Risk Management - Market risk is monitored daily by an independent business unit, the DCIR, which evaluates trading and banking portfolio positions every 15 days [120]. - Liquidity risk management is centralized and involves daily monitoring of available funds to ensure compliance with established liquidity levels [122]. - The Short-Term Liquidity Ratio (LCR) has been used as a standard for internal management since October 2017, in compliance with CMN Resolution No. 4,401/15 [123]. - The organization started monitoring structural long-term liquidity risk through the Net Stable Funding Ratio (NSFR) in Q3 2018, following CMN Resolution No. 4,616/17 [123]. - Operational risk is managed through a Three Lines of Defense model, which includes identifying, evaluating, and monitoring operational risks inherent to activities [123]. - The organization employs regulatory and internal models for risk and capital management, with independent validation processes to mitigate risks from incorrect estimates [125]. - Internal controls are based on COSO frameworks and are certified by adherence tests to ensure acceptable risk levels in business processes [126]. Cybersecurity - Cybersecurity is prioritized at strategic levels to protect technological infrastructure and customer information from unauthorized access and fraud [127]. - The company has a state-of-the-art IT environment supported by a Data Center (CTI) with an area of 11,900 square meters, designed to ensure uninterrupted service availability [131]. - Data is continually replicated in a secondary processing center located in Alphaville, which can take over main system activities in case of issues at the primary site [131]. - The company conducts annual simulation exercises to test contingency structures, monitored by business managers and independent audits [131]. - The IT infrastructure includes systems for preventing cyber attacks, unauthorized access, and malicious codes, continuously upgraded for security [131]. - The Security Operations Center (SOC) operates 24/7 to monitor security incidents and develop prevention measures [131]. - The company has established a governance framework for cybersecurity, managing risks and reporting on cyber threats to appropriate committees [129]. Financial Performance - The company reported a revenue from financial intermediation of R$74.34 billion for the year ended December 31, 2020, down from R$113.40 billion in 2019 [141]. - The net income for the year ended December 31, 2020, was R$11.49 billion, compared to R$15.18 billion in 2019, reflecting a decrease of approximately 24% [141]. - The total assets increased to R$1.44 trillion as of December 31, 2020, up from R$1.26 trillion in 2019, indicating a growth of about 13.5% [141]. - The company had a customer base of 70.2 million by the end of 2020, demonstrating its commitment to financial inclusion and service accessibility [142]. Market Position - The company led the Brazilian insurance market with a 22.4% market share, generating R$73.67 billion in total revenues from insurance premiums and pension plan contributions [140]. - The company managed R$611.0 billion in assets through its subsidiary BRAM, making it one of Brazil's largest private fund and investment managers [139]. - The company was the leader in automobile financing loans with a market share of 13.3% as of December 31, 2020 [139]. - As of December 31, 2020, Bradesco had 32.3 million checking account holders, with 30.6 million being individuals and 1.7 million being companies [149]. Customer Deposits and Loans - Total customer deposits reached R$545.3 billion in 2020, a significant increase from R$366.2 billion in 2019, reflecting a growth of 48.9% [150]. - Demand deposits increased by 9.2% to R$50.2 billion, while savings deposits grew by 25.1% to R$136.7 billion [150]. - Time deposits surged by 65.7% to R$358.3 billion, indicating a strong preference for fixed-term investments among customers [150]. - Loans and advances to customers amounted to R$513.2 billion, with individuals accounting for 50% of the total portfolio [151]. - The corporate segment's loans reached R$256.8 billion, representing a 13.1% increase from the previous year [151]. Digital Transformation - The company expanded its digital product offerings, launching 16 new products in 2020 to enhance customer engagement [148]. - Digital channels represented 98% of transactions performed at Bradesco in 2020, with Mobile and Internet Banking accounting for 89% of this total [219]. - The number of clients with a digital profile increased to 21.2 million in 2020, compared to 18.5 million in 2019 [225]. - The total number of transactions through digital channels increased by 11.4% in 2020, reaching 21,613 million transactions [223]. Sustainability and ESG - The company aims to have 100% of its operations supplied by renewable energy resources and to neutralize 100% of greenhouse gas emissions from 2019 onwards [299]. - The corporate sustainability strategy is aligned with the United Nations' 2030 Agenda, focusing on six Sustainable Development Goals (SDGs) including quality education and climate action [292]. - Bradesco has established a governance structure for climate change, integrating it into risk management and sustainability processes [302]. - The company issued its first ESG security, raising R$1.2 billion to fund projects supporting a transition to a less carbon-intensive economy [303]. Regulatory Compliance - The company is required to publish annual consolidated financial statements prepared in accordance with IFRS, accompanied by independent auditors' reports [308]. - The company must rotate its audit partner every five fiscal years, ensuring independence in auditing practices [306]. - The Central Bank of Brazil has the authority to impose fines up to R$2 billion for violations, with a maximum daily fine of R$100,000 for certain infractions [252]. - Financial institutions must maintain records of all transactions, including those equal to or greater than R$50,000, and report suspicious activities to the Council of Control of Financial Activities (COAF) [286].
Bradesco(BBDO) - 2020 Q4 - Annual Report