SECURITIES AND EXCHANGE COMMISSION
06029-900 - Osasco - SP
Federative Republic of Brazil
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____.
Notice to the Market
Disclosure of the results for the year ended on December 31, 2018, in accordance with the International Financial Reporting Standards - IFRS
Banco Bradesco S.A. (“Bradesco”) hereby informs its shareholders, clients, employees and the Market in general that it has prepared the complete set of consolidated financial statements, according to the International Financial Reporting Standards - IFRS, in accordance with pronouncements issued by the International Accounting Standards Board - IASB, pursuant to CMN Resolution No. 3,786/09 and CVM Rule No. 457/07.
Consequently, these are the main changes we have made to our consolidated financial statements, as a result of the adoption of the IFRS:
Comparative between the BR GAAP and the IFRS
|
R$ million | |||
|
December 31, 2018 | |||
|
Consolidated Statements |
BR GAAP (1) |
Adjustments (2) |
IFRS |
|
Asset |
|
|
|
|
Cash and balances with banks |
107,210 |
- |
107,210 |
|
Financial assets at fair value through profit or loss |
246,161 |
- |
246,161 |
|
Financial assets at fair value through other comprehensive income |
223,727 |
(45,676) |
178,051 |
|
Financial assets at amortized cost: |
|
| |
|
- Loans and advances to financial institutions, net of provision for losses |
104,235 |
1,014 |
105,249 |
|
- Loans and advances to customers, net of provision for losses |
361,572 |
18,815 |
380,387 |
|
- Securities, net of provision for losses |
93,776 |
46,829 |
140,605 |
|
- Other financial assets |
43,893 |
- |
43,893 |
|
Non-current assets held for sale |
1,353 |
- |
1,353 |
|
Investments in associates and joint ventures |
7,640 |
486 |
8,126 |
|
Premises and equipment |
8,160 |
667 |
8,827 |
|
Intangible assets and goodwill, net of accumulated amortization |
13,895 |
2,234 |
16,129 |
|
Taxes to be offset |
13,498 |
- |
13,498 |
|
Deferred income tax assets |
54,047 |
(5,364) |
48,683 |
|
Other assets |
8,125 |
(753) |
7,373 |
|
Total assets |
1,287,292 |
18,252 |
1,305,544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R$ million |
|
|
December 31, 2018 | ||
|
Liabilities and Shareholders’ Equity |
BR GAAP (1) |
Adjustments (2) |
IFRS |
|
Liabilities |
|
|
|
|
Liabilities at amortized cost: |
|
|
|
|
- Deposits from Banks |
247,314 |
- |
247,314 |
|
- Deposits from customers |
340,748 |
- |
340,748 |
|
- Funds from issuance of securities |
147,721 |
308 |
148,029 |
|
- Subordinated debts |
53,643 |
- |
53,643 |
|
- Other financial liabilities |
62,598 |
- |
62,598 |
|
Financial liabilities at fair value through profit or loss |
16,152 |
- |
16,152 |
|
Provision for Expected Loss: |
|
|
|
|
- Loan Commitments |
- |
2,552 |
2,552 |
|
- Financial guarantees |
719 |
- |
719 |
|
Insurance technical provisions and pension plans |
250,568 |
1,010 |
251,578 |
|
Other reserves |
19,802 |
- |
19,802 |
|
Current income tax liabilities |
2,373 |
- |
2,373 |
|
Deferred income tax assets |
4,120 |
(2,919) |
1,200 |
|
Other liabilities |
19,747 |
14,412 |
34,158 |
|
Total liabilities |
1,165,505 |
15,363 |
1,180,868 |
|
Equity attributable to controlling shareholders |
121,121 |
3,154 |
124,275 |
|
Non-controlling interest |
666 |
(265) |
401 |
|
Total equity |
121,787 |
2,889 |
124,676 |
|
|
|
|
|
|
Total liabilities |
1,287,292 |
18,252 |
1,305,544 |
|
(1) The information presented considers the amounts calculated according to the accounting practices adopted in Brazil (BR GAAP), applicable to financial institutions, according to the regulation of the Central Bank of Brazil, grouped according to the presentation model required by the IFRS; and | |||
|
(2) The differences are the result of the reclassification between the accounts and adjustments applicable to the international accounting standards. | |||
The reconciliation of the Shareholders’ Equity and Net Income related to the fiscal year ended on December 31, 2018 is shown below:
Reconciliation of the Shareholders’ Equity and Net Income
R$ million
|
Shareholders’ Equity |
|
Net income |
|
|
| ||
|
|
December 31, 2018 |
|
12M18 |
|
|
| |
|
BR GAAP – Attributed to the Controller |
|
121,121 |
|
19,085 |
|
|
|
|
|
| ||||||
|
1) Impacts of the Adoption of the IFRS 9 (2) |
698 |
(2,657) |
|
| |||
|
2) Complementary Provision for Coverage |
(578) |
(578) |
|
| |||
|
3) Business combination |
2,735 |
998 |
|
| |||
|
Other |
299 |
(264) |
|
| |||
|
IFRS – Attributed to the Controlling Shareholders (1) |
|
124,275 |
|
16,584 |
|
|
|
|
Non-controlling interest |
401 |
165 |
|
| |||
|
IFRS – Attributed to the controlling and to non-controlling shareholders(1) |
|
124,676 |
|
16,749 |
|
|
|
|
(1) The net income, base for the calculation of dividends and interest on own capital paid to the shareholders, originates from the BR GAAP, which was disclosed on January 31, 2019. (2) The effects of the initial adoption of the IFRS 9 are included in the Shareholders’ Equity. | |||||||
Next, the descriptive of the main adjustments resulting from the effect of the adoption of the IFRS:
1) Impacts of the Adoption of the IFRS 9
It considers: (i) The adjustment at fair value of the financial assets/Securities; (ii) Expected loss on loans and advances to customers; and (iii) Expected loss on other financial assets.
We highlight that, with the adoption of the IFRS 9, the total balance of the provision for loss expected in the IFRS is aligned with the values recorded in the Expanded ALL in the BR GAAP. We highlight that most of the value refers to the initial adoption and subsequent adjustments of models implemented during the year.
2) Complementary Provision for Coverage
Difference between the IFRS 4 and SUSEP Circular No. 543/16 that required the compensation of any insufficiency calculated in the Liability Adequacy Test (LAT) with the difference between the market value and the accounting value of the securities offered in guarantee as the technical provisions classified in the category “held to maturity”.
3) Business combination
For purposes of the IFRS, the assets and liabilities identified originating from the business combination were adjusted by the differences of the accounting practices, as well as recognized at fair value, whereby the value of the goodwill is not amortized, but tested, periodically, to verify if there is objective evidence of impairment.
The complete consolidated financial statements in the IFRS, related to the fiscal years ended on December 31, 2018 and 2017, accompanied by the independent auditor’s report on the consolidated financial statements, with no amendments, issued by KPMG Auditores Independentes, are available on our site www.bradescori.com.br.
Cidade de Deus, Osasco, SP, March 7, 2019
Banco Bradesco S.A.
André Rodrigues Cano
Executive Vice-President
|
BANCO BRADESCO S.A. | ||
|
By: |
/S/Leandro de Miranda Araujo
| |
| Leandro de Miranda Araujo Executive Deputy Officer and Investor Relations Officer. | ||
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.