BBD

Business Context and Reporting Period

This Form 6-K filing by Banco Bradesco S.A. (Bank Bradesco), dated April 15, 2011, serves as a "Notice to the Market" regarding the convergence of its financial reporting with International Financial Reporting Standards (IFRS). The filing details the preparation of complete consolidated financial statements for the years ended December 31, 2010, and December 31, 2009, in compliance with Brazilian Monetary Council Resolution 3,786/09 and CVM Rule 457/07.

Key Financial Metrics (IFRS vs. BR GAAP)

The filing provides a reconciliation of financial data between Brazilian GAAP (BR GAAP) and IFRS for the periods ended December 31, 2010, and December 31, 2009. All figures are in millions of Brazilian Reais (R$).

Note: The filing does not provide specific data for revenue, cash flow, margins, debt, or liquidity ratios for the period ending June 30, 2011, as the document focuses on the retrospective adoption of IFRS for 2009 and 2010.

Material Changes and Adjustments

The transition from BR GAAP to IFRS resulted in significant reclassifications and adjustments to the balance sheet and income statement:

• Total Assets: Decreased by R$34,531 million in 2010 and R$16,539 million in 2009 under IFRS.
• Financial Assets: Significant reclassification occurred. "Financial assets held for trading" decreased by R$24,262 million (2010), while "Financial assets available for sale" increased by R$29,343 million (2010). "Investments held to maturity" were largely reclassified, dropping from R$28,577 million to R$3,394 million in 2010.
• Loans and Advances: Loans to banks increased significantly (R$23,993 million adjustment in 2010) due to reclassification, while loans to customers saw a smaller net increase (R$6,284 million adjustment in 2010).
• Liabilities: Deposits from banks decreased by R$38,498 million in 2010 due to reclassification. Other liabilities increased by R$4,412 million in 2010.
• Equity: Controlling shareholders' equity increased by R$3,008 million in 2010 and R$2,438 million in 2009 under IFRS.

Management Commentary and Risks

Reasons for Adjustments:

• Fair Value Adjustments: Financial instruments in consolidated mutual funds and equity instruments were reclassified to "available-for-sale" and recorded at fair value, with changes recognized in "Accumulated Comprehensive Income."
• Loan Impairment: Adjustments were made to the recoverable value of loans based on historical loss data and evidence of impairment.
• Tax Credits: Deferred tax assets were recognized based on an effective rate of 15%.
• Hedge Accounting: Certain instruments previously treated as hedges under BR GAAP were reversed against retained earnings as they did not meet IAS 39 hedge criteria.

Dividend Basis: Management clarified that the net income basis for calculating dividends and interest on capital paid to shareholders remains based on BR GAAP, as released on January 31, 2011.

Risks and Forward-Looking Statements: The filing includes 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 conditions, market volatility, and operating factors.

Investor Verification Checklist

• Verify the specific impact of IFRS adoption on the bank's capital adequacy ratios, as total assets decreased significantly under the new standard.
• Confirm that dividend declarations continue to be based on BR GAAP net income rather than IFRS net income.
• Review the reclassification of "Investments held to maturity" to "Available for sale" and its potential impact on future earnings volatility due to fair value changes.
• Check subsequent filings for the first full quarter of 2011 to see if the IFRS adjustments stabilize or if further transitional effects occur.
• Validate the effective tax rate assumptions (15%) used for deferred tax assets in the IFRS reconciliation.