Business Context and Reporting Period
This Form 6-K filing by Banco Bradesco S.A. (Bradesco) discloses the results for the fiscal year ended December 31, 2021, prepared in accordance with International Financial Reporting Standards (IFRS). The filing, dated March 17, 2022, provides a reconciliation between Brazilian GAAP (BR GAAP) and IFRS figures, noting that dividend calculations are based on BR GAAP results.
Key Financial Metrics (IFRS)
| Metric | Value (R$ million) |
|---|---|
| Total Assets | 1,675,572 |
| Total Liabilities | 1,525,343 |
| Total Shareholders' Equity | 150,229 |
| Net Income (12M21) | 23,381 |
| Net Income (Attributable to Controlling Shareholders) | 23,172 |
| Deposits from Clients | 569,726 |
| Loans and Advances to Clients (Net) | 573,033 |
The filing does not explicitly state revenue, operating margins, free cash flow, or specific liquidity ratios in the provided text.
Material Changes and Reconciliations
The primary material change presented is the adjustment from BR GAAP to IFRS for the year ended December 31, 2021:
- Total Assets: Increased by R$ 21,906 million under IFRS compared to BR GAAP.
- Net Income: IFRS net income (R$ 23,381 million) was higher than BR GAAP net income (R$ 21,946 million) by R$ 1,435 million.
- Shareholders' Equity: IFRS equity (R$ 150,229 million) exceeded BR GAAP equity (R$ 147,835 million) by R$ 2,394 million.
Key drivers for these adjustments include:
- Business Combination: Added R$ 4,240 million to equity and R$ 560 million to net income, primarily due to fair value recognition and non-amortization of goodwill.
- Technical Provisions: Added R$ 1,521 million to net income, reflecting differences in how mark-to-market effects on assets held to maturity are treated under IFRS 4 versus SUSEP standards.
- Expected Losses: Reduced equity by R$ 1,074 million but increased net income by R$ 55 million due to reclassifications of provisions on loans and financial assets.
Guidance, Outlook, and Risks
The filing contains standard forward-looking statements regarding future economic circumstances, industry conditions, and company performance. Management notes that actual results may differ materially from expectations due to risks including general economic and market conditions. No specific numerical guidance or updated outlook for 2022 is provided in this text.
Investor Verification Checklist
- Verify the full consolidated IFRS financial statements and the independent auditor's report (KPMG) on the company website (www.bradescori.com.br).
- Confirm that dividend declarations are based on BR GAAP net income (R$ 21,946 million) rather than IFRS net income.
- Review the specific impact of the "Business combination" adjustment on goodwill valuation and future impairment testing.
- Assess the difference in technical provisions between SUSEP standards and IFRS 4 to understand the R$ 1,521 million income adjustment.