75.4 80.2 73.1 and Administrative Expenses Shares (2) Interest on Shareholders’ Equity/Dividends 1,325 1,881 2,160 2,823 2,692 Net Earnings per Share 1.07 1.88 2.12 2.38 2.48 Book Value per Share 5.35 6.61 8.21 10.02 11.16 Capital Increase by Subscription/Merger – 712 1,200 790 1,200 Clients (million) Account holders 15.7 16.5 16.8 18.8 20.1 Savings Accounts 34.7 35.1 35.2 34.6 35.8 Finasa 1.994 5.475 5.846 5.492 4.859 Network/Structure Bradesco Branches 3,004 2,921 3,008 3,160 3,359 Banking Service Branches and Outlets (PABs) 2,301 2,451 2,542 2,776 3,738 Banco Postal 5,383 5,461 5,585 5,821 5,946 Bradesco Expresso 2,121 4,752 8,113 11,539 16,061 Finasa Branches 121 239 381 375 156 Finasa – Associated Stores and Dealers 32,687 40,439 39,893 36,970 22,366 ATM Network 21,822 23,036 24,099 25,974 29,218 Average of Clients by Branch (thousand) 5.2 5.6 5.6 5.9 6.0 Number of Employees 73,644 73,881 79,306 82,773 86,622 Internet Banking (million of clients) 6.4 7.0 7.8 8.6 9.8 Credit Card Base (million) 7.6 10.2 17.9 27.2 33.7 (1) Years of 2006 and 2007 – Recurring Income. (2) Previous amounts recalculated for comparison purposes, due to share reverse split and splitting.
2 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Corporate Profile
Branches throughout Brazil: commitment to development
Bradesco has R$ 454.413 billion of inclusion and loan democratization. consolidated assets and 40.6 million Today the Organization has over 86,000 clients, of which 20 million are checking employees. account holders who access one of the Over its 65-year history, Bradesco largest Costumer Service Networks in became acknowledged worldwide for Brazil, with 32,568 outlets, including its strength and tradition in providing branches, Banco Postal, Bradesco excellent service to its clients. As a Expresso, Service Stations, Outplaced publicly-held company since 1946, ATM network, in addition to 29,218 Bradesco’s operational premises include Bradesco Dia&Noite ATMs and 5,306 value creation for the groups with which Banco24Horas ATMs, providing support it operates; continuous investment to this wide network. The Banco Postal, in technology and management; a partnership with Post Offices, as well the identification of opportunities as Bradesco Expresso, is one of Brazil’s expanding operational targets; ethical corporate leaders in promoting bank conduct; and respect for human beings WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
and the environment. Committed to Brazil’s development and sustainability in its activities, the Bank ensures significant returns to its stockholders and investors. It offers all products and services in Varejo (Retail), Prime, Empresas (Middle Market), Corporate, and Private segments. With an innovative approach to corporate responsibility, the Bank has been providing quality education for children, adolescents, and adults free of charge for more than 52 years through the Fundação Bradesco. In 2008, the Company served more than 518,000 students, in its various segments, of which 110,000 were served by means of its 40 schools throughout Brazil and 408,000 by means of its virtual school, e-learning portal, and CIDs (Digital Inclusion Centers). The Bank has already provided services for over 2.1 million students, a total that reaches 3 million when both on-site and distance courses are considered.
Timeline
»»Cidade de Deus »»The first withdrawal is inaugurated in machine is implemented, the city of Osasco, SOS Bradesco, preceding state of São Paulo current ATMs »»Banco Brasileiro de »»First Latin American Descontos S.A. is company to acquire founded on March 10, a computer In the 1970’s, the in the city of Marília, »» Company merges state of São Paulo 17 others banks »»Bradesco card is launched, Brazil’s Headquarters are »» first credit card transferred to the city and state of São Paulo 1943 1946 1953 1962 1968 1970
4 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Leadership History São Paulo state, on Rua Álvares Penteado. Bradesco was founded in 1943 in the After only eight years of activity, in city of Marília, located in the interior of 1951, the Company became the largest São Paulo state, under the name Banco private bank in Brazil. In the 1950s, Brasileiro de Descontos S.A. Against Bradesco had already reached the rural the market trend at that time, which north of the state of Paraná. It had also prioritized large rural property owners, established its new headquarters in businessmen, and wealthy people, Osasco, the Cidade de Deus, which was the Company’s initial strategy aimed started operating in 1953. at attracting the small tradesman, the In 1962, Bradesco reaffirmed its civil servant, and the working person, pioneering nature by becoming the first in an effort to include a greater number Latin American company to acquire a of Brazilians in bank services. In 1946, computer, enabling clients to access the Company’s headquarters were their bank statements on a daily basis, a transferred to the center of São Paulo, in novel service at that time. Following its
»»Bradesco launches the first Latin American Internet Banking System
»»The branch no. 1,000 »»Bradesco completes the Information »»Bradesco launches is inaugurated in Chuí, Technology Center, in Cidade de Deus, the first credit card Brazil’s extreme south with recycled plastic »»Alô Bradesco, »»The Company in the city of Osasco, state of São Paulo customer service is concludes the »»In early 1980’s created, preceding implementation Grupo Bradesco the Consumer’s of the Bradesco Seguros Defense Code Instant System, »»Bradesco shares »»Fundação (Insurance when the entire start to be Bradesco turns Group) is network starts to traded on NYSE 50 years incorporated operate online 1978 1980 1985 1990 1996 2001 2006 2007 2008 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
strategy to offer innovative services, in 1968 Bradesco created the Bradesco Credit Card, the first in the Brazilian Bank System. The 1970s saw Brazil undergo its “economic miracle”, recording annual growth rates above 10%. Within this scenario, Bradesco performed strongly in the loan segment, mainly in vehicle financing, and extended its presence nationwide. In this decade, Bradesco merged 17 other banks and inaugurated two new units in 1978, located in Oiapoque (state of Amapá) and Chuí (state of Rio Grande do Sul), one city located in the extreme north and the other in the extreme south of Brazil, reaching its thousandth branch. In the 1980s, Bradesco created the Grupo Bradesco Seguros, operating in segments related to open private pension plans and certificated savings plans, as well as insurance. Bradesco popularized the use of magnetic strip cards among clients during these years and implanted the first ATM-equipped branches as well as Telecompras Bradesco. In 1986, the Telesaldo, now called Fone Fácil Bradesco (Easy Phone), began operations. In the early 1990s, all of Bradesco’s branches went online, and ATMs were extended to the entire country, enabling cash withdrawals, cash deposits, and check issues. The Internet Banking system, a pioneering initiative in Brazil, was also very successful and became one of the most important service channels, with millions of users annually enrolled. Now, in the first decade of the twenty-first century, Bradesco reaffirms its talent to retail. It has created the Banco Postal, in partnership with the Post Offices, aligned with its bank inclusion goals, enabling access to products and services, mainly in places devoid of bank services. It also assumes its position in the other segments in which it operates, such as Prime, Corporate, Private, and service to micro, small, and medium-sized companies. Through its long history, Bradesco never lost sight of the rightful expectations of its stockholders and investors with respect to results, nor of the awareness of its role as agent of Brazil’s economic growth, mainly in order to democratize loan service and expansion – an essential instrument to stimulating any modern economy. The strength of the Bradesco Brand will always be its largest competitive advantage.
6 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Organization Chart Main Subsidiaries and Associated Companies
Banco Bradesco
99.99% on 100.00% on 100.00% on 99.99% total 100.00% 100.00% 100.00% 100.00% total 100.00% total
Bradport – SGPS. Bradesco Leasing Banco Bradesco Bradesco Banco Bradesco Banco Sociedade S.A. Arrendamento Argentina Securities Luxembourg Boavista Unipessoal Lda. Mercantil
100.00% on 99.99% 92.69% on 99.88% on 100.00% total QuotaS 92.69% total 99.88% total 99.99% Cia. Securitização Banco Tempo QuotaS Bradesco Banco de Créditos Finasa BMC Serviços Ltda. Consórcios Alvorada S.A. Financeiros Rubi 7.27% on 7.27% total
100.00% on 100.00% on Alvorada Cartões Banco 100.00% total 100.00% total Crédito e Financ. Bankpar S.A. Investimentos S.A. 99.99% 91.14% 8.86% QuotaS QuotaS QuotaS
100.00% 100.00% Scopus Bradesplan New York Branch Nassau Branch Tecnologia Participações Ltda.
Grand Cayman II 100.00% 100.00% Banco Bradesco Branch Cartões 99.99% QuotaS
98.33% on 98.33% total Banco Bradesco União Grand Cayman 100.00% BBI S.A. Participações Ltda. Branch
49.00% on 100.00% on 100.00% on 100.00% on 100.00% 49.00% total 100.00% total 100.00% total 100.00% total
BRAM – Bradesco Bradesco Ágora Corretora de Bradesco CPM Asset Management Corretora T.V.M. Títulos e Valores Services Co. Holdings S.A. D.T.V.M. 99.99% QuotaS
Bradseg Participações
100.00% on 100.00% total
Bradesco Seguros
99.90% on 100.00% on 100.00% on 99.90% total 100.00% total 99.99% QuotaS 100.00% total
Bradesco Argentina Bradesco Vida Bradesco SegPrev Bradesco de Seguros e Previdência Investimentos Ltda. Capitalização
100.00% on 100.00% on 84.76% on 100.00% total 100.00% total 84.76% total
Bradesco Atlântica Bradesco Auto/RE Saúde Capitalização Cia. de Seguros 15.24% on 15.24% total
100.00% on 100.00% on 100.00% total 100.00% total
Bradesco Atlântica Dental S.A. Cia. de Seguros on = Common Shares pn = preferred Shares WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Values Client is the reason for the Organization’s existence. Transparency in all internal and external relationships. Respect for competition. Belief in values and in the capacity of people development. Respect for dignity and diversity of human being. Social and environmental responsibility, promoting and encouraging sustainable development actions. Commitment to a continued improvement of products and service quality. Objective To play an active role as development partner company Brazil’s social and economic growth, promoting the financial intermediation and the supply of products and services, so that to meet the expectations of clients, shareholders, employees and the public in general. Professional Principles
Act with integrity, respecting the laws of the country and rules governing the activities of our sector and of our Organization. Respect for people equal rights, preserving the individuality and privacy, not accepting the practice of any discriminatory acts. Be committed to the secrecy of information, and respecting this information so that to ensure its integrity, confidentiality and when the situation requires, to make it available precisely and completely. Exercise a responsible leadership, promoting the relationship among several hierarchical levels of the Organization in a proper ambience to perform tasks and professional and personal development, providing a healthy environment, with freedom of speech in pursuit of improved organizational results. Refuse advantages that may represent improper relationship, financial losses or compromise the Organization’s reputation. Cooperate so that positive relationship maintained with Clients, Shareholders and Investors, Suppliers of Products and Services and Business Partners, Governmental Agencies and Regulatory Authorities, Media, Communities, Associations and Professional Associations are guided by ethical conduct, transparency and confidence. Being committed to practicing, encouraging and valuing the environmental preservation, seeking to focusing corporate objectives to the community’s wishes where we operate. Support and foment initiatives to build and value citizenship, eradicate poverty and reduce social inequalities.
8 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Contents 10 Message to Shareholders 49 Risk Management
12 Directors’ Report 52 Intangible Assets Bradesco Brand 15 Results for the Year Human Resources Information Technology 17 Business Strategy 56 Marketing 19 Bradesco Shares 58 Bank of the Planet – Social and 20 Operating Efficiency Ratio – IEO Environmental Performance 21 Capital and Reserves of Bradesco Organization Fundação Bradesco 22 Operational Performance Finasa Sports Program Funding and Asset Management Loan Operations 63 Acknowledgments Collection and Recovery of Loans Ratings Rankings 25 International Area Awards 26 Market Segmentation Certifications Bradesco Corporate 65 Management Bodies Bradesco Empresas (Middle Market) Bradesco Private Banking Bradesco Prime Bradesco Varejo (Retail) Banco Postal Bradesco Expresso
29 Products and Services Bradesco’s Cards Receipts, Payments and Collection Solutions Shares, Custody and Controllership Services
32 Organizational Structure – Bradesco Customer Service Network
35 Bradesco’s Companies
40 Corporate Governance Internal Controls and Compliance Policies of Transparency and Disclosure of Information Investor Relations – IR Bradesco Ombudsman WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Message to Shareholders
Dear Shareholders, domestic and international markets, 2008 was marked by an abrupt change in maintaining our focus on improving our the world economic scenario beginning quality and performance ratio, and alert in the second half of the year, a period to safe, prudent and profitable growth when the liquidity issues of large U.S. opportunities the markets may offer. financial institutions started to affect The Net Income for the period stood other economies to varying degrees. In at R$ 7.620 billion. Interest paid on Brazil, recently raised to “investment shareholders’ equity and dividends grade,” the signs of slowdown became totaled R$ 2.692 billion, representing apparent in few sectors, especially among 37.17% of the adjusted net income, main growth drivers like automobiles exceeding the minimum of 30% and home building sectors. provided for by Bylaws. These figures On the other hand, the backbone of are substantial if we take into account the Brazilian Financial System served they were recorded after allocating the as a source of confidence, proving to significant amount of R$ 5.661 billion be solid as a result of proper preventive to the federal government as taxes and measures adopted over the past years by contributions. the Brazilian Central Bank. Nevertheless, In the year, several ratios have improved as a natural reaction of economic agents, when compared to the previous year, such operations became more selective, as total assets, shareholders’ equity, funds especially where credit is concerned. raised and the expansion of our customer Within this scenario, a trend toward service network. It is worth mentioning consolidation in the Brazilian banking the relevant contribution from Grupo system has been intensified, with Bradesco de Seguros e Previdência sizeable transactions proclaiming its (Insurance Group) in the net income for continuation, which undoubtedly the year. benefits the security of the system in As a result of the stock market conditions addition to increasing competition in this in Brazil, directly influenced by disputed market. worldwide economic turmoil, Bradesco’s Bradesco is facing these challenges market value reached the amount of in the same way as those that guided R$ 65.354 billion on December 31, 2008. our 65 years of history, supported by We point out that approximately 2/3 of our solidity and the recognition of the total shares comprising the Bank’s capital
10 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 are owned by minority shareholders, of the Organization’s social programs which explains the high trading volume completed its 52nd year of beneficial of our shares on stock exchanges, floated initiatives and activities, exceeding 518 in all trading sessions. thousand students assisted in 2008. Since That Bradesco was again included on the their creation, its 40 schools, mainly Dow Jones Sustainability World Index located in underprivileged regions, have opens a list of events that strengthened provided free-of-charge and quality the Organization’s image and operating education to 2.1 million students, which capacity in 2008, such as: the takeover added to other types of on-site and of Mediservice – Administradora de distance learning courses, reached more Planos de Saúde by Grupo Bradesco de than 3 million assistances. Seguros e Previdência and all shares A solid structure of internal controls that of Ágora Corretora by Banco Bradesco protects the Bradesco Organization in all BBI; the agreements signed with Banco its performance areas does not make us Bilbao Viscaya Argentaria, Banco invulnerable to market turmoil, however, Espírito Santo and JPMorgan Chase it does give us the required safety of Bank to expand the provision of cash continuing and preserving the plans management solutions to the clients outlined for the future in their essence. of these institutions; operating alliance Our efforts are guided and supported by to manage the investment funds of corporate governance which has been Mitsubishi UFJ Asset Management; continuously improving and by the the first Bank of Latin America to be experience acquired over the decades associated with Connector, a network in the risk management area that today composed of 13 financial institutions has reached the maximum scope of a providing access to the companies using responsible administration. cash management services in the 30 The achievements conquered in 2008 countries where they operate. result from the devoted and tireless work Since 2007, social-environmental-related of our officers, employees and other activities of the Organization have been collaborators, who we thank, as well as centralized in the Bank of the Planet, our shareholders and clients, for their an initiative that also aims to create support, confidence and preference that new products and services focused have distinguished us. on sustainability as well as foment a relationship of absolute harmony with Cidade de Deus, January 30, 2009 the environment among employees, clients, shareholders and suppliers. Fundação Bradesco, one of the largest Lázaro de Mello Brandão social and educational projects in Brazil and worldwide, and also the backbone Chairman of the Board of Directors WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Directors’ Report
Room of Board of Directors and Board of Executive Officers of Bradesco
We are pleased to present you the process that intensified in September Financial Statements for the year and has affected several interconnected ended on December 31, 2008 of markets. The most relevant outcomes Banco Bradesco S.A., as well as the of this process were noticeable in consolidated ones, pursuant to the the financial volatility; the banking Brazilian Corporation Law. system became unstable in various 2008 will be marked by a variation in economies, with credit constraints and the robust expansion cycle of global reduced capital flows, changes in asset growth initiated in 2004, a period and commodity prices and higher risk of several structural changes that aversion. Under these circumstances, a benefited emerging economies like couple of main developed economies Brazil’s. This change occurred with should post economic slowdown in the onset of the most severe crisis 2009, while the expansion of emerging of the past seventy years, basically economies should be milder than that characterized by a strong deleveraging verified over the past years.
12 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Notwithstanding an unfavorable Compatible with this trend, total credit international scenario, the Brazilian inventory should also increase at a economy behaved well most of the milder pace than that verified over the year, with growth around 5% – a level past years. Looking ahead, Bradesco achieved for the second consecutive reiterates its confidence as to Brazil’s year. Household consumption and prospects, which remains positive investments are still the main drivers despite the social and economic of economic expansion, benefited by problems already suffered throughout an environment of higher confidence the world. For these prospects to among consumers and businessmen become a reality, it is necessary to and by credit and income growth. advance the reform agenda so as to Inflationary pressures deriving from a enable GDP growth at a sustainable disparity between supply and demand pace, and perhaps the crisis is an and intensified by high commodity opportunity for such progress. prices resulted in monetary tightening by At the Bradesco Organization, among mid-2008, which decisively contributed the relevant events in the period, we can to Brazil avoiding an acceleration of highlight: inflation as strong as that verified in several economies. Within this scenario, on January 21, Grupo Bradesco de Brazil obtained the coveted investment Seguros e Previdência, through grade in the first half of 2008 amid high Bradesco Seguros S.A., signed the volatility in the global markets. It is also “Agreement for the Assignment of worth mentioning a significant inflow Quotas” with Marsh Corretora de of foreign direct investments, which Seguros Ltda., aiming at the takeover reached the level of US$ 40 billion for of Mediservice – Administradora de the first time in history. Planos de Saúde Ltda., an important 2009 will be a year of adjustments in strategic step which enabled the Brazil and in the world. Brazil’s GDP expansion of our client base with growth should slow down to nearly 1.5%. scale gains;
Indicators Bank Loan 2007 2008 Bradesco Loan Portfolio (R$ billion) 131.307 173.423 • Individuals (R$ billion) 53.474 66.701 • Corporations (R$ billion) 77.833 106.722 Growth of Bradesco Loan Portfolio (%) 36.5 32.1 Total Loans of Financial Sector (R$ billion) 936.0 1,227.4 Bradesco Portfolio in relation to the Financial Sector (%) 13.1 13.2 Loans/GDP ratio (%) 34.7 41.3* Economic Indicators (%) • Nominal Selic (12 months) 11.25 13.75 • GDP 5.67 5.60* • IPCA (Broad Consumer Price Index) 4.46 5.90 * Preliminary figures WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
on March 6, Banco Bradesco BBI S.A. entered into with shareholders of Ágora Corretora de Títulos e Valores Mobiliários S.A. a “Private Instrument of Share Merger Commitment and Other Covenants”, aiming the acquisition of all its capital stock. Ágora Corretora is Brazil’s largest brokerage firm in online trading of shares for individuals (home broker service), with nearly 29 thousand active clients. The operation was approved on September 3, 2008 by the Brazilian Central Bank; on March 17, the payment of Monthly Dividends was approved, as of May 2, 2008, in replacement of Monthly Interest on Shareholders’ Equity. As no withholding tax is In 2008, levied on dividends, this measure represented an increase of 17.6% in the amount monthly paid to shareholders, which Bradesco was were taxed upon receipt of interest; again included on May 27, Bradesco entered into a partnership with Banco Bilbao Viscaya Argentaria – BBVA and on October 22 with on Dow Jones BES – Banco Espírito Santo, S.A. and on November 21 with Sustainability JPMorgan Chase Bank, N.A., to expand the provision of cash management solutions to these Institutions’ clients. This is an World Index important step in the expansion of business with multinational (DJSI) of New companies by centralizing treasuries in Brazil; on August 18, Bradesco entered into an operating York Stock alliance with The Bank of Tokyo Mitsubishi UFJ, Ltd. to Exchange manage investment funds by means of its respective asset management companies BRAM – Bradesco Asset Management S.A. Distribuidora de Títulos e Valores Mobiliários and MUAM – Mitsubishi UFJ Asset Management Co. Ltd.; on August 27, Bradesco joined Connector, a global network of 13 partner banks and is the first Bank of Latin America to be a member of this network. With this alliance, corporate clients will be able to use cash management services in 30 countries where these banks operate; and on September 4, Bradesco was again included on the Dow Jones Sustainability World Index (DJSI), an index of the New York Stock Exchange that lists the world’s best companies that adopt good corporate governance practices, including transparency, ethics, social and environmental responsibility.
14 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Results for the Year
Quality service to 20.1 million account holders
Notwithstanding the turmoil of economy the origin and evolution is available on the scenario in 2008, the results achieved website www.bradesco.com.br/ir, on the and the compensation to shareholders Report on Economic and Financial Analysis. confirm a good performance in the period. R$ 7.620 billion was the Net Income A detailed analysis of these figures as to for the year, corresponding to R$ 2.48
Net Income Origin of Result (in billions of reais) (%)
6.0 7.620 Funding 8.0 Securities 7.210*
6.363* 25.0
5.514 Loan
26.0 Services 3.060
35.0 Insurance
2004 2005 2006 2007 2008 * Recurring net income WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
per share and annualized profitability of 23.76% on average Shareholders’ Equity * . The annualized return on Total Average Assets stood at 1.93% when compared to 2.67% of previous year. R$ 2.692 billion was allocated to shareholders, as monthly, interim and supplementary Dividends and Interest on Shareholders’ Equity, included in the calculation of mandatory dividends. Thus, R$ 0.919455 (R$ 0.819212 net of withholding tax) was attributed, which includes the additional of 10%, for each preferred share and R$ 0.835868 (R$ 0.744738 net of withholding tax) for each common share. The interest and dividends distributed represent 37.17% (net of withholding tax 33.12%) of the adjusted net income for the year. In order to restate monthly paid dividends, its amount will be increased by 10% as of February, 2009.
Taxes and Contributions In a direct proportion to the volume of activities developed, Bradesco Organization earmarked a significant portion of its earnings to the federal government. R$ 5.661 billion represented taxes and contributions, including social security contributions, paid or provisioned in the year. The amount of taxes withheld and collected corresponding to financial intermediation stood at R$ 6.351 billion.
Interest on Shareholders’ Taxes and Contributions Equity/Dividends (in billions of reais) (in billions of reais) 6.795 2.823 2.692 5.959 5.661 2.160 1.881 3.941 3.155 1.325
2004 2005 2006 2007 2008 2004 2005 2006 2007 2008
* It excludes the mark-to-market effect of Available-for-Sale Securities recorded in Shareholders’ Equity.
Additional information on 2008 Results, see ev the Book of Financial Statements, the Report 16 on Economic and Financial Analysis and at www.bradesco.com.br/ir WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Business Strategy
The world crisis saw Brazil with Expresso, besides 29,218 thousand strengthened foreign accounts, a machines of the Bradesco Dia&Noite dynamic banking sector and well (Day&Night) ATM Network and 5,306 grounded expectations of investments. thousand machines of Banco24Horas Despite this turmoil scenario, GDP (24-hour Bank), and combined with the growth outlook is nearly 1.5 % for 2009, confidence that inspires Bradesco brand, which motivates the Bank to continuing solid corporate governance and culture focused on the domestic market, with practices, it plans to yearly expand by 1.3 expectations of 12.9% increment in the million its client base, especially among nominal loan inventory of the national the population that do not have access to financial system. the banking system. With 32,568 branches, Bradesco owns Carrying on the continued growth plan a broad nationwide Customer Service to be the “1st Bank of its Clients”, based Network, comprised of branches, service on an agile and safe service that provides stations, Banco Postal and Bradesco clients and users with convenience,
Sales Strategy
Consumer
16,061 Outlets
Commercial Partnerships 33,871 Associated Stores and Dealers
5,946 Branches
5,574 Branches, 156 Branch Offices Banking Service Branches and Advanced Service Branches WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
more than R$ 2.670 billion were earmarked to infrastructure At Bradesco and Information Technology, besides significant funds to the training programs of its staff. Organization, For the launching of products, Bradesco will continue supported social and by businesses conducted by performance areas, such as investment banking, capital markets and private banking, such as environmental Bradesco BBI and high-income investment by the card markets, responsibility such as Amex. The segments of insurance, supplementary private pension plans and certificated savings plans will be supported by actions play an Grupo Bradesco de Seguros e Previdência. At Bradesco Organization, social-environmental responsibility important role actions have a significant role in the strategic planning, in the strategic surpassing the philanthropy field and disseminated into the Company’s culture. planning The thought posed by this current moment enables to reaffirm three relevant targets already existing as priority: a) to grow organically, attentive to potential acquisitions and partnerships, always committed to service quality and security of products and services, pursuing improvement of the Operating Efficiency Ratio; b) to identity and evaluate risks intrinsic to the activities, applying adequate controls and acceptable levels in the operations; and c) partnership with the capital markets, conducting businesses with total transparency, ethics and adequate compensation to investors.
Market Share % Investment Funds and Portfolios under Management (1) 15.2 Consortium – Real Estate (2) 27.1 Credit Card Revenue (2) 17.9 Debit Card Revenue (2) 18.9 Savings Deposits (3) 13.8 Foreign Exchange Closing – Exports (1) 22.2 Foreign Exchange Closing – Imports (1) 16.0 Insurance Premiums (2) 24.0 Private Pension Plan and VGBL Investment Portfolio (2) 38.4 Revenues from Certificated Savings Plans (2) 18.9 Sources: Bacen, Susep, ANS, Abecs, Anbid, Fenaprevi and Bradesco (1) Reference date: December 2008 (2) Reference date: November 2008 (3) Reference date: September 2008
18 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Bradesco Shares
Traded in all sessions of BM&FBOVESPA Index with Special Corporate Governance S.A. – Securities, Commodities and Futures – IGC and in Brazil Indexes – IBrX50 Exchange, Bradesco shares stand out for and IBrX100 (most traded shares). In their high liquidity level, and its preferred the foreign market, Bradesco shares are shares are among the highest weight shares included in Dow Jones Sustainability on Ibovespa index, with a participation of World Index of the New York Stock 4.08% at the end of the year. In 2008, due to Exchange and in FTSE Latibex Brazil of the crisis that affected the world economy, the Madrid Stock Exchange. common shares were devaluated by 38.29% R$ 43.689 billion was the amount of and preferred shares by 37.05%, against Bradesco Shares traded during the year 41.22% of Ibovespa. In the foreign market, on the Stock Exchange, represented by shares are traded on the New York Stock 122.382 million common shares and Exchange by means of ADR – American 1.316 billion preferred shares. Depositary Receipt – Level 2, and on the US$ 47.839 billion was traded as ADRs, in Madrid Stock Exchange, in Spain, listed on the US market (New York Stock Exchange the Latibex Index. – NYSE), equivalent to 2.783 billion In addition to Ibovespa, Bradesco shares preferred shares of the Bank. are traded in almost all indexes of the EUR 35.375 million was traded as DRs in Stock Exchange, such as: Corporate the European market (Latibex – Madrid), Sustainability Index – ISE, Share Index corresponding to 3.046 preferred shares with Special Tag Along – ITAG, Share of the Bank.
Financial Volume (R$ million) 2004 2005 2006 2007 2008 Bradesco ON (common shares) 381 757 1,018 860 3,177 Bradesco PN (preferred shares) 7,147 13,772 21,590 33,737 40,495 Ibovespa 252,143 334,356 504,102 1,012,531 1,225,431 Bradesco’s Share (%) 2.8 4.1 4.3 3.3 3.3 Valuation (%) Bradesco ON (common shares) 35.8 133.5 33.7 25.2 – 38.3 Bradesco PN (preferred shares) 35.2 117.7 33.1 32.9 – 37.0 Ibovespa 17.8 27.7 32.9 43.7 – 41.2 ADR Performance Financial Volume (US$ million) 1,369 5,504 12,866 27,793 47,925 Valuation (%) 50.2 134.5 42.3 58.9 – 51.5
Further information on v Share Performance in 2008 at www.bradesco.com.br/ir WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Operating Efficiency Ratio – IEO
The Activity-Based Costing – ABC Integrated Management methodology used at Bradesco System Organization has been resulting in a The Integrated Management System continuous improvement of the criteria – ERP, SAP Business Suite solution, to establish and negotiate fees, study of which has been implemented in the cost for the Performance Management Organization since 2006 has eased the and Decision Support – GDAD and to interrelationship of the information evaluate the Client Profitability – RENC, flow among the several departments, setting out a safe basis for permanent branches and affiliated companies. rationalization analyses. More than 85 thousand employees ABM – Activity-Based Management is have been qualified by means of on-site a methodology we have actively been training and e-learning, in the processes adopting for cost control, enabling us to already implemented by human resources, grow quickly, also in the identification training, accounts payable, fixed assets and of opportunities, combining operating purchases of material and services areas. performances and strategic goals, In light of excellent results, the solution concurrently with the improvement of used in the maintenance, works, system processes. development, real estate, consolidation IEO reflects a strict and ongoing of financial statements, accounting, control of administrative expenses and auction and e-trading, cash and audit higher revenues, combined with an was enhanced. efficient synergy process of acquired Interacting with a set of applications into a institutions. single database, it provides higher security 42.02% was the ratio obtained on of information, improved quality and data December 31, 2008, compared to 41.81% availability, resulting in the optimization, in 2007 and 42.13% in 2006. integration and process control.
Operating Efficiency Ratio * ( %) 2000 2001 2002 2003 2004 2005 2006 2007 2008 60.5 54.3 56.6 56.6 55.5 45.6 42.1 41.8 42.0 * The lower, the better is the efficiency
20 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Capital and Reserves
Total Assets (in billions of reais)
R$ 23.000 billion was the Bank’s Capital Stock at the end of the year.
R$ 11.257 billion totaled Equity Reserves. 454.413 R$ 34.257 billion was the Shareholders’ Equity, with a 12.84%
growth in the year. Concerning Consolidated Assets, which total 341.144 R$ 454.413 billion, the Managed Shareholders’ Equity corresponds 265.547 to 7.61%. The book value stood at R$ 11.16 per share. 208.683
The capital adequacy ratio in the consolidated financial result 184.926 reached 16.93%, and in the consolidated economic-financial result reached 16.09%, higher than the minimum of 11% regulated by Resolution no. 2,099, as of August 17, 1994 of the National 2004 2005 2006 2007 2008 Monetary Council, in conformity with the Basel Committee. As regards the Consolidated Reference Shareholders’ Equity, fixed Shareholders’ Equity (in billions of reais) assets ratio (maximum of 50%, according to the Brazilian Central Bank) stood at 13.55% in the consolidated economic-financial result and at 48.02% in the consolidated financial result. At the end of the year, Bradesco’s Subordinated Debt amounted to 34.257 R$ 19.249 billion (abroad, R$ 3.261 billion and in Brazil, R$ 15.988 30.357 billion), already included in the Shareholders’ Equity for purposes 24.636 of determining the ratios mentioned in the previous paragraph. 19.409 Pursuant to Article 8 of Circular Letter no. 3,068, dated November 15.215 8, 2001 of the Brazilian Central Bank, Bradesco declares to have financial capacity and plans to hold to maturity securities classified in the “held-to-maturity securities” category.
2004 2005 2006 2007 2008
Further information on Capital ev and Reserves, see the Report on Economic and Financial Analysis or at www.bradesco.com.br/ir WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Operational Performance
Funding and Asset R$ 92.506 billion recorded at the Management Exchange Portfolio, Borrowings and The Bank manages, together, 20.081 Onlendings, Own Working Capital, Tax million checking accounts and holds Payment and Collection and Related 18% of the Brazilian Savings and Loan Taxes, Funds From Issuance of Securities, System – SBPE. At the end of the year, Subordinated Debt in the Country and the total volume of funding and assets Other Funding; managed by the Organization stood R$ 64.587 billion in Technical Provisions at R$ 597,177 billion, a 23.65% growth for Insurance, Supplementary Private compared to the previous year: Pension Plan and Certificated Savings R$ 244.470 billion in Demand Deposits, Plans, with a 10.36% increase when Time Deposits, Interbank Deposits, compared to the previous year; and Other Deposits, Open Market and R$ 8.463 billion in Foreign Funding, by Savings Account; means of public and private issuances, R$ 187.151 billion in assets under Subordinated Debt and Securitization management, comprising Investment of Future Financial Flows, representing Funds, Managed Portfolios and Third- US$ 3.621 billion. Party Fund Quotas, with a 5.45% growth compared to the same period of the Loan Operations previous year; An increased volume of Bradesco operations, both in financing directly Funding and Asset Management made and partnerships with market (in billions of reais) agents, and in other lines focused on Individuals, such as Payroll-
597.177 Deductible Loan, is based on the credit democratization strategy and on the
482.971 continuous expansion and diversification of financing by means of its extensive 386.586 Branches Network, Service Stations and 309.048 Banco Postal as well as several alternative 265.383 channels, such as Bradesco Dia&Noite ATMs machines, Internet Banking, Fone Fácil, Bradesco Celular and on Customer 2004 2005 2006 2007 2008 Service Center 0800 Loan.
22 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 R$ 215.345 billion was the balance at the end of the year of the Loan Operations* consolidated loan operations, including Advances on Exchange (in billions of reais) Contracts, Sureties and Guarantees, Credit Card Receivables and Leasing, up by 33.42% in the period.
R$ 10.263 billion was the consolidated balance of allowance 215.345 for doubtful accounts. 161.408 Real Estate Loan
Bradesco, ratifying its commitment to meet the demands 116.226 of final borrowers and boosted activities of home-building 93.607 72.635 sector, which generates employment and social-economic development, the Real Estate Loan Portfolio stands out by the large volume of operations carried out. The Bank made 2004 2005 2006 2007 2008 * It includes advance on exchange available the website www.bradescoimoveis.com.br to consult contract, sureties, guarantees, receivables projects on sale by developers and real estate agents, an from credit cards and leasing important tool in the portfolio’s growth process. R$ 5.993 billion were the total funds allocated to this area, enabling the construction and acquisition of 49,251 properties.
Onlending Operations In 2008, Bradesco contributed with 18.41% of BNDES onlending operations, which totaled the equivalent to R$ 8.924 billion and 50,494 contracts, up by 25.11% compared to the same period of the previous year. For the sixth consecutive year, the Bank authorized the highest number of onlendings to micro, small and medium-sized enterprises, with a volume of R$ 4.068 billion and 19.71% of entire system. R$ 14.480 billion was the balance of the onlending portfolios with internal and external funds at the end of the year, mainly 49,251 properties funded allocated to micro, small and medium-sized enterprises with 82,123 contracts recorded. Portfolio Structure (%) R$ 4.467 billion was the total of Guarantees provided to BNDES, with R$ 1.525 billion contracted in the year.
Rural Loan 30.5 Traditional partner in the farming and ranching sector, Large Corporations Bradesco maintains a vigorous pace of financing initiatives of production means, processing and commercialization 31.0 of crops. It also seeks to identify opportunities, support the SMEs opening of new business and contribute to increase the productivity and quality of domestic products, in addition 38.5 to offering support to the domestic market supply and to Individuals the growth of exports. In order to assist the sector with WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
agribusiness-related information, loan and liquidity in the assets investments. products and services, it developed the Branches are granted at different levels www.bradescorural.com.br website. of authority, according to the size and R$ 10.720 billion was the balance of type of guarantee, operating limits investments at the end of the year, for loan granting so that to minimize represented by 148,638 operations. risks, including social-environmental criteria. The Credit Scoring systems Consumer Financing enable to speed up and support the The consumer financing positively decision-making process with specific contributes to higher employment safety standards. The Loan Executive level, generation of income, generation Committee, located at the Company’s and flow of resources. The Bank has headquarters, centralizes, analyzes and been operating in the consumer resolves on the loans that go beyond the financing area along the years, also by branches’ authority level. means of partnerships, with significant participation in operations focused on Loan Portfolio Quality the acquisition of new and used vehicles. At the end of 2008, the quality of loans In line with social-environmental rated between “AA” and “C” remained responsibility, Ecofinancing, a practically stable, with a slight drop due partnership with Programa Floresta do to the rise in delinquency, as a result Futuro Fundação SOS Mata Atlântica of the social-economic environment (Forest of the Future Program of caused by the impacts of the global Fundação SOS Mata Atlântica) promotes economic scenario. As a preventive the growing of native trees seedlings measure, in the last quarter, ratings for each financed vehicle, aiming at of specific cases were reviewed, in reducing the effects of GHG emissions addition to strengthening the excess into the atmosphere. provisions. R$ 57.908 billion was the balance of operations allocated to consumer Collection and Recovery financing. of Loans The Bank promotes specific actions for Loan Policy recovery of overdue loans, with special Bradesco adopts a Loan Policy based on renegotiation policies, using the Bank diversified and distributed businesses, Payment Slip, Collection Center, the supported by suitable guarantees and Internet, Friendly Collection Companies destined to individuals and companies and Court Collection Offices. evidencing ability to pay. The operations R$ 2.712 billion were recovered from are rapidly carried out with safety losses and in the renegotiation portfolio and profitability, ensuring quality in the year.
Further information on the Operational ev Performance, see the Report on 24 Economic and Financial Analysis or at www.bradesco.com.br/ir WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 International Area
With a broad line of products and Contracts, to US$ 10.638 billion of Export services available and operating Financing Portfolio, up 45.18% compared in multiple markets, the Trade and to the previous year. Exchange Services area of Bradesco US$ 1.998 billion in Import Financing in Organization has its own branches in Foreign Currency. New York, London, Grand Cayman, US$ 42.880 billion were traded in Export Nassau, Buenos Aires, Tokyo, Hong Kong Deals, a 9.37% higher performance than and Luxembourg, in addition to a large 2007 and 22.20% market share. Network of International Correspondent US$ 22.397 billion of Import contracted, Banks. It keeps in Brazil a structure with a growth of 29.48% compared to the 12 specialized units and another 13 previous year, with a market share of 16%. exchange platforms. US$ 1.652 billion in medium and long- R$ 9.846 billion was the balance at the term public and private offerings on the end of 2008 in Advances on Exchange international market.
Branches and Subsidiaries Abroad (US$ million) Assets Shareholders’ Equity Bradesco New York 2.942 180 Bradesco Grand Cayman 9.808 2.621 BMC Grand Cayman 45 45 Bradesco Grand Cayman II 433 433 Bradesco Nassau (1) 25 25 Cidade Capital Markets Ltd. – Grand Cayman 37 37 Bradesco Services Co., Ltd. – Tokyo 1 1 Banco Bradesco Argentina S.A.(2) 36 29 Banco Bradesco Luxembourg S.A. 678 163 Total 14.005 3.534 (1) Start-up on August 16, 2007. (2) Capital Increase on 5.29.2007 in the amount of US$ 14.0 million. Further information on v International Area products at www.bradesco.com.br WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Market Segmentation
Specialized care for all profiles of clients
Focused on relationship, the segmentation long-term relationship principle consists process, which combines same profile clients, of an important competitive edge, allows cutting-edge services and growing resulting in the best solutions for clients gains of productivity and promptitude. and for the Organization. It also provides greater flexibility and R$ 176.259 billion is the total funds competitiveness in the execution of its managed by the area, comprising 1,204 business strategy, dimensioning operations, economic groups. whether for individuals or companies, in terms of quality and specialization. Bradesco Empresas (Middle Market) Bradesco Corporate This area, structured for the relationship Bradesco Corporate is specialized in with economic groups that yearly services to large economic groups, with earn between R$ 30 million and R$ 350 annual sales exceeding R$ 350 million, it million, also provides a broad portfolio develops activities by means of Business of products and services concerned Units in the main Brazilian cities. The with its target market.
26 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Individuals Corporations
» Minimum investment » Annual sales available of R$ 2 million higher than R$ 350 million
Bradesco Bradesco Private Corporate
» 1,204 groups » 10 offi ces (8 platforms)
» Investments » Middle Market – available above annual sales from R$ 50 thousand or R$ 30 million to monthly income R$ 350 million from R$ 4 thousand Bradesco Bradesco Prime Empresas (Middle Market) » 11,787 economic groups » 253 Branches (68 Branches)
Retail
» 3,030 Branches » 19 million clients Banco Postal » 5,946 Branches
R$ 55.837 billion is the total of funds funds of R$ 2 million for investments, this managed by this area, of 11,787 economic area also provides customized advisory groups in all the sectors of the economy. services and fully concerned with asset appreciation, in addition to guidance as to Bradesco Private Banking the best alternatives for each type of client. This area aims at providing services to In December 2008, this area managed individuals with minimum available R$ 33.150 billion, of a total of 6,100 clients. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Bradesco Prime The area is targeted to the customized service to individuals with a monthly income as of R$ 4 thousand or funds available exceeding R$ 50 thousand and offers full financial advisory services, as well as distinguished products and services. At the end of 2008, the Customer Service Network exclusive for this segment relied on 253 Prime Branches distributed throughout Brazil, specially designed to provide easiness and privacy to more than 400 thousand clients.
Bradesco Varejo (Retail) The Retail segment provides a dedicated and quality service Banco Postal Branches to all levels of the population, thus, preserving the mission cultivated since the inception of Bradesco. In this traditional, strategic and priority performance area, the efforts endeavored by the Bank concerned with the democratization 5,946 of banking services and products, reaches the largest number 5,821 5,585 5,461 5,383 as possible of companies and individuals, in all regions of the country, including the lower developed regions, target the interests of the Institution and the Brazilian society. In December 2008, this segment provided services to more than 19 million account holders.
Banco Postal 2004 2005 2006 2007 2008 A valuable and dynamic driver of the market expansion due to the capacity to provide financial services and products, Bradesco Expresso Outlets especially in locations deprived of banking network, this successful partnership between Bradesco and the Brazilian Post Office in addition to being a source of progress of local communities, also became a support to Bradesco Clients who 16,061 carry out transactions in Brazil. Since its inception in 2002, 5,113 cities of all regions of the country gained access to these services. 11,539 Bradesco Expresso 8,113 Bradesco also maintains a partnership with several commercial establishments, such as supermarkets, drugstores, department 4,752 stores, bakeries and other retail chains, providing clients and
2,121 users with the convenience to being served closer to their 2004 2005 2006 2007 2008 home or workplace.
28 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Products and Services
Bradesco’s Cards Bradesco owns the most complete line of products of the market, with Visa, American Express, MasterCard and Private Label credit cards, the latter for exclusive use in the associated networks. The growth of American Express cards base reflects the successful assumption of operations of American Express Company in Brazil, which includes credit cards and other similar activities, mainly as regards the exclusive issue of Centurion cards, for a maximum ten-year term, the Membership Rewards Program and the management of network of establishments associated to Amex. Bradesco Cartões relies on the outstanding performance of Fidelity Processadora e Serviços S.A., one of Brazil’s largest service providers related to activities of processing, management of Cards Revenues from Services Customer Service Centers, support and back office. (in millions of reais) In a partnership with Visa and Visanet, the Bank launched the first contactless credit card in Brazil, which allows payment by simply approaching the card on the equipment, not being 3,035 necessary to type the password or insert the card into device. 2,449 In order to ensure greater protection and reduce frauds, the
process of expanding Visa chip credit card base was initiated, 1,758 international modality, Gold and Platinum, in the Retail and 1,301
Prime segments. 1,069 Bradesco also launched, in partnership with the State Government of Amazonas, the Cartão de Crédito Amazonas Sustentável (Sustainable Amazonas Credit Card), the first 2004 2005 2006 2007 2008 credit card made of recycled plastic (white PET bottle). Part of its revenues will be transferred to the Fundação Amazonas Cards Sales Results Sustentável for investments in social-environmental (in billions of reais) actions, once more evidencing Bradesco’s concern with the preservation of environment. Bradesco is authorized to affiliate establishments into the 65.421
Redecard system, in addition to providing transfers of branch 53.683 where the holder maintains its account, thus, increasing its performance in this segment by affiliating establishments into 38.720 the major debit and credit card brands: Visa, American Express and MasterCard. 26.272 20.910 The Bank actively participated with other issuers and Visa International, in the distribution of Visa Vale cards of the Benefit- Vouchers are, contributing with 43.29% of all sales in 2008. 2004 2005 2006 2007 2008 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
In the Private Label card market, the Bank relies on agreements with Drogasil, O Boticário, Colombo, Luigi Bertolli, Casas Bahia, LeaderCard, Comper, Carone, Dois Irmãos, G. Barbosa, Coop. Panvel and Lojas Esplanada. R$ 65.421 billion was total sales of the Organization’s cards, of which R$ 39.738 billion for credit cards and R$ 21.159 billion for Bradesco Visa Electron debit card and R$ 4.524 billion for Private Label cards, accounting for, respectively, an increase of 21.20%, 26% and 9.80% compared to the previous year. In relation to the total sales of the co-branded and debit credit card market, Bradesco’s market share stood at 18.20%. 81.691 million is the number of credit and debit cards transacted, up 15.90% compared to 2007, with 33.708 million credit cards and Growth – Receipt and Payment Solutions 47.983 million debit cards. Number of operations (millions) R$ 15.962 billion were the assets generated by the card business, encompassing consumer financing, advances to commercial establishments and loans for cash or credit purchases, surpassing 1,302.7 the balance of December 2007 by 27%. 1,133.9 1,123.2
1,047.6 R$ 3.035 billion represented fee income, mainly commissions on 965.2 acquisitions by debit and credit cards and various fees. 2.000 million Visa Vale meal and food cards, up 29.20% compared to December 2007 and sales in 2008 reached R$ 2.653 billion, up 26.40%, compared to the previous year.
Receipts, Payments and Collections Solutions 2004 2005 2006 2007 2008 Solutions based on advanced technology and innovative Growth – Public Sector processes are offered to companies and government Payment and Collections Number of operations (millions) authorities, within the federal, states and local scopes, in addition to utilities concessionaries, allowing them gains in the management of accounts receivable and payable and greater 383.2
358.3 efficiency and agility in the collection of funds. A structure is also made available to retirees and pensioners of INSS to 309.6
271.8 receive their benefits. 248.1 Besides being specialized in cash management solutions for the Brazilian market, we expanded our services covered in the international market, using technological tools and/ or partnerships for Global Cash Management operations, providing our clients who centralize their cash management 2004 2005 2006 2007 2008 at Bradesco with all-inclusive services.
30 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 97.860 million documents collected been leader in the qualified custody during the year in federal, state segment, according to assets custody and municipal taxes and other ANBID Ranking. contributions. 223.832 million documents received Custody and Controllership from electricity, water, gas and telephone R$ 382.275 billion in assets under bills, with 51.058 million of them paid via custody of clients who use custody automatic debit into checking account services (funds, portfolios, DR and and savings account, a system that offers receivables funds). convenience to the client. R$ 453.067 billion represents the total 592.937 million of receipts via Bradesco assets under management that use the online collection, checks custody, controllership services. identified deposits and OCT – Credit 13 Registered DR programs, with market Order by Teleprocessing. value of R$ 49.791 billion. 214.191 million payment operations carried out during 2008 by Pag-For Bradesco systems – book payment to Assets under Custody (in billions of reais) suppliers, Bradesco Net Empresa and PTRB – Electronic Payment of Taxes, enabling the management of the 428.0
companies’ accounts payable. 382.3 5.104 million retirees and pensioners of the Brazilian social security system, 278.4 19.56% of the population connected to INSS, receive their benefits through 179.3
the bank which makes Bradesco the 141.2 largest payer of benefits among the private Banks.
2004 2005 2006 2007 2008 Shares, Custody and Controllership Services Assets Bookkeeping Bradesco makes available by means 231 companies compose Bradesco’s of specialized professionals and book-entry shares system, combining 3 adequate infrastructure, high-standard million shareholders. services in the custody of securities, 78 companies compose Bradesco’s controllership, receivables funds, DR bookkeeping debentures system, with – Depositary Receipt, BDR – Brazilian restated amount of R$ 123.585 billion. Depositary Receipt, Custody and 102 Investment funds compose Foreign Investors Representation, Bradesco’s bookkeeping quotas system, Share Bookkeeping, Debentures and with restated value of R$ 8.893 billion. Investment Fund Quotas and Qualified 3 Registered BDR programs, with Trustee. Since April 2007, Bradesco has market value of R$ 128.140 million. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Organizational Structure Bradesco Customer Service Network
Presence in all Brazilian municipalities
The Customer Service Network of Grand Cayman and 1 in Nassau, in the Bradesco Organization is dimensioned Bahamas; to meet high efficiency and quality 7 Subsidiaries Overseas (Banco Bradesco standards, and it is present throughout Argentina S.A., in Buenos Aires; Brazil and in several locations abroad. Banco Bradesco Luxembourg S.A., in On December 31, it was comprised of Luxembourg; Bradesco Securities, Inc., 32,568 service stations, as follows: in New York; Bradesco Securities UK 5,574 Branches, Corporate Site Branches – Limited, in London; Bradesco Services PABs and PAAs in the country (Branches: Co., Ltd., in Tokyo; Cidade Capital Bradesco’s 3,339, Finasa BMC’s Bank 15, Markets Ltd., in Grand Cayman; and Banco Bankpar’s 2, Banco Bradesco BBI’s Bradesco Trade Services Limited, in 1, Banco Bradesco Cartões’ 1 and Banco Hong Kong); Alvorada’s 1; PABs: 1,183; and PAAs: 1,032); 5,946 Banco Postal Branches; 5 Branches Overseas, 1 in New York, 3 in 16,061 Bradesco Expresso service stations;
32 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 1,523 Electronic Service Posts in 17 for transactions, enables to maintain corporate sites; more than 9.761 million registered 3,296 Outplaced Terminals of Bradesco users who have access from wherever Dia&Noite (Day&Night) ATM network; and they are to 769 types of operations, they 156 Branches of Finasa Promotora de may also utilize Bradesco Security Key Vendas, a company present in 22,366 System – Electronic and Card. car dealers. The website www.bradesco.com.br hosts The Branches stand out for their information about all the Bank’s products, functionality and convenience of in addition to specific websites to serve environments, with diversified clients of Bradesco Prime, Private, Middle equipment, large and modern self- Market and Corporate segments. service rooms that operate in extended Targeting corporate clients, Bradesco hours, making transactions easier and Net Empresa provides broad security more agile and saving the checking to banking transactions via digital account holders’ and users’ time. Clients certificate and electronic signature. receive at Bradesco Prime branches a The 571,186 companies connected, customized service and all-inclusive with 73.625 million transactions/year, advisory financial services, also made optimize the financial management of available in the middle market, with the businesses and they may carry out 321 same level of quality and specialization types of operations, such as transact of Bradesco’s middle market branches. checking account and savings account, Bradesco Dia&Noite ATM Network, and provide payments, collections and distributed in strategic places throughout transfers of files. the country, relies on 29,218 machines, Within the federal, state and municipal 28,835 of which also operate seven days a scopes, the executive, legislative and week, allows quick and practical access to judiciary branches have access to the a varied range of products and services. website Bradesco Poder Público, which The 5,306 machines of Banco24Horas, comprises products and services of the installed in 4,732 service stations are Bank, with payments and receipts solutions also available for withdrawal operations, issuance of statements and balance Service Branches (thousand) consultation, by using debit cards in checking account or savings account. The Bank provides a customized service 32,568 with digital language in Fone Fácil for hearing impaired people and access 26,459
to Internet Banking and to a bank 22,177 statement in Braille version or expanded 18,067
letters for visually impaired people and 14,887 ATMs duly adapted for wheelchair users. The state-of-the-art technology of Portal Bradesco, composed of a set of 57 websites, with 40 institutional ones and 2004 2005 2006 2007 2008 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Customer Service Network – Branches – Market Share
North North 21.3% 21.5% Northeast Northeast 19.4% 19.4%
Mid-West Mid-West 19.1% 19.7%
December/2007 Southeast December/2008 Southeast Total 17.3% 17.7% Total 17.7% 18.1%
South South 12.9% 13.6%
and access to Bradesco Net Empresa. Bradesco Celular, mobile technology, At ShopCredit – website of Loans may pay accounts, provide transfers and Financing – both individual and between accounts, recharge cell phones, corporate clients have a complete consult balance and other information portfolio of Bradesco, containing about products and services. detailed information about the lines Fone Fácil Bradesco by providing new offered. The website also has calculation business opportunities, information, simulators for personal loan, overdraft banking products and services, with facilities, CDC, leasing, mortgage, rural convenience, quickness and security loan, Finame, automobile insurance reached in 2008 the record of 358.694 operations, among others. million calls and 6.161 million items sold. The website Bradesco ShopInvest The capacity and efficiency of this wide enables to monitor the financial market, and integrated structure is attested investments on the Stock Exchanges, by the daily average of 13.961 million with online quotes, investments and transactions carried out by clients and redemptions, calculation simulations, users, with 2.261 million in counters acquisition of supplementary private and 11.700 million (83.80%) in the pension plans and certificated savings convenience channels, pointing out plans, as well as several options. Bradesco Dia&Noite ATM, Internet, Fone The client, by means of the channel Fácil and Bradesco Celular.
34 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Bradesco’s Companies
Insurance, Private Pension Plans and Certificated Savings Plans Grupo Bradesco de Seguros e Previdência is leader among the conglomerates that operate this sector in Latin America, and a history associated with innovation in several products Insurance Premium in the Insurance, Supplementary Private Pension Plan and Market Share (%) Certificated Savings Plan areas. R$ 2.648 billion was the Net Income of the Insurance, Supplementary Private Pension Plans and Certificated Savings 24.0 Plans Segments in 2008, with a 29.10% profitability on average Bradesco shareholders’ equity. R$ 8.772 billion was the shareholders’ equity, a growth of 1.45% for 2008.
R$ 77.968 billion represented total assets. 76.0 R$ 71.309 billion totaled free investments and for Technical Market Provisions coverage. R$ 23.149 billion represented the Revenues from Insurance Premiums, Private Pension Plans Contributions and Revenues from Certificated Savings Plans. Insured Base (in thousands) R$ 46.902 million represented the distribution of Certificated Savings Plans Premiums related to 2,937 plans drawn in a 22,962 portfolio which, at the end of the year, recorded 15.682 million active plans. 19,802 BEM – Distribuidora de Títulos e Valores Mobiliários 14,164 13,034
With a high specialization level, BEM operates in the fiduciary 11,205 management of third-party funds in the institutional segment. R$ 40.169 billion, on December 31, 2008 were distributed in 357 Investment Funds and 1 Managed Portfolios, amounting to 4,427 investors. 2004 2005 2006 2007 2008
Further information, see the Report on ev Economic and Financial Analysis and at www.bradescoseguros.com.br, www.bradescoprevidencia.com.br and www.bradescocapitalizacao.com.br WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Portfolio by Type of Asset Leasing Bradesco Leasing (%) It is one of the sector’s leading companies, especially focused on vehicles, aircraft, machinery and equipment segments and
Other 0.4 1.8 specialized in operating agreements with large manufacturers 9.2 Electronic Machinery and Equipment and resellers. Equipment R$ 20.537 billion represented the balance invested on December 31, 2008, with 478,944 operations contracted in the year.
88.6 651,507 leasing agreements were in force at the end of 2008, Vehicles characterizing a high level of businesses distribution.
Bradesco Administradora de Consórcios Based on the safe Bradesco brand and on the support of the Customer Service Network, Bradesco Consórcios maintains its leadership in all segments it operates, such as automobiles, real estate, trucks and tractors, a result that reflects its continued and resolute work. 345,969 active quotas at the end of the period, 165 thousand of which were sold in 2008. R$ 13.100 billion represented revenues year-to-date.
Banco Finasa BMC S.A. Finasa and BMC segments supplement the distribution network of Bradesco Organization’s financial products with an innovative performance strategy especially in partnership with stores and resellers. Finasa segment, specialized in Consumer Sales Financing and Personal Loan Operations promotes by means of its wholly-owned subsidiary, Finasa Promotora de Vendas Ltda., the relationship with car dealers and stores selling durable and semi-durable goods and services. The BMC segment, specialized in Payroll-Deductible Loan as well as vehicle financing and leasing operates through 883 Correspondent Banks in Brazil.
Finasa BMC: an innovative strategy R$ 534 million represented the Net Income for 2008. R$ 62.409 billion represented the Consolidated Assets, up 75.71% compared to the previous year. R$ 28.038 billion represented the balance of loan operations, 2.16% compared to December 2007.
Further information on Consortium, v see www.consorciobradesco.com.br 36 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Banco Bradesco BBI S.A. R$ 146.982 billion, on December 31, 2008 BBI, the Investment Bank of Bradesco were distributed in 450 Investment Funds Organization, carries out Equities, and 208 managed portfolios, reaching Fixed Income, Structured Operations, 3.278 million investors. Mergers and Acquisitions, Project Financing and Private Equity Bradesco S.A. Corretora de Operations by means of Investment Títulos e Valores Mobiliários Banking, Bradesco Corretora de Títulos Bradesco Corretora is structured to e Valores Mobiliários and Bradesco serve clients throughout the country Securities, as well as it coordinates the and stands out as one of the best operations of Bradesco Private, BRAM players of the Brazilian market, with – Bradesco Asset Management and significant participation in the stocks Ágora Corretora de Títulos e Valores and futures markets. Mobiliários. With more than 40 years of tradition In 2008, it coordinated 39.38% of the and efficiency in the capital markets, volume of issues recorded at CVM Bradesco Corretora was the first – Brazilian Securities and Exchange brokerage firm to make available the Commission, attesting its specialized DMA – Direct Market Access to its works that aim better alternatives for clients, a cutting-edge service of routing companies capitalization and expansion orders via computer, which allows the of their businesses, added by high- investor to carry out assets purchase and standard services provided to investors. sale operations directly at derivatives R$ 41.048 billion represented the total markets of BM&FBOVESPA. funds coordinated in 2008 in primary and It has an exclusive Automatic System secondary offering of shares, debentures of Shares Trading – SANA to provide and promissory notes. a greater participation of small R$ 1.324 billion represented the amount investor in the stock market, easing of receivables securitization Fund the purchase and sale of shares on the Coordinated Operations. stock exchange in small amounts and in the intermediation of public offerings, BRAM – Bradesco Asset by means of computer terminals at Management S.A. DTVM Bradesco Branches Network. With an outstanding asset management Through 17 Share Rooms, distributed market share, BRAM with all its in the main Brazilian cities, it provides experience and specialization, provides advisory financial services to its services in several segments, such as clients for operations carried out at Bradesco Prime, Bradesco Empresas, BM&FBOVESPA. Corporate, Private, Retail and Investment and economic analysis Institutional Investors. services provided to its clients stand out
Further information on BBI, v see www.bradescobbi.com.br WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
among the best services in the market, with a broad coverage of companies and sectors. In addition to brokerage services, it represents non-resident investors in operations carried out in the financial and capital markets, in the management of investment clubs and in the custody for non-institutional companies and individuals. It also provides the Direct Treasury Program, which allows individuals to invest in Federal Government Securities via the Internet, by registering at Bradesco Corretora by means of the website www.bradesco.com.br, under item Investments. R$ 71.430 billion represented the total amount traded by Bradesco Corretora on variable income markets of BM&FBovespa in 2008, corresponding to 3,165,600 operations carried out, providing services to 96,333 investors. 4.523 million contracts were traded on BM&FBovespa derivatives markets, representing a financial volume of R$ 359.177 billion. R$ 24.434 billion was the amount traded at home broker, corresponding to 2,554,061 call and put orders. 86,857 clients were registered on December 31, 2008 in the Fungible Custody Portfolio.
Ágora Corretora de Títulos e Valores Mobiliários S.A. Market leader since 2002 in home broker transactions and with a highly qualified and experienced team, Ágora Corretora trades in
38 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 all BM&FBovespa operations, providing Brokerage Firms Abroad its clients with products specialized in (Bradesco Securities, Inc. and stock markets and fitted into different Bradesco Securities UK Limited) investor’s profile, such as Investment Bradesco Securities, Inc. in New York Fund, Direct Treasury, Investment Clubs provides services to clients in the U.S. and Managed Portfolios. market and Bradesco Securities UK With www.agorainvest.com.br, client Limited based in London provides has access to an exclusive content, services to clients in the European such as Companies and Sector Report, market in the intermediation of shares, Recommended Portfolios and an by means of ADRs, as well as shares extensive set of TV programs at Ágora listed on the local stock exchanges. They TV where its team of economists carries also operate as broker-dealer in the out daily analyses on the market opening offering of public and private securities and closure in Brazil, USA and Europe, in to international investors. addition to programs about companies analyses and interviews with companies’ Private Banking representatives outstanding in the It offers to its clients, individuals with sectors they operate. Highlighted for its minimum available funds of R$ 2 million interactivity, Ágora also provides its clients for investments, customized services with Forums, Chats and daily Video-Chats by highly qualified and specialized on varied stock market-related issues. professionals, in addition to a select line R$ 63.037 billion represented the amount of products and services, supplemented traded at home broker, corresponding to by advisory services related to allocation 1.9 million put and call orders. of assets, tax and succession.
Exclusive line of products and services for asset management WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Corporate Governance
Although the global market has been In addition to the 100% Tag Along for showing distress in the second half of common shares and 80% for preferred 2008, Bradesco understands to be solid shares, shareholders are entitled to the serenity reasons for the domestic mandatory minimum dividend of 30% market, in view of a clear identification of the adjusted net income, a percentage of self-regulation satisfactory levels and higher than the minimum percentage a rigid government supervision. Focused of 25% set forth by Law no. 6,404/76. on sustainability, the Organization Preferred shares are also ensured since its inception has been improving dividends 10% higher than the ones its Corporate Governance practices, attributed to common shares. Over the pursuing excellence of management past years, the Bank has paid a percentage quality, as well as the satisfaction and a higher than the mandatory percentage of strict relationship with its shareholders, 30% provided for in the Bylaws. investors, clients, suppliers, employees, Among several initiatives carried out in the community and other stakeholders. the period, we point out: In November 1946, three years after Bank’s The Integrated Risk Management foundation, its shares started to be traded and Capital Allocation Committee on the São Paulo Stock Exchange. was created in March 2008, aiming at
40 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Corporate Governance Structure
Shareholders’ General Meeting
Fiscal Council
Board of Directors
Internal Controls Integrated Risk Committee of Compensation Management and Ethical Conduct and Compliance Audit Committee Committee Capital Allocation Committee Committee
External Audit
Internal Audit (Domestic and International Divisions)
Board of Executive Offi cers
Executive Social and Corporate Governance Environmental 30 other Advisory Executive Committee Committee of Responsibility Committees Disclosure Committee
The structure of Management Bodies and Committees mentioned above is presented at the end of this Annual Report. For further details, such as term of office and profile of its members, access the Corporate Governance web page at www.bradesco.com.br/ir.
advising the Board of Directors in the Terrorism Financing” were formalized performance of its duties related to in April 2008. the approval of institutional policies In August 2008, the Policy for Related and operating guidelines and the Parties Transactions was set out in establishment of risk exposure limits. order to consolidate the Company’s The policies “Know your Collaborator procedures as to said transactions, and Guidelines against Corruption, according to the conditions issued Money Laundering and Terrorism by Regulatory Agencies, aiming a Financing” and “Know your Client – transparent process to shareholders, Action against Money Laundering and investors and the market in general.
Further information on the v corporate governance structure at www.bradesco.com.br/ir WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Summary of Committees Body Objective Analyze eventual breaches and violations of the Codes of Ethical Conduct and/or Committee of Bradesco’s Policies and Procedures, determining the adoption of measures necessary Ethical Conduct to ensure that such breaches and violations are followed by applicable disciplinary actions, regardless of the hierarchical level, without prejudice of proper legal penalties. Advise the Board of Directors concerning the performance of its duties related to the follow-up of accounting practices adopted in the preparation Audit Committee of Financial Statements of the Company and its subsidiaries, in the appointment and the assessment of independent auditor’s effectiveness. Internal Controls Advise the Board of Directors in the performance of its duties related to the adoption and Compliance of strategies, policies and measures concerned with the dissemination of a culture Committee of internal controls, mitigation of risks and compliance with applicable rules. Compensation Propose to the Board of Directors the policies and guidelines for Statutory Management Committee compensation, based on the performance targets set forth by the Board. Integrated Risk Management and Advise the Board of Directors in the performance of its duties related to Capital Allocation the operating guidelines and the definition of risk exposure limits. Committee Corporate Advise the Board of Executive Officers concerning the performance Governance of its duties related to the compliance with guidelines set forth by Executive Committee the Board of Directors in the “Corporate Governance Policy”. Ensure the compliance with “Instrument of Policies of Disclosure of Material Executive Committee Act or Fact and Trading of Securities”, with a view to ensuring the control, of Disclosure consistency, quality and transparency in the disclosure of information. Social and Analyze the issues related to the social and environmental responsibility, defining Environmental procedures which allow the alignment of the “Social and Environmental Responsibility Executive Committee Corporate Policy” with the principles and best practices of sustainable development. Other 30 advisory committees of the Board of Executive Officers are included in the Corporate Governance Web page www.bradesco.com.br/ir.
»»The Integrated Risk Major practices at Bradesco Management and Capital Allocation Committee is created. »»Corporate and Sector Codes »»The policies “Know of Ethics are your Collaborator and established Guidelines against »»Monthly for Accounting »»Voluntary Corruption, Money dividends start and Financial adhesion Laundering and Terrorism to be paid. Management to the Financing” and “Know areas. “Statement of your Client – Action Commitment against Money Laundering to Abrasca Bradesco starts »»Committees of and Terrorism Financing” »» Handbook of to trade its Ethical Conduct were formalized. Control and shares on the and Disclosure Corporate Disclosure U.S. market are created. »» »»Policy of Related Parties Governance of Material (ADRs Level I). Transaction. »»Presence of 1 Policy is created. Information”. independent »»Corporate Governance member at »»The Corporate »»Rating AAA+ Communication Channel the Board of Governance assigned by (governancacorp@ »»Adhesion Directors. Executive Management bradesco.com.br). to Level I of Committee & Excellence, Corporate »»100% Tag of Bradesco the highest »»Reformulation of the Governance of Along for Organization Corporate Corporate Code of Ethics, BM&FBOVESPA. common and is created. Governance which is now called rating. »»Alô Bradesco preferred Bradesco Organization’s is created »»Preferred shares. Code of Ethical Conduct, (currently, shares listed on and of the Sector Code Bradesco Latibex. »»Audit, Internal of Ethical Conduct of the Ombudsman). Controls and Accounting and Financial »»Shares traded Compliance Management areas. on NYSE and (ADRs Level II). Compensation »»Creation of the Sector Committees Code of Ethical Conduct of are created. the Purchase Professional.
1970 1985 1997 2001 2003 2006 2007 2008
42 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 The Company’s Code of Ethics is reformulated, which now is called Bradesco Organization’s Code of Ethical Conduct and the Code of Ethics of Purchasing Professional is created. The channel [email protected] was created in October 2008 to provide services to shareholders, investors, students and the public in general to solve any doubts related to Bradesco’s Corporate Governance.
Dissemination of Ethics at Bradesco Organization
In order to strengthen the dissemination of Ethics in its culture, the Organization adopts permanent processes, such as: cycle of lectures included in the management training courses and other on-site courses; availability of channels to receive denouncements related to infringements to Codes of Ethical Conduct, polices and rules of Bradesco Organization; utilization of several in-house communication vehicles to spread and strengthen the ethical culture, such as instruction leaflets, Intranet, online training and other in-house publications. In 2008, the following measures were adopted, amongst others: review of the Corporate Code of Ethics, which is now called Bradesco Organization’s Code of Ethical Conduct; review of Sector Code of Ethical Conduct of the Accounting and Financial Management areas; and Creation of the Sector Code of Ethical Conduct of the Purchase Professional. In 2009, two (2) courses on Ethics will be available – in e-learning and endomarketing developed actions.
In addition to the AAA+ rating of Management & Excellence (first Latin American bank to obtain the highest Corporate Governance rating), Bradesco also obtained from Austing Rating the AA rating (Optimum Corporate Governance Practices). At the Annual Shareholders’ Meeting held on March 24, 2008, the shareholders resolved to maintain the Fiscal Council, composed of 3 sitting members and 3 alternate members, with term of office until 2009, one of them is a sitting member and his alternate chosen among the preferred shareholders. In 2008, Bradesco Organization, in compliance with CVM Rule no. 381, did neither contract nor had services provided by PricewaterhouseCoopers Auditores Independentes not related to external audit on levels exceeding 5% of total costs. The policy adopted complies with the principles preserving the Auditor’s independence, in accordance with internationally accepted criteria, which are: the Auditor must neither audit his/her own work, nor perform managerial tasks at his/her client or promote his/her client’s interests. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Operation of General Meetings
General Meetings will be presided over by the Chairman of the Board of Directors and attending members shall evidence their capacity as shareholder, the number and type of shares to which they are titleholders (preferred shares – PN; or common shares – ON). All of them may participate in the meetings, and only common shareholders shall be entitled to vote. The representation at the meetings may be made by proxy granted for less than one year, pursuant to prevailing laws.
Distribution of Capital Stock – Main Shareholders
Elo Part. e Inv. S.A. Nova Fundação (Managers/ (1) Employees) 53.70% ON Cidade de Deus 46.30% ON Bradesco 26.07% TOTAL 100.00% PN 44.84% ON 73.93% TOTAL 44.84% TOTAL
Aguiar Cidade 33.15% ON Family 22.01% ON de Deus 33.15% TOTAL 22.01% TOTAL 49.00% ON 0.02% PN 24.51% TOTAL 74.72% ON 39.51% TOTAL 25.13% ON 100.00% PN Bank of Tokyo 60.41% TOTAL BES Mitsubishi – UFJ NCF (MUFG)
7.16% ON 2.52% ON 3.56% ON 3.58% TOTAL 1.26% TOTAL 0.72% PN 2.14% TOTAL
Market Banco 22.64% ON Bradesco 15.12% ON 97.21% PN 2.05% PN 59.93% TOTAL 8.58% TOTAL
(1) The Management of Bradesco (Board of Directors and Board of Executive Officers) comprises the Governing Board of Fundação Bradesco, top decision-making body of this Entity.
44 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Board of Directors
The Board of Directors of Bradesco is composed of 7 members, 1 internal member, 1 independent member and 5 external members, with 1-year term of office and their attributions are: to set out the Company’s strategic guidance, with a view to, within the best Corporate Governance practices, protecting and maximizing the return on shareholder’s investment; elect and/or remove from office the members of the Board of Executive Officers; and evaluate the performance and management of the Chief Executive Officer, in the exercise of his term of office.
The Board holds meetings at least, quarterly, and extraordinarily, whenever necessary. In 2008, the Board held 66 meetings to discuss long-term strategic issues and 13 meetings to discuss on the financial and operational performance of the Bank.
Board of Executive Officers
In order to ensure the execution of strategy defined by the Board of Directors, the Company has a Board of Executive Officers composed of 1 Chief Executive Officer, 8 Vice Chief Executive Officers and 12 Managing Officers, with 1-year term of office. The ordinary meetings of this body take place on a weekly basis and extraordinarily whenever necessary. In 2008, 158 meetings were held.
Fiscal Council
The Fiscal Council is a non-permanent body, composed of 3 sitting members and 3 alternate members, with 1-year term of office, one sitting member and his/her alternate members elected among the preferred shareholders. Its duty is to inspect the management’s acts and check the fulfillment of their legal and statutory responsibilities, besides giving an opinion on the management annual report. The ordinary meetings of this body take place on a quarterly basis and extraordinarily whenever necessary. In 2008, 22 meetings were held.
Further information on v Statutory Bodies of Bradesco and the Profile of its Members at www.bradesco.com.br/ir, item Corporate Governance item. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Internal Controls and Compliance Based on a defined policy and approved by the Board of Directors, the Organization also maintains updated all the components of internal controls system, in order to mitigate the potential losses derived from its risk exposure and the strengthening of corporate governance-related processes and procedures. The staff structure, with an exclusive dedication, combined with investments in technology and training and staff recycling, on the whole, confirms that Bradesco’s internal controls management and compliance are effective and the Company complies with the requirements of regulatory agencies and is in line with international standards. The internal The flows of processes and systems of the Organization are controls and continuously revaluated and adherence tests are regularly made to measure the effectiveness of existing controls. compliance The work has full involvement of the areas, of the Internal management Controls and Compliance and Audit Committees and results in reports to the Board of Directors, in line with the at Bradesco are main control frameworks, such as COSO – Committee of effective and Sponsoring Organizations of the Treadway Commission and Cobit – Control Objectives for Information and Related in line with Technology, which comprise business and technology international aspects, respectively, as well as meeting the requirements of the PCAOB – Public Company Accounting Oversight Board standards and of Section 404 of U.S. Sarbanes-Oxley Act. In compliance with Section 404 of U.S. Sarbanes-Oxley Act, the layout of the processes is adequate, with identified risks and assessed controls. Adherence tests have not identified any deficiencies that would compromise processes certification in the report with reference date as of December 31, 2008 to be filed at the Securities and Exchange Commission – SEC, jointly with the related US GAAP financial statements.
Action Against Money “Laundering” and Terrorism Financing The Organization maintains specific policies, processes and systems to prevent and/or detect the utilization of its structure, products and services for money “laundering”
46 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 purposes or to finance terrorism. revisions of policies are maintained, To reach these goals, meaningful focused on the absolute protection of investments are made in the training of restricted data and of exclusive interest its employees, with programs in several of clients, as well as the Organization’s formats, such as the availability of strategic information are maintained to instruction leaflets, videos, e-learning preserve full compliance with the internal courses and on-site lectures, including controls and computerized systems. those specific for areas requiring these activities. Transparency and Information A multi-departmental Commission Disclosure Policies daily evaluates the relevance of Bradesco, in its relationship with the submitting suspicious or atypical cases market in general, makes available a to proper authorities, whether or not series of periodic publications aiming the operation has been carried out. at providing a greater number of On a quarterly basis, the Executive transparent and quality information. It Committee of Action Against Money monthly distributes the Cliente Sempre Laundering and Terrorism Financing em Dia newsletter with 400 thousand hold meetings to evaluate the progress copies; bimonthly, PrimeLine, with 168 of works and the need of adopting new thousand copies; on a quarterly basis measures with a view to aligning the Acionista Sempre em Dia newsletter, Program of the Organization to the with 41 thousand copies; Revista rules issued by regulatory agencies. Bradesco, with 25 thousand copies; and All this process was recently assessed Revista Bradesco Rural, with 5 thousand by independent auditors, confirming copies, and the Report on Economic that the procedures adopted are in line and Financial Analysis, a detailed with the best international practices. compilation of the most requested information by specialized readers. It Information Security also yearly publishes the Management The effective protection of information and Sustainability Report. assets, comprised by the databases, IT environments, documents, files, Investor Relations – IR systems backups, controlled accesses The Investor Relations area provides to systems and information and a deep and agile relationship with protection in the generation and individuals and domestic and foreign traffic of data, among other security companies. management tools can be found Essential to Bradesco, the transparency at Bradesco’s Information Security benefits both the market in the Corporate Rules and Policy. correct evaluation of the Bank and Training, awareness programs and the Institution itself, which takes
Further information on v Bradesco’s publications at www.bradesco.com.br WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
cognizance of the opinions of the financial community about its performance. On the Investor Relations website, www.bradesco.com.br/ir, in the Portuguese, English and 17 APIMEC Spanish versions, shareholders, investors and market and INI analysts are provided with clear, timely and ample information, such as, for instance, profile, track record, meetings were ownership structure, management reports, financial held aiming results, APIMEC meetings, besides other financial market- related issues. at disclosing 17 APIMEC and INI Meetings were promoted, out of which the Bank’s 8 broadcasted live via the Internet, with the participation of 18 thousand Internet users with the purpose of disclosing performance the Bank’s performance during the year. during the year In 2008, 198 internal and external meetings with analysts were held, as well as 55 conference calls and 20 events abroad, in addition to 980 services by means of, Fale com o RI, (Contact IR), on the Web page.
Bradesco Ombudsman The Ombudsman Area has an Officer in charge and an Ombudsman, which was created in 2005 to make an opening and direct dialogue with clients and users even more decisive when defining the Bank’s relationship strategies. The Ombudsman answers opinions received via the Brazilian Central Bank, Procon, the press, letters and telephone. A natural evolution of the innovative Alô Bradesco, created in April 1985, emphasizes the commitments with the client’s satisfaction and the understanding of trends that allow to anticipate procedures compatible with the new market demands. The first communication channel of the financial market with the public, Alô Bradesco, already recorded and gave adequate treatment to the complaints and suggestions of clients, five years before the edition of the Consumer Defense Code. 197,515 contacts recorded in 2008.
48 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Risk Management
For the Organization, caution principles provisions for margin losses to deal are always included in the policies, with volatile scenarios; procedures and targets. Decisions rely on strict evaluation of credit upon granting factors that combine the return on the risk and portfolio follow-up; previously known and assessed, allowing correct assessment of guarantees and risk management to operate as a strong liquidity; and support to define business goals. improvement of models and risks These principles have ensured pricing models. consistency to face the market turmoil The risk management structure is in light of current global financial crisis. aligned with business structure, allowing We point out few measures that led us to the cooperation among these areas, these results: without losing their independency, identification of risks and their focus and quality, which is supported correct assessment; by an area exclusively loyal and directly maintenance of hedges and matching subordinated to an executive officer of own portfolio positions; and to the presidency of Bradesco proper equity to the operations; Organization.
Organizational Structure – Risk Management and Compliance
Board of Directors
Audit Committee
Executive Presidency Executive Committee for Implementation of Basel II Integrated Risk Management and Capital Allocation Committee Market Risk Management and Liquidity Executive Internal Controls and Committee Compliance Committee
Credit Risk Management Executive Committee General Inspectorship
Operating Risk Management Board of Executive Offi cers Executive Committee
Risk Management and Compliance Department
Consolidated Risk Market and Liquidity Risk Credit Risk Operating Risk WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Credit Risk Credit Risk The credit risk management at the Organization, in line It consists on the with the best practices, is a continuous and evolutional possibility of a process of mapping, measurement and diagnosis of models, counterparty of loan or financial operation to instruments, policies and procedures in force, requiring modify its capacity of a high level of discipline and control in the analyses of complying with (or not intending to comply with) operations carried out, preserving the integrity and the its contractual obligations, independence of the processes. Policies are concerned with which may cause losses concentration, granting, guarantees requirement and terms for the Institution. that do not compromise the portfolio expected quality.
Market Risk Market Risk In compliance with the recommendations and rules of the Possibility of loss due regulatory agencies and in line with the best methodologies to rates fluctuation and models practiced in the domestic and foreign markets, related to mismatching of term, currency and market risk is carefully monitored, measured and managed. indexes of assets and The market risk management policy is conservative, and liabilities portfolios of the Institution. the risk, result and exposure limits are defined by the Senior Management and daily monitored on an independent basis.
Liquidity Risk Liquidity Risk The liquidity risk management aims at controlling distinct Non-availability of mismatching for the settlement terms of rights and financial resources from obligations, as well as the liquidity of financial instruments Financial Institutions to honor its commitments, employed in the management of operations. Therefore, due to mismatching the liquidity policy approved by the Senior Management of flows, terms and settlement of rights comprises the daily monitoring of the composition of and obligations. available funds, the observance to the minimum liquidity level and the contingency plan for stress situations.
Operational Risk Bradesco Organization, based on the dissemination of Operating Risk the culture, availability of tools, disclosure of policies and Possibility of occurring implementation of corporate methodologies, considers losses resulting from failure, deficiency or the Operating Risk management activity fundamental for inadequate of internal the generation of added value. These assumptions enable processes, personnel the improvement of internal processes, as well as the and systems or external events. support to business areas to improve operating efficiency and reducing capital commitment.
50 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 With a continuous work to be in line with the best market practices in operating risk management, Bradesco is ready to comply with the guidance of the New Basel Capital Accord, according to the schedule established by the Brazilian Central Bank. The goal is to be qualified for the Capital Allocation Model by the Advanced Internal Measurement Approach (AMA), as the adoption of this method will result in a smaller capital allocation. It is worth mentioning the development process of a new corporate system platform, which will integrate in a single database the operating risk and internal controls information, also comprising the requirements established by the Sarbanes-Oxley Act, Section 404.
Continuation of Business Management – GCN The process of managing the continuation of business is dealt on a corporate basis and encompasses the Business Continuity Organization’s main activities. The Management is based Management – GCN on the preparation of plans for several important activities, Strategies to be adopted using methodologies and tools that formalize the measures to ensure conditions of continuing activities to be adopted so that in situations of crisis, the recovery and to prevent serious and the continuation of business processes are effective, losses deriving from operating risk. avoiding or minimizing financial losses both for Bradesco and for clients.
Risk Factors and Critical Accounting Policies Risk factors and critical accounting practices are disclosed in compliance with the best international transparency and corporate governance practices, and in conformity with the US GAAP financial statements, related to probable political-economic situations in the domestic and foreign markets and which may directly impact daily operations and, consequently, the Bank’s financial condition, available in the Report on Economic and Financial Analysis, on the website www.bradesco.com.br/ir. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Intangible Assets
Bradesco’s Market Value, calculated of realistic goals: the value of the based on its shares quote on the Stock Bradesco Brand; solid governance Exchange, remains with a positive practices and corporate culture; perception, despite share devaluation, the scale reached in its businesses; by force of current economic scenario, several relationship channels existing reaching R$ 65.354 billion at the end of between different types of public 2008, corresponding to 1.91 times the and the Organization; a cutting- book value of the Shareholders’ Equity, edge IT policy; wide diversification which stood at R$ 34.257 billion. A of products and services offered and significant difference resulting from its wide Customer Service Network, the magnitude of intangible assets which covers the entire country and which, although not reflected in the goes beyond frontiers; a dynamic and balance sheet accounts are realized responsible social-environmental and evaluated by investors. responsibility policy; a robust Human In pursuit of better results, the Resources policy that: a) provides a strategic planning developed takes more solid relationship among all into account in the establishment employees; b) increases, as a result,
52 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 the level of confidence among them; and excellence in the provision of services, c) shows professional development with courses mainly focused on the and appreciation opportunities; d) operating, technical and behavioral areas, substantially reduces staff turnover assisting everyone with the same quality index and costs related thereto; and standard. e) cultivates, in all levels, a long- Aiming at improving and deepening the term vision, factors that cannot be study of issues related to demands of separated from sustainability. the markets, economic scenarios and requirements of technological advances, Bradesco Brand the Organization relies on teams of specialized instructors and support of adequate infrastructure. An outstanding initiative is the TreiNet – training via Internet/Intranet, which provides Organization’s employees with distance learning on a comprehensive basis. In 2008, it recorded more than 1 million participants, evidencing its relevance and level of dissemination. Managerial Development Programs are During 2008, Bradesco Brand was carried out by means of specialization deemed the most valuable brand courses, also in the graduate level, in in Brazil, in the Brand Analytics/ the economy, administration and law Millward Brown ranking, published areas, in partnership with consulting by IstoÉ Dinheiro magazine, and the most valuable brand in the banking Human Resources (December/2008) By age-group sector of Latin America, according to Until 30 years of age 52% a survey by the largest international From 31 to 40 years of age 25% brand consulting firm, Brand Finance, From 41to 50 years of age 19% Above 50 years of age 4% published by The Banker magazine, the By gender Top 500 Financial Brands, 2008 edition. Male 52% Female 48% By education Human Resources High School 15% Bradesco Organization, by means of its University 84% Human Resources management policy Other 1% By time working at the Group confers an indispensable importance Until 5 years 43% to its human capital, comprising 69,411 From 6 to 10 years 20% employees at Banco Bradesco and 17,211 From 11 to 20 years 19% Above 20 years 18% in the Subsidiaries. Bradesco continuously By type of job position develops training and qualification Non-commissioned 49% programs, focused on the diversification Commissioned 51% WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Breakdown of Personnel firms, universities and business schools to provide updating Expenses (%) and advances of learning. At Bradesco, objectivity and consistence, strategic positioning, Training concepts and especially values and advances of the 1.3 4.8 7.6 Provision for organizational structure deserve a special emphasis in its Employees Labor Claims internal communication. In this context, TV Bradesco stands Profi t Sharing 17.9 Payroll out in all levels in its work to train, integrate and motivate staff, Charges 19.6 besides publications, such as Revista Interação, received by Benefi ts employee in a customized manner, and the daily newsletter Sempre em Dia, also available via the Bank’s Intranet.
48.8 The assistance benefits focused on the improvement of quality Income of life, well-being and safety of employees and their dependents, by the end of the year, reached 182,418 lives, pointing out: Health Care Insurance; Dental Care Insurance; Personnal Expenses by Supplementary Private Pension Plan; Business Segment (%) Group Life and Personal Accidents Insurance; and Group Automobile Insurance. th 5.3 As a result of this work, Bradesco was included for the 9 Other 8.1 Segments Insurance time in the list of Guia Você S/A – Exame 2008 – The 150 Best Group Companies to Work for, promoted by Você S/A and Exame magazines, in partnership with Fundação Instituto de Administração – FIA, in addition to be ranked among the 100 86.6 Best Companies to Work for in Brazil and The Best Companies Financial Companies for Executives (2007/2008), by Época magazine, and included in the list of the 20 Best Companies in HR Practices, by Melhor Gestão de Pessoas magazine, both published in partnership with Great Place to Work® Institute Brasil. For the 5th year, Bradesco stood out in the survey The Best Companies in People Management, which directly listens to employees, disclosed by Valor Carreira magazine and published by Valor Econômico newspaper with the technical support of Hewitt Associates, and conquered in 2008, the Best Company in Human Resources Management Award among companies above 10 thousand employees. First financial institution to be listed among the 10 Best Companies in IDHO (Organizational Human Development Indicator), standing out in corporate citizenship, transparency and sustainability, from the website Gestão & RH Online, which focuses on sustainability.
54 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 R$ 91.318 million were invested in 2008 in training programs, with 1,537,946 participants. R$ 616.889 million were invested in the food program, with daily supply of 107,411 snacks and 82,388 meal vouchers. 4.018 million medical and hospital assistances. 580,735 dental assistances during the year.
Information Technology Characterized by innovation, Information Technology is one of the central pillars of Bradesco Organization’s strategy to provide sustainability and boost businesses, enabling clients to have access to safe, innovative, quality and convenient services. With a controlled infrastructure, with a high technological standard and guided by the best practices, IT has a processing capacity in the Information Technology Center: modernity and efficiency central computers exceeding 147 thousand Mips (million instructions per second). There are more than 6,100 servers of applications processed in other platforms and almost 14 thousand telecommunications services, with a data storage capacity close to six Petabytes (six quadrillions of characters), recording the average of 158.804 million transactions, with availability measured above 99.80%. Aiming a higher integration of IT to the Organization’s strategic objectives and by means of advance stage of IT Improvement Project, an executive Board was created to conduct the development plans of the new system architecture. The construction of the new Information Technology Center – CTI, which now operates, already allows the systematic processing of the entire mainframe platform into a new environment, which will support the expansion of our client base and the provision of services with agility, convenience, productivity and safety. R$ 2.003 billion were investments destined to is maintenance, expansion and innovation, in the year. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Marketing
Bradesco’s media strategy for 2008, according to the survey Institute TSBB. within the institutional scope, started Co-founder of Fundação Amazonas with the Summer campaign which Sustentável – FAS, Bradesco launched included the swimmer Thiago Pereira, the products, such as Credit Card and record-holder in the Panamerican Sustainable Amazonas Certificated Games that took place in the city of Savings Plans that allocate part of funds Rio de Janeiro, in 2007. Ads highlighted to this Fundação’s projects. In addition, convenience channels, the readiness it announced it is Brazil’s first financial and Bradesco’s closeness with its public. institution to compensate its Greenhouse This campaign was Bradesco’s most Gas emissions (GHG). It also employed reminded advertisement and of highest an environmental awareness campaign effective perception in the period – 46%, supported by the sustainability principles
56 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 of Akatu Institute, with a view to informing and mobilizing entire society to the benefit of a better future for the planet. In the cultural area, it launched Prime Arts, a culture incentive program, aiming at combining all shows sponsored and supported by Bradesco Prime. This is an incentive for people th enjoying the best cultural events and shows, exhibitions, For the 13 theater plays and movie theaters. The Bank also sponsored consecutive year, (initiated in 2007) the show Alegria of the Canadian group Cirque du Soleil and several events that took place throughout Grupo Bradesco the country to celebrate 100 years of Japanese immigration in de Seguros e Brazil, always developing media actions in line with events. A campaign that involved the market was the sponsorship Previdência to cover the Beijing Olympic Games, the most important (insurance, world’s sports event, recording a solid presence before and during the Olympic games broadcast in various media private pension vehicles. The campaign makes an analogy between sports plans) set up a modalities with Bradesco’s products and services, such as lines of credit, investment funds and Convenience Christmas Tree Channels, showing an all-inclusive Bank. For the 13th consecutive year, Grupo Bradesco de Seguros in the City of e Previdência set up a Christmas Tree in the city of Rio de Rio de Janeiro. Janeiro. Strategically installed at Lagoa Rodrigo de Freitas, the tree is already included in the calendar of tourist attractions of the city and maintained the utilization of a biodiesel generator, in line with the social-environmental responsibility principles. Bradesco Organization’s year-end campaign evidences the tradition of innovation in all areas where it operates over its 65 years of history. All these actions reinforced even more the value of Bradesco Brand. 806 regional, sector and/or professional events in the entire country, including business fairs, seminars, congresses, cultural and community events that relied on Bradesco’s participation in 2008. WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Bank of the Planet Social-environmental Performance of Bradesco Organization
Bradesco Organization in order to Fundação SOS Mata Atlântica, aiming be consolidated as an institution at making feasible projects concerned committed to sustainability, in all its with the protection of these rich and performance areas, launched the Bank of threatened ecosystems of the planet. the Plant, thus, centralizing all its social- With funds deriving from products, such environmental responsibility actions. as credit card, certificated savings plans This initiative also aims at creating new and vehicle financing, besides donations, products and services, besides investing it has already invested, since 1989, nearly in a more harmonious R$ 74 million in protection relationship between all programs of natural, types of public to which historical and cultural it is related to and the heritage in the remaining environment. areas of the Atlantic Bradesco was the first Forest, in a partnership Brazilian bank to launch with Fundação SOS Mata the measurement and Atlântica, thus, enabling neutralization program the planting of more than of its GHG emissions 26 million trees. into the atmosphere. It The Bank supports the obtained the ISO Certification 14064 Millennium Development Goals (MDGs) from Fundação Carlos Alberto Vanzolini, which pursue the improvement of which consolidates its innovation in the quality of life all over the world, and actions against climate changes. also have signed the Equator Principles, Co-founder of Fundação Amazonas ratifying the new version which Sustentável, an entity that will contribute comprises every project financing to the sustainable development and with amount equal or exceeding preservation of the Amazon Forest, the US$ 10 million and the Global Compact Bank also maintains a partnership with Principles. It is the first Latin American
Further information on the Bank of the ev Planet, see the Sustainability Report and 58 at www.bradesco.com.br/rsa WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 institution to join the Financial Coalition Sustainability Index of the New York Stock Against Child Pornography. Exchange and the new share portfolio of Bradesco’s building located at Avenida ISE – Corporate Sustainability Index of Paulista, in the City of São Paulo, State the BM&FBOVESPA. It has also obtained of São Paulo, has the Certification ISO the rating AAA+ from Management & 14001, granted to companies with Excellence, a renowned Spanish research proved environmental management and rating company. practices and the Certification of Rule Bradesco maintains a broad eco- OHSAS 18001 of Occupational Health efficiency program, with actions focused and Safety, which allows to establish and on a rational management of water and develop conditions that contribute to a energy consumption, proper discard safe and healthy workplace. It is also the of waste and usage of recycled paper, first financial institution of the Americas among others, and has already held six to receive the certification of SA8000 meetings with suppliers of products and Standard®, a certification of good social services from most different segments, responsibility practices granted by Social aiming the dissemination and awareness Accountability International. about the vital importance of this issue to The Bank launched to its employees the 1.5 thousand employees. Bradesco Volunteer Program, which relies The Social-Environmental Responsibility on the portal www.voluntariosbradesco. Corporate Policy, which defines the com.br, to centralize and disclose the guidelines on the issue, is available several initiatives to the benefit of society. on the Bank’s Social-Environmental In 2008, nearly 7 thousand employees Responsibility website, www.bradesco. of the Organization were involved in com.br/rsa, also available in English and volunteer actions. The Social Marathon, Spanish versions, enhancing the visibility a project held in Cidade de Deus, of the Organization’s actions focused on Alphaville, Paulista, Santa Cecília and sustainable development. Nova Central, aiming at disseminating and fomenting the volunteer work Fundação Bradesco among Bradesco’s employees relied Fundação Bradesco, main tool of Bradesco on the participation of more than Organization’s social action, is one of the 1 thousand people. The Quiz Challenge largest private social-educational projects of the Planet gathered more than 67 in Brazil and worldwide. It is present in all thousand employees, an initiative that Brazilian states and in the Federal District, reiterates Bradesco’s staff commitment with 40 schools mainly installed in social with social-environmental issues and and economically deprived regions. In 52 actions of the Bank of the Planet. It also years of activities, it has provided free of supported initiatives, such as Teleton, a charge and quality education to more than TV marathon aimed at collecting funds 2.1 million students, which combined for AACD and Fundação Dorina Nowill, with other on-site and distance courses, which promotes social inclusion of the exceeded 3 million services. visually impaired people. In its several operational segments, Bradesco is included in the Dow Jones Fundação Bradesco exceeded 518 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
thousand assistances in 2008, out of which prepare the participants to which 110 thousand assistances to entrepreneurship or to conquer better students, at its own Schools, in Basic positions in the employment market. Education, from Kindergarten to high It offers courses in the areas of graphic school, technical professional education technology, farming and ranching, at high school level, education of business management, IT, fashion, youths and adults and preliminary and leisure and development, which increase continuing qualification of workers. By relationship with regional markets and means of the Virtual School, its e-learning specific interests of the communities. portal and CIDs – Digital Inclusion On March 9, all units of Fundação Centers, more than 408 thousand Bradesco promoted for the 6 th students were assisted. Uniforms, school consecutive year, the National supplies, meals and medical and dental Day of Volunteer Action, gathering approximately 34 thousand volunteers in more than 225 sites, including Schools of Fundação Bradesco and Digital Inclusion Centers – CIDs, providing more than 1.7 million services in the areas of citizenship, education, leisure, sports and environment. The partnership with media lab, the research center of MIT – Massachusetts Institute of Technology, ensures the development of technology and social issues projects. The D-Lab (Development Digital Inclusion Center in the district of Perus, in the city of São Paulo Laboratory) is another project in which students of MIT, USP – Universidade assistance are ensured for approximately de São Paulo and Fundação Bradesco 50 thousand Fundação Bradesco students work together in the implementation of in basic education free of charge. technologies in the indigenous community Students’ pass rate at Fundação of Javaés, in Canuanã, Tocantins. Bradesco’s Schools reached 96% on the Fundação Bradesco has also been average of the last 5 years, equivalent to maintaining since 1997 with Fundação the best international parameters. Roberto Marinho of Organizações Globo, Fundação Bradesco, committed to as founder-partner, Canal Futura – O provide upgrade and qualification of Canal do Conhecimento (the Knowledge workers, with different education levels, Channel), with investments in the period it makes available more than 100 options in the amount of R$ 21.454 million, which of free courses, with flexible programs, currently reaches 33 million TV viewers.
60 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 The IT Program for Visually Impaired People, implemented more than 10 years ago, has already assisted more than 9 thousand students. The Programs Intel Educação para o Futuro (Intel Education for the Future) and Intel Aprender (Intel Learning) are other initiatives in the IT area, assisting more than 5 thousand educators and 6 thousand youths. Since 1998, it has supported Programa de Alfabetização Solidária (Joint Literacy Program) aiming at reducing illiteracy indices in the country. R$ 649.722 thousand were invested in 2008. Fundação Bradesco, by means of the e-learning portal Escola Virtual provides 184 distance and partial on-site courses in IT and teachers training, which have already benefited more than 298 thousand users in 2008. Neighboring communities of its schools also have access to the use of technology and digital inclusion, by means of its 103 CIDs. Four of these are located in indigenous communities working as learning and professional qualification centers, and already provided more than 250 thousand services, the social impact of which is Students of Fundação Bradesco of Jardim Conceição, highly positive. Another 30 new CIDs in the city of Osasco, state of São Paulo will be implemented in the country, in partnership with the British Telecom Global Service – BT that carries out a worldwide project with Unicef to provide Internet in deprived communities of developing economies. With a view to promoting the environmental education and reforestation actions, it also supports the relevant work of Fundação SOS Mata Atlântica, maintaining 18 nurseries in its schools to produce seedlings. Teachers and students of Fundação Bradesco are technically trained by Fundação SOS Mata Atlântica in the handling of species and promotion of environmental education and reforestation actions in partnership with local social players. Fundação Bradesco develops a work of proved influence in the increased level of quality of life of the communities where it operates, defined as socially responsible investment,
Further information on v Fundação Bradesco at www.fb.org.br WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
in the best definition of the term. It also represents an unmistakable way of distributing wealth generated within the Organization’s scope, since its main source of funds derives from its participation as shareholder of Bradesco. R$ 220.791 million totaled the budget of Fundação Bradesco invested in 2008, estimating for 2009 the amount of R$ 231.343 million to finance more than 518 thousand services, for 110,830 students at their own schools (in basic education of youths, adults and workers) and more than 408 thousand services in other on-site and distance courses through Virtual School and CIDs. Over the past 10 years, the accrued investment stood at R$ 3.124 billion (in restated values). R$ 129.564 million were the other investments made in 2008 by Bradesco Organization in social projects targeting communities, focused on education, arts, culture, sports, health , sanitation, action against hunger and food safety.
Finasa Sports Program Finasa Esportes Program developed by Bradesco Organization, structured in 41 Qualification Centers and 12 Specialists Centers, in Volleyball and Basketball modalities assists nearly 2,300 girls, from 9 and 18 years of age, most of them coming from needy households and all of them are enrolled at schools, with proven attendance to the classes. Finasa Sports Program: 41 Qualification Centers and 12 Specialists Centers The interaction with community has been one of the main traits of this program, which considers sports much more than a path to arouse talents or create athletes, but an instrument of social inclusion and basis for the full exercise of citizenship. This Program, during its 20-year history has been establishing several partnerships, pointing out that one executed with the City Hall of Osasco, which allows the development of activities in its Sports Centers, besides State and Municipal Public Schools, SESI unit, Fundação Bradesco and private schools of the city.
Further information v on Finasa Esportes at 62 www.finasaesportes.com.br WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Acknowledgments
Ratings assets by The Banker magazine, in the Domestic and international Agencies and Top 1000 World Banks edition; Entities honored Bradesco in 2008 with Best Bank of the year in Brazil and Best the highest rating indexes attributed to the Bank in terms of Environment and banks in Brazil, among them: Corporate Social Governance, by The Fitch Ratings raised its long-term risk Banker magazine; rating in foreign currency from BBB- Brazilian financial institution with to BBB, and short-term from F3 to F2, the best ranking of Fortune magazine, and long-term risk rating in domestic achieving the 204th position in the currency, from BBB to BBB+ and short- general ranking in the list of the 500 term from F3 to F2; world’s largest companies; Standard & Poor’s raised the long- Brazilian bank with the best position term risk rating in local and foreign in the ranking of 2 thousand largest currencies, from BBB- to BBB; world companies in 2007, with the 85th Austin Rating assigned the short-term position, according to Forbes, one of the A-1 rating, which reflects Bradesco’s most respected international magazines excellent capacity to pay short-term of economy, finance and business; obligations in comparison with other Best Financial Institution of the market issuers, placing it in the top level of and leader among the companies investment grade of such scale. comprising the Corporate Sustainability Index – ISE of BM&FBOVESPA, in the Rankings ranking of Agência Estado Empresas 2007; In 2008 important domestic and Bradesco won the survey 100 Most international publications honored Browsed Companies in Brazil, 2007 Bradesco, such as: edition, promoted by Info Exame Best Bank of Brazil by Euromoney magazine. The survey assessed the magazine, which assessed Bradesco’s companies on the forefront of IT; performance based on income, Bradesco was elected the Bank of profitability and efficiency; the Year and the Best Brazilian Bank Most valuable brand of Brazil, according by Latinfinance, a publication that to a study prepared by a specialized is a benchmark in the international consulting firm BrandAnalytics/Millward financial sector; and Brown, published by IstoÉ Dinheiro Bradesco was elected the Best Bank of magazine; Latin America by Emerging Markets, a Most valuable brand in the banking publication addressed to the participants sector of Latin America, according to a of annual meetings of World Bank and IMF. survey of the international consulting firm Brand Finance, published by The Awards Banker magazine, Top 500 Financial From independent opinions, the Brands, 2008 edition; Organization conquered 98 awards in 2008, Leader of Latin America ranking with standing out for the quality of its products highest level of capital and volume of and services, mainly: WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Worldwide winner in the IR Global Certification SA8000 – It regards the Rankings 2008 Awards, promoted by MZ respect for employee and employment Consult in three categories: Earnings relations, child defense and action Results, On-Line Annual Report and against child labor, in addition to a safe Investor Relations Website; and healthy workplace. Bradesco Organization was the winner Certification ISO 14001 – It regards of Balance Sheet Award, promoted by environmental aspects, pointing out works newspaper Gazeta Mercantil and in to reduce the generation of solid waste of a study of the consulting firm Austin civil works and consumption of inputs. Rating, elected as the Best Retail Bank, Bradesco was the first financial institution Best Company in Private Pension Plan in Brazil to receive this certification. and Leasing; Certification ISO 14064 – for issues related Bradesco won the Excellence Modern to quantification, monitoring, checking Consumer in Client Services Award in the and validation of GHG emissions. Premium Bank category, with Bradesco Certification OHSAS 18001 – For issues Prime; related to occupational health and Abemd Award – The Best Direct safety, such as ergonomics, prevention of Marketing Practices of ADVB-SP, with the accidents and quality of life. case 120 Reasons to be an All-inclusive Certifications ISO 14001, OHSAS 18001 Client; and SA8000 were granted to Bradesco’s Bradesco wins the first edition of building located at Avenida Paulista, in Environmental Renowned Institution the City of São Paulo and the latter was 2007 Award given by ADVB-SP; and also granted to the Human Resources In the 10th Abrasca Best Annual Report Department. Award, Bradesco won honorable mention in Economic-Financial Performance Analysis. The results of the year attest the Certifications successful efforts endeavored within Certification ISO 9001 – At the end of an environment not always favorable 2008, the Organization had 209 products and consolidate the positions achieved, and services qualified with such high disseminating a healthy motivation distinction, reaffirming the objective of to overcome expectations in pursuit ensuring in all its initiatives, increased of more solid results. They evidence a utilities and convenience to clients and constant optimism and attitude to always users. contributing to build a fair and prosperous Certification GoodPriv@cy – Data Nation. Privacy and Protection Seal – 15 products and services with the seal that ensures that its management systems adopt an Cidade de Deus, January 30, 2009 internationally established standard, comprising requirements for data Board of Directors and protection and privacy. Board of Executive Officers
64 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Management Bodies
Board of Directors Paulo Eduardo D’Avila Isola Ademir Cossiello Chairman Sérgio Alexandre Figueiredo Clemente Lázaro de Mello Brandão Departmental Directors Vice-Chairman Adineu Santesso Antônio Bornia Airton Celso Exel Andreolli Alexandre da Silva Glüher Members Alfredo Antônio Lima de Menezes Mário da Silveira Teixeira Júnior Antônio Carlos Del Cielo Márcio Artur Laurelli Cypriano Antonio Celso Marzagão Barbuto João Aguiar Alvarez Candido Leonelli Denise Aguiar Alvarez Cassiano Ricardo Scarpelli Ricardo Espírito Santo Silva Salgado Clayton Camacho Douglas Tevis Francisco Board of Executive Officers Fábio Mentone Fernando Barbaresco President Fernando Roncolato Pinho Jair Delgado Scalco Chief Executive Officer Jean Philippe Leroy Márcio Artur Laurelli Cypriano José Luiz Rodrigues Bueno Executive Vice-Presidents José Maria Soares Nunes Laércio Albino Cezar Josué Augusto Pancini Arnaldo Alves Vieira Laércio Carlos de Araújo Filho Luiz Carlos Trabuco Cappi Luiz Alves dos Santos Sérgio Socha Luiz Carlos Angelotti Julio de Siqueira Carvalho de Araujo Luiz Carlos Brandão Cavalcanti Júnior Milton Almicar Silva Vargas Luiz Fernando Peres José Luiz Acar Pedro Marcelo de Araújo Noronha Norberto Pinto Barbedo Marcos Bader Mario Helio de Souza Ramos Managing Directors Marlene Moran Millan Armando Trivelato Filho Mauro Roberto Vasconcellos Gouvêa Carlos Alberto Rodrigues Guilherme Moacir Nachbar Junior José Alcides Munhoz Nilton Pelegrino Nogueira José Guilherme Lembi de Faria Nobuo Yamazaki Luiz Pasteur Vasconcellos Machado Octavio Manoel Rodrigues de Barros Milton Matsumoto Ricardo Dias Odair Afonso Rebelato Robert John van Dijk Aurélio Conrado Boni Roberto Sobral Hollander Domingos Figueiredo de Abreu Walkíria Schirrmeister Marquetti WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Annual Report 2008
Directors Conduct Ethic Committee Altair Antônio de Souza Domingos Figueiredo de Abreu - Coordinator Aurélio Guido Pagani Arnaldo Alves Vieira Cláudio Fernando Manzato Milton Almicar Silva Vargas Fernando Antônio Tenório José Luiz Acar Pedro Márcia Lopes Gonçalves Gil Carlos Alberto Rodrigues Guilherme Marcos Daré Milton Matsumoto Osmar Roncolato Pinho Clayton Camacho Paulo de Tarso Monzani Nilton Pelegrino Nogueira Tácito Naves Sanglard Roberto Sobral Hollander
Remuneration Committee Committee on Integrated Management Lázaro de Mello Brandão - Coordinator Risk and Allocation of Capital Antônio Bornia Márcio Artur Laurelli Cypriano - Coordinator Mário da Silveira Teixeira Júnior Laércio Albino Cezar Márcio Artur Laurelli Cypriano Arnaldo Alves Vieira Audit Committee Luiz Carlos Trabuco Cappi Sérgio Socha Mário da Silveira Teixeira Júnior - Coordinator Hélio Machado dos Reis Julio de Siqueira Carvalho de Araujo Paulo Roberto Simões da Cunha Milton Almicar Silva Vargas Yves Louis Jacques Lejeune José Luiz Acar Pedro Norberto Pinto Barbedo Compliance and Internal Controls Domingos Figueiredo de Abreu Committee Roberto Sobral Hollander Mário da Silveira Teixeira Júnior - Coordinator Milton Almicar Silva Vargas Fiscal Council Carlos Alberto Rodrigues Guilherme Sitting Members Domingos Figueiredo de Abreu Ricardo Abecassis Espírito Santo Silva - Coordinator Clayton Camacho Domingos Aparecido Maia Nilton Pelegrino Nogueira Nelson Lopes de Oliveira Roberto Sobral Hollander Deputy Members Executive Committee of Disclosure João Batistela Biazon (Non-statutory Body) Renaud Roberto Teixeira Milton Almicar Silva Vargas - Coordinator Julio de Siqueira Carvalho de Araujo Ombusdsman José Luiz Acar Pedro Cleuza de Lourdes Lopes Curpievsky Carlos Alberto Rodrigues Guilherme José Guilherme Lembi de Faria Domingos Figueiredo de Abreu Denise Pauli Pavarina de Moura Jean Philippe Leroy Department of General Contadoria Luiz Carlos Angelotti Moacir Nachbar Junior Antonio José da Barbara Accountant - CRC 1SP198208/O-5
66 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 Addresses and contacts Credits
Basic Conception, Coordination, Banco Bradesco S.A. Supervision and Edition Bradesco – Press Office Cidade de Deus, Osasco – SP CEP 06029-900 Texts Bradesco – General Secretariat www.bradesco.com.br Verification and Consolidation of Indicators Stockholders Service Bradesco – General Controllership Departmental To exercise their rights or obtain Photo Coordination information on the position of stocks, Egberto Nogueira dividends, etc., stockholders of the Photos Bradesco Companies may refer Egberto Nogueira Daniel Teixeira directly to the Bradesco Branches in Clodoir Oliveira which they have current accounts. Fábio Nunes Gilberto Tadday In case of other doubts, please contact: Conception, Design and Production Camarinha Editora & Comunicação Stock and Custody Department Cidade de Deus – Prédio Amarelo – 2o andar Prepress and Printing Stilgraf Osasco – SP – CEP 06029-900 Electronic version address Phone: (55 11) 3684-9495 www.bradesco.com.br/ir e-mail: [email protected]
Services to Market Analysts and Institutional Investors
Market Relations Department Institutional Assistance Phone: (55 11) 2178-6218 Individuals Assistance Phone: (55 11) 2178-6217 e-mail: [email protected] WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74 WorldReginfo - 66c2fa9a-bb58-4079-ac54-7564d7b9ea74