Banco Bradesco Sa (BBD)

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Banco Bradesco SA (BBD)

Q4 2012 Earnings Call

Jan 29, 2013 9:00 am ET


Paulo Faustino da Costa – Market Relations Officer

Luiz Carlos Angelotti – Managing Officer


Daniel Adrian Abut – Citigroup Global Markets

Carlos Macedo – Goldman Sachs do Brasil CTVM SA

Saul Martinez – JPMorgan Securities LLC

Mario Pierry – Deutsche Bank Corretora de Valores SA

Jorge Kuri – Morgan Stanley & Co. LLC

Regina Longo Sanchez – Itaú Corretora de Valores SA

Victor Galliano – HSBC Securities USA, Inc.

Boris Molina – Santander Central Hispano Investment

Maclovio Pina – Morningstar Equity Research



Good morning, ladies and gentlemen. We would like to welcome everyone to Banco Bradesco’s Fourth Quarter 2012 Earnings Results Conference Call.

This call is being broadcasted simultaneously through the Internet in the website, In that address, you can also find a banner through which the presentation will be available for download.

We inform that all participants will only be able to listen to the conference call during the company’s presentation. After the presentation, there will be a question-and-answer session. At that time, further instructions will be given. (Operator Instructions) Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Banco Bradesco’s management and on information currently available to the company.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events, and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Banco Bradesco and could cause the results to differ materially from those expressed in such forward-looking statements.

Now, I’ll turn the conference over to Mr. Paulo Faustino da Costa, Market Relations Department Director.

Paulo Faustino da Costa

Good morning everyone and thank you all for participating in our conference call. We are here to provide you with all the information you may need about our numbers. This is in line with our goal of always increasing the transparency of information disclosed to the market.

We have here today Mr. Marco Antonio Rossi, Chief Executive Officer of Bradesco Seguros Group, and Bradesco’s Executive Vice President; Mr. Luiz Carlos Angelotti, Executive Managing Director and Director, Investor Relations Officer; and Mr. Moacyr Nachbar, Deputy Officer.

I will now turn to Mr. Luiz Carlos Angelotti, who will lead our conference call. After his presentation, we will be open to answer your questions. Mr. Angelotti, please go ahead.

Luiz Carlos Angelotti

Good morning, everyone. The fourth quarter of 2012 was marked by recover of the global economy. Even it is very moderately and between July and at September we saw the lowest level in terms of growth. Global economy risk remains uneasily negative, but they are manageable and are currently noticed as lower than those including 2012. This scenario, the global economy outlook towards Brazilian economy is positive from the commercial viewpoint and also considering the lack of inflationary pressure, or abrupt reduction of international liquidity over the next months.

The recovery of Brazilian’s reduced economy also continues moderate, but it is certain that the second half of 2012 was better than the first half.

In 2013, the normalization of supplying, trading, and manufacturing is going to recover in this strong production under our scenario where our household consumption continues growing at solid base, supported by employment and income growth. It is also worth mentioning the excellent outlook for domestic agribusiness as well as its positive effect on the economics of small and medium-sized cities. Brazil continues moving forward in institutional terms and most recently policies concerning the structural issues have been adopted, such as infrastructure and production cost and savings.

Concerning the financial industry, specifically 2012 results, a very challenged scenario. It is important to evaluate the changes seen in the system in view of the thing that this industry has undergone over the past few years. Therefore, financial institutions have been taking a very close look at the flow of operations and at the same time they have improved the scope of general services offered to their clients. It is we think this macroeconomic context that Bradesco’s fourth quarter results were affected.

The slides two and three show our period highlights. I would particularly like to draw your attention to the slide two showing our adjusted net income for 2012 which reached to R$11.523 billion in 2012, 2.9% up on 2011.

Total assets came to more than R$879 billion, 15.4% up in the year while our expanded loan portfolio increases by 11.5% in the same period totaling R$385 billion.

On slide three, it’s worth noting our assets under management, which ended the year at R$1.225 trillion, a 20% increase over December 2011. It is also worth mentioning the improvement in our efficiency ratio, which closes the fourth quarter at 41.5%, its lowest level for the past ten quarters.

On slide four, we show the reconciliation between our booked net income and adjusted net income. This quarter, the main non-recurring items were; the recording of tax credits and the full goodwill amortization, both from BERJ, totaling R$1.389 billion and R$1.156 billion respectively. Again of this R$793 million from the sale of Serasa shares and the recognition of impairment losses amounting to R$1.470 billion, R$527 million of which resulting from the return revaluation of rights to provide banking services and the R$890 million relating to investment in shares classified as available for sale due to the adjustment of the book value to their realization value.

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