Business Context and Reporting Period
This Form 6-K filing by Banco Bradesco S.A. (Bank Bradesco) was submitted on March 28, 2013, covering the reporting period ending March 31, 2013. The document serves as a "Notice to the Market" disclosing the company's complete consolidated financial statements for the years ended December 31, 2012, and December 31, 2011, prepared in accordance with International Financial Reporting Standards (IFRS).
Key Financial Metrics
The filing provides a reconciliation of financial data between Brazilian GAAP (BR GAAP) and IFRS. Key IFRS metrics for the years ended December 31, 2012, and 2011 are as follows:
- Total Assets: R$ 801,186 million (2012) vs. R$ 722,087 million (2011).
- Net Income (Attributable to Controlling and Non-Controlling Shareholders): R$ 11,351 million (2012) vs. R$ 11,089 million (2011).
- Net Income (Attributable to Controlling Shareholder): R$ 11,291 million (2012) vs. R$ 10,958 million (2011).
- Shareholders' Equity (Controlling): R$ 71,137 million (2012) vs. R$ 59,139 million (2011).
- Loans and Advances to Customers (Net): R$ 269,653 million (2012) vs. R$ 245,875 million (2011).
- Deposits from Customers: R$ 210,771 million (2012) vs. R$ 216,321 million (2011).
The filing does not provide specific values for operating cash flow, profit margins, or debt-to-equity ratios.
Material Changes and Accounting Adjustments
The primary material change disclosed is the transition from BR GAAP to IFRS, resulting in significant reclassifications and adjustments to the balance sheet and income statement.
- Asset Reclassification: Total assets decreased by R$ 77,906 million under IFRS compared to BR GAAP for 2012, primarily due to reclassifications of financial assets held for trading and assets pledged as collateral.
- Net Income Adjustments: For 2012, the transition to IFRS resulted in a net decrease of R$ 90 million in net income compared to BR GAAP (R$ 11,381 million BR GAAP vs. R$ 11,291 million IFRS attributable to controlling shareholders).
- Key Adjustment Drivers:
- Adjustment to the recoverable value of loans and advances reduced net income by R$ 581 million in 2012.
- Reversal of hedge accounting increased net income by R$ 638 million in 2012.
- Deferred income tax adjustments reduced net income by R$ 197 million in 2012.
Outlook, Risks, and Management Commentary
Management commentary is limited to the explanation of accounting standard changes. The filing includes a standard "Forward-Looking Statements" disclaimer, noting that future results depend on economic conditions, industry trends, and operating factors. No specific guidance, capital expenditure plans, or dividend forecasts were provided in this specific text.
Risks and Contingencies: The document highlights risks associated with the assumptions used in forward-looking statements and the impact of general economic and market conditions on future performance.
Investor Verification Checklist
- Verify the impact of the R$ 581 million impairment adjustment on loan recoverability under IFRS compared to BR GAAP.
- Confirm the reclassification of "Financial assets held for trading" which saw a reduction of R$ 74,220 million in the 2012 balance sheet under IFRS.
- Review the full IFRS financial statements referenced in the filing for detailed liquidity and cash flow data not present in this summary.
- Monitor the "Reversal of hedge accounting" impact, which added R$ 638 million to 2012 net income, to understand the volatility in future earnings if hedge designations change.