Liquidity Risk Management - The liquidity risk management framework includes key metrics such as Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) to ensure sufficient liquid instruments and structural funding [167]. - The company has established strategic and operational limits for liquidity risk, which are approved by the Board of Directors and the Executive Committee, respectively [167]. - The liquidity risk management process includes cash flow projections and monitoring of liquidity indicators on a daily basis [164]. - The company engages in integrated stress exercises to address various risk dimensions within its liquidity risk framework [167]. Operational Risk Management - The operational risk management process involves identifying, evaluating, and monitoring operational risks, as well as assessing risks associated with new products and services [169]. - The company follows the Equator Principles for project financing, categorizing projects into High Risk, Medium Risk, and Low Risk based on their socio-environmental impacts [177]. - The socio-environmental risk management process includes ongoing assessments of suppliers to mitigate risks in the supply chain [183]. Compliance and Governance - Compliance risks are managed through a structured process that includes monitoring legal and regulatory aspects and adherence to the Code of Ethical Conduct [185]. - The company has a governance structure for socio-environmental risk management, complying with Central Bank regulations and international standards [173]. - The company has received the "Pro-Ethics Company" Seal for its commitment to integrity and anti-corruption measures [218]. Cybersecurity Risk Management - Cybersecurity risk management focuses on confidentiality, availability, and integrity of critical IT assets, ensuring protection against cyber incidents [188]. - The company utilizes various internal and external sources to develop a cybersecurity risk assessment model, adhering to standards such as ISO/IEC 27005:2018 and NIST Cybersecurity Framework [191]. - Cybersecurity risk control and monitoring are overseen by the Risk Control Commission, which advises the Executive Risk Monitoring Committee, ensuring compliance with Central Bank of Brazil regulations [195]. - The company has established a cybersecurity framework that includes continuous investments in IT security measures, such as intrusion detection and antivirus systems, to protect against cyber threats [205]. - Employees receive ongoing training and awareness programs to enhance the culture of security within the organization, ensuring preparedness against cybersecurity threats [206]. - The Cybersecurity Governance area monitors performance metrics and reports risks and cyber threats to appropriate committees, while managing data leakage and security incidents [210]. Business Continuity and Crisis Management - The Business Continuity Management (BCM) program is based on ABNT NBR ISO 22.301, ensuring the organization can continue delivering services at an acceptable level after interruptions [196]. - The corporate crisis management process includes four levels of impact classification: low, medium, high, and critical, to optimize resource allocation during crises [197]. - The company conducts annual simulation exercises to test contingency structures and ensure compliance with environmental regulations [213]. Financial Performance - In 2021, Bradesco's interest and similar income from loans and advances reached R$71.6 billion, an increase from R$66.6 billion in 2020, representing an increase of 3.1% [229]. - The company retained R$81.7 billion in premiums from insurance and pension plans, up from R$73.7 billion in 2020, marking an increase of 10.4% [229]. - The banking segment reported revenue from financial intermediation of R$98.8 billion in 2021, a 33% increase from R$74.3 billion in 2020 [235]. - The net income for 2021 was R$16.7 billion, compared to R$11.5 billion in 2020, reflecting a 45.5% year-over-year growth [235]. - Total assets increased to R$1.49 trillion in 2021, up from R$1.44 trillion in 2020, marking a growth of 23.5% from R$1.26 trillion in 2019 [235]. - The client base reached 74.1 million by the end of 2021, indicating a significant expansion in customer reach [236]. Digital Transformation and Innovation - The company has focused on digital sales strategies, leading to increased digital sales growth in 2021, which is expected to be strategically relevant in 2022 [242]. - The number of active clients using the Mobile App reached 21.7 million by the end of December 2021, an increase of 6.0 million compared to December 2019 [313]. - Digital channels accounted for 98% of transactions at Bradesco in 2021, with Mobile and Internet Banking representing 91% of this total [313]. - BIA, Bradesco's AI, surpassed 1.2 billion interactions by December 2021, enhancing client engagement across multiple platforms [315]. Market Position and Competitiveness - Bradesco is a leader in automobile financing loans with a market share of 13.3% [229]. - Grupo Bradesco Seguros holds a 22.3% market share in the Brazilian insurance market, with total revenues of R$81.8 billion from insurance premiums, pension plan contributions, and capitalization bond income [232]. - The company holds a market share of 13.0% in Brazil's total savings deposits, amounting to R$139.3 billion as of December 31, 2021 [229]. - The company manages R$625.0 billion in assets through its subsidiary BRAM, making it one of Brazil's largest private fund and investment managers [229]. Client Services and Offerings - The Bradesco Varejo service network includes 2,598 branches and 39,100 banking correspondents, enhancing accessibility for clients across Brazil [239]. - The financing and onlending segment accounted for 47.8% of the total portfolio, with R$293.5 billion in loans, up from R$256.8 billion in 2020 [246]. - The vehicle loans portfolio grew in 2021, with disbursements reaching R$6.9 billion, 87.4% of which were loaned to micro, small, and medium-sized enterprises [252]. - The housing loans segment had 318.5 thousand financing contracts as of December 31, 2021, with interest rates ranging from 9.5% to 15.0% p.a. [248][249]. Investment Banking and Asset Management - Bradesco BBI advised clients in 248 operations totaling approximately R$337 billion in 2021, including 35 M&A transactions worth around R$65 billion [282]. - As of December 31, 2021, BRAM managed 1,977 funds and 577 portfolios, serving 3.1 million investors [276]. - The total shareholders' equity of investment funds under fiduciary management by Bradesco reached R$1.1 trillion [289]. Insurance and Pension Plans - The insurance, pension plans, and capitalization bonds segment generated financial income of R$12.2 billion in 2021, with net income of R$5.3 billion [299]. - Bradesco Vida e Previdência managed open supplementary pension plans covering 3.0 million participants, with total collateral assets of R$247.4 billion as of December 31, 2021 [304]. - Bradesco Auto/RE had 1.6 million insured automobiles and 1.3 million property/casualty policies as of December 31, 2021, making it one of Brazil's main insurance companies [303].
Bradesco(BBDO) - 2021 Q4 - Annual Report