Business Context and Reporting Period
This Form 6-K filing by Banco Bradesco S.A. (Bank Bradesco) covers the period ending March 31, 2014. The document serves as a notice to the market disclosing the company's complete consolidated financial statements for the years ended December 31, 2013, and December 31, 2012, prepared in accordance with International Financial Reporting Standards (IFRS).
Key Financial Metrics
The filing provides a reconciliation of financial data from Brazilian GAAP (BR GAAP) to IFRS. Key IFRS metrics for the years ended December 31 are as follows (in R$ millions):
| Metric | 2013 | 2012 |
|---|---|---|
| Total Assets | 838,302 | 799,541 |
| Total Liabilities and Equity | 838,302 | 799,541 |
| Shareholders' Equity (Controlling) | 71,884 | 71,137 |
| Net Income (Controlling) | 12,396 | 11,291 |
| Net Income (Total) | 12,486 | 11,351 |
The filing does not provide specific data on operating cash flows, profit margins, or debt-to-equity ratios beyond the balance sheet totals and net income figures.
Material Changes and IFRS Adoption
The primary material change disclosed is the transition from BR GAAP to IFRS, which resulted in significant adjustments to the balance sheet and income statement:
- Total Assets Adjustment: Total assets decreased by R$ 69,837 million in 2013 and R$ 79,551 million in 2012 upon conversion to IFRS.
- Net Income Adjustment: Net income attributable to the controlling shareholder increased by R$ 385 million in 2013 and decreased by R$ 90 million in 2012 under IFRS compared to BR GAAP.
- Key Adjustments:
- Loans and Advances: Adjustments to the recoverable value of loans increased equity by R$ 1,550 million in 2013.
- Business Combinations: Fair value recognition of assets and liabilities in acquisitions added R$ 646 million to equity in 2013.
- Hedge Accounting: Reversal of amounts recorded in equity under BR GAAP against retained earnings due to instruments not qualifying as hedges under IAS 39.
- Joint Arrangements: Adoption of IFRS 11 changed the accounting policy for joint ventures to the equity method, though the impact was not significant.
Guidance, Outlook, and Risks
The filing contains standard forward-looking statements regarding future economic circumstances, industry conditions, and company performance. Management notes that statements involving "anticipates," "believes," "estimates," and "expects" are subject to risks and uncertainties, including general economic and market conditions. There is no guarantee that expected trends will occur.
The filing does not provide specific numerical guidance for future periods, nor does it detail specific new contingencies beyond the standard risks associated with the banking sector and the IFRS transition.
Investor Verification Checklist
- Verify the full consolidated financial statements for 2013 and 2012 to review detailed line items not summarized in this notice.
- Confirm the specific impact of the IFRS 11 "Joint Arrangements" adoption on future joint venture reporting.
- Review the detailed breakdown of the "Adjustment to the recoverable value of loans and advances" to understand credit risk provisioning under IFRS.
- Check subsequent filings for the actual dividend declaration, as the filing notes that dividend calculations are based on BR GAAP net income released on January 30, 2014.