Annual Report 2006
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2006 Banco do Brasil Annual Report Table of Contents Foreign Trade .......................................................... 83 Foreign Trade Products and Services ..................................... 83 Presentation Foreign Trade Relationship Channels ...................................... 86 Corporate Profile ....................................................... 8 Foreign Market ......................................................... 88 Mission, Values and Main Leaderships ..................................... 9 Capital Market ......................................................... 92 Ratings ....................................................................................... 10 Asset Management. ................................................. 94 BB Highlights ............................................................................. 11 Message from the Chairman ..................................... 14 Internal Process Outlook .............................. 96 Messages from the CEOs ................................. 16 General Policies ....................................................... 99 Risk Management .................................................... 101 Introduction ................................................................ 20 Credit Collection and Recovery ............................... 105 Cost Reductions ...................................................... 105 Macroeconomic Panorama ........................... 22 Internal Controls ...................................................... 107 Technology, Infrastructure and Logistics ................. 107 Prevention and Combating Money-Laundering ....... 110 Financial Outlook .......................................... 26 Investments .............................................................. 112 Performance Analysis ............................................... 30 Income Statement Highlights .................................................... 30 Society Outlook ............................................ 114 Balance Sheet Highlights .......................................................... 32 Shareholders, Investors and Market Analysts ......... 119 Indicators ................................................................................. 35 Customers ................................................................ 120 Stock Performance and Subscripition Warrants ....... 35 Competitors ............................................................ 125 Corporate Governance ............................................. 38 Suppliers and Partners ............................................ 125 Administration ........................................................................... 38 Employees ............................................................... 126 Inspection and Control .............................................................. 41 Community ............................................................... 127 Disclosure and Trading Policies. ................................................ 41 2006 Social Actions Panel ....................................... 134 Investor Relations ....................................................................... 42 Annual Social Balance Sheet .................................. 140 BB Conglomerate ...................................................................... 43 BB’s Internal Structure ............................................................... 44 Organizational Behavior Outlook .................. 142 Who’s Who ................................................................................. 45 Staff of Employees .................................................. 145 Customer Outlook ......................................... 52 Training and Career Planning ................................... 146 Retail Market ............................................................. 56 Performance Evaluation ......................................... 149 Retail Products and Services ................................................... 57 Remuneration, Profit Sharing and Salary Retail Relationship Channels ..................................................... 63 Negotiations.............................................................. 149 Wholesale Market ...................................................... 64 Complementary Pension Plan ................................. 150 Wholesale Products and Services ............................................. 64 Health and Quality of Life ....................................... 150 Wholesale Relationship Channels ............................................. 70 Corporate Communication ....................................... 150 Government Market .................................................. 70 Satisfaction in the Workplace .................................. 151 Government Products and Services ......................................... 71 Government Relationship Channels ......................................... 75 Intangibles .................................................... 152 Agribusiness .............................................................. 75 Main Awards in 2006 ............................................... 155 Agribusiness Products and Services ........................................ 76 Agribusiness Relationship Channels ......................................... 81 GRI Index ..................................................... 159 Renegotiation of 2005/2006 harverst debt ................................ 82 Index ............................................................ 165 Annual Report 2006 The Banco do Brasil is the bank of all Brazil and of all brazilian people GRI Corporate Profile Mission GRI 2.2 4.8 Today, Banco do Brasil is the largest financial institution in the Country To be the solution in services and financial intermediation, to meet the with 24.4 million clients and 15.1 thousand points of service in 3.1 expectations of customers and shareholders, to strengthen the thousand cities and 22 countries and it serves every segment of the commitment between employees and the Bank, and to contribute financial market. towardsthe development of the Country. Throughout its 198 years of existence, the first bank to operate in the Values GRI Country has collected stories of pioneer actions and leadership. It was 4.8 the first one to go public; to launch multiple function cards; to offer • Commitment to the development of communities and the Country. mobile banking services; to commit to Corporate Agenda 21 and to • Ethical and transparent approach. adhere to the Equator Principles. Today, it is the leader in assets, total deposits, export exchange, asset management, loan portfolio, account • Socio-environmental responsibility and respect for diversity. holders, distribution network in Brazil and more. These conquests are the result of investments in technology, the training of 82.7 thousand • Competitiveness and sound business. employees, its market segmentation strategy, specialized service and •Innovation and continual improvement in products, services and constant seas arch for efficiency. All this, together with the company’s processes. tradition, has made Banco do Brasil an agile, modern and competitive organization with the capacity to serve the most diverse business • Proactive and prudent stance in the management of risk, profi tability, demands of the Country. liquidity and security. • Excellence and specialization in client relationships. Besides the multiple bank, the Banco do Brasil Conglomerate also gathers 15 subsidiaries and a private complementary pension plan •Stimulating the formation of cooperatives, associations and joint- entity, which complement its product and services portfolio. BB holds ventures. strategic participations in all associated companies through its • Tradition of the Banco do Brasil brand as a competitive differential. investment bank. • Participative management, joint decisions and teamwork. See the structure of the BB Conglomerate on page 43. • Appreciation of effi cient and innovative work, stimulation of the professional growth of employees and promotion based on merit. In 2006, BB joined Novo Mercado (new market), a segment of the São Paulo Stock Exchange (Bovespa) that gathers those companies with the best and strictest practices in corporate governance. By joining this group, Banco do Brasil reaffirms its commitment with transparency Main Leaderships GRI 2.8 in management actions and equal treatment of shareholders. As it approaches its 200th anniversary, Banco do Brasil invests in the Assets – R$ 296.4 billion diversification of its product portfolio, expansion of its account holder Credit Portfolio – R$ 133.1 billion and non-account holder customer base, consolidation of its social- environmental action strategies and optimization of corporate Asset Management – R$ 182.7 billion, 19.1% of the market governance practices. The Company thus intends to successively Total Deposits – R$ 158.8 billion increase the return on its businesses for its shareholders, employees and society. Export Exchange – 26.5% of the market Customer Base – 24.4 million account holders ATM Network – 39,661 machines Own Service Network – 15,113 points of service Internet and Mobile Banking – 8.2 million registered customers Annual Report 2006 Annual Report 2006 8 9 Ratings GRI BB Highlights 2.8 2.9 Ratings Globais Balance Sheet (R$ million) 2002 2003 2004 2005 2006 Variation % 2005/2006 Total Assets 204,595 230,144 239,014 252,977 296,356 17.1 Global Ratings Credit Operations 97,253 110,014