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 results for the years 2017 and 2016, in accordance to International Financial Reporting Standards (IFRS)
Banco Bradesco S.A. (“Bradesco”) announces to its shareholders, clients, collaborators and to the market in general that it prepared complete consolidated financial statements for the years ended December 31, 2017 and 2016, according to the International Financial Reporting Standards - IFRS, in conformity with the pronouncements issued by the International Accounting Standards Board - IASB, pursuant to Resolution 3,786/09 of the Brazilian Monetary Council (CMN) and CVM Rule 457/07.
See below, the main changes seen in our consolidated financial statements due to the adoption of IFRS:
|
Comparison between BR GAAP and IFRS | |||||||
| R$ Millions | |||||||
|
Balance sheet |
12/31/2017 |
12/31/2016 | |||||
|
BR GAAP (1) |
Differences (2) |
IFRS |
BR GAAP (1) |
Differences (2) |
IFRS | ||
|
Assets |
|
|
|
|
|
| |
|
Cash and balances with banks |
81,743 |
- |
81,743 |
72,555 |
- |
72,555 | |
|
Financial assets held for trading |
241,710 |
- |
241,710 |
213,140 |
- |
213,140 | |
|
Financial assets available for sale |
159,415 |
(2) |
159,413 |
113,152 |
(33) |
113,119 | |
|
Investments held to maturity |
38,985 |
21 |
39,006 |
42,980 |
22 |
43,002 | |
|
Assets pledged as collateral |
183,975 |
- |
183,975 |
155,287 |
- |
155,287 | |
|
Loans and advances to banks |
32,248 |
- |
32,248 |
94,838 |
- |
94,838 | |
|
Loans and advances to customers (3) |
326,278 |
20,480 |
346,758 |
348,108 |
19,195 |
367,303 | |
|
Non-current assets held for sale |
1,521 |
- |
1,521 |
1,579 |
- |
1,579 | |
|
Investments in associated companies and joint ventures |
7,874 |
383 |
8,257 |
6,889 |
114 |
7,003 | |
|
Property and equipament |
7,744 |
688 |
8,432 |
7,722 |
675 |
8,397 | |
|
Intangible assets and goodwill |
15,234 |
945 |
16,179 |
16,339 |
(541) |
15,798 | |
|
Taxes to be offset |
10,525 |
- |
10,525 |
7,723 |
- |
7,723 | |
|
Deferred income taxes |
52,397 |
(8,665) |
43,732 |
50,956 |
(5,839) |
45,117 | |
|
Other assets |
51,623 |
(769) |
50,854 |
48,339 |
(1,170) |
47,169 | |
|
|
|
|
|
|
|
| |
|
Total assets |
1,211,272 |
13,081 |
1,224,353 |
1,179,607 |
12,423 |
1,192,030 | |
|
Liabilities |
|
|
|
|
|
| |
|
Deposits from banks |
285,957 |
- |
285,957 |
301,663 |
- |
301,663 | |
|
Deposits from customers |
262,008 |
- |
262,008 |
232,748 |
- |
232,748 | |
|
Financial liabilities held for trading |
14,275 |
- |
14,275 |
13,436 |
- |
13,436 | |
|
Funds from securities issued |
135,174 |
- |
135,174 |
151,065 |
37 |
151,102 | |
|
Subordinated debt |
50,179 |
- |
50,179 |
52,611 |
- |
52,611 | |
|
Insurance technical provisions and pension plans |
239,090 |
- |
239,090 |
215,840 |
- |
215,840 | |
|
Other provisions |
18,491 |
- |
18,491 |
18,292 |
- |
18,292 | |
|
Current income tax liabilities |
2,416 |
- |
2,416 |
2,130 |
- |
2,130 | |
|
Deferred income tax liabilities |
4,563 |
(3,311) |
1,252 |
3,277 |
(1,514) |
1,763 | |
|
Other liabilities |
88,098 |
9,719 |
97,817 |
87,654 |
9,312 |
96,966 | |
|
|
|
|
|
|
|
| |
|
Shareholders´ equity of controlling |
110,457 |
6,947 |
117,404 |
100,442 |
4,860 |
105,302 | |
|
Non-controlling interest |
564 |
(274) |
290 |
449 |
(272) |
177 | |
|
|
|
|
|
|
|
| |
|
Total liabilities and shareholders´equity |
1,211,272 |
13,081 |
1,224,353 |
1,179,607 |
12,423 |
1,192,030 | |
1) Information presented herein consider amounts calculated pursuant to the accounting practices adopted in Brazil (BR GAAP), which are applicable to financial institutions, in accordance with the regulations of the Brazilian Central Bank, and classified according to the presentation model determined by IFRS;
2) Differences refer to reclassification between accounts and other effects from the adoption of IFRS; and
3) The loan and advances to customers’ portfolio is presented net of provision for impairment losses.
See below, reconciliation of Shareholders’ Equity and Net Income for the 2017 and 2016 years:
|
Reconciliation of Shareholders´Equity and Net Income | |||||
| R$ Millions | |||||
|
Differences |
Shareholders´ Equity |
Net Income |
Shareholders´ Equity |
Net Income | |
|
12/31/2017 |
2017 |
12/31/2016 |
2016 | ||
|
|
|
|
|
|
|
|
BR GAAP |
110,457 |
14,658 |
100,442 |
15,084 | |
|
1) Adjustment to the recoverable value of loans and advances |
4,932 |
629 |
4,303 |
2,205 | |
|
2) Business combinations |
1,737 |
1,379 |
359 |
669 | |
|
Others |
278 |
423 |
198 |
(64) | |
|
|
|
|
|
| |
|
IFRS - Attributable to the controlling shareholder (1) |
117,404 |
17,089 |
105,302 |
17,894 | |
|
Non-controlling shareholder |
290 |
225 |
177 |
99 | |
|
IFRS - Attributable to the controlling and non-controlling shareholder (1) |
117,694 |
17,314 |
105,479 |
17,993 | |
|
(1) The net income basis for the calculation of dividends and interest on capital paid to shareholders, is originally from BR GAAP, which was released on February 01, 2018. |
|||||
Below is a description of the main adjustments from the adoption of IFRS:
1) Adjustment to the recoverable value of loans and advances
Impairment of loans and advances were established based on the history of losses and other information about the clients of the organization at the balance sheet date and clear evidences that show losses had occurred after the initial recognition of the financial asset (concept of loss incurred), while in BR GAAP, the concept of expected losses is used.
2) Business combinations
Under IFRS, the identifiable assets and liabilities in business combinations were adjusted for differences in accounting practices, and recognized at their fair value, based on a study report on purchase price allocation (PPA). In addition, goodwill is not amortized, but tested periodically to determine whether there is objective evidence of impairment.
The complete consolidated financial statements under IFRS, for the years ended December 31, 2017 and 2016, followed by the independent auditors´ report on the consolidated financial statements, without any modification, issued by KPMG Independent Auditors, are available on our website banco.bradesco/ri.
Cidade de Deus, Osasco, S.P, March 8, 2018
Banco Bradesco S.A.
Alexandre da Silva Glüher
Executive Vice-President,
Chief Risk Officer (CRO) and
Investor Relations Officer
|
BANCO BRADESCO S.A. | ||
|
By: |
/S/ Alexandre da Silva Glüher
| |
| Alexandre da Silva Glüher Executive Vice President, Chief Risk Officer (CRO) 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.