Banco Bradesco Sa · BMFBOVESPA:BBDC3
Banco Bradesco Sa — Bank Bradesco — Q2 2004 Earnings Presentation
90 slides from Banco Bradesco Sa's earnings presentation, Aug 10, 2004
Slide 1: Comparative Statement of Income
• Comparative Statement of Income - In millions of reais 1st Half 2003 1st Half 2004 % Variation 1st Qtr. 2004 2nd Qtr. 2004 % Variation INCOME FROM LENDING AND TRADING ACTIVITIES 12,175 14,476 18.9 6,756 7,720 14.3 Credit operations 5,621 6,759 20.2 3,100 3,659 18.0 Leasing operations (0.7) (32.9)
Slide 2: Composition: 2Q04 in relation to 1Q04
(*) Composition: Premiums and contributions, net of variations in technical reserves for insurance, private pension plans and savings bonds, less claims, redemptions, benefits and commissions, not including financial income on insurance activities and price-level restatement and interest on technica
Slide 3: Increase in Financial Margin Items plus Exchange Adjustment
(*) Composition: Premiums and contributions, net of variations in technical reserves for insurance, private pension plans and savings bonds, less claims, redemptions, benefits and commissions, not including financial income on insurance activities and price-level restatement and interest on technica
Slide 4: 2Q04 in relation to 1Q04
2Q04 in relation to 1Q04 - In millions of reais
Slide 5: Analysis of the Adjusted Financial Margin and Average Rates
(1) Includes income on credit operations + income on leasing operations + income on foreign exchange transactions (Note 13a). (2) Includes interest and charges on deposits, excluding expenses for purchase and sale commitments + expenses for borrowings and onlendings + income on compulsory deposits +
Slide 6: Credit Operations x Income
1st Half 1st Half 1st Qtr. 2nd Qtr. In millions of reais 2003 2004 2004 2004 Credit operations 43,297 47,625 46,358 48,460 Leasing operations 1,515 1,383 1,398 1,364 Advances on foreign exchange contracts 5,676 6,169 6,124 6,162 1 - Total - Average balance (quarterly) 50,488 55,177 53,880 55,986 2 -
Slide 7: Securities x Income on Security Transactions
In millions of reais 1st Half 1st Half 1st Qtr. 2nd Qtr. 2003 2004 2004 2004 Securities 38,076 54,388 53,475 54,679 Interbank investments 21,960 23,828 25,478 19,881 Subject to repurchase agreements (16,308) (21,541) (23,938) (15,915) Derivative financial instruments (409) (392) (196) (562) 4 - Tota
Slide 8: Total Assets x Income from Financial Intermediation
In millions of reais 1st Half 1st Half 1st Qtr. 2nd Qtr. 2003 2004 2004 2004 7 - Total assets - Average balance (quarterly) 147,425 171,106 168,532 168,610 8 - Income from financial intermediation 12,175 14,476 6,757 7,720 9 - Average rate annualized exponentially (8/7) 17.2% 17.6% 17.0% 19.6% Fundi
Slide 9: Funding x Expenses
In millions of reais 1st Half 1st Half 1st Qtr. 2nd Qtr. 2003 2004 2004 2004 Deposits 56,019 60,448 58,605 61,660 Funds from acceptance and issuance of securities 4,615 6,830 6,704 6,821 Interbank and interdepartmental accounts 1,834 1,527 1,746 1,135 Subordinated debt 3,350 5,439 5,068 5,661 10 - T
Slide 10: Technical Reserves x Expenses
In millions of reais 1st Half 1st Half 1st Qtr. 2nd Qtr. 2003 2004 2004 2004 13 – Technical reserves for insurance, private pension plans and savings bonds - Average balance (quarterly) 20,979 27,945 27,178 28,713 14 – Expenses (*) 1,658 1,351 15 – Average rate annualized exponentially (14/13) 16.4%
Slide 11: Borrowings and Onlendings x Expenses
In millions of reais 1st Half 1st Half 1st Qtr. 2nd Qtr. 2003 2004 2004 2004 Borrowings 8,844 7,971 7,510 8,345 Onlendings 6,903 7,838 7,795 7,971 16 - Total borrowings and onlendings - Average balance (quarterly) 15,747 15,809 15,305 16,316 17 - Expenses for borrowings and onlendings (*) (199) 18 -
Slide 12: Total Assets x Financial Margin
In millions of reais 1st Half 1st Half 1st Qtr. 2nd Qtr. 2003 2004 2004 2004 19 - Total assets - Average balance (quarterly) 147,425 171,106 168,532 168,610 20 - Financial margin (*) 5,977 6,411 3,330 3,081 21 - Average rate annualized exponentially (20/19) 8.3% 7.6% 8.1% 7.5% (*) Income from financ
Slide 13: Analysis of Financial Margin
Analysis of Financial Margin Banco Bradesco’s consolidated financial margin (before PDD) totaled R$ 3,081 million for the second quarter of 2004 (2Q04), as compared to R$ 3,330 million for the first quarter (1Q04), down by R$ 249 million. However, financial margin for the first half of 2004 (1H04) t
Slide 14: Personnel Expenses by Business Segment
Personnel Expenses by Business Segment 1st Half of 2004
Slide 15: Training
Training The Staff Training Department has created and deploys specific professional capacity building and enhancement programs providing employees with technical and behavioral skills, in sync with the Organization’s needs and market requirements. Designed to provide ongoing improvement and quality
Slide 16: Total Amount Invested in Training
Total Amount Invested in Training In millions of reais
Slide 17: Operating Efficiency
• Operating Efficiency In millions of reais Year 1H04(*) 1999 2000 2001 2002 2003 Personnel expenses 2,784 3,221 3,549 4,076 4,780 4,990 Employee profit sharing (104) (112) (160) (140) (171) (175) Other administrative expenses 2,567 2,978 3,436 4,028 4,814 4,984 Total (1) 5,247 6,087 6,825 7,964 9,4
Slide 18: Operating Efficiency Ratio and Expenditure Appraisal Committee
The variation in the operating efficiency ratio (accumulated for the 12-month period) from 56.6% (December 2003) to 60.1% (June 2004) reflects the increase in operating costs generated by the synergy process of the institutions acquired in prior periods, in particular, the integration of BCN by Brad
Slide 19: Credit Portfolio by Sector
At the end of the first half of 2004, 99.0% of the credit portfolio was directed to the private sector, with no significant movement compared with the prior quarter. By economic activity sector, manufacturing maintained the majority of credit volume, with a 31.7% share of total operations, particula
Slide 20: Portfolio Movement between June 2003 and June 2004
The performance of the consolidated credit portfolio over the prior twelve months up to June 2004, despite the low level of economic activity, evidences the maintenance of the quality of the assets, in particular as a result of new borrowers, corresponding to an increase of 17.1%, compared to the ba
Slide 21: Savings Accounts
Savings Accounts The balance of Bradesco Organization Savings Accounts totaled R$ 22.4 billion in deposits at the end of the first half of 2004, corresponding to a 18.9% market share of the Brazilian Savings and Loan System (SBPE). Savings Account Deposits - In billions of reais
Slide 22: Share of SBPE
Share of SBPE (Brazilian Savings and Loan System) - %
Slide 23: Savings Accounts - Million Accounts
Savings Accounts - Million Accounts
Slide 24: Asset Management
• Asset Management BRAM - Bradesco Asset Management rated Aaa(MQ) by Moody’s Based on its detailed quality assessment methodology, Moody’s rated BRAM as Aaa(MQ), the highest rating according to the scale defined by this agency. The score was based on Moody’s evaluation that the company presents an e
Slide 25: Main Subsidiaries and Associated Companies
(1) No single stockholder holds more than 4% of capital. (2) Bradesco Management (Board of Executive Officers and Board of Directors) is a member of the Governing Board of the Bradesco Foundation, the Entity’s most senior deliberative organ. Base date: June 30, 2004 ON = COMMON STOCK PN = PREFERRED
Slide 26: Administrative Body
ON = COMMON STOCK PN = PREFERRED STOCK • Administrative Body
Slide 27: Risk Ratings – Bank
• Risk Ratings – Bank FITCH ATLANTIC RATINGS MOODY’S INVESTORS SERVICE AUSTIN RATING International Scale National Scale International Scale National Scale Financial Quality National Scale Individual Support Foreign Currency Local Currency National Foreign Currency Deposit Foreign Currency Debt Local
Slide 28: Cash Generation
Cash Generation - In millions of reais 2003 2004 1st Qtr. 2nd Qtr. 1st Half 1st Qtr. 2nd Qtr. 1st Half Net income 1,027 1,250 Equity in earnings of associated companies - (122) (122) Allowance for loan losses 1,395 1,075 Technical reserves for insurance, private pension plans and savings bonds 1,856
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Slide 31: Other Ratios
• Other Ratios - % 2003 2004 March June March June Capital adequacy ratio - financial consolidated (1) 19.7 16.4 18.9 18.1 Capital adequacy ratio - total consolidated (1) 17.1 14.5 16.4 15.7 Permanent assets to stockholders' equity - financial consolidated (2) 42.5 43.9 43.8 41.4 Permanent assets to
Slide 32: Added Value
• Added Value - In millions of reais 2003 2004 1st Qtr. 2nd Qtr. 1st Half 1st Qtr. 2nd Qtr. 1st Half ADDED VALUE (A+B+C) 2,250 2,192 4,442 2,382 2,311 4,693 A - Gross profit from financial intermediation 2,554 2,028 4,582 2,769 2,567 5,336 B - Commissions and fees 1,017 1,083 2,100 1,319 1,375 2,694
Slide 33: Consumer and Corporate Customers – June 2004
Consumer and Corporate Customers – June 2004
Slide 34: Increase in Checking Accounts
Increase in Checking Accounts – million
Slide 35: Increase in Savings Accounts
Increase in Savings Accounts - million
Slide 36: Market Segmentation
• Market Segmentation Bradesco operates on a segmented service basis, seeking to match its different products and services to the different profiles and size of its target public. In line with a world market trend, Bradesco’s structure permits the grouping together of customers with similar profiles
Slide 37: Retail Bradesco and Corporate Banking
• Retail Bradesco Focus: Individuals with a monthly income of up to R$ 4 thousand and companies with annual billings of up to R$ 15 million. More than 15 million customers in this segment have access to the Bradesco Customer Service Network with its 2,700 Branches and more than 2,100 Service Outlets
Slide 38: Customer to Branch Ratio
Customer to Branch Ratio - thousand
Slide 39: Bradesco and Market Share
Bradesco and Market Share REGION/STATE BRADESCO BEM BANCO FINASA TOTAL CONSOLIDATED TOTAL BANKS IN MARKET (1) MARKET SHARE(%) North Acre - - 16.1 Amazonas - - 44.4 Amapá - - 21.1 Pará - - 18.7 Rondônia - - 20.5 Roraima - - 11.8 Tocantins - - 13.7 Total - - 23.2 Northeast Alagoas - - 9.8 Bahia - - 31
Slide 40: Banco Postal
Banco Postal Bradesco uses the post office bank, Banco Postal, created in partnership with the Brazilian Postal and Telegraph Company (Correios) to offer its banking products and services nationwide in the majority of Brazilian town and cities. Banco Postal plays a significant role in offering Brazi
Slide 41: Branches opened
Branches opened (accumulated)
Slide 42: Number of Transactions carried out Monthly
Number of Transactions carried out Monthly - thousand
Slide 43: Investments in Infrastructure, IT; Risk Management
• Investments in Infrastructure, Information Technology and Telecommunications The investments for expanding operating capacity, infrastructure, IT and telecommunications at the Bradesco Organization are designed to maintain a modern, practical and secure customer service network, characterizing the
Slide 44: Risk management organizational structure
This organizational structure is designed not only to guarantee area independence but also to place greater focus on these important value-added activities, confirming the Organization’s commitment to the implementation of best corporate governance practices, using every available resource, whether
Slide 45: Methodology for Credit Portfolio classification
Methodology used for Credit Portfolio classification In addition to supporting the establishment of minimum parameters for granting credit and managing risk, the credit risk scoring system established by the Brazilian Central Bank also facilitates the definition of differentiated credit policies bas
Slide 46: Financial Volume
Financial Volume – In millions of reais
Slide 47: Self-service Network Highlights
Self-service Network Highlights 2003 2004 Items 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr. 2nd Qtr. Banking service outlets (nationwide network) 5,762 5,845 6,172 6,487 6,628 6,783 Outplaced terminals (excluding branches, PABs and PAEs) 1,755 1,772 1,842 1,794 1,752 1,822 Cash withdrawal transacti
Slide 48: Number of Transactions
Number of Transactions - - thousand
Slide 49: Second-quarter highlights: Phone and Internet Banking
Second-quarter highlights for 2004 An increase of 7.2% in total calls compared to the same period in 2003. An increase of 4.6% in EVR calls compared to the same period in 2003. An increase of 2.5% in Financial Movement compared to the same period in 2003. 95.2% of personalized service call queries w
Slide 50: Financial Volume via Internet
(*) Via Internet Banking, ShopInvest, Cards, ShopCredit and Net Empresa. Financial Volume – in millions of reais (*)
Slide 51: Internet Banking Registered Users
(*) Via Internet Banking, ShopInvest, Cards, ShopCredit and Net Empresa. Internet Banking – Registered users - thousand
Slide 52: Main Websites
Main Websites: Bradesco Internet Banking (www.bradesco.com.br) Internet Banking is an important and profitable customer relationship channel, providing access to all transactions carried out in the branches and generating benefits for both customers and stockholders. ShopInvest Bradesco (www.shopinv
Slide 53: Credit Card Billings
Credit Card Billings - In millions of reais
Slide 54: acs10
5.4507 acs10 2.7019 27458 23509 23304
Slide 55: Debit Card Billings
Debit Card Billings - In millions of reais
Slide 56: Total Card Base
Total Card Base (Credit and Debit) – million
Slide 57: International Area
• International Area The International Area operates under the following framework: 12 Operational Units in Brazil Belo Horizonte, Blumenau, Campinas, Curitiba, Fortaleza, Manaus, Porto Alegre, Recife, Rio de Janeiro, Salvador, São Paulo and Vitória. 4 Support Outlets Belém, Brasília, Franca and San
Slide 58: Origination and Distribution Ranking
(*) Primary and secondary issues. Of the total number of floating and fixed-return transactions registered at CVM up to June 2004, Bradesco participated in 25% of primary and secondary issues, in 36% of debenture issues and in 50% of promissory notes issues. Origination and Distribution Ranking – AN
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Slide 60: Banco Finasa S.A.
• Banco Finasa S.A. Consolidated Balance Sheet - In millions of reais 2003 2004 March June March June ASSETS Current assets and long-term receivables 4,123 4,260 6,508 7,037 Funds available - Interbank investments Securities and derivative financial instruments Interbank accounts Credit and leasing
Slide 61: Bradesco Seguros
Bradesco Seguros secured R$ 4.3 billion in premiums and maintained its industry leadership with a 24.6% market share. The insurance sector obtained a total of R$ 17.547 billion in premiums through May 2004. Growth in Technical Reserves In millions of reais
Slide 62: Growth in Guaranteeing Assets of Technical Reserves
Growth in Guaranteeing Assets of Technical Reserves In millions of reais
Slide 63: Earned Premiums by Insurance Line
Earned Premiums by Insurance Line - In millions of reais 2003 2004 Line 1st Qtr. 2nd Qtr. 1st Half 1st Qtr. 2nd Qtr. 1st Half Health 1,248 1,439 Auto/RCF(a) Life/AP(b)/VGBL(c) Basic Lines DPVAT(d) Total 1,253 1,285 2,538 1,500 1,481 2,981 (a) Optional third-party liability. (b) Personal accident. (c
Slide 64: Retained Claims by Insurance Line
Retained Claims by Insurance Line - In millions of reais 2003 2004 Line 1st Qtr. 2nd Qtr. 1st Half 1st Qtr. 2nd Qtr. 1st Half Health 1,110 1,322 Auto/RCF Life/AP Basic Lines DPVAT Total 1,046 1,993 1,237 1,291 2,528 Retained Claims by Insurance Line (%)
Slide 65: Selling Expenses by Insurance Line
N.B. Retained claims/earned premiums. Selling Expenses by Insurance Line - In millions of reais 2003 2004 Line 1st Qtr. 2nd Qtr. 1st Half 1st Qtr. 2nd Qtr. 1st Half Health Auto/RCF Life/AP Basic Lines Total Selling Expenses by Insurance Line (%)
Slide 66: Number of Policyholders
N.B. Expenses for selling/earned premiums Number of Policyholders - - Thousand
Slide 67: Bradesco Saúde
Up to June 2004, the average number of customers grew by 9.8% compared to the same period in 2003. In the first half of 2004, compared to the same period in 2003, Bradesco Saúde maintained its outstanding market position, especially in the corporate health insurance segment (source: ANS). Brazilian
Slide 68: Bradesco Vida e Previdência
Bradesco Vida e Previdência is Brazil’s sole leader in complementary pension plans and VGBL, with a 33.7% share of the market, more than double that held by its nearest rival. First-half plan income totaled R$ 2.861 billion, an 18.3% growth rate compared to the same period in 2003. Income on Insuran
Slide 69: Income on premiums retained
Income on premiums retained of R$ 451 million for the first six-months guaranteed Bradesco’s leadership of the market with a 15.1% share. We highlight during the half-year the “Vida Segura Bradesco” and “Vida Máxima Mulher Bradesco”, products which strengthen the strategy designed to offer products
Slide 70: Technical reserves guarantees
The growing strength of its technical reserves guarantees the company’s capacity to meet its commitments and, at the same time, confirms its position as Brazil’s largest open complementary private pension company with a 48.2% share of the market. (Source: ANAPP - May 2004). Growth in Guaranteeing As
Slide 71: Pension Plan and VGBL Investment Portfolios
The continuing increase in revenues and appropriate investment policy adjustments prompted a significant growth in the investment portfolio of Bradesco Vida e Previdência, thereby guaranteeing full coverage of technical reserves. Pension Plan and VGBL Investment Portfolios – Market Share (%)
Slide 72: Participants
Bradesco Vida e Previdência is the market’s outright leader as regards the size of its investment portfolios, since this company accounts for almost half of total market resources. Participants Increase in Number of Participants – thousand
Slide 73: Policyholders
N.B. Includes VGBL long-term life products The strength of the Bradesco brand, its commitment to innovation and the adoption of appropriate pricing and management policies, prompted a continuing growth in the number of customers, which have now attained the 1.4 million mark. Policyholders Increase i
Slide 74: Savings Bonds
As well as launching the “Vida Segura Bradesco” and “Vida Máxima Mulher Bradesco” products, during the first half, Bradesco Vida e Previdência also launched its campaign designed to extend the popularity of life insurance policies. • Savings Bonds (1) Balance Sheet - In millions of reais 2003 2004 M
Slide 75: Technical Reserves - Market Share
Technical Reserves - Market Share (%)
Slide 76: Growth in Technical Reserves
Growth in Technical Reserves - In millions of reais
Slide 77: Bradesco Capitalização technical reserves
Bradesco Capitalização’s fast-growing volume of technical reserves totaled R$ 2.0 billion in June 2004, a growth rate of 18.3% compared to the same period in 2003. According to data for May 2004 published by SUSEP, the company has 23.1% of the total market volume of technical reserves. These results
Slide 78: Number of Customers
Number of Customers - Thousand
Slide 79: Customer loyalty and Outstanding Savings Bonds
In line with its customer loyalty building policy focused on quality customer service and the offer of innovative products, the number of Bradesco Capitalização customers in June 2004 had grown by 2.4% in comparison with the same period in 2003, totaling 2.8 million. Outstanding Savings Bonds - Thou
Slide 80: Outstanding Savings Bonds with transfer of draw participation rights
Outstanding Savings Bonds with transfer of draw participation rights - thousands
Slide 81: Total Outstanding Savings Bonds
Total Outstanding Savings Bonds - thousands
Slide 82: Savings bond portfolio growth and awards
The outstanding savings bond portfolio also presented a significant increase of 692.3% compared to the same period in 2003, with more than 60 million outstanding bonds. Of this amount, 92.5% are certificates with “Transfer of Draw Participation Rights”, which were sold via partnership agreements wit
Slide 83: Bradesco Consórcios
• Bradesco Consórcios (Consortium Purchase System) Administradora (management company) Balance Sheet - In thousands of reais 2003 2004 March June March June ASSETS Current assets and long-term receivables 21,907 22,521 36,744 47,501 Securities 18,118 18,853 35,788 45,765 Other receivables 3,789 3,66
Slide 84: Consortium Groups
Consortium Groups Balance Sheet - In thousands of reais 2003 2004 March June March June ASSETS Current assets and long-term receivables 1,566 19,342 124,366 164,330 Amount offset 123,557 1,465,378 4,436,832 5,499,952 Total 125,123 1,484,720 4,561,198 5,664,282 LIABILITIES Current and long-term liabi
Slide 85: Quotas sold and accumulated up to June 30, 2004
Quotas sold and accumulated up to June 30, 2004
Slide 86: Total Outstanding Real-estate Quotas in 2004
Total Outstanding Real-estate Quotas in 2004
Slide 87: Active participants in largest real-estate consortium administrators
Number of active participants in the 10 largest real-estate consortium administrators (thousand) (*)
Slide 88: Bradesco S.A. Corretora de Títulos e Valores Mobiliários
(*) Brazilian Central Bank Data for May 2004 • Bradesco S.A. - Corretora de Títulos e Valores Mobiliários Balance Sheet – In thousands of reais 2003 2004 March June March June ASSETS Current assets and long-term receivables 145,320 153,910 320,961 128,999 Funds available Interbank investments and se
Slide 89: SraescoOrganiatin oops
SraescoOrganiatin oops “chien of empoyees 225%, Students fom the community
Slide 90: Statement of Social Responsibility for the First Half
• Statement of Social Responsibility for the First Half - 2004 and 2003 1) Calculation basis 1st Half 2004 (in thousands of reais) 1st Half 2003 (in thousands of reais) Net revenue (RL) (1) 5,336,282 4,581,642 Operating income (RO) 1,420,448 1,999,071 Gross payroll (FPB) 2,410,603 2,201,013 2) Inter