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Consolidated Financial Statements
1st
quarter 2016
0
1st
quarter 2016
Financial Statements
Consolidated Financial Statements
1st
quarter 2016
1
INDEX
Index .............................................................................................................................................................1
Financial Statements ...................................................................................................................................3
BALANCE SHEET.....................................................................................................................................3
STATEMENT OF INCOME .......................................................................................................................7
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY .................................................................8
STATEMENT OF CASH FLOWS ..............................................................................................................9
STATEMENT OF VALUE ADDED ......................................................................................................... 10
Notes to the Consolidated Financial Statements .................................................................................. 11
1 - THE BANK AND ITS OPERATIONS ................................................................................................ 11
2 - COMPANY RESTRUCTURING........................................................................................................ 11
3 - PRESENTATION OF FINANCIAL STATEMENTS ........................................................................... 12
4 - DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES ........................................................ 17
5 - INFORMATION BY SEGMENT ........................................................................................................ 23
6 - CASH AND CASH EQUIVALENTS .................................................................................................. 35
7 - SHORT-TERM INTERBANK INVESTMENTS .................................................................................. 35
8 - SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS ...................................................... 36
9 - INTERBANK ACCOUNTS ................................................................................................................ 43
10 - LOAN OPERATIONS ...................................................................................................................... 45
11 - OTHER RECEIVABLES ................................................................................................................. 51
12 - FOREIGN EXCHANGE PORTFOLIO ............................................................................................ 52
13 - OTHER ASSETS ............................................................................................................................ 53
14 - INVESTMENTS............................................................................................................................... 54
15 - PROPERTY AND EQUIPMENT ..................................................................................................... 60
16 - INTANGIBLE ASSETS ................................................................................................................... 60
17 - DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS ......................... 61
18 - BORROWINGS AND ONLENDINGS ............................................................................................. 65
19 - FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES ............................................. 67
20 - OTHER LIABILITIES ....................................................................................................................... 68
Index
Consolidated Financial Statements
1st
quarter 2016
2
21 - OTHER OPERATING INCOME/EXPENSES ................................................................................. 72
22 - NON-OPERATING INCOME .......................................................................................................... 74
23 - SHAREHOLDERS' EQUITY ........................................................................................................... 75
24 - TAXES ............................................................................................................................................ 80
25 - RELATED PARTY TRANSACTIONS ............................................................................................. 83
26 - EMPLOYEE BENEFITS .................................................................................................................. 85
27 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES - TAXES AND
SOCIAL SECURITY ............................................................................................................................... 95
28 - RISK AND CAPITAL MANAGEMENT ............................................................................................ 98
29 - STATEMENT OF COMPREHENSIVE INCOME .......................................................................... 106
30 - OTHER INFORMATION ............................................................................................................... 107
Report of the Independent Auditors ..................................................................................................... 110
Members of Management ...................................................................................................................... 113
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
3
BALANCE SHEET
ASSETS Note Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Restated
CURRENT ASSETS 794,044,220 771,228,599 781,341,718
Cash and cash equivalents 6 22,244,838 18,054,422 16,130,100
Short-term interbank investments 7.a 360,672,687 351,419,935 348,398,818
Open market investments 320,732,915 303,356,591 308,838,003
Interbank deposits 39,939,772 48,063,344 39,560,815
Securities and derivative financial instruments 8 28,255,045 24,273,925 30,917,833
Own portfolio 23,699,895 20,534,138 25,247,605
Subject to repurchase agreements 1,447,510 1,257,846 1,655,295
Pledged in guarantee 105,260 113,777 2,269,990
Derivative financial instruments 3,002,380 2,368,164 1,744,943
Interbank accounts 69,860,300 65,050,180 64,031,849
Payments and receipts pending settlement 9.a 3,029,916 7,252 3,719,204
Restricted deposits 9.b 65,277,643 63,361,321 59,106,731
Deposits with Banco Central do Brasil 62,612,540 60,810,918 56,612,772
National Treasury - rural credits resources 122,884 54,205 130,130
National Housing Finance System 2,542,219 2,496,198 2,363,829
Interbank onlendings 1,469 -- 1,114
Correspondent banks 1,551,272 1,681,607 1,204,800
Interdepartmental accounts 193,653 597,676 196,501
Internal transfers of funds 193,653 597,676 196,501
Loan operations 10 190,567,698 188,807,055 189,308,185
Public sector 2,210,829 2,438,099 2,420,477
Private sector 200,326,770 196,989,843 195,334,839
Loan operations linked to assignment 243 431 213
(Allowance for loan losses) (11,970,144) (10,621,318) (8,447,344)
Leasing transactions 10 301,554 318,349 327,804
Private sector 339,682 352,475 346,982
(Allowance for leasing transactions losses) (38,128) (34,126) (19,178)
Other receivables 121,420,632 122,226,217 131,506,096
Receivables from guarantees honored 578,772 397,550 202,339
Foreign exchange portfolio 12.a 23,082,698 19,847,057 20,273,324
Accrued income 2,538,212 2,784,436 2,718,635
Securities trading 496,145 308,180 265,994
Sundry 11.b 96,522,143 100,389,034 109,375,671
(Allowance for other losses) (1,797,338) (1,500,040) (1,329,867)
Other assets 13 527,813 480,840 524,532
Assets not for own use and materials in stock 334,971 332,533 349,070
(Allowance for impairment) (123,397) (120,940) (129,643)
Prepaid expenses 316,239 269,247 305,105
See the accompanying notes to the financial statements.
Financial Statements
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
4
ASSETS Note Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Restated
NON-CURRENT ASSETS 610,837,435 629,900,158 589,084,189
LONG-TERM RECEIVABLES 579,460,537 597,797,430 557,875,109
Short-term interbank investments 7.a 1,129,130 1,321,852 1,127,568
Open market investments 168,552 174,225 220,041
Interbank deposits 960,578 1,147,627 907,527
Securities and derivative financial instruments 8 93,366,835 93,011,125 84,605,247
Own portfolio 72,069,569 71,087,575 60,351,952
Subject to repurchase agreements 17,810,160 16,939,716 10,912,487
Pledged in guarantee 2,921,775 3,989,966 12,402,265
Derivative financial instruments 565,331 993,868 938,543
Interbank accounts 385,183 358,235 420,811
Restricted deposits 9.b 8,181 99 138,521
National Treasury - rural credits resources 8,181 99 138,521
Interbank onlendings 377,002 358,136 282,290
Loan operations 10 419,597,717 439,070,732 417,133,309
Public sector 74,088,325 76,374,043 64,271,789
Private sector 367,442,958 384,232,452 370,154,512
Loan operations linked to assignment 320,396 332,860 306,660
(Allowance for loan losses) (22,253,962) (21,868,623) (17,599,652)
Leasing transactions 10 395,318 507,440 527,719
Private sector 416,243 522,360 536,751
(Allowance for leasing transactions losses) (20,925) (14,920) (9,032)
Other receivables 64,570,309 63,512,259 53,990,320
Foreign exchange portfolio 12.a 1,311,560 1,573,065 --
Accrued income 40,558 36,398 37,536
Securities trading 1,179,383 1,344,984 1,032,548
Specific credits 11.a 344,699 334,604 1,591,775
Sundry 11.b 62,292,171 61,040,381 51,797,955
(Allowance for other losses) (598,062) (817,173) (469,494)
Other assets 13 16,045 15,787 70,135
Prepaid expenses 16,045 15,787 70,135
PERMANENT ASSETS 31,376,898 32,102,728 31,209,080
Investments 15,563,772 15,452,248 13,952,804
Associates and joint ventures 14.a 15,401,200 15,281,217 13,809,449
Domestic 15,257,800 15,100,387 13,577,830
Abroad 143,400 180,830 231,619
Other investments 14.c 216,833 225,300 197,607
(Accumulated impairment) (54,261) (54,269) (54,252)
Property and equipment 15 7,159,486 7,323,034 7,040,631
Land and buildings 6,780,845 6,796,594 6,402,943
Other property and equipment 9,403,055 9,336,493 8,859,765
(Accumulated depreciation) (9,024,414) (8,810,053) (8,222,077)
Intangible 16 8,638,956 9,310,872 10,191,168
Intangible assets 17,637,798 17,543,048 17,045,672
(Accumulated amortization) (8,998,842) (8,232,176) (6,854,504)
Deferred 14,684 16,574 24,477
Organization and expansion costs 1,587,621 1,588,601 1,605,810
(Accumulated amortization) (1,572,937) (1,572,027) (1,581,333)
TOTAL ASSETS 1,404,881,655 1,401,128,757 1,370,425,907
See the accompanying notes to the financial statements.
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
5
LIABILITIES/SHAREHOLDERS’ EQUITY Note Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Restated
CURRENT LIABILITIES 938,008,275 909,357,947 904,723,361
Deposits 17.a 397,930,613 406,119,891 403,984,256
Demand deposits 62,631,054 66,549,760 73,704,884
Savings deposits 151,919,172 151,845,281 144,089,086
Interbank deposits 31,986,510 35,863,954 30,033,534
Time deposits 151,363,934 151,860,896 156,156,752
Other deposits 29,943 -- --
Securities sold under repurchase agreements 17.c 320,626,154 294,973,701 299,403,708
Own portfolio 14,902,976 30,332,240 14,459,736
Third-party portfolio 305,723,178 264,641,461 284,943,972
Funds from acceptance and issuance of securities 19 36,776,073 43,600,506 41,517,886
Bonds backed by real estate, mortgage and other credits 31,345,769 31,127,215 26,386,150
Foreign securities 5,430,304 12,473,291 15,127,725
Certificates of structured operations -- -- 4,011
Interbank accounts 2,489,082 30,621 2,774,240
Receipts and payments pending settlement 9.a 2,476,118 34 2,753,422
Correspondent banks 12,964 30,587 20,818
Interdepartmental accounts 3,874,647 5,438,786 4,118,051
Third-party funds in transit 3,869,933 5,438,146 4,111,162
Internal transfers of funds 4,714 640 6,889
Borrowings 18.a 20,845,824 22,214,249 18,976,030
Foreign borrowing 20,845,824 22,214,249 18,976,030
Domestic onlending - official institutions 18.b 38,363,266 39,015,494 35,291,927
National Treasury 196 -- 429
BNDES 10,191,956 11,394,421 14,369,710
Caixa Econômica Federal 20,686,877 19,690,627 14,232,878
Finame 5,470,329 5,696,559 5,971,741
Other institutions 2,013,908 2,233,887 717,169
Foreign onlending 18.b 95 9,916 95
Derivative financial instruments 8.d 2,375,127 1,967,562 2,970,152
Other liabilities 114,727,394 95,987,221 95,687,016
Billing and collection of taxes and contributions 4,178,985 398,229 4,412,615
Foreign exchange portfolio 12.a 22,167,222 13,737,534 14,409,414
Shareholders and statutory distributions 741,115 1,588,380 2,093,511
Taxes and social security 20.a 20,586,294 19,149,334 21,082,583
Securities trading 884,714 563,939 596,031
Financial and development funds 20.b 9,484,657 10,021,062 7,960,086
Subordinated debts 20.c 1,755,528 1,845,639 1,698,140
Equity and debt hybrid securities 20.d 233,367 121,313 951,323
Other liabilities 20.e 54,695,512 48,561,791 42,483,313
See the accompanying notes to the financial statements.
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
6
LIABILITIES/SHAREHOLDERS’ EQUITY Note Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Restated
NON-CURRENT LIABILITIES 382,717,589 410,234,637 382,104,507
LONG-TERM LIABILITIES 382,264,059 409,775,429 381,683,875
Deposits 17.a 56,108,132 58,299,827 62,440,476
Interbank deposits 4,898,884 5,618,593 6,702,594
Time deposits 51,209,248 52,681,234 55,737,882
Securities sold under repurchase agreements 17.c 33,782,205 38,547,947 29,762,011
Own portfolio 33,782,205 38,547,900 29,762,011
Third-party portfolio -- 47 --
Funds from acceptance and issuance of securities 19 142,519,253 144,960,986 129,608,762
Bonds backed by real estate, mortgage and other credits 124,934,851 123,923,197 113,565,448
Foreign securities 17,454,517 21,026,465 16,039,190
Certificates of structured operations 129,885 11,324 4,124
Borrowings 18.a 4,384,761 7,441,111 6,157,413
Domestic loans - other institutions 52,277 38,494 --
Foreign borrowing 4,332,484 7,402,617 6,157,413
Domestic onlending - official institutions 18.b 49,719,054 51,049,914 55,394,101
National Treasury 190,735 178,145 296,260
BNDES 26,207,886 26,586,982 27,894,144
Finame 23,320,433 24,284,787 27,203,697
Foreign onlending 18.b 382 382 382
Derivative financial instruments 8.d 1,260,516 1,321,610 1,331,367
Other liabilities 94,489,756 108,153,652 96,989,363
Foreign exchange portfolio 12.a 636,270 1,862,406 2,834,812
Taxes and social security 20.a 685,450 784,824 819,283
Securities trading 101,576 107,822 127,739
Financial and development funds 20.b 5,296,382 4,981,462 4,304,693
Special operations 2,197 2,187 2,158
Subordinated debts 20.c 50,147,141 52,172,117 47,966,101
Equity and debt hybrid securities 20.d 6,990,745 7,745,195 5,317,400
Debt instruments eligible as capital 20.c and
20.d 25,627,776 27,293,304 24,776,309
Other liabilities 20.e 5,002,219 13,204,335 10,840,868
DEFERRED INCOME 453,530 459,208 420,632
SHAREHOLDERS' EQUITY 23 84,155,791 81,536,173 83,598,039
Capital 60,000,000 60,000,000 54,000,000
Local residents 48,043,731 47,321,901 42,971,511
Domiciled abroad 11,956,269 12,678,099 11,028,489
Instruments qualifying to common equity tier 1 capital 23.c 8,100,000 8,100,000 8,100,000
Capital reserves 15,740 14,326 13,992
Revaluation reserves 2,713 2,730 2,788
Profit reserves 29,060,181 29,031,090 25,393,416
Accumulated other comprehensive income (16,312,045) (17,042,671) (10,174,852)
Retained earnings/accumulated losses 1,667,695 -- 4,623,836
(Treasury shares) (1,691,986) (1,697,380) (1,629,765)
Noncontrolling interests 3,313,493 3,128,078 3,268,624
TOTAL LIABILITIES 1,404,881,655 1,401,128,757 1,370,425,907
See the accompanying notes to the financial statements.
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
7
STATEMENT OF INCOME
Note 1st quarter/2016 1st quarter/2015
Restated
INCOME FROM FINANCIAL INTERMEDIATION 34,345,206 46,655,991
Loan operations 10.b 20,412,315 27,598,402
Leasing transactions 10.i 94,847 112,978
Securities 8.b 11,536,664 16,362,618
Derivative financial instruments 8.e (302,795) 611,951
Foreign exchange results 12.b 630,277 305,180
Compulsory investments 9.c 1,390,177 1,190,489
Operations of sale and transfer of financial assets 583,721 474,373
EXPENSES FROM FINANCIAL INTERMEDIATION (26,903,604) (40,941,775)
Deposits and securities sold under repurchase agreements 17.d (23,944,081) (21,959,420)
Borrowings and onlendings 18.c 4,231,718 (13,299,624)
Leasing transactions 10.i (55,375) (71,510)
Operations of sale and transfer of financial assets (8,837) (6,735)
Allowance for loan losses 10.f and 10.g (7,127,029) (5,604,486)
INCOME FROM FINANCIAL INTERMEDIATION 7,441,602 5,714,216
OTHER OPERATING INCOME/EXPENSES (3,378,509) (4,043,276)
Service fee income 21.a 3,619,115 3,834,015
Bank fee income 21.b 1,938,658 1,589,067
Personnel expenses 21.c (5,175,668) (4,900,864)
Other administrative expenses 21.d (3,801,922) (3,736,846)
Tax expenses 24.c (1,387,165) (1,586,037)
Equity in associates and joint ventures 14 1,024,064 997,442
Other operating income 21.e 2,858,536 2,643,841
Other operating expenses 21.f (2,454,127) (2,883,894)
OPERATING INCOME 4,063,093 1,670,940
NON-OPERATING INCOME 22 36,592 5,771,918
Incomes 68,029 5,815,168
Expenses (31,437) (43,250)
PROFIT BEFORE TAXATION AND PROFIT SHARING 4,099,685 7,442,858
INCOME TAX AND SOCIAL CONTRIBUTION 24.a (1,044,841) (492,066)
EMPLOYEE AND DIRECTORS PROFIT SHARING (306,317) (727,538)
NON-CONTROLLING INTERESTS (389,476) (404,904)
NET INCOME 2,359,051 5,818,350
EARNINGS PER SHARE 23.f
Weighted average number of shares - basic and diluted 2,792,561,206 2,796,086,165
Basic and diluted earnings per share (R$) 0.83 2.03
See the accompanying notes to the financial statements.
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
8
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
BB Consolidated Note Capital
Instrument Qualifying as
Common Equity Tier 1
Capital
Capital Reserves
Revaluation reserves
Profit Reserves Accumulated Other
Comprehensive Income Treasury shares
Retained earnings/
accumulated losses
Non-controlling
Interest Total
Legal Reserve
Statutory reserves
Banco do Brasil
Associates and
subsidiaries
Balances at Dec 31, 2014 54,000,000 8,100,000 10,773 2,805 5,468,217 21,157,294 (9,437,805) (160,035) (1,621,507) -- 3,093,452 80,613,194
Accumulated other comprehensive income of securities and derivative financial instruments, net of taxes
-- -- -- -- -- -- (585,179) 8,167 -- -- -- (577,012)
Share-based payment transactions -- -- 3,219 -- -- -- -- -- 4,454 -- -- 7,673
Repurchase of shares program -- -- -- -- -- -- -- -- (12,712) -- -- (12,712)
Expired dividends/interest on own capital -- -- -- -- -- -- -- -- -- 2,037 -- 2,037
Realization of revaluation reserve in subsidiary/associated companies -- -- -- (17) -- -- -- -- -- 17 -- --
Change in noncontrolling interest -- -- -- -- -- -- -- -- -- -- 175,172 175,172
Net income for the period 23.h -- -- -- -- -- -- -- -- -- 5,818,350 -- 5,818,350
Interest on instruments elegible to common equity -- -- -- -- -- -- -- -- -- (113,069) -- (113,069)
Unrealized results -- -- -- -- -- 29,365 -- -- -- (29,365) -- --
Allocation - Dividends 23.g -- -- -- -- -- (1,261,460) -- -- -- -- -- (1,261,460)
- Interest on own capital 23.g -- -- -- -- -- -- -- -- -- (1,054,134) -- (1,054,134)
Balances at Mar 31, 2015 54,000,000 8,100,000 13,992 2,788 5,468,217 19,925,199 (10,022,984) (151,868) (1,629,765) 4,623,836 3,268,624 83,598,039
Changes in the period -- -- 3,219 (17) -- (1,232,095) (585,179) 8,167 (8,258) 4,623,836 175,172 2,984,845
Balances at Dec 31, 2015 60,000,000 8,100,000 14,326 2,730 6,173,642 22,857,448 (16,678,569) (364,102) (1,697,380) -- 3,128,078 81,536,173
Accumulated other comprehensive income of securities and derivative financial instruments, net of taxes
-- -- -- -- -- -- 493,963 236,663 -- -- -- 730,626
Share-based payment transactions -- -- 1,414 -- -- -- -- -- 5,394 -- -- 6,808
Expired dividends/interest on own capital -- -- -- -- -- -- -- -- -- 4,016 -- 4,016
Realization of revaluation reserve in subsidiary/associated companies -- -- -- (17) -- -- -- -- -- 17 -- --
Change in noncontrolling interest -- -- -- -- -- -- -- -- -- -- 185,415 185,415
Net income for the period 23.h -- -- -- -- -- -- -- -- -- 2,359,051 -- 2,359,051
Interest on instruments elegible to common equity -- -- -- -- -- -- -- -- -- (19,559) -- (19,559)
Unrealized results -- -- -- -- -- 29,091 -- -- -- (29,091) -- --
Allocation - Interest on own capital 23.g -- -- -- -- -- -- -- -- -- (646,739) -- (646,739)
Balances at Mar 31, 2016 60,000,000 8,100,000 15,740 2,713 6,173,642 22,886,539 (16,184,606) (127,439) (1,691,986) 1,667,695 3,313,493 84,155,791
Changes in the period -- -- 1,414 (17) -- 29,091 493,963 236,663 5,394 1,667,695 185,415 2,619,618
See the accompanying notes to the financial statements.
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
9
STATEMENT OF CASH FLOWS
Note 1st quarter/2016 1st quarter/2015
Cash flows from operating activities
Income before taxation and profit sharing 4,099,685 7,442,858
Adjustments to income before taxation and profit sharing 10,975,146 (6,322,159)
Provision for credits, leasing and other credits 10.f and 10.g 7,127,029 5,604,486
Depreciation and amortization 21.d 1,066,243 1,008,331
(Revenues) / Expenses from impairment 15 and 16 -- (2,409)
Equity in subsidiaries and associates 14.a (1,024,064) (997,442)
(Gain) Loss on the disposal of assets 22 (3,193) (3,465)
(Gain) Loss on the disposal of investments 22 -- (1,356)
Capital (gain) loss 22 (25,287) (5,752,333)
Foreign currency exchange results (1,258,969) 1,694,347
Provision (Reversal) for devaluation of other assets 22 3,240 360
Amortization of goodwill 14.d 52,274 50,550
Expenses with civil, labor and tax provisions 27 (e.1) 725,486 1,129,748
Adjustment of actuarial assets/liabilities and surplus allocation funds 26 (139,831) (505,742)
Commissions income deferred (109,153) (191,396)
Effect of changes in foreign exchange rates in cash and cash equivalents 4,984,290 (7,844,539)
Non-controlling interests (389,476) (404,904)
Other adjustments (33,443) (106,395)
Income adjusted before taxation and profit sharing 15,074,831 1,120,699
Equity variations (23,395,517) 5,478,056
(Increase) Decrease in short-term interbank investments (33,499,922) (34,521,849)
(Increase) Decrease in trading securities and derivative financial instruments (103,897) 1,340,687
(Increase) Decrease in interbank and interdepartmental accounts (1,737,101) (1,868,264)
(Increase) Decrease in compulsory deposits with Banco Central do Brasil (1,801,622) 6,611,465
(Increase) Decrease in loan operations 10,816,001 (17,123,202)
(Increase) Decrease in leasing transactions 103,164 (30,613)
(Increase) Decrease in other receivables net of deferred taxes 933,000 (7,951,145)
(Increase) Decrease in other assets (47,278) (59,988)
Income tax and social contribution paid (1,847,150) (3,531,209)
(Decrease) Increase in deposits (10,380,973) (1,751,332)
(Decrease) Increase in securities sold under repurchase agreements 20,886,711 35,245,285
(Decrease) Increase in funds from acceptance and issuance of securities (9,266,166) 23,535,874
(Decrease) Increase in borrowings and onlendings (5,158,715) 4,439,536
(Decrease) Increase in other liabilities 7,714,109 1,147,549
(Decrease) Increase in deferred income (5,678) (4,738)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (8,320,686) 6,598,755
Cash flows from investing activities
Increase in securities available for sale (12,814,485) (12,921,780)
Decrease in securities available for sale 9,557,447 6,927,753
Increase in securities held to maturity (1,676,324) --
Decrease in securities held to maturity 1,792,825 79,574
Dividends received from associated and subsidiaries companies 1,055,753 943,058
Acquisition of property, plant and equipment in use (192,496) (234,305)
Disposal of property, plant and equipment in use 75,772 1,695
(Acquisition) Disposal of investments (124,160) (214,245)
Acquisition of intangible assets (112,166) (85,985)
Disposal of intangible assets/deferred assets -- 735
Funds from partnership in the card segment -- 2,314,674
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (2,437,834) (3,188,826)
Cash flows from financing activities
Change in non-controlling interests 185,415 175,172
(Decrease) Increase in subordinated debts (1,886,811) 424,624
(Decrease) Increase in equity and debt hybrid securities (2,536,198) 4,755,168
(Acquisition) Disposal of treasury shares 5,394 (8,258)
Dividends paid -- (251,260)
Interest on own capital paid (274,466) (1,054,134)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (4,506,666) 4,041,312
Net variation of cash and cash equivalents (15,265,186) 7,451,241
At the beginning of the period 102,707,171 61,859,479
Effect of changes in foreign exchange rates in cash and cash equivalents (4,984,290) 7,844,539
At the end of the period 82,457,695 77,155,259
Increase (Decrease) in cash and cash equivalents (15,265,186) 7,451,241
See the accompanying notes to the financial statements.
Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
10
STATEMENT OF VALUE ADDED
Note 1st quarter/2016 1st quarter/2015
Restated
Income 33,070,257 51,857,108
Income from financial intermediation 34,345,206 46,655,991
Income from service and bank fees 5,557,773 5,423,082
Allowance for loan losses (7,127,029) (5,604,486)
Capital gains 22 51,833 5,791,686
Other income/(expenses) 242,474 (409,165)
Expenses from financial intermediation (19,776,575) (35,337,289)
Inputs purchased from third parties (2,204,557) (2,209,427)
Materials, water, electric power and gas 21.d (182,054) (150,575)
Expenses with outsourced services 21.d (416,190) (397,114)
Communications 21.d (303,535) (342,459)
Data processing 21.d (160,420) (185,695)
Transportation 21.d (265,760) (303,864)
Security services 21.d (276,526) (256,049)
Financial system services 21.d (188,544) (176,472)
Advertising and marketing 21.d (57,989) (58,957)
Other (353,539) (338,242)
Gross added value 11,089,125 14,310,392
Depreciation and amortization 21.d (1,118,517) (1,058,881)
Value added produced by entity 9,970,608 13,251,511
Value added received through transfer 1,024,064 997,442
Equity in associates and joint ventures 1,024,064 997,442
Added value to distribute 10,994,672 100.00% 14,248,953 100.00%
Value added distributed 10,994,672 100.00% 14,248,953 100.00%
Personnel 4,895,655 44.53% 5,024,572 35.26%
Salaries and fees 3,205,023 3,060,434
Employee and directors profit sharing 306,317 727,538
Benefits and training programs 694,979 640,485
FGTS (government severance indemnity fund for employees) 174,013 164,356
Other charges 515,323 431,759
Taxes, rates and contributions 3,018,335 27.45% 2,681,934 18.82%
Federal 2,675,286 2,375,380
State 70 79
Municipal 342,979 306,475
Interest on third parties' capital 332,155 3.02% 319,192 2.24%
Rent 21.d 332,155 319,192
Interest on own capital 23.g 2,748,527 25.00% 6,223,255 43.68%
Federal government's interest on own capital 357,957 610,317
Other shareholders’ interest on own capital 288,782 443,817
Federal government dividends -- 730,354
Dividends for other shareholders' dividends -- 531,106
Interest on the instrument eligible to the federal government's common equity tier 1 capital
19,558 113,069
Retained earnings 1,692,754 3,389,688
Non-controlling interest in retained earnings 389,476 404,904
See the accompanying notes to the financial statements.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
11
1- THE BANK AND ITS OPERATIONS
Banco do Brasil S.A. (Banco do Brasil or the Bank) is a publicly traded company established under private law, with
both public and private shareholders, and is subject to the requirements of Brazilian corporate legislation. It is
headquartered in Setor de Autarquias Norte, Quadra 5, Lote B, Torre I, Edifício Banco do Brasil, Brasília, Distrito
Federal, Brazil. Its purpose is to carry out all asset, liability and accessory banking operations, to provide banking
services, to promote financial intermediation and to originate financial transactions in various forms, including foreign
exchange transactions and supplementary activities, and to practice any of the activities permitted for institutions that
are part of the National Financial System. It is also the main financial agent of the Brazilian Federal Government and
is therefore required to carry out the functions attributed to it by law, specifically those of article 19 of Law
4,595/1964.
2- COMPANY RESTRUCTURING
Partnership in the card segment
BB Elo Cartões and Cielo S.A.
On November 19, 2014, the Bank announced to the market that BB Elo Cartões Participações S.A. (BB Elo Cartões),
its wholly-owned subsidiary, and Cielo S.A. signed on this date the Association Agreement to form a new strategic
partnership in the electronic payment industry.
The equity interest of BB Elo Cartões and Cielo in the Company was authorized by Banco Central do Brasil on
December 30, 2014.
The creation of the company, arising from the partnership, was regarded as permitted under the Conselho
Administrativo de Defesa Econômica, after expiry of the period laid down in article 65 of Law 12,529/2011, went on
without any appeals or avocation of the case by the Administrative Court.
On February 27, 2015, after approval by the relevant regulators, supervisors and inspection, and subject to the
fulfillment of all contractual conditions precedent to the closing of the transaction, BB Elo Cartões and Cielo
completed the formation of the strategic partnership, forming a new company called Cateno Gestão de Contas de
Pagamento S.A. (Cateno).
Under the terms of the Agreement, the new company has the right, transferred by BB Elo Cartões, to exploit the
activities of management of post-paid accounts transactions and management of the functionality of purchasing via
debit of its payment arrangements. In addition, the new deal aims, among its objectives, to perform associations with
other partners in order to leverage opportunities related to the electronic payment niche market, seeking to obtain
synergy gains and optimizing the structuring of new businesses in the segment.
The injection of this intangible asset to Cateno’s shareholders’ equity represented R$ 11,572,000 thousand,
according to the technical report of appraisal performed by an independent company. In return, and for equalization
of the intended equity interests, Cateno gave to BB Elo Cartões R$ 4,640,951 thousand in cash, related to the
payment of taxes on the operation, and R$ 3,459,449 thousand in debentures from Cielo. The amount of 3,471,600
thousand was kept to compose the equity interest of BB Elo Cartões in Cateno.
The total capital was divided in the proportion of 30% for BB Elo Cartões and 70% for Cielo. However, taking into
account the indirect holding of the Bank in Cielo, through BB Banco de Investimento S.A., the total indirect holding of
the Bank in Cateno, on the date of acquisition, was distributed as follows:
Holding of the Bank - % Common shares (ON) Preferred shares (PN) Total
Total Capital 42.27 100.00 50.13
Due to the conclusion of the transaction, the amount of R$ 3,211,700 thousand impacted the Bank's results from the
1st quarter 2015, as shown in the following table:
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
12
1) BB Elo Cartões’ capital gain 11,572,000
2) Taxes (4,640,951)
3) Effect in BB Elo Cartões’ income, net of tax effects (1+2) 6,931,049
4) Unrealized result (50.13% of item 3) (3,474,189)
5) Effect in the Consolidated income (3+4) 3,456,860
6) Profit sharing, net of tax effects (245,160)
7) Effect in the Consolidated net income (5+6) 3,211,700
3 - PRESENTATION OF FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance with the accounting guidelines derived from
Brazilian corporation law, the rules and instructions issued by the National Monetary Council (Conselho Monetário
Nacional - CMN), the Central Bank of Brazil (Banco Central do Brasil - Bacen) and the Securities and Exchange
Commission of Brazil (Comissão de Valores Mobiliários - CVM), as applicable. In the consolidated financial
statements, there was a reclassification of the Instrument qualifying as CET1 – hybrid capital and debt instrument to
Shareholder's equity. This adjustment is also performed in the prudential financial statements and to IFRS to improve
the quality and transparency of these consolidated financial statements.
The preparation of financial statements in accordance with accounting practices adopted in Brazil, applicable to
financial institutions, requires that Management use judgment in the determination and recording of accounting
estimates, when applicable. Significant assets and liabilities subject to these estimates and assumptions include: the
residual value of fixed assets, the allowance for loan losses, deferred tax assets, provision for labor, civil and tax
demands, valuation of financial instruments, assets and liabilities relating to post-employment benefits and other
provisions. The final amounts of transactions involving these estimates are only known upon their settlement.
The consolidated financial statements include the operations of the Bank performed by their domestic agencies and
abroad and also include the operations of the Bank’s controlled entities, as well as of the special purpose entities
(Dollar Diversified Payment Rights Finance Company and Loans Finance Company Limited) and of the investment
financial funds (Fênix Fundo de Investimento em Direitos Creditórios do Varejo, Fundo de Investimento em Direitos
Creditórios da Companhia Pernambucana de Saneamento - Compesa and BB FIA BDR Nível I) which the Bank
controls directly or indirectly. The consolidated financial statements reflect the assets, liabilities, income and
expenses of Banco do Brasil and its controlled entities.
In the preparation of the consolidated financial statements, amounts resulting from transactions between
consolidated companies, including the equity interest held by one in another, balances of balance sheet accounts,
revenues, expenses and unrealized profits, net of tax effects, were eliminated. Non-controlling interest in net equity
and in income of the controlled entities were separately disclosed in the financial statements. Leasing transactions
were considered based on the financial method, and the amounts were reclassified from the Leased assets line to
the Leasing transactions line, after deduction of residual amounts received in advance. The profit and loss with
foreign exchange from branches operations are presented in the groupings of income in which the charges and
income on these transactions are recognized. The foreign exchange profit and loss on overseas investments are
presented in the grouping of Borrowings and Onlendings, in order to eliminate the effect of protection for the
exchange rate fluctuations of these investments.
The Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - CPC) is responsible
for issuing accounting standards and interpretations, based on international accounting standards, approved by the
CVM. Bacen adopted the following pronouncements of the CPC, applied by the Bank, as applicable: CPC 00 (R1) -
Conceptual framework, CPC 01 – Decrease in recoverable amount of assets, CPC 03 - Statement of cash flows
(DFC), CPC 05 – Related party disclosures, CPC 10 (R1) – Share-based payment, CPC 23 – Accounting policies,
changes in accounting estimates and errors, CPC 24 – Events after the reporting period, CPC 25 - Provisions,
contingent liabilities and contingent assets and CPC 33 (R1) - Employee benefits.
Additionally, Bacen issued CMN Resolution No. 3,533/2008, which became effective in January 2012 and
established procedures for classification, accounting and disclosure of sale and transfer transactions related to
financial assets. This Resolution establishes the criteria for the derecognition of financial assets as specified in the
CPC 38 – Financial instruments: recognition and measurement.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
13
The Bank has also applied the following pronouncements which do not conflict with the Bacen rules, as established
by article 22, paragraph 2 of Law 6,385/1976: CPC 09 – Value Added Statement, CPC 12 – Adjustment at Present
Value, CPC 22 – Information by Segment, CPC 36 (R3) – Consolidated Financial Statements and CPC 41 – Income
per Share.
The application of other standards, which depend on Bacen’s regulations, results primarily in immaterial adjustments
or in changes in disclosure, except the following pronouncements, that may result in significant impacts on the
financial statements:
CPC 04 (R1) – Intangible assets and CPC 15 (R1) - Business combinations - a) reclassification of intangible assets
identified in the acquisition of the equity interest in Banco Votorantim, in 2009, as well as in acquisition of controlling
interest of Banco Patagonia, in 2011, and of BB Americas, in 2012, from the investment account to the account of
Intangible assets, in the group of Non-current assets – permanent; b) derecognition of goodwill amortization
expenses from acquisitions; and c) recognition of amortization expenses of intangible assets with definite useful lives,
identified in the acquisitions.
CPC 18 (R2) – Investments in associates and joint ventures – a) recording at fair value of the equity interests
received in the partnership of the formation of the joint ventures BB Mapfre SH1 and SH2, on June 30, 2011; b) write-
off of the book value of the assets contributed by the Bank including any goodwill; and, c) recognition of the result of
the transaction in the new constituted companies by the proportion of the equity interest.
CPC 38 - Financial instruments: recognition and measurement - adjustment in the allowance for loan losses, due to
the adoption of the incurred loss criteria instead of the expected loss criteria.
These financial statements were approved by the Executive Board of Directors on May 10, 2016.
a) Equity interest included in the consolidated financial statements, segregated by business segments:
Activity Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
% of Total Share
Banking Segment
Banco do Brasil - AG Banking 100.00% 100.00% 100.00%
BB Leasing Company Ltd. Leasing 100.00% 100.00% 100.00%
BB Leasing S.A. - Arrendamento Mercantil Leasing 100.00% 100.00% 100.00%
BB Securities Asia Pte. Ltd. Broker 100.00% 100.00% 100.00%
Banco do Brasil Securities LLC. Broker 100.00% 100.00% 100.00%
BB Securities Ltd. Broker 100.00% 100.00% 100.00%
BB USA Holding Company, Inc. Holding 100.00% 100.00% 100.00%
Brasilian American Merchant Bank Banking 100.00% 100.00% 100.00%
Banco do Brasil Americas Banking 100.00% 100.00% 100.00%
Besc Distribuidora de Títulos e Valores Mobiliários S.A. Asset Management 99.62% 99.62% 99.62%
Banco Patagonia S.A. Banking 58.96% 58.96% 58.96%
Investment Segment
BB Banco de Investimento S.A. Investment Bank 100.00% 100.00% 100.00%
Segment of Fund Management
BB Gestão de Recursos-Distribuidora de Títulos e Valores Mobiliários S.A.
Asset Management 100.00% 100.00% 100.00%
Segment of Insurance, Private Pension Fund and Capitalization
BB Seguridade Participações S.A. (1)
Holding 66.36% 66.25% 66.25%
BB Cor Participações S.A. (1)
Holding 66.36% 66.25% 66.25%
BB Corretora de Seguros e Administradora de Bens S.A. (1)
Broker 66.36% 66.25% 66.25%
BB Seguros Participações S.A. (1)
Holding 66.36% 66.25% 66.25%
Segment of Payment Methods
BB Administradora de Cartões de Crédito S.A. Service Rendering 100.00% 100.00% 100.00%
BB Elo Cartões Participações S.A. Holding 100.00% 100.00% 100.00%
Other Segments
Ativos S.A. Securitizadora de Créditos Financeiros Credits Acquisition 100.00% 100.00% 100.00%
Ativos S.A. Gestão de Cobrança e Recuperação de Crédito Credits Acquisition 100.00% 100.00% 100.00%
BB Administradora de Consórcios S.A. Consortium 100.00% 100.00% 100.00%
BB Tur Viagens e Turismo Ltda. (2)
Tourism 100.00% 100.00% 100.00%
BB Asset Management Ireland Limited Credits Acquisition 100.00% 100.00% --
BB Tecnologia e Serviços S.A. IT 99.97% 99.97% 99.97%
(1) Refers to the percentage of the equity interest, considering the acquisition of shares by the invested entity held in treasury.
(2) The financial statements refers to February/2016.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
14
b) Information for comparability purposes
On May 31, 2015, the Bank prepared its consolidated financial statements including the assets, liabilities, income and
expenses of joint ventures proportionally to the direct or indirect equity interest held in each of them, according to
article 3 from CMN Resolution No. 2,723/2000, revoked by CMN Resolution No. 4,403/2015. The consolidated
financial statements also included the assets, liabilities, income and expenses of some associates determined by
Bacen.
Considering this revocation, from Dec 31, 2015, the consolidated financial statements started to be prepared in
accordance with article 249 from Law 6,404/1976 and with CPC 36 (R3) – Consolidated financial statements,
including the assets, liabilities, income and expenses of Banco do Brasil and its controlled entities.
According to CPC 19 (R2) – Joint Arrangements, it is required to use the equity method, and the option for
proportional consolidation method of joint ventures is not allowed.
O CPC 36 (R3) was applied retrospectively, considering certain simplifications contained in the transitional rules of
that pronouncement and in accordance with CPC 23 - Accounting policies, changes in accounting estimates and
errors. The Bank recorded its investments in associates and joint ventures using the equity method from the earliest
period presented. The initial investment was measured as the sum of the book value of the assets and liabilities that
the Bank had previously proportionally consolidated, including any goodwill.
So the balance amounts and the results related to March 31, 2015 are being presented again retrospectively,
considering the exclusion of equity interests listed below, which started being consolidated by the equity method.
Equity interest not included in the consolidated financial statements, segregated by business segments
Activity Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
% of Total Share
Banking Segment
Banco Votorantim S.A. Banking 50.00% 50.00% 50.00%
Investment Segment
Kepler Weber S.A. Industry 17.46% 17.46% 17.46%
Companhia Brasileira de Securitização - Cibrasec Credits Acquisition 12.12% 12.12% 12.12%
Neoenergia S.A. Energy 11.99% 11.99% 11.99%
Segment of Insurance, Private Pension Fund and Capitalization
BB Mapfre SH1 Participações S.A. (1)
Holding 49.77% 49.68% 49.68%
Brasildental Operadora de Planos Odontológicos S.A. (1)
Service Rendering 49.77% 49.68% 49.68%
Companhia de Seguros Aliança do Brasil (1)
Insurance Company 49.77% 49.68% 49.68%
Mapfre Vida S.A. (1)
Insurance Company 49.77% 49.68% 49.68%
Brasilprev Seguros e Previdência S.A. (1)
Pension/Insurance 49.77% 49.68% 49.68%
Brasilcap Capitalização S.A. (1)
Capitalization 44.24% 44.16% 44.16%
Mapfre BB SH2 Participações S.A. (1)
Holding 33.18% 33.13% 33.13%
Aliança do Brasil Seguros S.A. (1)
Insurance Company 33.18% 33.13% 33.13%
Brasilveículos Companhia de Seguros (1)
Insurance Company 33.18% 33.13% 33.13%
Mapfre Seguros Gerais S.A. (1)
Insurance Company 33.18% 33.13% 33.13%
BB Mapfre Assistência S.A. (1)
Service Rendering 33.18% 33.13% 33.13%
Votorantim Corretora de Seguros S.A. Broker 50.00% 50.00% 50.00%
Seguradora Brasileira de Crédito à Exportação - SBCE Insurance Company 12.09% 12.09% 12.09%
IRB - Brasil Resseguros S.A. (1)
Reinsurer 13.55% 13.53% 13.53%
Segment of Payment Methods
Cateno Gestão de Contas de Pagamento S.A. (1)
Service Rendering 50.11% 50.11% 50.13%
Elo Participações S.A. Holding 49.99% 49.99% 49.99%
Companhia Brasileira de Soluções e Serviços CBSS - Alelo Service Rendering 49.99% 49.99% 49.99%
Elo Serviços S.A. Service Rendering 33.33% 33.33% 33.33%
Cielo S.A. (1)
Service Rendering 28.73% 28.72% 28.75%
Tecnologia Bancária S.A. - Tecban Service Rendering 12.52% 12.52% 13.53%
(1) Refers to the percentage of the equity interest, considering the acquisition of shares by the invested entity held in treasury.
The effects of CPC 36 (R3) application on the consolidated financial statements are presented below.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
15
Restated balance sheet
Mar 31, 2015
Original report Adjustments Restated balances
CURRENT ASSETS and LONG-TERM RECEIVABLES 1,501,811,020 (162,594,193) 1,339,216,827
Cash and Cash Equivalents 16,536,604 (406,504) 16,130,100
Short-term Interbank Investments 351,658,176 (2,131,790) 349,526,386
Securities and Derivative Financial Instruments 235,999,192 (120,476,112) 115,523,080
Interbank Accounts 64,682,415 (33,254) 64,649,161
Loan operations and Leasing transactions 631,542,180 (24,245,163) 607,297,017
Other Receivables 197,641,607 (12,145,191) 185,496,416
Other Assets 3,750,846 (3,156,179) 594,667
PERMANENT ASSETS 21,854,684 9,354,396 31,209,080
Investments 3,584,912 10,367,892 13,952,804
Property and Equipment 7,504,117 (463,486) 7,040,631
Intangible 10,728,629 (537,461) 10,191,168
Deferred 37,026 (12,549) 24,477
TOTAL ASSETS 1,523,665,704 (153,239,797) 1,370,425,907
CURRENT LIABILITIES and LONG-TERM LIABILITIES 1,439,633,857 (153,226,621) 1,286,407,236
Deposits 468,005,995 (1,581,263) 466,424,732
Securities Sold Under Repurchase Agreements 338,906,729 (9,741,010) 329,165,719
Funds from Acceptance and Issuance of Securities 183,328,583 (12,201,935) 171,126,648
Interbank Accounts 2,774,586 (346) 2,774,240
Interdepartmental Accounts 4,206,078 (88,027) 4,118,051
Borrowings 29,156,933 (4,023,490) 25,133,443
Domestic Onlending - Official Institutions 92,614,783 (1,928,755) 90,686,028
Foreign Onlending 477 -- 477
Derivative Financial Instruments 5,632,137 (1,330,618) 4,301,519
Other Liabilities 315,007,556 (122,331,177) 192,676,379
DEFERRED INCOME 433,808 (13,176) 420,632
SHAREHOLDERS' EQUITY 83,598,039 -- 83,598,039
TOTAL LIABILITIES 1,523,665,704 (153,239,797) 1,370,425,907
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
16
Restated statement of income
1st quarter/2015 Original report Adjustments Restated balances
INCOME FROM FINANCIAL INTERMEDIATION 50,422,332 (3,766,341) 46,655,991
Loan operations 29,321,943 (1,723,541) 27,598,402
Leasing transactions 257,455 (144,477) 112,978
Securities 16,973,308 (610,690) 16,362,618
Derivative financial instruments 903,370 (291,419) 611,951
Foreign exchange results 423,996 (118,816) 305,180
Compulsory investments 1,190,489 -- 1,190,489
Operations of sale and transfer of financial assets 129,794 344,579 474,373
Financial income from insurance, pension plans and capitalization 1,221,977 (1,221,977) --
EXPENSES FROM FINANCIAL INTERMEDIATION (45,569,488) 4,627,713 (40,941,775)
Deposits and securities sold under repurchase agreements (23,556,530) 1,597,110 (21,959,420)
Borrowings and onlendings (15,076,205) 1,776,581 (13,299,624)
Leasing transactions (213,723) 142,213 (71,510)
Operations of sale and transfer of financial assets (20,943) 14,208 (6,735)
Financial expenses from technical provisions of insurance, pension plans and capitalization
(753,155) 753,155 --
Allowance for loan losses (5,948,932) 344,446 (5,604,486)
INCOME FROM FINANCIAL INTERMEDIATION 4,852,844 861,372 5,714,216
OTHER OPERATING INCOME/EXPENSES (2,650,659) (1,392,617) (4,043,276)
Service fee income 4,654,219 (820,204) 3,834,015
Bank fee income 1,655,246 (66,179) 1,589,067
Personnel expenses (5,189,429) 288,565 (4,900,864)
Other administrative expenses (4,121,966) 385,120 (3,736,846)
Tax expenses (1,845,556) 259,519 (1,586,037)
Equity in associates and subsidiaries 1,707,803 (710,361) 997,442
Financial income from insurance, pension plans and capitalization 1,153,478 (1,153,478) --
Other operating income 3,139,826 (495,985) 2,643,841
Other operating expenses (3,804,280) 920,386 (2,883,894)
OPERATING INCOME 2,202,185 (531,245) 1,670,940
NON-OPERATING INCOME 5,770,561 1,357 5,771,918
Incomes 5,844,393 (29,225) 5,815,168
Expenses (73,832) 30,582 (43,250)
PROFIT BEFORE TAXATION AND PROFIT SHARING 7,972,746 (529,888) 7,442,858
INCOME TAX AND SOCIAL CONTRIBUTION (984,183) 492,117 (492,066)
EMPLOYEE AND DIRECTORS PROFIT SHARING (765,309) 37,771 (727,538)
NON-CONTROLLING INTERESTS (404,904) -- (404,904)
NET INCOME 5,818,350 -- 5,818,350
Restated statement of cash flows
1st quarter/2015 Original report Adjustments Restated balances
CASH PROVIDED BY OPERATING ACTIVITIES 8,923,601 (2,324,846) 6,598,755
CASH USED IN BY INVESTING ACTIVITIES (3,851,945) 663,119 (3,188,826)
CASH PROVIDED BY FINANCING ACTIVITIES 4,084,393 (43,081) 4,041,312
Increase (Decrease) in cash and cash equivalents 9,156,049 (1,704,808) 7,451,241
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
17
Restated statement of value added
1st quarter/2015 Original report Adjustments Restated balances
Income 56,834,174 (4,977,066) 51,857,108
Expenses From Financial Intermediation (39,620,556) 4,283,267 (35,337,289)
Inputs Purchased from Third Parties (2,452,747) 243,320 (2,209,427)
Gross Added Value 14,760,871 (450,479) 14,310,392
Depreciation and amortization (1,115,099) 56,218 (1,058,881)
Value Added produced by Entity 13,645,772 (394,261) 13,251,511
Value Added received through transfer 1,707,803 (710,361) 997,442
Added Value to Distribute 15,353,575 (1,104,622) 14,248,953
Value Added Distributed 15,353,575 (1,104,622) 14,248,953
Personnel 5,306,743 (282,171) 5,024,572
Taxes, Rates and Contributions 3,477,735 (795,801) 2,681,934
Interest on Third Parties' Capital 345,842 (26,650) 319,192
Interest on Own Capital 6,223,255 -- 6,223,255
4 - DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted by Banco do Brasil are applied consistently in all periods presented in these
financial statements and applied to all the entities of the Conglomerate.
) Statement of income a
In accrual basis accounting, revenues and expenses are reported in the closing process of the period in which they
are incurred, regardless of receipt or payment. The operations with floating rates are adjusted pro rata die, based on
the variation of the indexes agreed, and operations with fixed rates are recorded at future redemption value, adjusted
for the unearned income or prepaid expenses for future periods. The operations indexed to foreign currencies are
converted at the reporting date using current rates.
) Present value measurement b
Financial assets and liabilities are presented at present value due to the application of the accrual basis in the
recognition of their interest income and expenses.
Non-contractual liabilities are primarily represented by provisions for lawsuit and legal obligations, for which the
disbursement date is uncertain and is not under the Bank's control. They are measured at present value because
they are initially recognized at estimated disbursement value on the valuation date and are updated monthly.
) Cash and cash equivalents c
Cash and cash equivalents comprise available funds in local currency, foreign currency, investments in gold,
investments in repurchase agreements – own resources, interbank deposits and investments in foreign currencies,
with high liquidity and insignificant risk of change in fair value, with maturity at time of acquisition not exceeding 90
days.
) Short-term interbank investments d
Short-term interbank investments are recorded at their investment or acquisition amount, plus income accrued up to
the balance sheet date and adjustments for allowance for losses.
) Securities e
The securities purchased for the Bank's portfolio are recorded at the actual amount paid, including brokerage charges
and fees, and are classified based on management’s intention, in one of three categories, according to Bacen
Circular 3,068/2001:
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
18
Trading Securities: these are securities purchased to be actively and frequently traded. They are adjusted monthly to
market value. The increases and decreases in value are recorded in income and expense accounts for the period;
Securities available for sale: these are securities that may be traded at any time, but are not acquired to be actively
and frequently traded. They are adjusted monthly to market value and their increases and decreases in value are
recorded, net of tax effects, in Accumulated other comprehensive income in Shareholders' equity; and
Securities held to maturity: these are securities that the Bank owns and has the financial capacity and intent to hold
to maturity. These securities are not adjusted to market value. The Bank's financial capacity to hold to maturity is
supported by a cash flow projection that does not consider the possibility of sale of these securities.
The mark-to-market methodology used for securities was established following consistent, verifiable criteria, which
consider the average price of trading on the day of calculation or, if not available, the indicative price reported by
Anbima, or relationship between the unit price and the latest business value in the last 30 day, or the net expected
realizable value obtained through pricing models, using credit risk curves, future values of interest rates, foreign
exchange rates, price and currency indices, and similar financial instruments.
Income accrued on the securities, irrespective of the category in which they are classified, is appropriated on a pro
rata die basis on an accrual basis until the date of maturity or final sale, using the cumulative or straight-line method,
based on the contractual remuneration and purchase price, and recorded directly in the statement of income for the
period.
Impairment of securities classified as available for sale and held to maturity, if considered not to be temporary, are
recorded directly in expense for the period and a new cost basis for the asset is determined.
Upon sale, the difference between the sale amount and the cost of purchase plus accrued income is considered as a
result of the transaction and is recorded on the date of the transaction as a gain or loss on securities.
) Derivative financial instruments f
Derivative financial instruments are adjusted to market value at each monthly trial balance and balance sheet date.
Increases or decreases in value are recorded in the appropriate income or expense accounts.
The mark-to-market methodology used for derivative financial instruments was established following consistent and
verifiable criteria, which consider the average price of trading on the date of calculation or, if not available, pricing
models that estimate the expected net realizable value, or the price of a similar financial instrument, considering at
least, the payment or maturity date, the credit risk and currency or index.
Derivative financial instruments used to offset, in whole or in part, the risks arising from exposure to variations in the
market value or asset cash flow or financial liabilities, commitment or future transaction, are considered hedge
instruments and are classified according to their nature:
Market Risk Hedge: increases or decreases in value of the financial instruments, as well as of the hedged item, are
recorded in income/expense accounts for the period; and
Cash Flow Hedge: the effective portion of the increases or decreases in value of the derivative financial instruments
classified in this category are recorded, net of tax effects, in Accumulated other comprehensive income in
Shareholders' equity. The effective amount is that in which the variation of the hedged item, directly related to the
corresponding risk, is offset by the variation in the financial instrument used for the hedge, considering the
accumulated effect of the transaction. Other variations in these instruments are recorded directly in the statement of
income for the period.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
19
) Loan and leasing operations, advances on foreign exchange contracts, other receivables with gloan characteristics and allowance for loan losses
Loans, leases, advances on foreign exchange contracts and other receivables with loan characteristics are classified
according to Management's judgment with respect to the level of risk, taking into consideration market conditions,
past experience and specific risks in relation to the operation, to borrowers and guarantors, observing the parameters
established by CMN Resolution 2,682/1999, which requires periodic analyses of the portfolio and its classification into
nine levels, ranging from AA (minimum risk) to H (maximum risk), as well as the classification of operations more than
15 days overdue as non-performing. For atypical transactions with a term of more than 36 months, there is a double
counting on the days-past-due intervals defined for the nine levels of risk, as permitted by CMN Resolution
2,682/1999.
Income from loans overdue for more than 60 days, regardless of their risk level, will only be recognized as income
when effectively received.
Operations classified at level H, which remain in this classification for 180 days, are written off against the existing
allowance.
Renegotiated operations are maintained, at a minimum, at the same level at which they were rated on the date of
renegotiation. The renegotiations of loans already written off against the allowance are rated as H level and any gains
from renegotiation are recognized as income when effectively received. Reclassification to a lower risk category is
allowed when there is significant amortization of the operation or when new material facts justify a change in risk
level, according to CMN Resolution 2,682/1999.
Allowance for loan losses, considered sufficient by management, satisfies the minimum requirement established by
the aforementioned CMN Resolution 2,682/1999 (Note 10.e).
) Taxes h
Taxes are calculated based on the rates shown in the table below:
Taxes Rate
Income Tax (15.00% + additional 10.00%) 25.00%
Social Contribution on Net Income (CSLL) (1)
20.00%
Social Integration Program/Public servant fund program (PIS/Pasep) (2)
0.65%
Contribution to Social Security Financing - (Cofins) (2)
4.00%
Tax on services of any kind - (ISSQN) Up to 5.00%
(1) Rate applied to financial companies and to non-financial companies in the areas of private insurance and capitalization, since September 01, 2015 (the rate was 15% until August 31, 2015). In January 2019, the rate will return to 15%. For others non-financial companies, the CSLL rate is 9%.
(2) For non-financial firms that have opted for the non-cumulative regime of calculation, the PIS/PASEP rate is 1.65% and the Cofins rate is 7.6%.
Deferred tax assets (tax credits) and deferred tax liabilities are recorded by applying the current rates of taxes on
their respective bases. For the recording, maintaining and writing-off of deferred tax assets, the Bank follows the
established criteria by CMN Resolution 3,059/2002, amended by Resolutions CMN No. 3,355/2006, CMN 4,192/2013
and CMN 4,441/2015 and they are supported by a study of their realizability. Tax credits resulting from the increase
of the social contribution rate from 15% to 20% are being recognized in an amount sufficient for consumption by the
end of the term of the new rate (December 31, 2018), according to Law 13,169/2015.
) Prepaid expenses i
These expenses refer to the application of payments made in advance, for which the benefits or the services will
occur in subsequent periods. Prepaid expenses are recorded at cost and amortized as incurred.
) Permanent assets j
Investments: investments in subsidiaries and associates in which the Bank has significant influence or an ownership
interest of 20% or more of the voting shares, and in other companies which are part of a group or are under common
control are accounted for by the equity method based on the Shareholders’ equity of the subsidiary or associates.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
20
In the consolidated financial statements, the subsidiaries are fully consolidated and the associates and joint ventures
are presented under the equity method.
Goodwill, the premium paid over the book value of the investment acquired due to expectations of future profitability,
is based on a financial-economic assessment which substantiate the purchase price of the business and is amortized
based on annual income projections as per the assessment. Goodwill is tested for impairment annually.
The statements of the branches and subsidiaries abroad are adapted to the prevailing accounting criteria in Brazil
and translated into Brazilian Reais using current exchange rates, in conformity with Bacen Circulars 2,397/1993 and
2,571/1995, and their impacts are recorded in the statement of income for the period.
Other permanent investments are valued at acquisition cost, less allowance for impairment losses, as applicable.
Property and equipment: property and equipment are stated at cost less depreciation, calculated using the straight-
line method at the following annual rates: buildings and improvements - 4%; vehicles - 20%; data processing systems
- 20% and others - 10% (Note 15).
Deferred: deferred assets are recorded at cost of acquisition or formation, net of accrued amortization. They are
composed mainly of restructuring costs, and the expenditures, up to September 30, 2008, with: third party properties,
as a result of opening branches, which are amortized according to rates based on rental terms, limited to 10 years;
and with the acquisition and development of information systems, which are amortized at 10% per annum (p.a.). New
values are not recorded in deferred assets, in accordance with Resolution CMN 3,617/2008. New values are not
recorded in deferred assets, in accordance with Resolution CMN 3,617/2008.
Intangible: intangible assets consist of rights over intangible assets used in the running of the Bank, including
acquired goodwill.
An asset meets the criteria for identification as an intangible asset, when it is separable, i.e, it can be separated from
the entity and sold, transferred or licensed, rented or exchanged, individually or jointly with a contract, related assets
or liabilities, regardless of the intention for use by the entity; or results from contractual rights or other legal rights,
regardless of whether these rights are transferable or separable from the entity or other rights and obligations.
Intangible assets with finite useful lives compromise: disbursements for the acquisition of rights to provide banking
services (rights to managing payrolls), amortized over the terms of contracts; goodwill paid on the acquisition of
merged company (Banco Nossa Caixa), amortized based on projections of annual results set in the economic-
financial study; software, amortized on a straight-line basis at a rate of 10% per year from the date it is available for
use. Intangible assets are adjusted by allowance for impairment losses, if applicable (Note 16). The amortization of
intangible assets is recorded in the Other administrative expenses account.
) Impairment of non-financial assets k
At the end of each reporting period, the Bank assesses whether there is any indication that a non-financial asset may
be impaired based on internal and external sources of information. If there is an indication that an asset may be
impaired, the Bank estimates the recoverable amount of the asset. The recoverable amount of the asset is the higher
of: i) its fair value less costs to sell it; and ii) its value in use.
The Bank tests, at least annually, the recoverable amount of intangible assets not yet available for use and goodwill
on acquisition of investments, regardless whether there is an indication of impairment or not. This test can be applied
any time during the year, provided it is performed at the same period every year.
If the recoverable amount of the asset is less than its carrying amount, the asset's carrying amount is reduced to its
recoverable amount through a provision for impairment, which is recognized in the Income statement.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
21
Methodologies in assessing the recoverable amount of the main non-financial assets:
Property and equipment in use
Land and buildings - in determining the recoverable amount of land and buildings, technical assessments are carried
out in accordance with the rules of the Brazilian Association of Technical Standards - ABNT.
Data processing systems - in determining the recoverability, the market value is considered, if it is available, or the
recoverable value for use in the operations of the Bank. Otherwise the calculation considers the projection of cash
flows arising from the use of each asset during its useful life, discounted to present value based on the rate of the
Interbank Deposit Certificate - CDI.
Other assets - although they are subject to impairment testing, other assets have little value individually and, given
the cost-effectiveness, the Bank does not assess the recoverable value of these items individually. However, the
Bank conducts inventory each year, and lost or damaged goods are properly derecognized.
Investments and goodwill on acquisition of investments
The methodology for calculating the recoverable amount of goodwill and investments for future profitability consists of
measuring the expected result of the investment using discounted cash flow (DCF). To measure this result, the
assumptions made are based on (i) operational projections, results and investment plans, (ii) macroeconomic
scenarios developed by the Bank, and (iii) internal methodology for calculating the cost of capital based on the
Capital Asset Pricing Model - CAPM.
Intangible
Rights to Managing Payrolls - The model for assessing the recoverable amount of the rights to managing payroll
involves monitoring contracts performance, that are calculated from the contribution margins of customer relationship
related to each contract in order to check if the projections that justified the acquisition of assets match the observed
performance. For the contracts that do not achieve the expected performance levels, a provision for impairment loss
is recognized.
Software - Software, substantially developed by the Bank in accordance with its needs, constantly receives
investments for modernization and adaptation to new technologies and business requirements. Considering that
there are no similar products on the market and considering the high cost to deploy metrics that allow calculation of
its value in use, the impairment test for software evaluates its usefulness to the company so that when software is
retired, its value is derecognized.
Goodwill on acquisition of merged company - The methodology for calculating the recoverable amount of goodwill on
the acquisition of Banco Nossa Caixa, merged into Banco do Brasil in November 2009, is to compare the value of the
goodwill paid, less the accumulated amortization, with the present value of the results of the Bank estimated for the
state of São Paulo, discounting the assets with finite useful lives. The projections are derived from the observed
results and assumptions of profitability growth for the Bank and are discounted at the rate of cost of capital calculated
using an internal methodology, based on Capital Asset Pricing Model – CAPM.
The losses recorded in the Statement of Income to adjust the recoverable value of these assets, if any, are stated in
the respective notes.
) Employee benefits l
Employee benefits related to short-term benefits for current employees are recognized on the accrual basis as the
services are provided. Post-employment benefits, comprising supplementary retirement benefits and medical
assistance for which the Bank is responsible, are assessed in accordance with criteria established by CPC 33 (R1) -
Employee benefits, approved by CVM Resolution 695/2012 (Note 26) and by the Resolution CMN 4,424/2015. The
evaluations are performed semiannually.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
22
In defined-contribution plans, the actuarial risk and the investment risk are borne by the plan participants.
Accordingly, cost accounting is based on each period's contribution amount representing the Bank's obligation.
Consequently, no actuarial calculation is required when measuring the obligation or expense, and there are neither
actuarial gains nor losses.
In defined benefit plans, the actuarial risk and the investment risk value of plan assets fall either partially or fully on
the sponsoring entity. Accordingly, cost accounting requires the measurement of plan obligations and expenses, with
a possibility of actuarial gains and losses, leading to the register of a liability when the amount of the actuarial
obligation exceeds the value of plan assets, or an asset when the amount of assets exceeds the value of plan
obligations. In the latter instance, the asset should be recorded only when there is evidence that it can effectively
reduce the contributions from the sponsor or will be refundable in the future.
The Bank recognizes the components of defined benefit cost in the period in which the actuarial valuation was
performed, in accordance with criteria established by CPC 33 (R1) -Employee benefits, as follows:
the current service cost and the net interest on the net defined benefit liability (asset) are recognized in profit or loss; and
the remeasurements of the net defined benefit liability (asset) are recognized in other comprehensive income, in the Bank’s equity, net of tax effects.
Contributions to be paid by the Bank to medical assistance plans in some cases will continue after the employee’s
retirement. Therefore, the Banks obligations are evaluated by the present actuarial value of the contributions to be
paid over the expected period in which the plan participants and beneficiaries will be covered by the plan. Such
obligations are evaluated and recognized under the same criteria used for defined benefit plans.
) Deposits and securities sold under repurchase agreements m
Deposits and securities sold under repurchase agreements are recorded at the amount of the liabilities and include,
when applicable, related charges up to the balance sheet date, on a daily pro rata die basis.
) Provisions, contingent assets and liabilities and legal obligations n
The recognition, measurement and disclosure of provisions, contingent assets and liabilities and legal obligations are
made in accordance with the criteria defined by CPC 25 – Provisions, Contingent Assets and Contingent Liabilities,
approved by CMN Resolution 3,823/2009 (Note 27).
Contingent assets are not recognized in the financial statements however when there is evidence assuring their
realization, usually represented by the final judgment of the lawsuit and by the confirmation of the capacity for its
recovery by receipt or offsetting by another receivable, are recognized as assets.
Contingent liabilities are recognized in the financial statements when, based on the opinion of legal advisor and
Management, the risk of loss of legal or administrative proceedings is considered probable, with a probable outflow of
financial resource for the settlement of the obligation and when the amounts involved are measurable with sufficient
assurance, being quantified when judicial noticed and revised monthly as follows:
Aggregated Method: cases that are similar and recurring in nature and whose values are not considered relevant.
Provisions are based on statistical data. It covers civil, tax or labor judicial proceedings (except labor claims filed by
trade unions and all proceedings classified as strategic) with probable value of award, estimated by legal advisors, up
to R$ 1 million.
Individual Method: cases considered unusual or whose value is considered relevant by our legal counsel. Provisions
are based on: the amount claimed; probability of an unfavorable decision; evidence presented; evaluation of legal
precedents; other facts raised during the process; judicial decisions made during the course of the case; and the
classification and the risk of loss of legal actions.
Contingent liabilities considered as possible losses are not recognized in the financial statements, they are disclosed
in notes, while those classified as remote do not require provisioning or disclosure.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
23
Legal obligations (fiscal and social security) are derived from tax obligations provided in the legislation, regardless of
the probability of success of lawsuits in progress, and have their amounts recognized in full in the financial
statements.
) Debt instrument issue expense o
Expenses related to transactions involving the issue of debt instruments are capitalized and presented as a reduction
of the corresponding liability. The expenses are recognized in the income statement over the term of the transaction.
) Other assets and liabilities p
Other assets are stated at their realizable amounts, including, when applicable, related income and monetary and
exchange variations on a pro rata die basis, and allowance for losses, when deemed appropriate. Other liabilities are
stated at their known and measurable amounts, plus, when applicable, related charges and monetary and exchange
variations on a pro rata die basis.
) Earnings per share q
Earnings per share is disclosed in accordance with CPC 41 – Earnings per Share, approved by Resolution
CVM 636/2010. The Bank's basic and diluted earnings per share were calculated by dividing the net profit attributable
to shareholders by the weighted average number of total common shares, excluding treasury shares (Note 23.f). The
Bank has no outstanding options, bonus of subscription nor its equivalents which provide their holders the right to
acquire shares. Thus, the basic and diluted earnings per share are equal.
5- INFORMATION BY SEGMENT
The segment information were prepared based on the criteria applied by the chief operating decision maker in
assessing performance, in deciding how to allocate resources for investment and other purposes, also considering
the regulatory environment and the similarities between goods and services. These information are prepared based
on internal management reports (Management Information), which are reviewed regularly by Management.
The accounting practices adopted in the Management Information are different from those presented in the
description of significant accounting policies of BB-Consolidated (Note 4.j) because the investments in joint ventures
are consolidated proportionally to the holdings by the Bank.
The Bank's operations are mainly made in Brazil. They are basically divided into five segments: banking,
investments, fund management, insurance (insurance, pension and capitalization) and payment methods. In addition,
the Bank participates in other business activities, such as consortium and other services, that were aggregated in
"Other Segments".
The measurement of managerial income and of managerial assets and liabilities by segment takes into account all
income and expenses as well as all assets and liabilities recorded by the companies that comprise each segment, as
presented in Note 3. There are no common income or expenses nor common assets or liabilities allocated between
the segments, for any distribution criteria.
Transactions between segments are eliminated in the column “Intersegment transactions”. They are conducted under
terms and rates consistent with those applied with third parties, when applicable. These transactions do not involve
payment risks.
Revenues from transactions with a single customer does not amount to ten percent or more of the Bank’s revenues.
) Banking segment a
Responsible for the most significant portion of Banco do Brasil results, predominantly from operations in Brazil, this
segment involves a large diversity of products and services, such as deposits, loans and services that are made
available to customers by means of a wide variety of distribution channels, located in the country and abroad.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
24
The operations of the banking segment include business with the retail, wholesale and government markets, carried
out through the branch network and customer service teams, and business with micro-entrepreneurs and the with the
low income population, undertaken through banking correspondents.
) Investments segment b
Responsible for operations in the domestic capital markets, being active in the intermediation and distribution of
debts in the primary and secondary markets, as well as being responsible for equity investments and the rendering of
some financial services.
The income from financial intermediation of this segment is a result of the revenues accrued on investments in
securities less the interest expenses on funding from third parties. The principal equity investments are those in the
associates and subsidiary companies. Financial service fee income is derived from economic/financial advisory
services and the underwriting of fixed and variable income.
) Fund management segment c
Responsible for operations inherent to the purchase, sale and custody of securities, portfolio management, and
management of investment funds and clubs. Revenues mainly derived from commissions and management fees
charged to investors for services rendered.
) Insurance, pension, and capitalization segment d
In this segment, the products and services offered are related to life, property and automobile insurance,
complementary private pension plans and capitalization plans.
Income is derived mainly from revenues from insurance premiums issued, contributions for private pension plans,
capitalization bonds and investments in securities, net of commercialization expenses, technical provisions and
expenses related to benefits and redemptions.
) Payment methods segment e
This segment is responsible for the funding, transmission, processing and settlement of operations via electronic
means.
Revenues are derived mainly from commissions and management fees charged to commercial and banking
establishments for the services rendered, as well as income from rent, installation and maintenance of electronic
terminals.
) Other segments f
Other segments comprise the consortium and other services segments, which have been aggregated as they are not
individually significant.
Their revenues are originated mainly from rendering services not covered in previous segments, such as: credit
recovery; consortium administration; development, manufacture, commercialization, rent and integration of digital
electronic systems and equipment, peripherals, programs, inputs and computing supplies; and intermediation of air
tickets, lodging and organization of events.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
25
) Breakdown of managerial income by segment g
1st quarter/2016
Banking Investments Fund Menagement Insurance, pension and capitalization
Payment methods Other Segments Intersegment transactions
Management Information
Income from financial intermediation 35,810,189 43,953 20,069 1,730,122 87,007 24,701 (126,013) 37,590,028
Income from loans and leases 22,243,519 -- -- -- -- -- (18,385) 22,225,134
Loans and discounted securities 13,339,385 -- -- -- -- -- (268) 13,339,117
Financing 6,309,178 -- -- -- -- -- -- 6,309,178
Leasing 117,923 -- -- -- -- -- -- 117,923
Other 2,477,033 -- -- -- -- -- (18,117) 2,458,916
Securities 11,804,851 44,364 20,069 32,810 87,007 24,616 (129,250) 11,884,467
Interbank investments 10,495,465 297 19,929 -- -- 9,636 (129,558) 10,395,769
Fixed-income securities 3,624,177 3,013 716 32,810 87,007 11,497 308 3,759,528
Variable-income securities (2,314,791) 41,054 (576) -- -- 3,483 -- (2,270,830)
Derivative financial instruments (401,350) (411) -- -- -- -- -- (401,761)
Income from exchange operations and Compulsory deposits 1,960,550 -- -- -- -- 85 (88) 1,960,547
Operations of sale and transfer of financial assets 202,619 -- -- -- -- -- -- 202,619
Financial results from insurance, pension and capitalization operations -- -- -- 1,697,312 -- -- 21,710 1,719,022
Expenses from financial intermediation (28,097,523) (103,909) (4) (1,166,932) -- (30,135) 213,141 (29,185,362)
Expenses of market funding (24,970,499) (99,776) -- -- -- (30,276) 187,938 (24,912,613)
Deposits (6,471,385) (99,776) -- -- -- -- 106,896 (6,464,265)
Securities sold under repurchase agreements (11,347,428) -- -- -- -- -- 81,015 (11,266,413)
Acceptance and issuance of securities (6,278,641) -- -- -- -- (27,956) 27 (6,306,570)
Subordinated debt abroad and Equity and debt hybrid securities (687,573) -- -- -- -- -- -- (687,573)
Other (185,472) -- -- -- -- (2,320) -- (187,792)
Loans, assignments, onlending and leases 4,094,748 -- -- -- -- -- 25,203 4,119,951
Allowance/Reversal for loan losses (7,212,935) (4,133) (4) -- -- 141 -- (7,216,931)
Operations of sale and transfer of financial assets (8,837) -- -- -- -- -- -- (8,837)
Interest and inflation adjustment of technical reserves -- -- -- (1,166,932) -- -- -- (1,166,932)
Other Income 7,552,168 278,204 391,607 1,717,935 1,510,286 615,698 (585,042) 11,480,856
Income from service fees 2,522,675 154,963 285,688 546,946 1,274,670 342,065 (344,190) 4,782,817
Card income 41,551 -- -- -- 1,253,940 -- -- 1,295,491
Fund Management 575,421 -- 249,448 322,641 -- 480 (1,856) 1,146,134
Insurance, pension and capitalization 31,836 -- -- 215,760 -- -- -- 247,596
Other 1,873,867 154,963 36,240 8,545 20,730 341,585 (342,334) 2,093,596
Income from fees, rates and commissions 1,895,733 13,269 102,436 -- -- -- -- 2,011,438
Equity in the earnings/(loss) of subsidiaries and associates (1,249) (4,988) -- 848 (37,969) 61 -- (43,297)
Results from insurance, pension plan and capitalization operations -- -- -- 1,086,593 -- -- 52,033 1,138,626
Other 3,135,009 114,960 3,483 83,548 273,585 273,572 (292,885) 3,591,272
Other expenses (13,360,760) (140,533) (76,285) (658,377) (905,010) (369,891) 497,914 (15,012,942)
Personnel expenses (5,213,804) (17,977) (21,120) (138,544) (77,276) (89,002) 2,145 (5,555,578)
Other administrative expenses (2,955,525) (15,514) (12,620) (175,098) (145,127) (74,422) 349,115 (3,029,191)
Amortization (811,638) (27,310) -- (28,324) (37,873) (555) -- (905,700)
Depreciation (281,568) (859) -- (4,733) (4,049) (2,509) -- (293,718)
Tax expenses (1,266,956) (14,269) (27,059) (175,483) (146,978) (52,835) -- (1,683,580)
Other (2,831,269) (64,604) (15,486) (136,195) (493,707) (150,568) 146,654 (3,545,175)
Profit before tax and profit sharing 1,904,074 77,715 335,387 1,622,748 692,283 240,373 -- 4,872,580
Income tax and social contribution (663,484) (28,457) (150,729) (641,009) (240,155) (65,985) -- (1,789,819)
Profit sharing (328,678) -- (461) (4,811) 26 (310) -- (334,234)
Non-controlling Interests (67,618) -- -- (321,858) -- -- -- (389,476)
Net Income 844,294 49,258 184,197 655,070 452,154 174,078 -- 2,359,051
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
26
1st quarter/2015
Banking Investments Fund Menagement Insurance,
pension and capitalization
Payment methods Other Segments Intersegment transactions
Management Information
Income from financial intermediation 49,130,848 40,346 19,225 1,203,928 27,326 37,649 (36,990) 50,422,332
Income from loans and leases 29,577,109 -- -- -- -- -- 2,289 29,579,398
Loans and Discounted Securities 12,923,363 -- -- -- -- -- (256) 12,923,107
Financing 13,231,354 -- -- -- -- -- (49) 13,231,305
Leasing 257,455 -- -- -- -- -- -- 257,455
Other 3,164,937 -- -- -- -- -- 2,594 3,167,531
Securities 16,905,993 40,660 19,225 3,050 27,326 37,228 (60,174) 16,973,308
Interbank Investments 8,843,157 464 15,509 -- -- 7,261 (86,808) 8,779,583
Fixed-income securities 3,950,650 2,169 4,443 3,050 27,326 1,769 26,634 4,016,041
Variable-income securities 4,112,186 38,027 (727) -- -- 28,198 -- 4,177,684
Derivative financial instruments 903,505 (314) -- -- -- 179 -- 903,370
Income from exchange operations and Compulsory deposits 1,614,447 -- -- -- -- 242 (204) 1,614,485
Operations of sale and transfer of financial assets 129,794 -- -- -- -- -- -- 129,794
Financial results from insurance, pension and capitalization operations -- -- -- 1,200,878 -- -- 21,099 1,221,977
Expenses from financial intermediation (43,157,206) (67,631) (15) (753,155) (130) (8,968) 125,120 (43,861,985)
Expenses of market funding (23,602,189) (63,574) -- -- -- (9,994) 119,227 (23,556,530)
Deposits (7,888,189) (63,574) -- -- -- -- 67,359 (7,884,404)
Securities sold under repurchase agreements (9,539,661) -- -- -- -- -- 75,189 (9,464,472)
Acceptance and issuance of securities (5,339,533) -- -- -- -- (9,994) 37 (5,349,490)
Subordinated debt abroad and Equity and debt hybrid securities (653,273) -- -- -- -- -- -- (653,273)
Other (181,533) -- -- -- -- -- (23,358) (204,891)
Loans, assignments, onlending and leases (13,588,318) -- -- -- -- -- 5,893 (13,582,425)
Allowance/Reversal for loan losses (5,945,756) (4,057) (15) -- (130) 1,026 -- (5,948,932)
Operations of sale and transfer of financial assets (20,943) -- -- -- -- -- -- (20,943)
Interest and inflation adjustment of technical reserves -- -- -- (753,155) -- -- -- (753,155)
Other Income 7,098,433 305,767 350,432 1,706,657 7,029,458 550,476 (540,651) 16,500,572
Income from service fees 2,740,474 204,558 260,179 476,888 989,726 338,634 (356,240) 4,654,219
Card income 450,245 -- -- -- 945,451 -- -- 1,395,696
Fund Management 518,173 -- 226,884 258,401 -- -- (1,905) 1,001,553
Insurance, pension and capitalization 34,601 -- -- 217,016 -- -- -- 251,617
Other 1,737,455 204,558 33,295 1,471 44,275 338,634 (354,335) 2,005,353
Income from fees, rates and commissions 1,558,689 8,684 87,873 -- -- -- -- 1,655,246
Equity in the earnings/(loss) of subsidiaries and associates (4,715) (1,649) -- 786 241 5,637 -- 300
Results from insurance, pension plan and capitalization operations -- -- -- 1,094,030 -- -- 59,448 1,153,478
Other 2,803,985 94,174 2,380 134,953 6,039,491 206,205 (243,859) 9,037,329
Other expenses (13,073,173) (140,639) (70,166) (620,171) (1,300,046) (336,499) 452,521 (15,088,173)
Personnel expenses (4,942,156) (15,470) (19,423) (130,696) (68,188) (78,270) 1,946 (5,252,257)
Other administrative expenses (2,973,176) (18,012) (12,903) (176,604) (88,300) (63,092) 325,221 (3,006,866)
Amortization (762,834) (23,759) -- (18,802) (22,901) (703) -- (828,999)
Depreciation (272,054) (770) -- (4,756) (6,532) (1,989) -- (286,101)
Tax expenses (967,546) (20,103) (24,286) (146,925) (633,909) (52,787) -- (1,845,556)
Other (3,155,407) (62,525) (13,554) (142,388) (480,216) (139,658) 125,354 (3,868,394)
Profit before tax and profit sharing (1,098) 137,843 299,476 1,537,259 5,756,608 242,658 -- 7,972,746
Income tax and social contribution 1,774,847 (52,626) (118,756) (559,717) (1,952,469) (75,462) -- (984,183)
Profit sharing (752,041) -- (389) (10,698) (746) (1,435) -- (765,309)
Non-controlling Interests (84,678) -- -- (320,221) -- (5) -- (404,904)
Net Income 937,030 85,217 180,331 646,623 3,803,393 165,756 -- 5,818,350
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
27
) Breakdown of managerial assets and liabilities by segment h
Mar 31, 2016
Banking Investments Fund Menagement Insurance,
pension and capitalization
Payment methods Other Segments Intersegment transactions
Management Information
Current assets and long-term receivables 1,413,320,041 2,332,928 812,015 151,368,858 11,817,545 6,842,337 (13,233,936) 1,573,259,788
Cash and Cash Equivalents 22,338,269 14,609 1,586 238,666 143,614 10,219 (24,801) 22,722,162
Interbank Investments 372,950,724 5,694 402,830 1,162,527 1,650,247 285,746 (6,594,714) 369,863,054
Securities 128,637,025 1,507,527 7,722 136,025,095 2,934,824 985,427 (2,059,758) 268,037,862
Trading securities 7,441,115 65,603 -- 127,382,838 102 985,427 (664,274) 135,210,811
Securities available for sale 119,942,885 1,441,924 17 31,198 -- -- (1,395,484) 120,020,540
Securities held to maturity 1,253,025 -- 7,705 8,611,059 2,934,722 -- -- 12,806,511
Derivative financial instruments 5,027,876 650 -- -- 31,792 -- (1,366) 5,058,952
Interbank and interdepartmental accounts 70,659,907 -- -- -- -- -- -- 70,659,907
Loan Operations and Leasing transactions, net of allowance for losses 632,512,757 -- -- -- 7 2,953,036 (3,010,502) 632,455,298
Loans and discounted securities 245,379,727 -- -- -- -- 2,953,036 (2,961,829) 245,370,934
Financing 421,775,671 -- -- -- -- -- (48,673) 421,726,998
Other receivables with loan characteristics 320,639 -- -- -- -- -- -- 320,639
Leasing 835,371 -- -- -- 7 -- -- 835,378
Allowance for loan losses (35,798,651) -- -- -- -- -- -- (35,798,651)
Loan operations (35,730,708) -- -- -- -- -- -- (35,730,708)
Other receivables and leasing transactions (67,943) -- -- -- -- -- -- (67,943)
Other receivables 180,392,054 786,775 398,683 9,541,937 7,031,066 2,545,277 (1,541,863) 199,153,929
Other assets 801,429 17,673 1,194 4,400,633 25,995 62,632 (932) 5,308,624
Permanent assets 30,035,945 4,802,585 23,682 718,691 1,079,656 353,065 (16,678,007) 20,335,617
Investments 14,184,565 4,770,445 23,682 155,622 702,126 290,949 (16,678,007) 3,449,382
Investments in subsidiaries and associates 14,010,599 3,465,234 -- 108,049 726,191 -- (16,678,007) 1,632,066
Other investments 246,907 1,309,962 23,700 60,684 1,265 290,949 -- 1,933,467
Accumulated Impairment (72,941) (4,751) (18) (13,111) (25,330) -- -- (116,151)
Property and Equipment 7,152,334 20,549 -- 139,954 228,102 56,078 -- 7,597,017
Intangible 8,677,308 11,591 -- 423,115 149,428 6,038 -- 9,267,480
Deferred 21,738 -- -- -- -- -- -- 21,738
TOTAL ASSETS 1,443,355,986 7,135,513 835,697 152,087,549 12,897,201 7,195,402 (29,911,943) 1,593,595,405
Total Liabilities 1,360,756,972 3,926,183 519,872 144,804,064 6,210,239 3,687,202 (10,937,881) 1,508,966,651
Deposits 455,568,369 3,412,963 -- 394 -- -- (3,651,856) 455,329,870
Securities sold under repurchase agreements 377,290,100 -- -- -- -- -- (5,514,532) 371,775,568
Acceptance and issuance of securities 186,579,543 -- -- -- 1,406,377 3,145,632 -- 191,131,552
Interbank and interdepartmental accounts 6,381,118 -- -- -- -- -- -- 6,381,118
Borrowings 26,827,121 154,951 -- -- 1,335,922 61,071 (57,450) 28,321,615
Onlendings 89,869,445 -- -- -- -- -- -- 89,869,445
Derivative financial instruments 5,019,457 715 -- -- -- -- (1,365) 5,018,807
Other liabilities 213,221,819 357,554 519,872 144,803,670 3,467,940 480,499 (1,712,678) 361,138,676
Technical provisions for insurance, pension plans and capitalization -- -- -- 137,848,805 -- -- (11,112) 137,837,693
Subordinated debts and equity and debt hybrid securities 61,981,467 -- -- -- -- -- -- 61,981,467
Other 151,240,352 357,554 519,872 6,954,865 3,467,940 480,499 (1,701,566) 161,319,516
DEFERRED INCOME 473,895 -- -- -- -- -- (932) 472,963
SHAREHOLDERS' EQUITY 82,125,119 3,209,330 315,825 7,283,485 6,686,962 3,508,200 (18,973,130) 84,155,791
TOTAL LIABILITIES 1,443,355,986 7,135,513 835,697 152,087,549 12,897,201 7,195,402 (29,911,943) 1,593,595,405
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
28
Dec 31, 2015
Banking Investments Fund Menagement Insurance,
pension and capitalization
Payment methods Other Segments Intersegment transactions
Management Information
Current assets and long-term receivables 1,409,073,850 2,329,479 1,240,081 146,093,675 12,747,355 7,173,216 (15,830,164) 1,562,827,492
Cash and Cash Equivalents 18,133,602 7,929 77 180,153 173,296 5,501 (142,051) 18,358,507
Interbank Investments 361,260,988 5,516 910,185 1,668,826 525,161 377,959 (6,287,566) 358,461,069
Securities 124,492,021 1,426,399 16,685 129,887,846 3,901,426 621,833 (2,170,536) 258,175,674
Trading securities 9,306,703 85,061 9,638 114,352,196 325,744 467,560 (270,266) 124,276,636
Securities available for sale 111,259,972 1,341,338 21 3,417,303 1,055,790 154,273 (1,900,184) 115,328,513
Securities held to maturity 3,925,346 -- 7,026 12,118,347 2,519,892 -- (86) 18,570,525
Derivative financial instruments 4,637,397 1,278 -- -- 61,268 -- (1,873) 4,698,070
Interbank and interdepartmental accounts 66,042,169 -- -- -- -- -- -- 66,042,169
Loan Operations and Leasing transactions, net of allowance for losses 650,686,508 -- -- -- -- 3,212,445 (3,284,977) 650,613,976
Loans and discounted securities 255,485,376 -- -- -- -- 3,212,445 (3,222,024) 255,475,797
Financing 428,031,499 -- -- -- -- -- (62,953) 427,968,546
Other receivables with loan characteristics 333,291 -- -- -- -- -- -- 333,291
Leasing 971,490 -- -- -- -- -- -- 971,490
Allowance for loan losses (34,135,148) -- -- -- -- -- -- (34,135,148)
Loan operations (34,072,735) -- -- -- -- -- -- (34,072,735)
Other receivables and leasing transactions (62,413) -- -- -- -- -- -- (62,413)
Other receivables 183,060,716 868,725 312,199 10,574,438 8,071,210 2,891,602 (3,942,715) 201,836,175
Other assets 760,449 19,632 935 3,782,412 14,994 63,876 (446) 4,641,852
Permanent assets 29,586,286 4,494,814 23,682 704,052 1,078,740 360,083 (15,036,138) 21,211,519
Investments 12,900,909 4,461,766 23,682 250,811 550,904 296,361 (15,036,138) 3,448,295
Investments in subsidiaries and associates 12,718,420 3,209,678 1 196,509 508,230 -- (15,036,138) 1,596,700
Other investments 255,374 1,256,839 23,700 63,803 42,982 296,361 -- 1,939,059
Accumulated Impairment (72,885) (4,751) (19) (9,501) (308) -- -- (87,464)
Property and Equipment 7,314,359 21,710 -- 114,139 358,915 57,212 -- 7,866,335
Intangible 9,347,037 11,338 -- 339,102 168,921 6,510 -- 9,872,908
Deferred 23,981 -- -- -- -- -- -- 23,981
TOTAL ASSETS 1,438,660,136 6,824,293 1,263,763 146,797,727 13,826,095 7,533,299 (30,866,302) 1,584,039,011
Total Liabilities 1,358,397,939 3,937,451 1,132,134 140,402,507 7,536,739 4,136,328 (13,522,313) 1,502,020,785
Deposits 465,860,141 3,014,721 -- 386 462 -- (3,557,918) 465,317,792
Securities sold under repurchase agreements 352,869,871 -- -- -- -- -- (5,393,427) 347,476,444
Acceptance and issuance of securities 197,760,042 788 -- -- 479,284 3,447,244 -- 201,687,358
Interbank and interdepartmental accounts 5,511,011 -- -- -- -- -- -- 5,511,011
Borrowings 31,574,204 101,068 -- -- 2,355,094 48,073 (72,511) 34,005,928
Onlendings 91,908,322 -- -- -- -- -- -- 91,908,322
Derivative financial instruments 4,747,983 251 -- -- -- 4 (1,872) 4,746,366
Other liabilities 208,166,365 820,623 1,132,134 140,402,121 4,701,899 641,007 (4,496,585) 351,367,564
Technical provisions for insurance, pension plans and capitalization -- -- -- 131,546,178 -- -- (14,032) 131,532,146
Subordinated debts and equity and debt hybrid securities 64,907,232 -- -- -- -- -- -- 64,907,232
Other 143,259,133 820,623 1,132,134 8,855,943 4,701,899 641,007 (4,482,553) 154,928,186
DEFERRED INCOME 482,500 -- -- -- -- -- (447) 482,053
SHAREHOLDERS' EQUITY 79,779,697 2,886,842 131,629 6,395,220 6,289,356 3,396,971 (17,343,542) 81,536,173
TOTAL LIABILITIES 1,438,660,136 6,824,293 1,263,763 146,797,727 13,826,095 7,533,299 (30,866,302) 1,584,039,011
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
29
Mar 31, 2015
Banking Investments Fund Menagement Insurance,
pension and capitalization
Payment methods Other Segments Intersegment transactions
Management Information
Current assets and long-term receivables 1,369,887,099 2,183,880 573,736 120,709,265 14,362,110 4,127,382 (10,032,452) 1,501,811,020
Cash and Cash Equivalents 16,167,215 23,868 866 190,659 189,786 2,544 (38,334) 16,536,604
Interbank Investments 353,533,246 5,013 360,955 1,621,110 77,356 306,023 (4,245,527) 351,658,176
Securities 121,353,586 1,420,943 26,971 106,419,976 3,598,542 498,798 (1,074,114) 232,244,702
Trading securities 11,670,453 69,522 20,417 92,672,701 892,701 398,355 (306,828) 105,417,321
Securities available for sale 105,515,214 1,351,421 27 2,694,351 15,762 100,443 (519,291) 109,157,927
Securities held to maturity 4,167,919 -- 6,527 11,052,924 2,690,079 -- (247,995) 17,669,454
Derivative financial instruments 3,754,142 1,209 -- -- -- 366 (1,227) 3,754,490
Interbank and interdepartmental accounts 64,682,415 -- -- -- -- -- -- 64,682,415
Loan Operations and Leasing transactions, net of allowance for losses 631,638,959 -- -- -- -- 1,610,773 (1,707,552) 631,542,180
Loans and discounted securities 250,439,283 -- -- -- -- 1,610,773 (1,617,081) 250,432,975
Financing 407,564,291 -- -- -- -- -- (48,741) 407,515,550
Other receivables with loan characteristics 348,603 -- -- -- -- -- (41,730) 306,873
Leasing 1,054,153 -- -- -- -- -- -- 1,054,153
Allowance for loan losses (27,767,371) -- -- -- -- -- -- (27,767,371)
Loan operations (27,725,380) -- -- -- -- -- -- (27,725,380)
Other receivables and leasing transactions (41,991) -- -- -- -- -- -- (41,991)
Other receivables 177,889,505 700,706 184,007 9,699,687 10,474,818 1,657,645 (2,964,761) 197,641,607
Other assets 868,031 32,141 937 2,777,833 21,608 51,233 (937) 3,750,846
Permanent assets 30,605,113 4,064,553 22,088 745,689 1,068,643 298,580 (14,949,982) 21,854,684
Investments 13,306,041 4,035,487 22,088 271,918 645,108 253,231 (14,948,961) 3,584,912
Investments in subsidiaries and associates 13,153,130 2,845,232 -- 220,985 536,758 -- (14,948,794) 1,807,311
Other investments 223,847 1,195,006 22,107 60,184 119,141 253,231 (167) 1,873,349
Accumulated Impairment (70,936) (4,751) (19) (9,251) (10,791) -- -- (95,748)
Property and Equipment 7,052,846 19,721 -- 81,375 311,910 38,265 -- 7,504,117
Intangible 10,211,101 9,345 -- 392,396 109,724 7,084 (1,021) 10,728,629
Deferred 35,125 -- -- -- 1,901 -- -- 37,026
TOTAL ASSETS 1,400,492,212 6,248,433 595,824 121,454,954 15,430,753 4,425,962 (24,982,434) 1,523,665,704
Total Liabilities 1,318,270,716 3,054,396 283,859 114,935,502 9,779,463 2,446,933 (9,137,012) 1,439,633,857
Deposits 468,494,486 2,001,958 -- 435 -- -- (2,490,884) 468,005,995
Securities sold under repurchase agreements 341,891,500 -- -- -- -- -- (2,984,771) 338,906,729
Acceptance and issuance of securities 181,401,383 1,398 -- -- -- 1,925,802 -- 183,328,583
Interbank and interdepartmental accounts 6,980,664 -- -- -- -- -- -- 6,980,664
Borrowings 27,657,721 67,073 -- -- 2,330,576 6,307 (904,744) 29,156,933
Onlendings 92,615,260 -- -- -- -- -- -- 92,615,260
Derivative financial instruments 5,633,347 18 -- -- -- -- (1,228) 5,632,137
Other liabilities 193,596,355 983,949 283,859 114,935,067 7,448,887 514,824 (2,755,385) 315,007,556
Technical provisions for insurance, pension plans and capitalization -- -- -- 108,989,098 -- -- (7,396) 108,981,702
Subordinated debts and equity and debt hybrid securities 59,247,640 -- -- -- -- -- (169,517) 59,078,123
Other 134,348,715 983,949 283,859 5,945,969 7,448,887 514,824 (2,578,472) 146,947,731
DEFERRED INCOME 434,744 -- -- -- -- -- (936) 433,808
SHAREHOLDERS' EQUITY 81,786,752 3,194,037 311,965 6,519,452 5,651,290 1,979,029 (15,844,486) 83,598,039
TOTAL LIABILITIES 1,400,492,212 6,248,433 595,824 121,454,954 15,430,753 4,425,962 (24,982,434) 1,523,665,704
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
30
) Reconciliation of managerial income by segment with the accounting income i
1st quarter/2016
Management Information
Adjustments
BB Consolidated Banking Investments Fund Menagement
Insurance, pension and capitalization
Payment methods Other Segments Intersegment transactions
Income from financial intermediation 37,590,028 (1,551,592) -- -- (1,701,045) 35,071 (4,893) (22,364) 34,345,205
Income from loans and leases 22,225,134 (1,717,972) -- -- -- -- -- -- 20,507,162
Loans and Discounted Securities 13,339,117 (363,162) -- -- -- -- -- -- 12,975,955
Financing 6,309,178 (1,221,514) -- -- -- -- -- -- 5,087,664
Leasing 117,923 (23,076) -- -- -- -- -- -- 94,847
Other 2,458,916 (110,220) -- -- -- -- -- -- 2,348,696
Securities 11,884,467 (373,594) -- -- (3,733) 35,071 (4,893) (654) 11,536,664
Interbank Investments 10,395,769 (203,105) -- -- -- -- (7) -- 10,192,657
Fixed-income securities 3,759,528 (165,475) -- -- (3,733) 35,071 (1,403) (654) 3,623,334
Variable-income securities (2,270,830) (5,014) -- -- -- -- (3,483) -- (2,279,327)
Derivative financial instruments (401,761) 98,966 -- -- -- -- -- -- (302,795)
Income from exchange operations and Compulsory deposits 1,960,547 59,906 -- -- -- -- -- -- 2,020,453
Operations of sale and transfer of financial assets 202,619 381,102 -- -- -- -- -- -- 583,721
Financial results from insurance, pension and capitalization operations 1,719,022 -- -- -- (1,697,312) -- -- (21,710) --
Expenses from financial intermediation (29,185,362) 1,123,260 -- -- 1,166,932 -- -- (8,434) (26,903,604)
Expenses of market funding (24,912,613) 976,966 -- -- -- -- -- (8,434) (23,944,081)
Deposits (6,464,265) 62,357 -- -- -- -- -- (6,570) (6,408,478)
Securities sold under repurchase agreements (11,266,413) 514,928 -- -- -- -- -- (1,864) (10,753,349)
Acceptance and issuance of securities (6,306,570) 398,610 -- -- -- -- -- -- (5,907,960)
Subordinated debt abroad and Equity and debt hybrid securities (687,573) -- -- -- -- -- -- -- (687,573)
Other (187,792) 1,071 -- -- -- -- -- -- (186,721)
Loans, assignments, onlending and leases 4,119,951 56,392 -- -- -- -- -- -- 4,176,343
Allowance/Reversal for loan losses (7,216,931) 89,902 -- -- -- -- -- -- (7,127,029)
Operations of sale and transfer of financial assets (8,837) -- -- -- -- -- -- -- (8,837)
Interest and inflation adjustment of technical reserves (1,166,932) -- -- -- 1,166,932 -- -- -- --
Other Income 11,480,856 (494,711) 189,816 -- (429,955) (1,346,534) (5,150) 114,081 9,508,403
Income from service fees 4,782,817 (58,932) -- -- 59,083 (1,274,542) (168) 110,857 3,619,115
Card income 1,295,491 (7,932) -- -- -- (1,253,940) -- -- 33,619
Fund Management 1,146,134 (11,807) -- -- (322,641) -- -- 1,856 813,542
Insurance, pension and capitalization 247,596 59,382 -- -- 390,269 -- -- -- 697,247
Other 2,093,596 (98,575) -- -- (8,545) (20,602) (168) 109,001 2,074,707
Income from fees, rates and commissions 2,011,438 (72,780) -- -- -- -- -- -- 1,938,658
Equity in the earnings/(loss) of subsidiaries and associates (43,297) 46,274 294,253 -- 598,897 127,998 (61) -- 1,024,064
Results from insurance, pension plan and capitalization operations 1,138,626 -- -- -- (1,086,593) -- -- (52,033) --
Other 3,591,272 (409,273) (104,437) -- (1,342) (199,990) (4,921) 55,257 2,926,566
Other expenses (15,012,942) 816,591 60,353 -- 486,795 878,530 3,637 (83,283) (12,850,319)
Personnel expenses (5,555,578) 172,154 4,729 -- 126,490 76,537 -- -- (5,175,668)
Other administrative expenses (3,029,191) 132,957 3,787 -- 125,427 144,823 1,072 (62,280) (2,683,405)
Amortization (905,700) 3,154 392 -- 26,036 37,873 -- -- (838,245)
Depreciation (293,718) 3,853 859 -- 4,685 4,049 -- -- (280,272)
Tax expenses (1,683,580) 48,782 1,938 -- 110,600 135,029 66 -- (1,387,165)
Other (3,545,175) 455,691 48,648 -- 93,557 480,219 2,499 (21,003) (2,485,564)
Profit before tax and profit sharing 4,872,580 (106,452) 250,169 -- (477,273) (432,933) (6,406) -- 4,099,685
Income tax and social contribution (1,789,819) 111,360 (487) -- 452,383 181,288 434 -- (1,044,841)
Profit sharing (334,234) 23,132 -- -- 4,811 (26) -- -- (306,317)
Non-controlling Interests (389,476) -- -- -- -- -- -- -- (389,476)
Net Income 2,359,051 28,040 249,682 -- (20,079) (251,671) (5,972) -- 2,359,051
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
31
1st quarter/2015
Management Information
Adjustments
BB Consolidated Banking Investments
Fund Menagement
Insurance, pension and capitalization
Payment methods Other Segments Intersegment transactions
Income from financial intermediation 50,422,332 (2,496,055) -- -- (1,203,928) 11,025 (29,188) (48,195) 46,655,991
Income from loans and leases 29,579,398 (1,868,064) -- -- -- -- -- 46 27,711,380
Loans and Discounted Securities 12,923,107 (328,255) -- -- -- -- 5,892 (5,892) 12,594,852
Financing 13,231,305 (988,571) -- -- -- -- -- 49 12,242,783
Leasing 257,455 (144,477) -- -- -- -- -- -- 112,978
Other 3,167,531 (406,761) -- -- -- -- (5,892) 5,889 2,760,767
Securities 16,973,308 (562,335) -- -- (3,050) 11,025 (29,188) (27,142) 16,362,618
Interbank Investments 8,779,583 (153,630) -- -- -- -- -- -- 8,625,953
Fixed-income securities 4,016,041 (404,363) -- -- (3,050) 11,025 (990) (27,142) 3,591,521
Variable-income securities 4,177,684 (4,342) -- -- -- -- (28,198) -- 4,145,144
Derivative financial instruments 903,370 (291,419) -- -- -- -- -- -- 611,951
Income from exchange operations and Compulsory deposits 1,614,485 (118,816) -- -- -- -- -- -- 1,495,669
Operations of sale and transfer of financial assets 129,794 344,579 -- -- -- -- -- -- 474,373
Financial results from insurance, pension and capitalization operations
1,221,977 -- -- -- (1,200,878) -- -- (21,099) --
Expenses from financial intermediation (43,861,985) 2,146,430 -- -- 753,155 130 (25) 20,520 (40,941,775)
Expenses of market funding (23,556,530) 1,576,590 -- -- -- -- -- 20,520 (21,959,420)
Deposits (7,884,404) 53,071 -- -- -- -- -- (3,059) (7,834,392)
Securities sold under repurchase agreements (9,464,472) 394,388 -- -- -- -- -- 218 (9,069,866)
Acceptance and issuance of securities (5,349,490) 1,127,557 -- -- -- -- -- -- (4,221,933)
Subordinated debt abroad and Equity and debt hybrid securities (653,273) -- -- -- -- -- -- -- (653,273)
Other (204,891) 1,574 -- -- -- -- -- 23,361 (179,956)
Loans, assignments, onlending and leases (13,582,425) 211,291 -- -- -- -- -- -- (13,371,134)
Allowance/Reversal for loan losses (5,948,932) 344,341 -- -- -- 130 (25) -- (5,604,486)
Operations of sale and transfer of financial assets (20,943) 14,208 -- -- -- -- -- -- (6,735)
Interest and inflation adjustment of technical reserves (753,155) -- -- -- 753,155 -- -- -- --
Other Income 16,500,572 (308,617) 194,706 -- (390,752) (1,166,318) (7,097) 57,039 14,879,533
Income from service fees 4,654,219 (54,416) -- -- 114,793 (989,616) (135) 109,170 3,834,015
Card income 1,395,696 (6,529) -- -- -- (945,451) -- -- 443,716
Fund Management 1,001,553 (11,118) -- (190) (258,401) -- -- 1,905 733,749
Insurance, pension and capitalization 251,617 69,509 -- -- 374,665 -- -- -- 695,791
Other 2,005,353 (106,278) -- 190 (1,471) (44,165) (135) 107,265 1,960,759
Income from fees, rates and commissions 1,655,246 (66,179) -- -- -- -- -- -- 1,589,067
Equity in the earnings/(loss) of subsidiaries and associates 300 68,423 264,514 -- 604,685 65,157 (5,637) -- 997,442
Results from insurance, pension plan and capitalization operations
1,153,478 -- -- -- (1,094,030) -- -- (59,448) --
Other 9,037,329 (256,445) (69,808) -- (16,200) (241,859) (1,325) 7,317 8,459,009
Other expenses (15,088,173) 715,477 56,045 -- 432,871 761,287 966 (29,364) (13,150,891)
Personnel expenses (5,252,257) 158,090 4,340 -- 121,345 67,617 -- -- (4,900,865)
Other administrative expenses (3,006,866) 133,005 5,888 -- 118,175 88,186 580 (16,933) (2,677,965)
Amortization (828,999) 2,428 295 -- 16,047 22,901 -- -- (787,328)
Depreciation (286,101) 2,507 770 -- 4,739 6,532 -- -- (271,553)
Tax expenses (1,845,556) 58,350 1,821 -- 101,359 97,682 307 -- (1,586,037)
Other (3,868,394) 361,097 42,931 -- 71,206 478,369 79 (12,431) (2,927,143)
Profit before tax and profit sharing 7,972,746 57,235 250,751 -- (408,654) (393,876) (35,344) -- 7,442,858
Income tax and social contribution (984,183) (40,805) 2,649 -- 379,917 150,813 (457) -- (492,066)
Profit sharing (765,309) 26,327 -- -- 10,698 746 -- -- (727,538)
Non-controlling Interests (404,904) -- -- -- -- -- -- -- (404,904)
Net Income 5,818,350 42,757 253,400 -- (18,039) (242,317) (35,801) -- 5,818,350
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
32
) Reconciliation of managerial assets and liabilities by segment with the accounting assets and liabilities j
Mar 31, 2016
Management Information
Adjustments
BB Consolidated Banking Investments
Fund Menagement
Insurance, pension and capitalization
Payment methods Other Segments Intersegment transactions
Current assets and long-term receivables 1,573,259,788 (45,221,882) (200,877) -- (148,343,958) (7,765,333) (261,443) 2,038,462 1,373,504,757
Cash and Cash Equivalents 22,722,162 (104,269) (56) -- (238,638) (143,587) (404) 9,630 22,244,838
Interbank Investments 369,863,054 (7,759,817) -- -- (129,809) (1,080,534) (172) 909,095 361,801,817
Securities 268,037,862 (15,558,688) (50,891) -- (135,362,207) 446,966 (146,837) 687,964 118,054,169
Trading securities 135,210,811 (900,005) (2,215) -- (126,719,950) -- (146,837) 663,226 8,105,030
Securities available for sale 120,020,540 (13,764,330) (48,676) -- (31,198) -- -- 24,738 106,201,074
Securities held to maturity 12,806,511 (894,353) -- -- (8,611,059) 446,966 -- -- 3,748,065
Derivative financial instruments 5,058,952 (1,459,449) -- -- -- (31,792) -- -- 3,567,711
Interbank and interdepartmental accounts 70,659,907 (220,771) -- -- -- -- -- -- 70,439,136
Loan Operations and Leasing transactions, net of allowance for losses
632,455,298 (21,641,677) -- -- -- (7) -- 48,673 610,862,287
Loans and discounted securities 245,370,934 (4,839,281) -- -- -- -- -- -- 240,531,653
Financing 421,726,998 (18,238,442) -- -- -- -- -- 48,673 403,537,229
Other receivables with loan characteristics 320,639 -- -- -- -- -- -- -- 320,639
Leasing 835,378 (79,446) -- -- -- (7) -- -- 755,925
Allowance for loan losses (35,798,651) 1,515,492 -- -- -- -- -- -- (34,283,159)
Loan operations (35,730,708) 1,506,602 -- -- -- -- -- -- (34,224,106)
Other receivables and leasing transactions (67,943) 8,890 -- -- -- -- -- -- (59,053)
Other receivables 199,153,929 1,811,218 (132,257) -- (8,212,671) (6,930,384) (81,994) 383,100 185,990,941
Other assets 5,308,624 (288,429) (17,673) -- (4,400,633) (25,995) (32,036) -- 543,858
Permanent assets 20,335,617 3,826,997 (65,535) -- 5,355,830 12,912 (290,922) 2,201,999 31,376,898
Investments 3,449,382 3,927,369 (33,395) -- 5,918,897 390,442 (290,922) 2,201,999 15,563,772
Investments in subsidiaries and associates 1,632,066 3,961,546 1,272,742 -- 5,966,470 366,377 -- 2,201,999 15,401,200
Other investments 1,933,467 (57,856) (1,306,137) -- (60,684) (1,035) (290,922) -- 216,833
Accumulated Impairment (116,151) 23,679 -- -- 13,111 25,100 -- -- (54,261)
Property and Equipment 7,597,017 (48,928) (20,549) -- (139,952) (228,102) -- -- 7,159,486
Intangible 9,267,480 (44,390) (11,591) -- (423,115) (149,428) -- -- 8,638,956
Deferred 21,738 (7,054) -- -- -- -- -- -- 14,684
TOTAL ASSETS 1,593,595,405 (41,394,885) (266,412) -- (142,988,128) (7,752,421) (552,365) 4,240,461 1,404,881,655
Total Liabilities 1,508,966,651 (41,309,845) (266,412) -- (142,935,930) (5,668,225) (27,018) 1,513,113 1,320,272,334
Deposits 455,329,870 (1,452,293) -- -- -- -- -- 161,168 454,038,745
Securities sold under repurchase agreements 371,775,568 (18,276,304) -- -- -- -- -- 909,095 354,408,359
Acceptance and issuance of securities 191,131,552 (10,429,849) -- -- -- (1,406,377) -- -- 179,295,326
Interbank and interdepartmental accounts 6,381,118 (17,389) -- -- -- -- -- -- 6,363,729
Borrowings 28,321,615 (1,648,813) (154,951) -- -- (1,335,922) -- 48,656 25,230,585
Onlendings 89,869,445 (1,786,648) -- -- -- -- -- -- 88,082,797
Derivative financial instruments 5,018,807 (1,383,165) -- -- -- -- -- -- 3,635,642
Other liabilities 361,138,676 (6,315,384) (111,461) -- (142,935,930) (2,925,926) (27,018) 394,194 209,217,151
Technical provisions for insurance, pension plans and capitalization
137,837,693 -- -- -- (137,848,805) -- -- 11,112 --
Subordinated debts and equity and debt hybrid securities 61,981,467 (2,854,686) -- -- -- -- -- -- 59,126,781
Other 161,319,516 (3,460,698) (111,461) -- (5,087,125) (2,925,926) (27,018) 383,082 150,090,370
DEFERRED INCOME 472,963 (19,433) -- -- -- -- -- -- 453,530
SHAREHOLDERS' EQUITY 84,155,791 (65,607) -- -- (52,198) (2,084,196) (525,347) 2,727,348 84,155,791
TOTAL LIABILITIES 1,593,595,405 (41,394,885) (266,412) -- (142,988,128) (7,752,421) (552,365) 4,240,461 1,404,881,655
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
33
Dec 31, 2015
Management Information
Adjustments
BB Consolidated Banking Investments
Fund Menagement
Insurance, pension and capitalization
Payment methods Other Segments Intersegment transactions
Current assets and long-term receivables 1,562,827,492 (43,677,717) (225,085) -- (142,601,627) (8,735,033) (247,690) 1,685,689 1,369,026,029
Cash and Cash Equivalents 18,358,507 (89,687) (70) -- (180,149) (173,271) (50) 139,141 18,054,421
Interbank Investments 358,461,069 (5,531,652) -- -- (118,438) (128,729) (377) 59,914 352,741,787
Securities 258,175,674 (15,196,624) (46,248) -- (129,243,107) (394,870) (144,386) 772,579 113,923,018
Trading securities 124,276,636 (2,607,333) (27,137) (9,638) (113,707,509) (325,744) (9,200) 270,266 7,860,341
Securities available for sale 115,328,513 (9,015,051) (19,111) 9,638 (3,417,251) (1,055,668) (135,186) 502,227 102,198,111
Securities held to maturity 18,570,525 (3,574,240) -- -- (12,118,347) 986,542 -- 86 3,864,566
Derivative financial instruments 4,698,070 (1,274,770) -- -- -- (61,268) -- -- 3,362,032
Interbank and interdepartmental accounts 66,042,169 (36,078) -- -- -- -- -- -- 66,006,091
Loan Operations and Leasing transactions, net of allowance for losses
650,613,976 (21,973,353) -- -- -- -- -- 62,953 628,703,576
Loans and discounted securities 255,475,797 (4,827,634) -- -- -- -- -- -- 250,648,163
Financing 427,968,546 (18,645,225) -- -- -- -- -- 62,953 409,386,274
Other receivables with loan characteristics 333,291 -- -- -- -- -- -- -- 333,291
Leasing 971,490 (96,655) -- -- -- -- -- -- 874,835
Allowance for loan losses (34,135,148) 1,596,161 -- -- -- -- -- -- (32,538,987)
Loan operations (34,072,735) 1,582,794 -- -- -- -- -- -- (32,489,941)
Other receivables and leasing transactions (62,413) 13,367 -- -- -- -- -- -- (49,046)
Other receivables 201,836,175 720,613 (159,135) -- (9,277,521) (7,961,901) (70,856) 651,102 185,738,477
Other assets 4,641,852 (296,166) (19,632) -- (3,782,412) (14,994) (32,021) -- 496,627
Permanent assets 21,211,519 3,567,307 (23,444) -- 5,728,477 1,275,229 (296,334) 639,974 32,102,728
Investments 3,448,295 3,665,928 9,604 -- 6,181,716 1,803,065 (296,334) 639,974 15,452,248
Investments in subsidiaries and associates 1,596,700 3,700,168 1,262,618 -- 6,236,018 1,845,739 -- 639,974 15,281,217
Other investments 1,939,059 (57,856) (1,253,014) -- (63,803) (42,752) (296,334) -- 225,300
Accumulated Impairment (87,464) 23,616 -- -- 9,501 78 -- -- (54,269)
Property and Equipment 7,866,335 (48,539) (21,710) -- (114,137) (358,915) -- -- 7,323,034
Intangible 9,872,908 (42,675) (11,338) -- (339,102) (168,921) -- -- 9,310,872
Deferred 23,981 (7,407) -- -- -- -- -- -- 16,574
TOTAL ASSETS 1,584,039,011 (40,110,410) (248,529) -- (136,873,150) (7,459,804) (544,024) 2,325,663 1,401,128,757
Total Liabilities 1,502,020,785 (40,087,565) (246,235) -- (136,764,430) (6,929,341) (46,537) 1,186,699 1,319,133,376
Deposits 465,317,792 (1,350,136) -- -- -- (462) -- 452,524 464,419,718
Securities sold under repurchase agreements 347,476,444 (13,962,425) -- -- -- -- -- 7,629 333,521,648
Acceptance and issuance of securities 201,687,358 (12,645,794) (788) -- -- (479,284) -- -- 188,561,492
Interbank and interdepartmental accounts 5,511,011 (41,604) -- -- -- -- -- -- 5,469,407
Borrowings 34,005,928 (1,957,338) (101,068) -- -- (2,355,094) -- 62,932 29,655,360
Onlendings 91,908,322 (1,832,616) -- -- -- -- -- -- 90,075,706
Derivative financial instruments 4,746,366 (1,457,194) -- -- -- -- -- -- 3,289,172
Other liabilities 351,367,564 (6,840,458) (144,379) -- (136,764,430) (4,094,501) (46,537) 663,614 204,140,873
Technical provisions for insurance, pension plans and capitalization
131,532,146 -- -- -- (131,546,178) -- -- 14,032 --
Subordinated debts and equity and debt hybrid securities 64,907,232 (3,022,968) -- -- -- -- -- -- 61,884,264
Other 154,928,186 (3,817,490) (144,379) -- (5,218,252) (4,094,501) (46,537) 649,582 142,256,609
DEFERRED INCOME 482,053 (22,845) -- -- -- -- -- -- 459,208
SHAREHOLDERS' EQUITY 81,536,173 -- (2,294) -- (108,720) (530,463) (497,487) 1,138,964 81,536,173
TOTAL LIABILITIES 1,584,039,011 (40,110,410) (248,529) -- (136,873,150) (7,459,804) (544,024) 2,325,663 1,401,128,757
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
34
Mar 31, 2015
Management Information
Adjustments
BB Consolidated Banking Investments
Fund Menagement
Insurance, pension and capitalization
Payment methods Other Segments Intersegment transactions
Current assets and long-term receivables 1,501,811,020 (39,107,025) (225,312) -- (117,992,422) (7,267,051) (311,906) 2,309,523 1,339,216,827
Cash and Cash Equivalents 16,536,604 (60,749) (167) -- (190,555) (189,766) (98) 34,831 16,130,100
Interbank Investments 351,658,176 (2,059,799) -- -- (70,103) (7,909) (218) 6,239 349,526,386
Securities 232,244,702 (13,613,750) (43,024) -- (106,419,902) (224,178) (161,021) 1,056,768 112,839,595
Trading securities 105,417,321 (2,028,767) (19,508) -- (92,672,627) (892,701) (60,578) 289,482 10,032,622
Securities available for sale 109,157,927 (7,744,377) (23,516) -- (2,694,351) (15,598) (100,443) 519,291 99,098,933
Securities held to maturity 17,669,454 (3,840,606) -- -- (11,052,924) 684,121 -- 247,995 3,708,040
Derivative financial instruments 3,754,490 (1,071,003) -- -- -- -- -- -- 2,683,487
Interbank and interdepartmental accounts 64,682,415 (33,254) -- -- -- -- -- -- 64,649,161
Loan Operations and Leasing transactions, net of allowance for losses
631,542,180 (24,335,634) -- -- -- -- -- 90,471 607,297,017
Loans and discounted securities 250,432,975 (6,226,574) -- -- -- -- -- -- 244,206,401
Financing 407,515,550 (19,589,075) -- -- -- -- -- 48,741 387,975,216
Other receivables with loan characteristics 306,873 (41,730) -- -- -- -- -- 41,730 306,873
Leasing 1,054,153 (170,420) -- -- -- -- -- -- 883,733
Allowance for loan losses (27,767,371) 1,692,165 -- -- -- -- -- -- (26,075,206)
Loan operations (27,725,380) 1,678,384 -- -- -- -- -- -- (26,046,996)
Other receivables and leasing transactions (41,991) 13,781 -- -- -- -- -- -- (28,210)
Other receivables 197,641,607 2,365,997 (149,980) -- (8,534,047) (6,823,590) (124,787) 1,121,214 185,496,414
Other assets 3,750,846 (298,833) (32,141) -- (2,777,815) (21,608) (25,782) -- 594,667
Permanent assets 21,854,684 3,620,268 38,032 -- 4,697,084 1,103,232 (253,204) 148,984 31,209,080
Investments 3,584,912 3,707,394 67,098 -- 5,170,853 1,526,767 (253,204) 148,984 13,952,804
Investments in subsidiaries and associates 1,807,311 3,738,140 1,258,278 -- 5,221,786 1,635,117 -- 148,817 13,809,449
Other investments 1,873,349 (52,430) (1,191,180) -- (60,184) (118,911) (253,204) 167 197,607
Accumulated Impairment (95,748) 21,684 -- -- 9,251 10,561 -- -- (54,252)
Property and Equipment 7,504,117 (50,482) (19,721) -- (81,373) (311,910) -- -- 7,040,631
Intangible 10,728,629 (25,996) (9,345) -- (392,396) (109,724) -- -- 10,191,168
Deferred 37,026 (10,648) -- -- -- (1,901) -- -- 24,477
TOTAL ASSETS 1,523,665,704 (35,486,757) (187,280) -- (113,295,338) (6,163,819) (565,110) 2,458,507 1,370,425,907
Total Liabilities 1,439,633,857 (35,473,581) (185,032) -- (113,242,064) (6,070,523) (41,546) 1,786,125 1,286,407,236
Deposits 468,005,995 (1,987,773) -- -- -- -- -- 406,510 466,424,732
Securities sold under repurchase agreements 338,906,729 (9,747,209) -- -- -- -- -- 6,199 329,165,719
Acceptance and issuance of securities 183,328,583 (12,200,537) (1,398) -- -- -- -- -- 171,126,648
Interbank and interdepartmental accounts 6,980,664 (88,373) -- -- -- -- -- -- 6,892,291
Borrowings 29,156,933 (1,716,314) (67,073) -- -- (2,330,576) -- 90,473 25,133,443
Onlendings 92,615,260 (1,928,755) -- -- -- -- -- -- 90,686,505
Derivative financial instruments 5,632,137 (1,330,618) -- -- -- -- -- -- 4,301,519
Other liabilities 315,007,556 (6,474,002) (116,561) -- (113,242,064) (3,739,947) (41,546) 1,282,943 192,676,379
Technical provisions for insurance, pension plans and capitalization
108,981,702 -- -- -- (108,989,098) -- -- 7,396 --
Subordinated debts and equity and debt hybrid securities 59,078,123 (3,314,676) -- -- -- -- -- 169,517 55,932,964
Other 146,947,731 (3,159,326) (116,561) -- (4,252,966) (3,739,947) (41,546) 1,106,030 136,743,415
DEFERRED INCOME 433,808 (13,176) -- -- -- -- -- -- 420,632
SHAREHOLDERS' EQUITY 83,598,039 -- (2,248) -- (53,274) (93,296) (523,564) 672,382 83,598,039
TOTAL LIABILITIES 1,523,665,704 (35,486,757) (187,280) -- (113,295,338) (6,163,819) (565,110) 2,458,507 1,370,425,907
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
35
6 - CASH AND CASH EQUIVALENTS
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Cash and Cash Equivalents 22,244,838 18,054,422 16,130,100
Local currency 15,884,420 8,990,683 9,864,058
Foreign currency 6,352,126 9,056,034 6,242,494
Investments in gold 8,292 7,705 23,548
Interbank Investments (1)
60,212,857 84,652,749 61,025,159
Open market investments - sales pending settlement - held position 21,173,964 38,195,496 22,689,386
Interbank deposits 39,038,893 46,457,253 38,335,773
Total 82,457,695 102,707,171 77,155,259
(1) Investments whose original maturity is less than or equal to 90 days and with insignificant risk of change in fair value.
7 - SHORT-TERM INTERBANK INVESTMENTS
) Breakdown a
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Open Market Investments 320,901,467 303,530,816 309,058,044
Reverse repos - Own Resources 21,184,813 38,196,143 22,772,602
Treasury Financial Bills 429,832 -- 191,083
National Treasury Bills 5,289,586 22,232,207 346,656
National Treasury Notes 15,231,373 15,139,814 21,818,986
Other securities 234,022 824,122 415,877
Reverse repos - Financed Position 299,716,654 265,334,673 286,285,442
Treasury Financial Bills 116,258,443 399,992 36,052,865
National Treasury Bills 127,819,816 117,887,474 199,679,516
National Treasury Notes 55,473,499 146,872,982 50,393,593
Other securities 164,896 174,225 159,468
Interbank Deposits 40,900,350 49,210,971 40,468,342
Total 361,801,817 352,741,787 349,526,386
Current assets 360,672,687 351,419,935 348,398,818
Non-current assets 1,129,130 1,321,852 1,127,568
) Income from short-term interbank investments b
1st quarter/2016 1st quarter/2015
Income from Open Market Investments 10,088,660 8,510,525
Own resources 858,419 676,001
Financed position 9,230,241 7,834,524
Income from Investments in Interbank Deposits 103,997 115,428
Total 10,192,657 8,625,953
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
36
8- SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS
a) Securities
) Breakdown of the consolidated portfolio by category, type of bonds and maturity a.1
Maturity in Days
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Market Value Total Total Total
Without maturity
0 to 30 31 to 180 181 to 360 More than 360 Cost value Market value Mark to Market Cost value Market value Mark to Market Cost value Market value Mark to Market
1 - Trading securities 1,231,102 2,638,910 1,892,426 519,941 1,822,651 7,347,205 8,105,030 757,825 7,525,861 7,860,341 334,480 10,025,841 10,032,622 6,781
Federal Government Bonds
14 2,636,619 1,845,998 267,434 1,777,677 5,818,072 6,527,742 709,670 6,250,648 6,558,357 307,709 9,479,622 9,488,019 8,397
Treasury Financial Bills -- -- 745,437 94,539 313,643 1,153,864 1,153,619 (245) 1,035,232 1,035,362 130 1,124,026 1,123,580 (446)
National Treasury Bills -- 27,133 3,531 41,042 815,667 889,932 887,373 (2,559) 1,189,094 1,184,359 (4,735) 3,364,428 3,291,479 (72,949)
National Treasury Notes -- -- 341,953 2,995 22,790 370,383 367,738 (2,645) 85,030 84,783 (247) 1,339,605 1,321,403 (18,202)
Brazilian foreign debt securities
-- -- -- -- 35,846 37,309 35,846 (1,463) 72,333 65,760 (6,573) 72,467 70,310 (2,157)
Foreign Government bonds 14 2,609,486 737,884 113,899 557,320 3,302,540 4,018,603 716,063 3,754,840 4,084,718 329,878 3,497,733 3,600,520 102,787
Other -- -- 17,193 14,959 32,411 64,044 64,563 519 114,119 103,375 (10,744) 81,363 80,727 (636)
Corporate Bonds 1,231,088 2,291 46,428 252,507 44,974 1,529,133 1,577,288 48,155 1,275,213 1,301,984 26,771 546,219 544,603 (1,616)
Debentures -- -- 27,962 13,568 21,858 64,119 63,388 (731) 59,310 57,924 (1,386) 50,969 50,014 (955)
Shares in investment funds 1,208,712 -- -- 213,590 -- 1,370,963 1,422,302 51,339 1,071,605 1,113,316 41,711 349,133 351,719 2,586
Shares 121 -- -- -- -- 23 121 98 26 65 39 119 426 307
Rural Product Bills - Commodities
-- -- -- -- -- -- -- -- 1 1 -- -- -- --
Certificate of deposit -- -- 1 -- -- -- 1 1 -- -- -- 91 91 --
Eurobonds -- -- 15,725 5,029 16,793 49,043 37,547 (11,496) 114,568 91,349 (23,219) 122,129 111,950 (10,179)
Other 22,255 2,291 2,740 20,320 6,323 44,985 53,929 8,944 29,703 39,329 9,626 23,778 30,403 6,625
2 - Available for sale securities
505,610 2,223,630 6,756,207 6,109,418 90,606,209 110,808,295 106,201,074 (4,607,221) 107,308,851 102,198,111 (5,110,740) 101,206,449 99,098,932 (2,107,517)
Federal Government Bonds
77,611 1,017,252 3,885,018 1,972,257 54,010,471 61,520,820 60,962,609 (558,211) 57,430,254 56,038,610 (1,391,644) 51,592,802 50,999,840 (592,962)
Treasury Financial Bills -- -- 344 -- 40,359,225 40,385,294 40,359,569 (25,725) 36,475,017 36,474,678 (339) 31,796,722 31,792,145 (4,577)
National Treasury Bills -- 299,840 1,056,606 1,059,578 4,907,679 7,318,526 7,323,703 5,177 5,456,744 5,216,331 (240,413) 5,573,211 5,464,375 (108,836)
National Treasury Notes -- -- 370,449 135,893 3,725,535 4,593,029 4,231,877 (361,152) 5,182,210 4,661,076 (521,134) 4,335,322 3,937,681 (397,641)
Agricultural debt securities -- 5 884 501 3,551 5,110 4,941 (169) 5,157 4,713 (444) 6,312 6,010 (302)
Brazilian foreign debt securities
-- -- -- -- 2,950,236 3,051,293 2,950,236 (101,057) 3,120,701 2,685,040 (435,661) 3,188,275 3,124,515 (63,760)
Foreign Government bonds -- 717,407 2,456,735 776,285 1,330,655 5,279,718 5,281,082 1,364 6,123,190 6,112,039 (11,151) 5,939,267 5,940,126 859
Other 77,611 -- -- -- 733,590 887,850 811,201 (76,649) 1,067,235 884,733 (182,502) 753,693 734,988 (18,705)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
37
Maturity in Days
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Market Value Total Total Total
Without maturity
0 to 30 31 to 180 181 to 360 More than 360 Cost value Market value Mark to Market Cost value Market value Mark to Market Cost value Market value Mark to Market
Corporate Bonds 427,999 1,206,378 2,871,189 4,137,161 36,595,738 49,287,475 45,238,465 (4,049,010) 49,878,597 46,159,501 (3,719,096) 49,613,647 48,099,092 (1,514,555)
Debentures -- 871,582 2,108,734 2,391,515 33,285,923 39,838,538 38,657,754 (1,180,784) 40,004,158 39,289,630 (714,528) 36,206,514 35,589,939 (616,575)
Promissory notes -- -- 70,915 504,432 105,111 675,187 680,458 5,271 918,460 931,194 12,734 1,252,909 1,248,279 (4,630)
Credit Notes -- -- -- -- 44,362 50,152 44,362 (5,790) 50,936 46,771 (4,165) 52,607 47,003 (5,604)
Shares in investment funds 19,887 103,768 120,329 635,194 2,806,638 6,043,115 3,685,816 (2,357,299) 3,012,747 1,656,953 (1,355,794) 4,030,075 3,407,249 (622,826)
Shares 505 -- -- -- -- 810 505 (305) 810 457 (353) 810 722 (88)
Rural Product Bills - Commodities
-- 139,665 541,867 367,608 2,058 1,051,179 1,051,198 19 1,066,970 1,068,167 1,197 889,879 884,452 (5,427)
Certificate of deposit -- 88,951 -- -- -- 88,969 88,951 (18) 97,628 97,608 (20) 2,123,274 2,123,167 (107)
Certificates of Agribusiness Credit Rights
-- -- -- -- -- -- -- -- -- -- -- 10,826 10,953 127
Financial bills -- -- 21,258 -- -- 21,339 21,258 (81) 20,542 20,500 (42) 1,410,230 1,407,274 (2,956)
Real Estate Receivables Certificates
-- -- -- 238,412 237,916 489,637 476,328 (13,309) 479,761 468,783 (10,978) 504,165 483,505 (20,660)
Other 407,607 2,412 8,086 -- 113,730 1,028,549 531,835 (496,714) 4,226,585 2,579,438 (1,647,147) 3,132,358 2,896,549 (235,809)
3 - Held to maturity securities
-- -- -- -- 3,485,028 3,748,065 3,485,028 (263,037) 3,864,566 3,625,314 (239,252) 3,708,040 3,511,287 (196,753)
Corporate Bonds -- -- -- -- 3,485,028 3,748,065 3,485,028 (263,037) 3,864,566 3,625,314 (239,252) 3,708,040 3,511,287 (196,753)
Debentures -- -- -- -- 3,381,688 3,381,688 3,381,688 -- 3,506,434 3,506,434 -- 3,374,200 3,374,200 --
Shares in investment funds -- -- -- -- -- -- -- -- 7,026 7,026 -- -- -- --
Real Estate Receivables Certificates
-- -- -- -- 95,635 358,672 95,635 (263,037) 351,106 111,854 (239,252) 327,313 130,560 (196,753)
Other -- -- -- -- 7,705 7,705 7,705 -- -- -- -- 6,527 6,527 --
Total 1,736,712 4,862,540 8,648,633 6,629,359 95,913,888 121,903,565 117,791,132 (4,112,433) 118,699,278 113,683,766 (5,015,512) 114,940,330 112,642,841 (2,297,489)
) Breakdown of the consolidated portfolio by financial statement classification and maturity date a.2
Maturity in Days
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Market Value Total Total Total
Without maturity
0 to 30 31 to 180 181 to 360 More than
360 Cost value Market value
Mark to Market
Cost value Market value Mark to Market
Cost value Market value Mark to Market
Total by portfolio 1,736,712 4,862,540 8,648,633 6,629,359 95,913,888 121,903,565 117,791,132 (4,112,433) 118,699,278 113,683,766 (5,015,512) 114,940,330 112,642,841 (2,297,489)
Own portfolio 1,736,712 4,649,770 8,147,335 5,797,621 72,722,200 94,854,113 93,053,638 (1,800,475) 90,500,313 89,084,740 (1,415,573) 85,286,373 85,369,496 83,123
Subject to repurchase agreements
-- 123,819 484,989 831,738 20,269,913 24,020,920 21,710,459 (2,310,461) 24,095,222 20,495,283 (3,599,939) 14,951,019 12,601,090 (2,349,929)
Pledged in guarantee -- 88,951 16,309 -- 2,921,775 3,028,532 3,027,035 (1,497) 4,103,743 4,103,743 -- 14,702,938 14,672,255 (30,683)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
38
) Breakdown of the consolidated portfolio by category and maturity in years a.3
Maturity in years
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Market Value Total Total Total
Without maturity
Due in up to one year
Due from 1 to 5 years
Due from 5 to 10 years
Due after 10 years
Cost value Market value Cost value Market value Cost value Market value
Total by category 1,736,712 20,140,532 71,328,551 22,191,867 2,393,470 121,903,565 117,791,132 118,699,278 113,683,766 114,940,330 112,642,841
1 - Trading securities 1,231,102 5,051,277 1,360,063 345,893 116,695 7,347,205 8,105,030 7,525,861 7,860,341 10,025,841 10,032,622
2 - Available for sale securities 505,610 15,089,255 69,968,256 18,464,286 2,173,667 110,808,295 106,201,074 107,308,851 102,198,111 101,206,449 99,098,932
3 - Held to maturity securities -- -- 232 3,381,688 103,108 3,748,065 3,485,028 3,864,566 3,625,314 3,708,040 3,511,287
) Summary of the consolidated portfolio by financial statement classification a.4
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Book value Book value Book value
Current Non-current Total Current Non-current Total Current Non-current Total
Total by portfolio 25,252,665 92,801,504 118,054,169 21,905,761 92,017,257 113,923,018 29,172,890 83,666,704 112,839,594
Own portfolio 23,699,895 72,069,569 95,769,464 20,534,138 71,087,575 91,621,713 25,247,605 60,351,952 85,599,557
Subject to repurchase agreements 1,447,510 17,810,160 19,257,670 1,257,846 16,939,716 18,197,562 1,655,295 10,912,487 12,567,782
Pledged in guarantee 105,260 2,921,775 3,027,035 113,777 3,989,966 4,103,743 2,269,990 12,402,265 14,672,255
) Summary of the consolidated portfolio by category a.5
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Total by category
1 - Trading securities 8,105,030 7% 7,860,341 7% 10,032,622 9%
2 - Available for sale securities 106,201,074 90% 102,198,111 90% 99,098,932 88%
3 - Held to maturity securities 3,748,065 3% 3,864,566 3% 3,708,040 3%
Portfolio Book Value 118,054,169 100% 113,923,018 100% 112,839,594 100%
Mark to market - held to maturity (263,037) -- (239,252) -- (196,753) --
Portfolio Market Value 117,791,132 -- 113,683,766 -- 112,642,841 --
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
39
) Income from operations with securities b
1st quarter/2016 1st quarter/2015
Short-term Interbank Investments (Note 7.b) 10,192,657 8,625,953
Fixed-income securities 3,623,334 3,591,521
Variable-income securities (2,279,327) 4,145,144
Total 11,536,664 16,362,618
) Reclassification of securities c
There was no reclassification of securities in the March 31, 2016 and March 31, 2015.
) Derivative financial instruments d
The Bank uses derivative financial instruments to manage, at the consolidated level, its positions and to meet clients'
needs, classifying its own positions as hedge (market risk and cash flow risk) and trading, both within limits approved
by committees of the Bank. The hedge strategy of the equity positions is in line with macroeconomic analyses and is
approved by the Executive Board of Directors.
In the options market, active or long positions have the Bank as holder, while passive or short positions have the
Bank as writer.
The main risks inherent to derivative financial instruments resulting from the business of the Bank and its subsidiaries
are credit, market, liquidity and operational, and the management process presented in note 28.
The models used to manage risks with derivatives are reviewed periodically and the decisions made follow the best
risk/return relationship, estimating possible losses based on the analysis of macroeconomic scenarios.
The Bank uses tools and systems to manage the derivatives. Trading in new derivatives, standardized or not, is
subject to a prior risk analysis.
Risk analysis of the subsidiaries is undertaken on an individual basis and its risk management is done on a
consolidated basis.
The Bank uses statistical methods and simulations to measure the risks of its positions, including derivatives, using
models of values at risk sensibility and stress analysis.
Total credit exposure from swaps is R$ 378,668 thousand on Mar 31, 2016 (R$ 464,076 thousand on Dec 31, 2015
and R$ 546,642 thousand on Mar 31, 2015).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
40
) Breakdown of the portfolio of derivatives for trading by index d.1
By Index Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Notional value Cost value Market value Notional value Cost value Market value Notional value Cost value Market value
Future Contracts
Purchase commitments
8,714,900 -- -- 1,600,302 -- -- 3,605,124 -- --
Interbank Deposits 4,806,749 -- -- 1,042,332 -- -- 1,819,576 -- --
Currencies 3,889,284 -- -- 530,810 -- -- 1,769,899 -- --
Commodities 18,867 -- -- 27,160 -- -- 15,649 -- --
Sales commitments 3,005,318 -- -- 9,188,542 -- -- 5,336,234 -- --
Interbank Deposits 763,938 -- -- 6,205,028 -- -- 3,886,560 -- --
Currencies 2,228,969 -- -- 2,977,888 -- -- 513,654 -- --
T-Note -- -- -- -- -- -- 865,859 -- --
Libor -- -- -- -- -- -- 22,610 -- --
Commodities 12,411 -- -- 5,626 -- -- 47,551 -- --
Forward operations
Asset position 7,349,237 1,642,771 1,704,736 12,525,819 1,359,977 1,749,951 10,446,169 1,094,479 1,255,688
Term securities 1,101,571 1,101,571 1,101,571 -- -- -- 45,440 45,440 45,440
Term currencies 6,228,240 540,135 599,415 12,492,001 1,358,628 1,744,654 10,348,296 1,041,029 1,199,999
Term commodities 19,426 1,065 3,750 33,818 1,349 5,297 52,433 8,010 10,249
Liability position 15,616,034 (2,322,275) (1,900,244) 11,454,776 (783,298) (582,955) 5,777,984 (702,367) (526,431)
Term securities 1,101,571 (1,101,571) (1,101,571) -- -- -- 45,440 (45,440) (45,440)
Term currencies 14,479,741 (1,215,803) (790,688) 11,430,037 (778,007) (575,299) 5,679,483 (643,286) (468,549)
Term commodities 34,722 (4,901) (7,985) 24,739 (5,291) (7,656) 53,061 (13,641) (12,442)
Option Market
Purchase Commitments - Long Position
1,760 29 19 -- -- -- 6,567 59 195
Foreign currency -- -- -- -- -- -- 6,567 59 190
Shares 1,760 29 19 -- -- -- -- -- 5
Sale Commitments - Long Position
1,450 28 28 -- -- -- -- -- --
Shares 1,450 28 28 -- -- -- -- -- --
Purchase Commitments - Short Position
437,463 (17,082) (41,249) 391,447 (15,121) (119,529) 1,804,363 (55,879) (472,188)
Foreign currency 329,279 (9,078) (3,909) 11,381 (522) (883) 13,124 (489) (1,128)
Pre-fixed 65,268 (2,264) (25,281) 348,015 (9,830) (107,098) 1,782,687 (54,022) (468,185)
Interbank deposit 41,656 (5,653) (11,803) 32,051 (4,769) (11,548) 8,371 (1,358) (2,870)
Shares 1,260 (87) (256) -- -- -- 181 (10) (5)
Sale Commitments - Short Position
185,711 (27,425) (10,622) 426,369 (238,328) (166,391) 1,940,988 (1,852,818) (931,674)
Foreign currency 1,648 (31) (16) -- -- -- 7,552 (100) (29)
Pre-fixed 65,268 (25,694) (10,290) 348,016 (237,202) (166,254) 1,782,687 (1,849,186) (927,679)
Shares 2,292 (78) (23) -- -- -- 113 (6) --
Commodities 116,503 (1,622) (293) 78,353 (1,126) (137) 150,636 (3,526) (3,966)
Swaps Contracts
Asset position 10,016,668 1,724,393 1,823,461 6,649,135 1,362,026 1,562,039 7,964,412 1,386,374 1,334,990
Interbank Deposits 5,386,439 526,502 527,708 1,170,012 28,463 11,245 155,527 (580) 2,040
Foreign currency 4,141,490 1,140,589 1,234,661 5,233,939 1,326,041 1,546,439 6,917,636 1,334,928 1,274,181
Pre-fixed 466,342 55,870 60,377 222,787 6,416 4,104 889,603 52,000 58,752
IPCA 22,397 1,432 715 22,397 1,106 251 1,646 26 17
Liability position 12,799,827 (1,414,069) (1,541,520) 15,978,320 (1,906,269) (2,354,368) 12,919,638 (2,011,530) (2,126,421)
Interbank Deposits 3,108,633 (308,276) (290,623) 187,764 (6,638) (4,577) 36,106 1,021 (3,617)
Foreign currency 9,408,264 (1,093,609) (1,234,983) 15,550,493 (1,897,600) (2,347,504) 12,392,772 (1,949,546) (2,060,418)
Pre-fixed 282,930 (12,184) (15,914) 41,172 (2,513) (1,190) 490,760 (63,005) (62,386)
IPCA -- -- -- 198,891 482 (1,097) -- -- --
Other derivatives (1)
Asset position
Foreign currency 1,126,784 25,434 39,467 1,123,416 32,242 50,042 696,630 80,854 92,613
Liability position
Foreign currency 3,131,315 (131,794) (142,008) 2,422,956 (46,492) (65,929) 3,788,889 (239,739) (244,805)
(1) Related, essentially, to Non Deliverable Forwards (NDF) which are traded in the over-the-counter (OTC) market and have as their object an exchange rate of a specific currency.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
41
) Breakdown of the derivatives portfolio by maturity (notional value) d.2
Maturity in Days
0 to 30 31 to 180 181 to 360 More than 360 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Futures 656,519 7,554,088 2,736,687 772,924 11,720,218 10,788,844 8,941,358
Forwards 10,798,944 5,803,708 5,102,987 1,259,632 22,965,271 23,980,595 16,224,153
Options 57,053 412,611 115,065 41,655 626,384 817,816 3,751,918
Swaps 653,708 7,467,449 5,624,209 9,071,129 22,816,495 22,627,455 20,884,050
Other 2,438,106 1,415,875 253,403 150,715 4,258,099 3,546,372 4,485,519
) Breakdown of the derivative portfolio by trading market and counterparty (notional value on d.3Mar 31, 2016)
Futures Forwards Option market Swaps Credit
derivatives Other
BM&FBovespa 11,720,218 -- 626,384 -- -- --
Over-the-counter
Financial Institutions -- 2,203,142 -- 17,853,523 -- 4,258,099
Client -- 20,762,129 -- 4,962,972 -- --
) Breakdown of margin given as guarantee for transactions with derivative financial d.4instruments
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Treasury Financial Bills 1,245,581 2,637,630 1,235,984
Total 1,245,581 2,637,630 1,235,984
) Portfolio of derivatives designated as hedge accounting d.5
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Market Risk Hedge
Hedging instruments
Assets 342,445 338,068 335,823
Swaps 342,445 338,068 335,823
Hedged items
Liabilities 342,800 338,300 335,676
Other liabilities 342,800 338,300 335,676
In order to hedge against possible fluctuations in the interest and exchange rates on its securities and foreign
investments, the Conglomerate contracted derivative operations to offset the exposure to the market value changes.
The hedges were assessed as effective, in accordance with the Circular No. 3,082/2002 from the Banco Central do
Brasil, which requires evidence of hedge effectiveness between 80% and 125%.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
42
) Income gains and losses with hedging instruments and hedged items d.6
1st quarter/2016 1st quarter/2015
Hedged items losses (34,476) --
Hedging instruments gains 34,332 --
Net effect (144) --
Hedge items gains -- 81,221
Hedging instruments losses -- (81,884)
Net effect -- (663)
) Derivative financial instruments segregated by current and non-current d.7
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Current Non-current Current Non-current Current Non-current
Assets
Forwards 1,662,600 42,136 1,280,205 469,746 1,088,844 166,844
Options 47 -- -- -- 195 --
Swaps 1,309,192 514,269 1,056,926 505,113 573,775 761,215
Other derivatives 30,541 8,926 31,033 19,009 82,129 10,484
Total 3,002,380 565,331 2,368,164 993,868 1,744,943 938,543
Liabilities
Forwards (1,817,345) (82,899) (558,119) (24,836) (474,005) (52,426)
Options (40,068) (11,803) (274,372) (11,548) (1,358,644) (45,218)
Swaps (383,259) (1,158,261) (1,086,815) (1,267,553) (902,842) (1,223,579)
Other derivatives (134,455) (7,553) (48,256) (17,673) (234,661) (10,144)
Total (2,375,127) (1,260,516) (1,967,562) (1,321,610) (2,970,152) (1,331,367)
) Income from derivative financial instruments e
1st quarter/2016 1st quarter/2015
Swaps 534,343 (164,662)
Forwards (819,070) 525,296
Options 13,104 (46,765)
Futures (2,797) 317,367
Other derivatives (28,375) (19,285)
Total (302,795) 611,951
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
43
9 - INTERBANK ACCOUNTS
a) Payments and receipts pending settlement
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Assets
Rights against other participants of settlement systems (1)
Bank checks and other instruments 1,292,723 7,252 1,911,646
Documents sent by other participants 1,737,193 -- 1,807,558
Total 3,029,916 7,252 3,719,204
Current assets 3,029,916 7,252 3,719,204
Liabilities
Obligations to other participants of settlement systems (1)
Remitted receipts 1,743,859 -- 1,848,795
Bank checks and other instruments 726,569 -- 889,872
Other receipts 5,690 34 14,755
Total 2,476,118 34 2,753,422
Current liabilities 2,476,118 34 2,753,422
(1) There was no operation of the service of clearing checks and other securities on Dec 31, 2015.
b) Restricted deposits
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Compulsory Deposits with Banco Central do Brasil 62,612,540 60,810,918 56,612,772
Additional reserve requirements on deposits 14,410,202 14,425,618 21,455,100
Savings deposit requirements 24,022,481 24,116,566 19,936,060
Demand deposit requirements 9,652,082 8,018,230 10,132,448
Time deposit requirements 12,576,776 12,238,303 5,084,926
Resources for microfinance 298,406 363,781 --
Resources for rural credit (1)
1,643,753 1,643,753 --
Other 8,840 4,667 4,238
Housing Finance System 2,542,219 2,496,198 2,363,829
Compensation of wage changes fund 2,709,424 2,663,942 2,527,911
Provision for losses (174,186) (173,192) (169,793)
Other 6,981 5,448 5,711
National Treasury - Rural Credit 131,065 54,304 268,651
Rural credit - Proagro 295,099 210,965 404,995
Provision for losses (164,034) (156,661) (136,344)
Total 65,285,824 63,361,420 59,245,252
Current assets 65,277,643 63,361,321 59,106,731
Non-current assets 8,181 99 138,521
(1) Refers to funds deposited with the Banco Central do Brasil, because they were not lent on to rural credits, according to Resolution CMN No. 3,745/2009. The special supply funds were provided by Banco Central do Brasil and recorded in borrowings and onlendings (Note 18.b).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
44
c) Compulsory investments
1st quarter/2016 1st quarter/2015
Deposits linked to the Banco Central do Brasil 1,341,104 1,124,910
Additional reserve requirements on deposits 462,388 617,639
Savings deposit requirements 479,572 357,440
Time deposit requirements 399,144 149,831
Deposits linked to Real State 46,424 38,051
Deposits linked to National Treasury - Rural Credit 11,601 9,776
Losses on Restricted Deposits (8,952) 17,752
Total 1,390,177 1,190,489
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
45
10 - LOAN OPERATIONS
) Portfolio by modality a
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Loan operations 644,389,521 660,367,728 632,488,490
Loans and discounted securities 240,531,653 250,648,163 244,206,401
Financing 168,890,326 180,849,464 178,595,567
Rural and agribusiness financing 183,753,959 178,902,040 168,215,968
Real estate financing 50,811,992 49,559,757 41,142,982
Financing of infrastructure and development 80,952 75,013 20,699
Loan operations sold under assignment (1)
320,639 333,291 306,873
Other receivables with loan characteristics 56,881,386 56,606,639 48,815,433
Credit card operations (2)
21,541,905 22,940,041 20,275,224
Advances on exchange contracts (3)
18,362,928 17,582,677 12,660,418
Other receivables purchase under assignment (4)
15,973,453 15,266,721 15,339,481
Guarantees honored 578,772 397,550 202,339
Other 424,328 419,650 337,971
Leasing transactions 755,925 874,835 883,733
Total loan portfolio 702,026,832 717,849,202 682,187,656
(Allowance)/reversal for loan losses (35,397,636) (33,577,000) (26,862,462)
(Allowance for loan losses - loan operations) (34,224,106) (32,489,941) (26,046,996)
(Allowance for other losses - other receivables) (5)
(1,114,477) (1,038,013) (787,256)
(Allowance for lease losses - leasing transactions) (59,053) (49,046) (28,210)
Total loan portfolio net of provisions 666,629,196 684,272,202 655,325,194
(1) Loan operations assigned with retention of the risks and benefits of the financial assets.
(2) On March 31, 2015, credit card bills to receive from clients of Banco Patagonia of R$ 1,381,270 thousand were reclassified from other receivables without characteristics of credit, to harmonize the accounting practices with Banco do Brasil.
(3) Advances on exchange contracts are classified as a deduction to other liabilities.
(4) Loan operations acquired with retention of the risks and benefits by the assignor of the financial assets.
(5) Includes the amount of R$ 8,883 thousand as of March 31, 2016 (R$ 8,421 thousand as of December 31, 2015 and R$ 6,067 thousand as of March 31, 2015) related to allowance for interbank onlendings losses.
) Loan operations and leasing transactions income b
1st quarter/2016 1st quarter/2015
Loan operations income 20,412,315 27,598,402
Loans and discounted securities 12,975,955 12,594,852
Rural and agribusiness financing 3,498,696 2,688,915
Equalization of rates - agricultural crop- Law 8,427/1992 1,382,724 1,800,522
Real estate financing 1,216,219 890,357
Recovery of loans previously written-off as loss (1)
861,143 839,781
Income from foreign currency financing 255,875 499,714
Financing 116,874 8,163,797
Export financing 34,070 87,867
Guarantees honored 44,137 16,586
Other 26,622 16,011
Leasing transactions income (Note 10.i) 94,847 112,978
Total 20,507,162 27,711,380
(1) The amount of R$ 53,100 thousand in the 1st quarter/2016 (with impact on the income of R$ 27,847 thousand) and R$ 47,817 thousand in 1
st the
quarter/2015 (with an impact on the income of R$ 27,356 thousand) was received from assignments without recourse of written-off credits to entities outside the financial system, in accordance with CMN Resolution 2,836/2001. The book value of these transactions were R$ 54,824 thousand and R$ 84,656 thousand respectively.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
46
) Breakdown of the loan portfolio by sector c
Mar 31, 2016 % Dec 31, 2015 % Mar 31, 2015 %
Public sector 76,551,278 10.9 79,036,961 11.0 66,692,266 9.8
Public administration 39,030,919 5.6 41,774,780 5.8 33,298,729 4.9
Oil sector 25,116,579 3.6 24,790,928 3.5 20,695,451 2.9
Electricity 11,108,382 1.6 11,142,352 1.6 11,272,492 1.7
Services 296,048 -- 325,448 -- 350,981 0.1
Other activities 999,350 0.1 1,003,453 0.1 1,074,613 0.2
Private sector (1)
625,475,554 89.1 638,812,241 89.0 615,495,390 90.2
Individuals 314,403,480 44.8 309,647,850 43.1 291,373,816 42.7
Companies 311,072,074 44.3 329,164,391 45.9 324,121,574 47.5
Mining and metallurgy 37,470,955 5.3 38,377,486 5.3 38,373,568 5.7
Agribusiness of plant origin 32,396,166 4.6 35,625,466 5.0 34,172,941 5.0
Automotive sector 23,484,193 3.3 25,412,588 3.5 22,757,007 3.3
Transportation 22,118,708 3.2 23,552,525 3.3 21,542,356 3.2
Services 20,246,056 2.9 21,583,846 3.0 22,639,998 3.3
Real estate agents 19,691,939 2.8 20,162,150 2.8 18,574,732 2.7
Fuel 19,169,522 2.7 21,594,810 3.0 21,709,757 3.2
Electricity 17,140,875 2.4 17,950,892 2.5 17,015,343 2.5
Retail commerce 16,507,156 2.4 17,872,597 2.5 18,060,058 2.6
Agribusiness of animal origin 16,212,517 2.3 14,306,536 2.0 12,872,815 1.9
Specific activities of construction 11,529,953 1.6 12,223,985 1.7 12,536,969 1.8
Agricultural inputs 10,018,371 1.5 10,410,596 1.5 9,737,874 1.4
Textile and clothing 9,621,352 1.4 10,250,211 1.4 10,747,256 1.6
Pulp and paper 8,251,489 1.2 9,009,701 1.3 9,566,209 1.4
Electronics 7,534,963 1.1 8,429,919 1.2 8,635,942 1.3
Wholesale and various industries 7,273,058 1.1 7,112,589 1.0 7,003,139 1.0
Chemical 7,234,744 1.0 8,038,385 1.1 7,770,548 1.1
Woodworking and furniture market 5,837,821 0.8 6,251,811 0.9 6,646,506 1.0
Heavy construction 5,786,113 0.8 6,076,581 0.8 5,796,688 0.8
Financial services 5,152,712 0.7 5,775,570 0.8 5,802,599 0.9
Telecommunications 4,196,416 0.6 4,185,482 0.6 5,537,201 0.8
Other activities 4,196,995 0.6 4,960,665 0.7 6,622,068 1.0
Total 702,026,832 100.0 717,849,202 100.0 682,187,656 100.0
(1) The amounts disclosed under individuals include loans to the sectors of agribusiness, housing and other sectors of economic activity carried out
with individuals. To the highlighted economic sectors, operations are exclusive to companies.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
47
) Loan portfolio by risk level and maturity d
AA A B C D E F G H Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Current operations
Installments falling due
01 to 30 20,142,825 8,847,479 16,753,777 2,066,884 203,438 242,786 90,651 3,405,322 284,233 52,037,395 53,744,732 52,733,561
31 to 60 14,857,059 5,428,119 5,712,340 826,203 96,281 171,864 46,050 37,039 131,812 27,306,767 26,577,542 29,683,996
61 to 90 16,046,034 4,695,585 4,389,075 789,059 116,084 181,556 96,941 28,989 185,056 26,528,379 22,691,437 29,193,663
91 to 180 35,779,561 10,296,218 11,124,165 2,322,840 358,410 541,527 181,276 91,730 304,564 61,000,291 67,876,209 68,453,096
181 to 360 54,192,669 14,723,500 15,690,638 3,446,140 517,842 857,358 276,429 119,186 958,580 90,782,342 98,952,476 89,016,744
More than 360 230,342,669 94,254,952 58,809,519 12,852,374 2,703,895 5,841,735 1,518,314 988,900 4,741,696 412,054,054 421,212,532 390,198,412
Installments overdue
Up to 14 days 167,030 161,005 621,531 148,021 44,897 77,302 18,149 5,867 85,498 1,329,300 1,130,563 933,120
Other (1)
381,128 -- -- -- -- -- -- -- -- 381,128 373,113 355,526
Subtotal 371,908,975 138,406,858 113,101,045 22,451,521 4,040,847 7,914,128 2,227,810 4,677,033 6,691,439 671,419,656 692,558,604 660,568,118
Operations past due
Installments falling due
01 to 30 -- -- 173,092 204,297 100,562 166,073 106,020 96,736 522,105 1,368,885 1,154,552 1,251,297
31 to 60 -- -- 193,085 102,602 54,511 96,311 55,038 54,322 229,883 785,752 744,060 641,211
61 to 90 -- -- 65,778 95,037 53,498 87,688 57,191 51,565 236,857 647,614 520,178 538,024
91 to 180 -- -- 173,838 241,574 230,678 268,771 159,069 147,918 651,538 1,873,386 1,614,801 1,463,522
181 to 360 -- -- 352,649 422,768 269,683 458,928 324,234 271,711 1,162,603 3,262,576 2,743,742 2,473,153
More than 360 -- -- 1,105,779 1,283,716 979,732 2,307,259 1,380,552 1,033,971 4,312,386 12,403,395 9,768,847 7,443,717
Installments overdue
01 to 14 -- -- 15,382 51,974 38,456 45,747 30,028 23,684 102,933 308,204 261,878 283,754
15 to 30 -- -- 250,295 323,751 73,975 261,059 85,630 43,106 197,273 1,235,089 798,591 925,192
31 to 60 -- -- 14,184 359,236 149,746 179,876 205,083 97,815 407,092 1,413,032 1,185,605 1,119,411
61 to 90 -- -- 12 13,612 298,147 204,015 327,050 135,895 495,992 1,474,723 1,031,905 944,687
91 to 180 -- -- 1 4,405 13,425 345,982 361,210 467,236 1,503,899 2,696,158 2,827,156 1,388,206
181 to 360 -- -- -- 1 4 17,340 32,971 31,739 2,820,840 2,902,895 2,429,502 1,590,587
More than 360 -- -- -- -- -- -- -- -- 235,467 235,467 209,781 1,556,777
Subtotal -- -- 2,344,095 3,102,973 2,262,417 4,439,049 3,124,076 2,455,698 12,878,868 30,607,176 25,290,598 21,619,538
Total 371,908,975 138,406,858 115,445,140 25,554,494 6,303,264 12,353,177 5,351,886 7,132,731 19,570,307 702,026,832 717,849,202 682,187,656
(1) Operations with third party risk linked to government funds and programs, primarily Pronaf, Procera, FAT, BNDES and FCO. They include 33,003 thousand of overdue installments, which comply with rules defined in each program for reimbursement by the program managers and, therefore, do not represent a credit risk for the Bank.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
48
) Allowance for loan losses by risk level e
Level of risk
% Provision
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Value of loans
Minimum required
allowance
Additional allowance
(1)
Existent allowance
Value of loans
Minimum required
allowance
Additional allowance
(1)
Existent allowance
Value of loans
Minimum required
allowance
Additional allowance
(1)
Existent allowance
AA -- 371,908,975 -- -- -- 373,297,999 -- -- -- 397,872,508 -- -- --
A 0.5 138,406,858 692,034 74,640 766,674 144,777,671 723,888 145,036 868,924 96,105,675 480,528 47,844 528,372
B 1 115,445,140 1,154,451 -- 1,154,451 124,924,839 1,249,248 181,690 1,430,938 121,120,805 1,211,208 -- 1,211,208
C 3 25,554,494 766,635 66,315 832,950 25,525,757 765,773 291,326 1,057,099 28,913,662 867,410 77,889 945,299
D 10 6,303,264 630,326 51,817 682,143 11,032,891 1,103,289 149,499 1,252,788 4,983,222 498,322 60,861 559,183
E 30 12,353,177 3,705,953 587,105 4,293,058 11,796,903 3,539,071 1,300,232 4,839,303 11,173,459 3,352,038 689,577 4,041,615
F 50 5,351,886 2,675,943 271,862 2,947,805 4,767,971 2,383,986 642,265 3,026,251 4,216,510 2,108,255 319,311 2,427,566
G 70 7,132,731 4,992,912 157,336 5,150,248 3,806,414 2,664,490 518,450 3,182,940 2,791,311 1,953,918 184,797 2,138,715
H 100 19,570,307 19,570,307 -- 19,570,307 17,918,757 17,918,757 -- 17,918,757 15,010,504 15,010,504 -- 15,010,504
Total 702,026,832 34,188,561 1,209,075 35,397,636 717,849,202 30,348,502 3,228,498 33,577,000 682,187,656 25,482,183 1,380,279 26,862,462
(1) Refers to the additional provision over and above the minimum required by CMN Resolution 2,682/1999. This provision is established based on the experience of Management, by making projections for the loan portfolio, based on the history of default of operations and in accordance with good banking practice.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
49
) Changes in allowance for loan losses f
Includes loans, leases and other receivables with characteristics of credit.
1st quarter/2016 1st quarter/2015
Opening balance 33,577,000 25,294,947
Provision/(reversal) 7,124,193 5,654,426
Minimum required allowance 9,143,616 5,679,645
Additional allowance (2,019,423) (25,219)
Exchange fluctuation - foreign allowances (127,696) 75,180
Write-off (5,175,861) (4,162,091)
Closing balance 35,397,636 26,862,462
) Changes in allowance for other loan losses g
Includes provisions for other receivables without characteristics of credit.
1st quarter/2016 1st quarter/2015
Opening balance 1,287,621 1,041,399
Provision/(reversal) 2,836 (49,940)
Exchange fluctuation - foreign allowances (854) 4,005
Write-off/other adjustments 203 16,641
Closing balance 1,289,806 1,012,105
) Leasing portfolio by maturity h
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Up to 1 year (1)
339,682 352,475 346,982
More than 1 year and up to 5 years 415,977 519,337 531,710
Over 5 years 266 3,023 5,041
Total present value 755,925 874,835 883,733
(1) Includes amounts related to overdue installments.
) Income from leasing transactions i
1st quarter/2016 1st quarter/2015
Lease revenue 94,847 112,978
Leasing 94,847 112,978
Lease expenses (55,375) (71,510)
Leasing (55,319) (71,465)
Loss on disposal of leased assets (56) (45)
Total 39,472 41,468
) Concentration of loans j
Mar 31, 2016 % of credit portfolio
Dec 31, 2015 % of credit portfolio
Mar 31, 2015 % of credit portfolio
Largest debtor 25,561,879 3.6 25,120,839 3.5 21,321,617 3.1
10 largest debtors 88,979,659 12.7 92,471,599 12.9 79,946,320 11.7
20 largest debtors 119,654,320 17.0 122,894,723 17.1 110,496,254 16.2
50 largest debtors 162,710,073 23.2 168,071,302 23.4 151,941,814 22.3
100 largest debtors 190,698,907 27.2 197,567,210 27.5 180,352,335 26.4
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
50
) Renegotiated credits k
1st quarter/2016 1st quarter/2015
Credits renegotiated during the period (1)
9,812,239 10,221,969
Renegotiated when past due (2)
3,611,239 1,766,641
Renovated (3)
6,201,000 8,455,328
Changes on credits renegotiated when past due
Opening balance 19,652,990 9,030,112
Contracts (2)
3,611,239 1,766,641
Interest (received) and appropriated (448,654) (98,945)
Write-off (777,385) (514,339)
Closing balance (4)
22,038,190 10,183,469
Allowance for loan losses of the portfolio renegotiated when past due 9,495,142 6,110,873
(%) Allowance for loan losses on the portfolio 43.1% 60.0%
90 days default of the portfolio renegotiated when past due 4,302,909 1,587,602
(%) Portfolio default 19.5% 15.6%
(1) Represents the balance of all installments (past due and future) of loans renegotiated during the period using the internet, automated teller machines (ATM) or branch network.
(2) Renegotiated credit under debt composition as a result of payment delay by the clients.
(3) Renegotiated current credits (i.e. not past due) in the form of the extension or renewal of the credit or the granting of new loans for partial or full settlement of previous contracts or any other type of agreement that changes the maturity or the payment terms, originally agreed.
(4) Includes the amount of R$ 111,935 thousand (R$ 151,341 thousand as of March 31, 2015) related to renegotiated rural credits. The amount of R$ 5,336,999 thousand (R$ 5,276,075 thousand as of March 31, 2015), related to deferred credits from rural portfolio governed by specific legislation, is not included.
) Supplementary information l
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Undrawn credit lines 143,895,263 144,106,823 156,591,909
Guarantees provided (1)
8,996,932 9,730,748 8,508,488
Confirmed export credit 188,370 3,498,059 2,797,373
Contracted credit opened for import 944,478 1,239,989 958,074
Linked resources 2,880,137 2,772,443 1,426,589
Guaranteed values for linked deposits 2,812,354 2,723,589 1,410,020
(1) For these operations, the Bank maintains an allowance recorded in other liabilities - sundry, (Note 20,e) totaling R$ 501,898 thousand (R$ 541,312 thousand, on December 31, 2015 and R$ 301,401 thousand on March, 31, 2015) calculated in accordance with Resolution CMN 2,682/1999.
) Loan operations by line of credit from Fund for Workers’ Assistance (Fundo de Amparo ao mTrabalhador – FAT)
Lines of FAT TADE (1)
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Loans and discounted securities 2,574,692 2,682,826 3,104,243
Proger Urbano Investimento 18/2005 2,574,686 2,682,793 3,104,221
Proger Urbano Capital de Giro 15/2005 6 6 7
Proger Urbano Empreendedor Popular 01/2006 -- 27 15
Financing 517,996 551,349 631,802
Proger Exportação 27/2005 37,348 40,203 9,256
FAT Taxista 02/2009 312,356 306,224 257,109
FAT Turismo - Investimento 01/2012 128,569 138,424 159,817
FAT Turismo - Capital de Giro 02/2012 39,723 66,498 205,620
Rural and agribusiness financing 107,541 117,358 247,644
Proger Rural Custeio 02/2006 751 887 1,717
Proger Rural Investimento 13/2005 13,364 13,865 22,200
Pronaf Custeio 04/2005 2,673 2,709 3,488
Pronaf Investimento 05/2005 86,789 95,907 212,403
Giro Rural - Aquisição de Títulos 03/2005 3,964 3,990 7,836
Total 3,200,229 3,351,533 3,983,689
(1) TADE - Allocation Term of Special Deposits.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
51
11 - OTHER RECEIVABLES
) Specific credits a
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Extension of rural credits - National Treasury 343,983 333,908 1,590,988
Other 716 696 787
Total 344,699 334,604 1,591,775
) Sundry b
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Deferred tax asset - tax credit (Note 24.e) 40,959,045 39,995,482 28,310,795
Sundry debtors from escrow deposits - contingencies (Note 27.g.1) 28,363,420 27,359,764 22,717,259
Credit card operations (Note 10.a) 21,541,905 22,940,041 20,275,224
Sundry debtors from escrow deposits - lawsuit (Note 27.h.1) 16,650,943 16,399,235 15,637,858
Credit linked to acquired operations (Note 10.a) (1)
15,973,453 15,266,721 15,339,481
Fund of allocation of surplus - Previ (Note 26.f) 9,325,763 9,079,921 8,599,030
Income tax and social contribution to offset 8,837,801 8,046,349 11,902,155
Receivables acquisition 3,366,825 3,862,570 3,529,818
Receivables - other 3,096,083 3,679,591 1,311,288
Sundry debtors - domestic 2,162,525 2,313,728 3,074,908
Premiums on credits linked to operations acquired in assignment 1,851,015 1,718,461 2,056,370
National Treasury - interest rate equalization - agricultural crop - Law 8,427/1992
1,356,904 3,384,982 12,715,116
Receivables - non-financial companies 1,242,147 1,511,529 15,650
Receivables - National Treasury (2)
1,002,162 1,021,565 2,175,361
Rights for acquisition of royalties and government credits 955,266 996,876 1,085,005
Receivables – ECT – Banco Postal 773,838 1,498,881 1,360,737
Salary advances and other advances 256,298 286,804 255,795
Sundry debtors - foreign 216,050 191,166 247,629
Actuarial assets (Note 26.e) 174,650 169,474 6,499,810
Sundry debtors from escrow deposits - other 60,979 60,013 57,758
Sundry debtors for purchasing assets 22,979 41,142 50,390
Advances to cards transactions processing’s companies -- 1,093,351 3,382,782
Other 624,263 511,769 573,407
Total 158,814,314 161,429,415 161,173,626
Current assets 96,522,143 100,389,034 109,375,671
Non-current assets 62,292,171 61,040,381 51,797,955
(1) Refers to the portfolios of payroll loans and vehicle financing granted to individuals, acquired by the Bank through assignments with full recourse to the transferor, accounted for in accordance with CMN Resolution 3,533/2008.
(2) Refers mainly to amounts from subsidies in operations with MCR 6-2 resources, MCR 6-4 (Rural Credit Manual) and they are supported by specific legislation, like the CMN resolutions, the program of Bahia's cocoa farming recovery (CMN Resolution No. 2,960/2002), the Family Agriculture Price Guarantee Program (PGPAF) and the regional funds (FNDE, FDA and FDCO).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
52
12 - FOREIGN EXCHANGE PORTFOLIO
) Breakdown a
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Other Receivables
Exchange purchases pending settlement 21,511,293 20,789,338 19,125,892
Bills of exchange and time drafts in foreign currency 44,460 48,204 39,601
Receivables from sales of foreign exchange 18,253,056 11,730,483 9,141,778
(Advances received in National/foreign currency) (15,673,806) (11,378,722) (8,222,257)
Foreign currency receivables 1,124 1,805 6,997
Income receivable on advances granted and on financed imports 258,131 229,014 181,313
Total 24,394,258 21,420,122 20,273,324
Current assets 23,082,698 19,847,057 20,273,324
Non-current assets 1,311,560 1,573,065 --
Other liabilities
Exchange sales pending settlement 18,632,582 14,025,881 13,592,767
(Financed imports) (13,843) (11,721) (20,964)
Exchange purchase liabilities 21,853,809 18,491,690 15,775,250
(Advances on exchange contracts) (17,744,351) (16,993,015) (12,177,698)
Foreign currency payables 63,328 72,204 69,858
Unearned income on advances granted 11,967 14,901 5,013
Total 22,803,492 15,599,940 17,244,226
Current liabilities 22,167,222 13,737,534 14,409,414
Non-current liabilities 636,270 1,862,406 2,834,812
Net Foreign Exchange Portfolio 1,590,766 5,820,182 3,029,098
Memorandum Accounts
Credit opened for imports 1,006,666 1,293,982 1,092,835
Confirmed export credit 188,370 3,498,059 2,797,373
) Foreign exchange results b
1st quarter/2016 1st quarter/2015
Exchange income 5,267,366 5,299,167
Exchange expenses (4,637,089) (4,993,987)
Foreign Exchange Result 630,277 305,180
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
53
13 - OTHER ASSETS
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Assets not for own use 274,093 271,143 289,548
Assets in special regime 168,877 166,729 154,656
Real estate 47,023 50,104 76,256
Residential properties 15,917 13,605 9,600
Machinery and equipment 3,670 3,693 4,022
Vehicles 509 516 488
Other 38,097 36,496 44,526
Materials in stock 60,878 61,390 59,522
Subtotal 334,971 332,533 349,070
(Impairment) (1)
(123,397) (120,940) (129,643)
Prepaid Expenses 332,284 285,034 375,240
Personnel expenses - meal program 150,749 162,348 133,505
Entities abroad 73,400 84,229 73,018
Tax expenses 40,160 27 34,917
Promotion and public relations 36,998 -- 32,259
Rent 5,787 5,810 5,878
Premiums for purchased payroll credits (2)
5,318 11,953 71,978
Commissions paid to car dealers - financing of vehicles -- -- 54
Other 19,872 20,667 23,631
Total 543,858 496,627 594,667
Current assets 527,813 480,840 524,532
Non-current assets 16,045 15,787 70,135
(1) The Bank recognized, in the 1st quarter/2016, allowance expenses for impairment losses of assets not in use in the amount of R$ 3,240 thousand (allowance expenses in the amount of R$ 360 thousand in the 1st quarter/2015).
(2) The amounts are amortized over the maturity of the installments of loans acquired from other financial institutions.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
54
14- INVESTMENTS
) Changes in associates and joint ventures a
Book value Changes - 1st quarter/2016 Book value Equity income
Dec 31, 2015 Dividends Other Events Equity income Mar 31, 2016 Mar 31, 2015 1st quarter/2015
Domestic 15,100,387 (1,077,151) 210,500 1,024,064 15,257,800 13,577,830 997,442
Banco Votorantim S.A. (1) 3,828,153 (28,602) 188,563 47,280 4,035,394 3,804,661 74,647
Cateno Gestão de Contas de Pagamento S.A.
3,631,654 (35,643) (3,667) 38,242 3,630,586 3,608,035 12,235
Cielo S.A. 1,834,175 (22,663) 377 272,307 2,084,196 1,434,351 256,625
BB Mapfre SH1 Participações S.A. 1,978,221 (517,431) 14,933 288,312 1,764,035 1,610,511 297,859
Brasilprev Seguros e Previdência S.A. 1,790,343 (215,874) 531 167,105 1,742,105 1,450,893 165,614
Mapfre BB SH2 Participações S.A. 1,657,372 (55,000) 7,334 21,492 1,631,198 1,491,918 46,251
Neoenergia S.A. 1,168,345 -- -- 19,581 1,187,926 1,166,259 23,245
Elo Participações S.A. 747,076 -- 11,850 51,787 810,713 637,379 53,163
IRB - Brasil Resseguros S.A. 659,379 (108,415) 7,408 31,613 589,985 569,059 26,087
Brasilcap Capitalização S.A. 294,480 (93,210) -- 90,040 291,310 258,501 69,857
Other investments 181,360 (313) (1,457) (3,695) 175,895 181,144 (28,141)
Goodwill/(Bargain) purchase on acquisition of investments
707,512 -- (44,324) -- 663,188 829,657 --
Unrealized gains (2) (3,377,683) -- 28,952 -- (3,348,731) (3,464,538) --
Overseas 180,830 -- (37,430) -- 143,400 231,619 --
Goodwill on acquisition of investments 180,830 -- (37,430) -- 143,400 231,619 --
Total investments 15,281,217 (1,077,151) 173,070 1,024,064 15,401,200 13,809,449 997,442
Accumulated Impairment (9,018) -- -- -- (9,018) (9,018) --
(1) Excluded unrealized result arising from transactions with the Banco do Brasil.
(2) Unrealized profit arising from a new strategic partnership between BB Elo Cartões Participações S.A. and Cielo S.A., forming Cateno Gestão de Contas de Pagamento S.A. (Note 2).
Balances at Mar 31, 2016 Capital stock Adjusted
Shareholders’ Equity
Net income/ (loss) 1st
quarter/2016
Number of shares (in thousands) Ownership interest in the total capital % Common Preferred
Domestic
Banco Votorantim S.A. 7,483,756 8,080,002 86,211 43,114,693 9,581,043 50.00%
Cateno Gestão de Contas de Pagamento S.A. (1)
414,000 12,103,493 127,473 10,787,400 1,198,600 30.00%
Cielo S.A. 2,500,000 7,254,954 964,384 540,500 -- 28.73%
BB Mapfre SH1 Participações S.A. (2)
2,050,198 2,352,184 384,470 1,039,908 2,079,400 74.99%
Brasilprev Seguros e Previdência S.A. (2)
943,417 2,357,393 222,822 572 1,145 75.00%
Mapfre BB SH2 Participações S.A. (2)
1,968,380 3,263,301 42,982 369,163 384,231 50.00%
Neoenergia S.A. 4,739,025 10,038,280 190,883 701,327 -- 11.99%
Elo Participações S.A. 800,227 1,621,750 103,595 372 -- 49.99%
IRB - Brasil Resseguros S.A. (2)
1,453,080 2,898,905 212,372 63,727 -- 20.43%
Brasilcap Capitalização S.A. (2)
231,264 437,009 135,073 107,989 107,989 66.66%
(1) Indirect interest of the Bank in Cateno, through its subsidiary BB Elo Cartões Participações S.A. The total share of the Bank is 50.11% (Cielo S.A. holds 70% of direct interest in Cateno).
(2) Equity interest held by BB Seguros Participações S.A. The percentage of total participation is in Note 3.b. It includes harmonization adjustments in accounting practices.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
55
Balances at Dec 31, 2015 Capital stock Adjusted
Shareholders’ Equity
Net income/ (loss) 2015
Number of shares (in thousands) Ownership interest in the total capital % Common Preferred
Domestic
Banco Votorantim S.A. 7,483,756 7,731,074 481,720 43,114,693 9,581,043 50.00%
Cateno Gestão de Contas de Pagamento S.A. (1)
414,000 12,094,830 443,747 2,397,200 1,198,600 30.00%
Cielo S.A. 2,500,000 6,386,403 3,170,289 540,500 -- 28.72%
BB Mapfre SH1 Participações S.A. (2)
2,050,198 2,637,803 1,680,709 1,039,908 2,079,400 74.99%
Brasilprev Seguros e Previdência S.A. (2)
943,417 2,423,237 1,155,543 572 1,145 75.00%
Mapfre BB SH2 Participações S.A. (2)
1,968,380 3,315,651 430,940 369,163 384,231 50.00%
Neoenergia S.A. 4,739,025 9,872,539 467,529 701,327 -- 11.99%
Elo Participações S.A. 800,227 1,494,451 468,070 372 -- 49.99%
IRB - Brasil Resseguros S.A. (2)
1,453,080 3,226,706 761,614 63,727 -- 20.43%
Brasilcap Capitalização S.A. (2)
231,264 441,764 360,460 107,989 107,989 66.66%
(1) Indirect interest of the Bank in Cateno, through its subsidiary BB Elo Cartões Participações S.A. The total share of the Bank is 50.11% (Cielo S.A. holds 70% of direct interest in Cateno).
(2) Equity interest held by BB Seguros Participações S.A. The percentage of total participation is in Note 3.b. It includes harmonization adjustments in accounting practices.
Balances at Mar 31, 2015 Capital stock Adjusted
Shareholders’ Equity
Net income/ (loss) 1st
quarter/2015
Number of shares (in thousands) Ownership interest in the total capital % Common Preferred
Domestic
Banco Votorantim S.A. 7,483,756 7,678,712 121,854 43,114,693 9,581,043 50.00%
Cateno Gestão de Contas de Pagamento S.A. (1)
414,000 12,026,784 40,783 10,787,400 1,198,600 30.00%
Cielo S.A. 2,000,000 4,989,360 893,870 450,417 -- 28.75%
BB Mapfre SH1 Participações S.A. (2)
2,050,197 2,147,458 397,201 1,039,908 2,079,400 74.99%
Brasilprev Seguros e Previdência S.A. (2)
943,417 1,971,369 220,072 572 1,145 75.00%
Mapfre BB SH2 Participações S.A. (2)
1,968,380 2,984,741 92,500 369,163 384,231 50.00%
Neoenergia S.A. 4,739,025 9,857,530 121,798 2,267,492 -- 11.99%
Elo Participações S.A. 800,227 1,275,013 106,347 372 -- 49.99%
IRB - Brasil Resseguros S.A. (2)
1,453,080 2,793,121 128,370 63,727 -- 20.43%
Brasilcap Capitalização S.A. (2)
231,264 387,790 104,795 107,989 107,989 66.66%
(1) Indirect interest of the Bank in Cateno, through its subsidiary BB Elo Cartões Participações S.A. The total share of the Bank is 50.13% (Cielo S.A. holds 70% of direct interest in Cateno).
(2) Equity interest held by BB Seguros Participações S.A. The percentage of total participation is in Note 3.b. It includes harmonization adjustments in accounting practices.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
56
) Financial information from the equity interest not included in the consolidated financial bstatements
Balance sheet
Mar 31, 2016
Brasilprev Seguros e
Previdência S.A.
Banco Votorantim
S.A
Brasilcap Capitalização
S.A.
BB Mapfre SH1 Participações
S.A.
Mapfre BB SH2 Participações
S.A.
IRB - Brasil Resseguros
S.A. Cielo S.A.
Other investments
Total
Total Assets 160,636,244 109,398,737 13,175,113 13,627,055 14,455,676 14,110,042 22,457,500 14,382,123 362,242,490
Cash and Cash Equivalents 3,614 209,863 399 171,164 208,719 13,884 39,245 508 647,396
Short-term interbank investments -- 17,030,291 -- -- -- 635,534 138,844 102,809 17,907,478
Securities and derivative financial instruments 158,920,633 34,046,412 12,154,256 6,043,402 4,598,371 5,448,140 390,400 419,030 222,020,644
Loan operations -- 43,291,742 -- -- -- -- -- -- 43,291,742
Other credits and other assets 1,512,445 14,209,038 1,012,075 7,049,721 9,200,399 7,718,448 11,427,079 1,170,701 53,299,906
Permanent assets 199,552 611,391 8,383 362,768 448,187 294,036 10,461,932 12,689,075 25,075,324
Total Liabilities 158,278,851 101,318,735 12,738,104 11,274,871 11,192,375 11,211,137 15,202,546 2,228,862 323,445,481
Deposits and securities sold under repurchase agreements
-- 41,143,381 -- -- -- -- -- -- 41,143,381
Other liabilities 158,278,851 60,175,354 12,738,104 11,274,871 11,192,375 11,211,137 15,202,546 2,228,862 282,302,100
Technical provisions for insurance, pension plans and capitalization
157,295,940 -- 11,723,268 8,272,461 8,057,851 8,985,554 -- -- 194,335,074
Subordinated debts and equity and debt hybrid securities
-- 5,709,372 -- -- -- -- -- -- 5,709,372
Other 982,911 54,465,982 1,014,836 3,002,410 3,134,524 2,225,583 15,202,546 2,228,862 82,257,654
Shareholders' Equity 2,357,393 8,080,002 437,009 2,352,184 3,263,301 2,898,905 7,254,954 12,153,261 38,797,009
% of Total Share 75.00% 50.00% 66.66% 74.99% 50.00% 20.43% 28.73% -- --
Shareholders' Equity (proportional to the equity interest)
1,767,927 4,040,001 291,310 1,763,903 1,631,651 592,104 2,084,196 8,169,347 20,340,439
Goodwill/(Bargain) purchase on acquisition of investments
(1,561) 106,480 31,898 -- -- 17,856 508,515 143,400 806,588
Other amounts (1)
(25,822) (4,607) -- 132 (453) (2,119) -- (5,712,958) (5,745,827)
Balance of the Investment 1,740,544 4,141,874 323,208 1,764,035 1,631,198 607,841 2,592,711 2,599,789 15,401,200
(1) It refers, mainly, to unrealized results and harmonization adjustments in accounting practices of non-financial companies to Chart of Accounts for
Financial Institutions - Cosif.
Statement of Income
1st quarter/2016
Brasilprev Seguros e
Previdência S.A.
Banco Votorantim
S.A.
Brasilcap Capitalização
S.A.
BB Mapfre SH1 Participações
S.A.
Mapfre BB SH2 Participações
S.A.
IRB - Brasil Resseguros
S.A. Cielo S.A.
Other investments
Total
Income from financial intermediation
145,029 851,650 212,810 190,477 191,705 201,256 -- -- 1,792,927
Service fee income 430,217 117,862 -- -- 2,239 -- 2,030,853 674,867 3,256,038
Other administrative expenses (50,282) (265,697) (5,944) (59,313) (127,970) (26,716) (125,239) (276,587) (937,748)
Other Operating Income/Expenses
(118,430) (345,615) 40,938 518,817 9,662 114,709 (473,497) 76,661 (176,755)
Non-operating income -- (435) 108 (130) (209) 13,977 (11,227) 1,058 3,142
Result before tax 406,534 357,765 247,912 649,851 75,427 303,226 1,420,890 475,999 3,937,604
Tax about profit and profit sharing (183,712) (271,554) (112,839) (265,381) (32,445) (90,854) (456,506) (58,950) (1,472,241)
Net Income 222,822 86,211 135,073 384,470 42,982 212,372 964,384 417,049 2,465,363
% of Total Share 75.00% 50.00% 66.66% 74.99% 50.00% 20.43% 28.73% -- --
Net Income (proportional to the equity interest)
167,105 43,106 90,040 288,312 21,492 43,377 277,047 138,157 1,068,636
Other amounts (1) -- 4,174 -- -- -- (11,764) (4,740) (32,242) (44,572)
Result in the equity method investments
167,105 47,280 90,040 288,312 21,492 31,613 272,307 105,915 1,024,064
(1) It refers, mainly, to unrealized results and harmonization adjustments in accounting practices of non-financial companies to Chart of Accounts for Financial Institutions - Cosif.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
57
Balance sheet
Dec 31, 2015
Brasilprev Seguros e
Previdência S.A.
Banco Votorantim
S.A
Brasilcap Capitalização
S.A.
BB Mapfre SH1 Participações
S.A.
Mapfre BB SH2 Participações
S.A.
IRB - Brasil Resseguros S.A.
Cielo S.A. Other
investments Total
Total Assets 151,373,655 110,379,915 13,818,200 14,144,637 15,124,957 14,441,038 24,251,378 15,328,868 358,862,648
Cash and Cash Equivalents 14 179,915 817 122,338 169,502 13,894 34,519 3,653 524,652
Short-term interbank investments -- 17,186,642 -- -- -- 577,447 9,467 -- 17,773,556
Securities and derivative financial instruments 149,739,705 32,974,008 12,907,255 6,492,107 4,385,502 5,620,654 279,579 377,515 212,776,325
Loan operations -- 44,329,680 -- -- -- -- -- -- 44,329,680
Other credits and other assets 1,436,501 14,947,330 902,287 7,195,294 10,114,638 7,933,277 13,272,436 1,657,438 57,459,201
Permanent assets 197,435 762,340 7,841 334,898 455,315 295,766 10,655,377 13,290,262 25,999,234
Total Liabilities 148,950,418 102,768,172 13,376,436 11,506,835 11,809,306 11,227,797 17,872,593 2,997,946 320,509,503
Deposits and securities sold under repurchase agreements
-- 37,005,799 -- -- -- -- -- 3,407 37,009,206
Other liabilities 148,950,418 65,762,373 13,376,436 11,506,835 11,809,306 11,227,797 17,872,593 2,994,539 283,500,297
Technical provisions for insurance, pension plans and capitalization
148,246,754 -- 12,354,368 8,210,249 8,220,696 9,055,437 -- -- 186,087,504
Subordinated debts and equity and debt hybrid securities
-- 6,045,936 -- -- -- -- -- -- 6,045,936
Other 703,664 59,716,437 1,022,068 3,296,586 3,588,610 2,172,360 17,872,593 2,994,539 91,366,857
Shareholders' Equity 2,423,237 7,611,743 441,764 2,637,802 3,315,651 3,213,241 6,378,785 12,330,922 38,353,145
% of Total Share 75.00% 50.00% 66.66% 74.99% 50.00% 20.43% 28.72% -- --
Shareholders' Equity (proportional to the equity interest)
1,817,428 3,805,872 294,480 1,978,088 1,657,826 656,308 1,831,987 8,140,618 20,182,607
Goodwill/(Bargain) purchase on acquisition of investments
(1,561) 121,597 34,187 -- -- 17,856 535,433 180,830 888,342
Other amounts (1)
(27,085) 22,281 -- 132 (453) 3,071 (1,353,939) (4,433,739) (5,789,732)
Balance of the Investment 1,788,782 3,949,750 328,667 1,978,220 1,657,373 677,235 1,013,481 3,887,709 15,281,217
(1) It refers, mainly, to unrealized results and harmonization adjustments in accounting practices of non-financial companies to Chart of Accounts for Financial Institutions - Cosif.
Mar 31, 2015
Brasilprev Seguros e
Previdência S.A.
Banco Votorantim
S.A
Brasilcap Capitalização
S.A.
BB Mapfre SH1 Participações
S.A.
Mapfre BB SH2 Participações
S.A.
IRB - Brasil Resseguros S.A.
Cielo S.A. Other
investments Total
Total Assets 122,986,991 105,734,915 12,862,183 12,084,651 14,064,914 13,460,766 21,979,707 14,216,479 317,390,606
Cash and Cash Equivalents 5,015 123,696 590 63,595 261,061 34,347 5,668 11,627 505,599
Short-term interbank investments -- 14,743,120 -- -- -- 343,221 -- 79 15,086,420
Securities and derivative financial instruments 121,641,204 29,462,601 12,026,360 5,298,967 4,029,862 5,214,479 132,540 375,840 178,181,853
Loan operations -- 48,613,802 -- -- -- -- -- -- 48,613,802
Other credits and other assets 1,148,154 11,876,537 823,458 6,476,836 9,106,950 7,582,355 11,434,276 1,556,696 50,005,262
Permanent assets 192,618 915,159 11,775 245,253 667,041 286,364 10,407,223 12,272,237 24,997,670
Total Liabilities 121,015,622 98,056,203 12,474,393 9,937,193 11,080,173 10,667,645 16,990,347 2,128,351 282,349,927
Deposits and securities sold under repurchase agreements
-- 34,155,157 -- -- -- -- -- -- 34,155,157
Other liabilities 121,015,622 63,901,046 12,474,393 9,937,193 11,080,173 10,667,645 16,990,347 2,128,351 248,194,770
Technical provisions for insurance, pension plans and capitalization
120,327,662 -- 11,685,681 7,227,330 7,572,522 8,566,546 -- -- 155,379,741
Subordinated debts and equity and debt hybrid securities
-- 6,629,352 -- -- -- -- -- -- 6,629,352
Other 687,960 57,271,694 788,712 2,709,863 3,507,651 2,101,099 16,990,347 2,128,351 86,185,677
Shareholders' Equity 1,971,369 7,678,712 387,790 2,147,458 2,984,741 2,793,121 4,989,360 12,088,128 35,040,679
% of Total Share 75.00% 50.00% 66.66% 74.99% 50.00% 20.43% 28.75% -- --
Shareholders' Equity (proportional to the equity interest)
1,478,428 3,839,356 258,501 1,610,379 1,492,371 570,498 1,434,351 7,995,653 18,679,537
Goodwill/(Bargain) purchase on acquisition of investments
(1,561) 165,083 42,453 -- -- 17,856 605,826 233,178 1,062,835
Other amounts (1)
(27,534) (34,695) -- 132 (454) (1,439) -- (5,868,933) (5,932,923)
Balance of the Investment 1,449,333 3,969,744 300,954 1,610,511 1,491,917 586,915 2,040,177 2,359,898 13,809,449
(1) It refers, mainly, to unrealized results and harmonization adjustments in accounting practices of non-financial companies to Chart of Accounts for Financial Institutions - Cosif.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
58
1st quarter/2015
Brasilprev Seguros e
Previdência S.A.
Banco Votorantim
S.A.
Brasilcap Capitalização
S.A.
BB Mapfre SH1 Participações
S.A.
Mapfre BB SH2 Participações
S.A.
IRB - Brasil Resseguros
S.A. Cielo S.A.
Other investments
Total
Income from financial intermediation
163,253 729,738 124,469 178,227 158,164 143,782 -- -- 1,497,633
Service fee income 344,557 110,532 -- -- 2,906 -- 1,893,270 552,660 2,903,925
Other administrative expenses (44,734) (277,581) (10,380) (44,414) (120,512) (24,062) (120,626) (251,223) (893,532)
Other Operating Income/Expenses
(94,080) (261,057) 60,564 488,982 119,237 91,950 (468,299) 20,118 (42,585)
Non-operating income 18 (2,976) 100 59 107 12,379 (5,324) (7,858) (3,495)
Result before tax 369,014 298,656 174,753 622,854 159,902 224,049 1,299,021 313,697 3,461,946
Tax about profit and profit sharing
(148,942) (176,802) (69,958) (225,653) (67,402) (95,679) (405,151) (55,001) (1,244,588)
Net Income 220,072 121,854 104,795 397,201 92,500 128,370 893,870 258,696 2,217,358
% of Total Share 75.00% 50.00% 66.66% 74.99% 50.00% 20.43% 28.75% -- --
Net Income (proportional to the equity interest)
165,043 60,927 69,857 297,859 46,251 26,220 256,972 85,383 1,008,512
Other amounts (1) 571 13,720 -- -- -- (133) (347) (24,881) (11,070)
Result in the equity method investments
165,614 74,647 69,857 297,859 46,251 26,087 256,625 60,502 997,442
(1) It refers, mainly, to unrealized results and harmonization adjustments in accounting practices of non-financial companies to Chart of Accounts for Financial Institutions - Cosif.
) Other investments c
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Tax incentive investments 35,189 35,189 33,596
Equity securities 57 58 58
Stocks and shares 89,227 89,346 79,950
Other investments 7,525 7,625 7,534
Other equity abroad 84,835 93,082 76,469
Total 216,833 225,300 197,607
(Accumulated impairment) (45,243) (45,251) (45,234)
) Goodwill arising on acquisition of investments d
Changes of goodwill BB Consolidated
1st quarter/2016 1st quarter/2015
Opening balance 889,903 1,077,869
Amortizations (1)
(52,274) (50,550)
Foreign exchange fluctuation (2)
(29,480) 35,518
Closing balance 808,149 1,062,837
(1) Recorded in Other Administrative Expenses.
(2) Levied on the goodwill from BB Americas e do Banco Patagonia.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
59
) Expected goodwill amortization e
2016 2017 2018 2019 After 2020 Total
Banco do Brasil 67,422 90,617 30,541 31,141 30,159 249,880
Banco Votorantim 45,347 61,133 -- -- -- 106,480
Banco Patagonia 18,016 21,866 22,289 22,733 19,267 104,171
Banco do Brasil Americas 4,059 7,618 8,252 8,408 10,892 39,229
Tax effects (1)
(30,340) (40,778) (13,743) (14,013) (13,572) (112,446)
Net Total 37,082 49,839 16,798 17,128 16,587 137,434
Other investments
BB-BI 80,752 123,517 141,696 162,550 -- 508,515
Cielo 80,752 123,517 141,696 162,550 -- 508,515
BB Seguros 12,687 10,743 11,040 10,028 5,256 49,754
Brasilcap 6,866 8,593 8,780 7,659 -- 31,898
IRB-Brasil Resseguros S.A. 5,821 2,150 2,260 2,369 5,256 17,856
BB Consolidated 160,861 224,877 183,277 203,719 35,415 808,149
Tax effects (1)
(70,992) (100,013) (81,260) (90,570) (15,359) (358,194)
Net Total 89,869 124,864 102,017 113,149 20,056 449,955
(1) 25% of income tax and 20% of social contribution for financial companies and for non-financial companies of insurance, private pension plan and capitalization, and 25% of income tax and 9% of social contribution for other non-financial companies.
The expected amortization of goodwill arising on the acquisition of investments is based on the projections of results
made at the time of the purchase, prepared by specialized firms or technical departments within the Bank, and
considers the timing of the estimates and discount rates used in calculating the net present value of expected cash
flows.
) Goodwill impairment test f
The recoverable amount of goodwill arising on acquisition of investments is determined by the value in use, which is
the discounted value of the cash flow projections of the invested entity (cash-generating unit).
Assumptions used to project these cash flows are based on public information, budgets and / or business plans of the
purchased entities. These assumptions consider current and past performance, as well as expected market and
macroeconomic growth.
The cash flow of the entities below were actively projected for ten years and considered perpetual from the eleventh
year with fixed growth rates. For the periods that exceed the terms of the budget or business plan, the growth
estimates are in line with those adopted by the entities. The nominal discount rate is determined annually based on
the CAPM (Capital Asset Pricing Model) adapted for the Brazilian market and referenced in Reais (R$).
Entity (cash-generating unit) Growth rate p.a. (1)
Discount rate p.a. (2)
Banco Votorantim 4,2% 15,5%
BB Americas 2,0% 8,19%
Banco Patagonia 25,5% 34,65%
(1) Nominal growth in perpetuity.
(2) Geometric average of ten years of projections, except BB Americas, that considered a geometric average of seven years of projections.
According to the sensitivity analysis performed, there is no indication that changes in the assumptions would cause
the book value of the cash-generating units to exceed the recoverable amount.
The recoverable amount of the goodwill arising on the acquisition of Cielo, as well as of the goodwill recognized in
the BB Seguros/BB Seguridade, is determined by the net realizable value through sale, based on the share price of
the companies on BM&FBovespa.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
60
Entity (cash-generating unit) Share price (1)
BB Seguridade (BBSE3) R$ 24,81
Cielo (CIEL3) R$ 36,66
(1) Share price quoted at September 30, 2015.
In the first quarter 2016 and in the first quarter 2015, there was no impairment loss on goodwill arising on the
acquisition of investments.
15- PROPERTY AND EQUIPMENT
Dec 31, 2015 1st quarter/2016 Mar 31, 2016 Mar 31, 2015
Book value Changes Depreciation Cost value Accumulated depreciation
Accumulated impairment
Book value Book value
Buildings 3,867,155 (11,554) (90,369) 6,587,800 (2,813,037) (9,531) 3,765,232 3,724,909
Furniture and equipment in use 1,488,760 27,163 (62,838) 3,424,957 (1,971,847) (25) 1,453,085 1,426,865
Data processing systems 1,186,740 27,736 (106,633) 4,152,530 (3,044,687) -- 1,107,843 1,131,748
Facilities 207,947 (911) (8,665) 985,792 (787,421) -- 198,371 204,704
Land 197,476 5,100 -- 202,576 -- -- 202,576 199,968
Security systems 162,518 7,811 (6,946) 399,576 (236,193) -- 163,383 162,773
Constructions in progress 102,952 44,949 -- 147,901 -- -- 147,901 90,583
Communication systems 100,085 16,355 (4,539) 275,609 (163,708) -- 111,901 89,698
Transport systems 7,652 104 (282) 14,995 (7,521) -- 7,474 7,620
Furniture and equipment in stock 1,749 (29) -- 1,720 -- -- 1,720 1,763
Total 7,323,034 116,724 (280,272) 16,193,456 (9,024,414) (9,556) 7,159,486 7,040,631
16 - INTANGIBLE ASSETS
) Changes and breakdown a
Dec 31, 2015 1st quarter/2016 Mar 31, 2016 Mar 31, 2015
Book value Acquisitions Amortization Cost value Accumulated amortization
Accumulated impairment
Book value Book value
Rights to manage payroll 5,301,265 2,500 (461,721) 9,342,060 (4,450,276) (49,740) 4,842,044 6,047,586
Goodwill on acquisition of absorbed company (1) 1,907,615 -- (225,039) 4,961,028 (3,278,452) -- 1,682,576 2,513,431
Softwares 1,709,152 85,535 (53,145) 2,768,767 (1,027,225) -- 1,741,542 1,387,411
Other intangible assets 392,840 23,664 (43,710) 615,683 (242,889) -- 372,794 242,740
Total 9,310,872 111,699 (783,615) 17,687,538 (8,998,842) (49,740) 8,638,956 10,191,168
(1) Refers to the goodwill from the merger of Banco Nossa Caixa on November 2009.
) Estimate for amortization b
2016 2017 2018 2019 2020 After 2020 Total
Amounts to be amortized 2,219,422 2,641,430 1,497,554 956,524 385,820 938,206 8,638,956
) Impairment test c
The impairment test of goodwill on the acquisition of Banco Nossa Caixa, which was merged into Banco do Brasil,
considers the value in use of Banco do Brasil´s operations in the state of São Paulo (cash-generating unit). Cash
flows are based on cash-generating unit results in 2015, and on the 2016 and 2017 budgets and internal projections
of results from 2018, for five years.
The assumptions adopted for the calculation are based on Banco do Brasil's Corporate Strategy and macroeconomic
scenario. They consider the current and past performance and expected growth in the market segment.
Cash flows were discounted by the Bank’s cost of own capital. The nominal discount rate is measured annually
based on the Capital Asset Pricing Model – CAPM adapted for the Brazilian market and referenced in Reais (R$).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
61
The impairment test of the goodwill from the merger of Brasilprev Nosso Futuro Seguros e Previdência S.A. follows
the same methodology of the goodwill on acquisition of investments listed in
Entity (Cash-generating unit) Growth rate p.a Discount rate p.a.
Banco do Brasil - state of São Paulo - Goodwill Banco Nossa Caixa (1) (2)
2.5% 15.3%
(1) Nominal growth in perpetuity.
(2) Geometric average of five years of projections.
According to the sensitivity analysis performed, there is no indication that changes in the assumptions would cause
the book value of the cash-generating unit to exceed its recoverable amount.
In the 1st quarter 2016 and 1
st quarter 2015, there was no impairment loss on goodwill on merged company.
17 - DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
) Deposits a
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Demand Deposits 62,631,054 66,549,760 73,704,884
Individuals 27,589,165 31,156,677 31,534,604
Companies 19,600,472 23,101,575 23,617,582
Restricted 11,210,993 5,648,623 13,346,647
Government 1,567,519 1,808,898 1,705,357
Financial system institutions 733,044 617,029 653,865
Foreign currency 710,508 774,883 899,790
Related companies 683,705 2,306,081 1,235,899
Special from Federal Treasury 282,848 268,841 413,834
Domiciled abroad 127,629 75,041 68,124
Other 125,171 792,112 229,182
Saving Deposits 151,919,172 151,845,281 144,089,086
Individuals 141,591,867 142,195,252 134,945,842
Companies 9,931,655 9,302,317 8,840,276
Related companies 380,515 332,789 289,235
Financial system institutions 15,135 14,923 13,733
Interbank Deposits 36,885,394 41,482,547 36,736,128
Time Deposits 202,573,182 204,542,130 211,894,634
Judicial 114,139,941 113,652,254 118,590,770
National currency 56,691,197 58,101,859 62,707,811
Foreign currency 26,428,218 27,256,485 25,267,566
Fundo de Amparo ao Trabalhador - FAT (Note 17.e) 3,835,218 4,102,449 4,148,296
Funproger (Note 17.f) 287,403 263,488 242,016
Other 1,191,205 1,165,595 938,175
Other Deposits 29,943 -- --
Total 454,038,745 464,419,718 466,424,732
Current liabilities 397,930,613 406,119,891 403,984,256
Non-current liabilities 56,108,132 58,299,827 62,440,476
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
62
) Segregation of deposits by repayment date b
Without maturity
Up to 3 months
3 to 12 months
1 to 3 years 3 to 5 years More than 5
years Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Time deposits (1)
121,724,989 20,143,671 9,495,274 20,877,748 30,331,500 -- 202,573,182 204,542,130 211,894,634
Saving deposits 151,919,172 -- -- -- -- -- 151,919,172 151,845,281 144,089,086
Demand deposits 62,631,054 -- -- -- -- -- 62,631,054 66,549,760 73,704,884
Interbank deposits
2,304,215 13,361,111 16,321,184 3,994,223 865,118 39,543 36,885,394 41,482,547 36,736,128
Other deposits 29,943 -- -- -- -- -- 29,943 -- --
Total 338,609,373 33,504,782 25,816,458 24,871,971 31,196,618 39,543 454,038,745 464,419,718 466,424,732
(1) Includes the amount R$ 54,796,512 thousand (R$ 56,772,137 thousand as of Dec 31, 2015 and R$ 61,556,071 thousand as of Mar 31, 2015), relating to time deposits with early repurchase clause (liquidity commitment), classified based on the contractual maturity dates.
) Securities sold under repurchase agreements c
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Own Portfolio 48,685,181 68,880,140 44,221,747
Corporate bonds 30,470,744 52,141,995 37,847,989
Treasury Financial Bills 16,874,661 14,615,322 5,203,538
Securities abroad 1,339,776 2,122,823 1,170,220
Third-Party Portfolio 305,723,178 264,641,508 284,943,972
National Treasury Bills 129,153,521 117,828,280 198,855,434
Treasury Financial Bills 116,262,471 399,993 36,058,615
National Treasury Notes 60,307,125 146,413,188 50,029,921
Securities abroad 61 47 2
Total 354,408,359 333,521,648 329,165,719
Current liabilities 320,626,154 294,973,701 299,403,708
Non-current liabilities 33,782,205 38,547,947 29,762,011
) Expenses with deposits and with securities sold under repurchase agreements d
1st quarter/2016 1st quarter/2015
Deposits (6,408,476) (7,834,392)
Saving deposits (2,991,891) (2,562,751)
Judicial deposits (2,890,202) (2,681,217)
Time deposits (2,140,991) (2,399,280)
Interbank deposits 1,614,608 (191,144)
Securities sold under repurchase agreements (10,753,349) (9,069,866)
Third-party portfolio (9,071,292) (7,820,025)
Own portfolio (1,682,057) (1,249,841)
Funds from acceptance and issuance of securities (1)
(5,907,960) (4,221,933)
Agribusiness letters of credit (3,879,979) (2,761,712)
Financial bills (1,012,067) (801,598)
Securities issues abroad (540,285) (278,786)
Letters of credit – Real estate (475,629) (379,837)
Subordinated debt abroad (2)
(152,094) (137,066)
Equity and debt hybrid securities (3)(4)
(535,479) (516,207)
Other (186,723) (179,956)
Total (23,944,081) (21,959,420)
(1) Funds from acceptance and issuance of securities are disclosed in Note 19.
(2) Subordinated debt abroad are disclosed in Note 20.c.
(3) Equity and debt hybrid securities are disclosed in Note 20.d.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
63
) Fund for worker's assistance (Fundo de Amparo ao Trabalhador – FAT) e
Program Resolution/
TADE (1)
Repayment of FAT Funds Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Type(2)
Initial date Final date Available
TMS(3)
Applied TJLP
(4)
Total Available
TMS(3)
Applied TJLP
(4)
Total Available
TMS(3)
Applied TJLP
(4)
Total
Proger Rural and Pronaf 13,309 91,297 104,606 55,004 98,318 153,322 67,069 240,864 307,933
Pronaf Custeio 04/2005 RA 11/2005 -- 206 1,718 1,924 181 1,841 2,022 285 2,208 2,493
Pronaf Investimento 05/2005 RA 11/2005 -- 12,426 81,527 93,953 53,075 88,252 141,327 65,219 222,555 287,774
Rural Custeio 02/2006 RA 11/2005 -- 88 427 515 104 485 589 230 990 1,220
Rural Investimento 13/2005 RA 11/2005 -- 589 7,625 8,214 1,644 7,740 9,384 1,335 15,111 16,446
Proger Urbano 713,617 2,415,255 3,128,872 753,477 2,523,289 3,276,766 154,280 2,939,494 3,093,774
Urbano Investimento 18/2005 RA 11/2005 -- 713,617 2,415,255 3,128,872 753,477 2,523,289 3,276,766 154,276 2,939,490 3,093,766
Urbano Capital de Giro 15/2005 RA 11/2005 -- -- -- -- -- -- -- 4 4 8
Other 94,104 507,636 601,740 132,916 539,445 672,361 122,841 623,748 746,589
Exports 27/2005 RA 11/2005 -- 712 35,844 36,556 804 37,352 38,156 2,719 9,068 11,787
FAT Taxista 02/2009 RA 09/2009 -- 54,029 310,154 364,183 82,299 304,362 386,661 49,308 256,094 305,402
FAT Turismo Investimento
01/2012 RA 08/2012 -- 9,536 127,093 136,629 5,409 137,240 142,649 4,467 158,836 163,303
FAT Turismo Capital de Giro
02/2012 RA 08/2012 -- 29,827 34,545 64,372 44,404 60,491 104,895 66,347 199,750 266,097
Total 821,030 3,014,188 3,835,218 941,397 3,161,052 4,102,449 344,190 3,804,106 4,148,296
(1) TADE - Allocation Term of Special Deposits.
(2) RA - Automatic Return (monthly, 2% of the balance) and SD - Available Balance.
(3) Funds remunerated by the Taxa Média Selic (average Selic Rate - TMS).
(4) Funds remunerated by Taxa de Juros de Longo Prazo (long-term interest rate - TJLP).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
64
FAT is a special accounting and financial fund, established by Law 7,998/1990, associated with the Ministério do
Trabalho e Emprego (Ministry of Labor and Employment) and managed by the Executive Council of the Fundo de
Amparo ao Trabalhador (Fund for Workers’ Assistance) - Codefat. Codefat is a collective, tripartite, equal level
organization, composed of representatives of workers, employers and government.
The main actions to promote employment using FAT funds are structured around the Programs for the Generating
Employment and Earnings (Proger), resources for which are allocated through special deposits, established by Law
8,352/1991, in official federal financial institutions. These programs include, among others, the urban Proger program
(Investment and Working Capital) and the rural Proger program and the National Program for Strengthening Family
Farming - Pronaf, in addition to the special lines such as FAT Integrar – Rural e Urbano, FAT Giro Setorial – Micro e
Pequenas Empresas (micro and small-sized companies), FAT Giro Setorial – Médias e Grandes Empresas (medium
and large-sized companies), FAT Giro Setorial Veículos – Micro e Pequenas Empresas (micro and small-sized
companies), FAT Giro Setorial Veículos – Médias e Grandes Empresas (medium and large-sized companies), FAT
Fomentar – Micro e Pequenas Empresas (micro and small-sized companies), FAT Fomentar – Médias e Grandes
Empresas (medium and large-sized companies), FAT Giro Agropecuário, FAT Inclusão Digital (digital inclusion), FAT
Taxista (taxi), FAT Turismo Investimento and FAT Turismo Capital de Giro.
The FAT special deposits allocated to Banco do Brasil incur interest on a daily pro rata die basis using the Average
Selic Rate (TMS) when not lent out. As they are disbursed as loans, the interest rate is swapped to the Long-term
Interest Rate (TJLP) until the maturity of the loans. The earnings on the Bank’s funds are paid to FAT on a monthly
basis, as established in Codefat Resolutions 439/2005 and 489/2006.
) Guarantee fund for generation of employment and earnings (Funproger) f
The Guarantee Fund for Generation of Employment and Earnings (Funproger) is a special accounting fund
established on November 23, 1999 by Law 9,872/1999, amended by Law 10,360/2001 and by Law 11,110/2005 and
regulated by Codefat Resolution 409/2004, and its amendments. It is managed by Banco do Brasil under the
supervision of Codefat/MTE and the balance at March 31, 2016 is R$ 287,403 thousand (R$ 263,488 thousand as of
December 31, 2015 and R$ 242,016 thousand as of March 31, 2015).
The objective of Funproger is to provide guarantees to entrepreneurs who would otherwise not have the necessary
guarantees to contract financing by Proger Urbano and Programa Nacional de Microcrédito Produtivo Orientado,
through the payment of a commission. The net assets of Funproger are accumulated through funds arising from the
difference between the Average Selic Rate (TMS) and the Long-Term Interest Rate (TJLP) in respect of the
remuneration of the special deposit balances available in FAT. Other sources of funds are the earnings from its
operations and the income on its excess cash resources paid by Banco do Brasil, the fund manager.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
65
18 - BORROWINGS AND ONLENDINGS
) Borrowings a
up to 90 days from 91 to 360 days
from 1 to 3 years
from 3 to 5 years
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Domestic -- -- 52,277 -- 52,277 38,494 --
Borrowing from non-financial companies
-- -- 52,277 -- 52,277 38,494 --
Overseas 5,192,571 15,653,253 3,867,805 464,679 25,178,308 29,616,866 25,133,443
Borrowings from bankers abroad
5,165,758 15,618,610 3,867,805 464,679 25,116,852 29,540,426 24,700,632
Linked to public sector borrowings
-- -- -- -- -- -- 198,962
Imports 26,813 34,643 -- -- 61,456 76,440 233,849
Total 5,192,571 15,653,253 3,920,082 464,679 25,230,585 29,655,360 25,133,443
Current liabilities 20,845,824 22,214,249 18,976,030
Non-current liabilities 4,384,761 7,441,111 6,157,413
) Onlendings b
Domestic - official institutions
Programs Finance charges Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
National Treasury - Rural Credit 190,931 178,145 296,689
Pronaf TMS (if available)
Fixed 0.50% p.a. to 4.00% p.a. (if applicable)
68,371 59,603 173,166
Cacau (cocoa) IGP-M + 8.00% p.a. or
TJLP + 0.60% p.a. or 6.35% p.a. 95,237 93,175 88,555
Recoop Fixed 5.75% p.a. to 8.25% p.a. or
IGP-DI + 1.00% p.a. or IGP-DI + 2.00% p.a.
21,579 23,136 33,613
Other 5,744 2,231 1,355
BNDES
Fixed 0.00% p.a. to 9.50% p.a. TJLP + 0.00% p.a. to 5.40% p.a. IPCA + 7.02% p.a. to 9.41% p.a. Selic + 0.40% p.a. to 2.50% p.a.
FX Variation + 0.90% p.a. to 6.89% p.a.
36,399,842 37,981,403 42,263,854
Caixa Econômica Federal Fixed 5.23% p.a. (average) 20,686,877 19,690,627 14,232,878
Finame
Fixed 0.00% p.a. to 8.50% p.a. TJLP + 0.50% p.a. to 5.50% p.a.
FX Variation + 0.90% p.a. to 3.00% p.a.
28,790,762 29,981,346 33,175,438
Other official institutions 2,013,908 2,233,887 717,169
Special supply - Deposits (Note 9.b) 1,643,753 1,643,753 --
Funcafé TMS (if available)
Fixed 5.50% p.a. to 10.50% p.a. (if applied)
370,127 590,106 717,141
Other 28 28 28
Total 88,082,320 90,065,408 90,686,028
Current liabilities 38,363,266 39,015,494 35,291,927
Non-current liabilities 49,719,054 51,049,914 55,394,101
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
66
Overseas
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Funds obtained under the terms of Resolution CMN 3,844/2010 -- 9,821 --
Special fund for support to small and medium manufacturing companies 477 477 477
Total 477 10,298 477
Current liabilities 95 9,916 95
Non-current liabilities 382 382 382
) Expense on borrowings and onlendings c
1st quarter/2016 1st quarter/2015
Borrowings expenses (1)
2,563,747 (5,761,710)
Onlendings expenses (1)
1,213,639 (5,311,431)
Foreign (1)
2,431,970 (4,117,589)
BNDES (662,543) (771,064)
Caixa Econômica Federal (353,186) (205,350)
Finame (149,308) (166,220)
National Treasury (24,542) (20,724)
Other (28,752) (30,484)
Expenses for obligations with bankers abroad (1)
1,749,064 (2,855,632)
Expenses for financial and development funds liabilities (27,516) (1,078,354)
Foreign exchange profit/(loss) on overseas investments (1,267,216) 1,707,503
Total 4,231,718 (13,299,624)
(1) The credit balances presented arise from the negative exchange variation of the period (the appreciation of the Real against the Dollar).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
67
19 - FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES
Funding Currency Issued value Remuneration
p.a. Issue Year Maturity year Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Banco do Brasil 176,099,340 184,927,920 168,892,779
Global Medium - Term Notes Program 7,338,483 11,065,431 9,674,240
R$ 350,000 9.75% 2007 2017 342,800 338,300 335,677
USD 500,000 6.00% 2010 2020 1,795,347 1,994,618 1,614,179
EUR 750,000 4.50% 2011 2016 -- 3,321,757 3,538,943
JPY 24,700,000 1.80% 2012 2015 -- -- 660,505
EUR 1,000,000 3.75% 2013/2014 2018 4,161,827 4,321,203 2,602,480
CHF 275,000 2.50% 2013 2019 1,038,509 1,089,553 922,456
"Senior Notes" 8,294,508 9,075,400 7,832,226
USD 500,000 3.88% 2011 2017 1,789,970 1,981,340 1,611,006
USD 1,809,700(1) 3.88% 2012 2022 6,504,538 7,094,060 6,221,220
Structured Notes USD 37,458 2.10% to
3.55% 2021 134,644 168,518 165,987
Certificates of Deposits (2) 3,921,200 9,556,835 11,260,593
Short term 0.37% to
4.60% 3,650,829 9,003,872 10,467,690
Long term 2,10% to
4,60% 2020 270,371 552,963 792,903
Certificates of structured operations 129,885 11,324 8,135
Short term -- -- 4,011
Long term 2018 129,885 11,324 4,124
Letters of credit - Real estate 18,681,053 18,121,444 19,066,736
Short term (3) 3,144,582 3,050,382 4,096,933
Long term (4) 2018 15,536,471 15,071,062 14,969,803
Letters of credit agribusiness 135,420,062 134,822,921 118,263,145
Short term (3) 28,201,187 28,076,833 19,709,195
Long term (4) 2020 107,218,875 106,746,088 98,553,950
Financial Letters 2,179,505 2,106,047 2,621,717
Short term (3) 106.50% DI -- -- 2,580,022
Long term (4) 104.00% DI 2018 2,179,505 2,106,047 41,695
Banco Patagonia (5) 207,863 329,399 396,648
Short term ARS 147,015 147,662 396,648
Long term ARS 2017 60,848 181,737 --
Special Purpose Entities Abroad (6) 3,145,633 3,447,244 1,925,803
Securitization of future flow of payment orders from abroad (6)
USD 60,000 5.25% 2008 2018 192,597 234,799 250,725
USD 200,000 Libor
3m+1.20% 2008 2015 -- -- 63,939
Structured notes (6)
USD 500,000 Libor
6m+2.50% 2014/2015 2034 1,801,752 1,961,854 802,328
USD 320,000 Libor
6m+3.25% 2015 2030 1,151,284 1,250,591 808,811
Eliminated Amount on Consolidation (7) (157,510) (143,071) (88,582)
Total 179,295,326 188,561,492 171,126,648
Current liabilities 36,776,073 43,600,506 41,517,886
Non-current liabilities 142,519,253 144,960,986 129,608,762
(1) Refers to the outstanding value since partial repurchases ocurred (the value on December 31, 2015 was USD 1,825,000 thousand and, on March 31, 2015, USD 1,925,000 thousand).
(2) Securities issued abroad in USD, AUD, EUR, SGD and GBP.
(3) Securities issued in national currency with maturities up to 360 days.
(4) Operations with maturity between 361 and 1,800 days.
(5) Securities issued with rates from 28.50% p.a. and from Badlar+300 pts. to Badlar+450 pts.
(6) The Special Purpose Entities (SPE) "Dollar Diversified Payment Rights Finance Company" and "Loans Finance Company Limited" were organized under the laws of the Cayman Islands. The liabilities arising from securities issued by these entities are paid using the funds accumulated in their accounts. The SPE declare that have no relevant asset or liability other than the rights and duties originating from the contracts for issue of securities. The Bank is not a shareholder, the owner, or a beneficiary of any of the results of operations of the SPE.
The Dollar Diversified Payment Rights Finance Company was organized for the following purposes: a) fund raising by issuance of securities in the international market; (b) use of resources obtained by issuing securities to pay for the purchase, with the Bank, of the rights to payment orders issued by banking correspondents located in the U.S. and by the agency of BB New York, in U.S. dollars, for any agency in Brazil (Rights on Consignment); and (c) making payments of principal and interest on securities issued and other payments defined in the contract of issuance of these securities.
The Loans Finance Company Limited was organized for the following purposes: a) fund raising by issuance of securities in the international market; (b) closing and booking repurchase agreements with the Bank; (c) purchasing of protection against credit risk of the Bank through a credit derivative, which is actionable only in case of Bank's default in any of the obligations assumed in repurchase agreements; and (d) making payments of principal and interest on securities issued and other payments defined in the contract of issuance of these securities.
(7) Refers to securities issued by Banco do Brasil Conglomerate, which are in possession of overseas subsidiaries/entities.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
68
20 - OTHER LIABILITIES
a) Taxes and social security
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Legal liabilities (Note 27.h) 14,316,074 14,076,071 13,350,098
Provision for taxes and contributions on net income 2,488,535 556,313 4,103,280
Deferred tax liabilities (Note 24.d) 1,961,297 2,298,292 2,138,085
Taxes and contributions payable 1,384,161 1,392,468 1,123,470
Taxes and contributions on net income payable 506,199 1,048,359 664,773
Provision for tax litigation (Note 27.e) 298,545 245,695 205,307
Other 316,933 316,960 316,853
Total 21,271,744 19,934,158 21,901,866
Current liabilities 20,586,294 19,149,334 21,082,583
Non-current liabilities 685,450 784,824 819,283
b) Financial and development funds
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Marinha Mercante 8,514,987 8,988,221 7,161,957
Pasep (1)
2,770,719 2,728,783 2,344,627
Fundo de Desenvolvimento do Nordeste - FDNE 2,202,403 1,987,918 1,540,917
Funds from Governo do Estado de São Paulo 744,505 736,035 713,193
Fundo de Desenvolvimento do Centro Oeste - FDCO 299,049 285,128 257,115
Fundo Nacional de Aviação Civil - FNAC 73,514 70,327 49,892
Other 175,862 206,112 197,078
Total 14,781,039 15,002,524 12,264,779
Current liabilities 9,484,657 10,021,062 7,960,086
Non-current liabilities 5,296,382 4,981,462 4,304,693
(1) The Bank is administrator of the Public Servant Heritage Formation Program (Pasep), guaranteeing a minimum return equal to the Long-Term Interest Rate - TJLP.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
69
c) Subordinated debts
Funding Issued Value
Remuneration p.a. Issue Date Maturity Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Banco do Brasil
FCO – Resources from Fundo Constitucional do Centro-Oeste
23,239,453 22,994,912 21,075,691
Funds applied (1) 21,605,722 22,067,675 20,189,622
Resources available (2) 1,633,731 927,237 877,052
Charges to capitalize -- -- 9,017
Subordinated CDB Issued in the Country -- -- 1,698,140
1,000,000 105.00% of CDI 2009 2015 -- -- 1,698,140
Subordinated Debt Abroad 10,399,650 11,568,774 9,361,309
USD 660,000 5.38% 2010 2021 2,366,409 2,630,575 2,131,403
USD 1,500,000 5.88% 2011 2022 5,351,712 5,953,739 4,815,278
USD 750,000 5.88% 2012 2023 2,681,529 2,984,460 2,414,628
Subordinated Letters of Credit 24,412,215 25,387,942 22,828,626
1,000,000 108.50% of CDI 2010 2016 -- 1,852,172 1,667,934
2,055,100 111.00% of CDI 2011 2017 3,510,088 3,387,610 3,043,286
4,844,900
111.50% of CDI 1.06% to 1.11% + CDI
5.24% to 5.56% + IPCA Fixed 10.51%
2012 2018 7,421,184 7,152,153 6,467,899
215,000 112.00% of CDI 2012 2019 328,740 317,168 284,655
4,680,900 111.00% of CDI 2013 2019 6,772,927 6,536,599 5,872,203
150,500 112.50% of CDI
5.45% + IPCA 2012 2020 233,192 224,433 201,298
377,100 112.00% to 114.00% of CDI 2014 2020 470,321 453,485 406,246
163,523 112.00% to 114.00% of CDI 2014 2020 209,984 202,528 181,591
1,594,580 113.00% to 115.00% of CDI 2014 2021 1,970,458 1,899,302 1,699,764
2,273,806 113.00% to 115.00% of CDI 2014 2021 2,953,956 2,847,744 2,549,799
400,000 8.08% + IPCA 2014 2022 541,365 514,748 453,951
Total Subordinated Debt from Banco do Brasil
58,051,318 59,951,628 54,963,766
Eliminated amount on consolidation (2,565) (16,063) (8,171)
Total Subordinated Debt Consolidated (3)(4) 58,048,753 59,935,565 54,955,595
Current liabilities 1,755,528 1,845,639 1,698,140
Non-current liabilities 56,293,225 58,089,926 53,257,455
(1) Remunerated at the rates on the loans funded with these amounts less the del credere of the financial institution, according to article 9 of Law 7,827/1989.
(2) Remunerated based on extra-market rate announced by the Banco Central do Brasil (Bacen), according to article 9 of Law 7,827/1989.
(3) R$ 38,466,314 thousand (39,839,840 thousand as of Dec 31, 2015 and 37,425,368 thousand as of Mar 31, 2015) of the total balance is considered tier II of the Referential Equity (RE).
(4) Includes the amount of R$ 6,146,084 thousand, relating to subordinated debt recorded in the line Debt Instruments Eligible as Capital.
d) Equity and debt hybrid securities
Funding Issued Value(1) Remuneration
p.a. Issue Date Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Perpetual Bonds
USD 1,499,000 8.50% 10/2009 5,523,775 5,939,561 4,979,817
USD 1,599,627 9.25% 01 and 03/2012 6,033,309 6,632,211 5,966,393
USD 1,988,000 6.25% 01/2013 7,248,758 7,878,240 6,569,507
R$ 8,100,000 5.50%(2)
09/2012 8,119,558 8,355,877 8,210,293
USD 2,171,700 9.00% 06/2014 7,893,556 8,541,012 8,147,019
Total Banco do Brasil 34,818,956 37,346,901 33,873,029
Eliminated amount on consolidation (13,152) (4,898) (19,351)
Total reclassified to shareholders' equity (Note 23.c)
(8,100,000) (8,100,000) (8,100,000)
Total BB-Consolidated 26,705,804 29,242,003 25,753,678
Current liabilities 233,367 121,313 951,323
Non-current liabilities 26,472,437 29,120,690 24,802,355
(1) Refers in funding in US dollars, the outstanding value, as occurred partial repurchases of these instruments.
(2) Since August.28, 2014, the remuneration is fully variable (Note 23.c).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
70
R$ 24,641,227 thousand of the Perpetual Bonds is included in the Referential Equity (R$ 27,036,585 thousand as of
December 31, 2015, and R$ 21,558,498 thousand as of March 31, 2015). Of this amount, R$ 19,481,692 thousand
are recorded in debt instruments eligible as capital (Note 28.b).
The bonds of USD 1,500,000 thousand, issued in October 2009, have the option of redemption at the discretion of
the Bank from 2020 or on each subsequent, semi-annual interest payment date, as long as it has been previously
authorized by Banco Central do Brasil (Bacen). In case the Bank does not exercise the option to redeem on October
2020, the interest on the bonds will be adjusted on this date to 7.782% plus the traded rate on 10 year North
American Treasury bonds. Thereafter, every 10 years, the interest on the bonds will be adjusted by taking into
account the traded rate of the 10 year North American Treasury bonds.
The bonds issued in January 2012 and March 2012 (reopening), of USD 1,000,000 thousand and USD 750,000
thousand respectively, and the bonds issued in January 2013 of USD 2,000,000 thousand, had their terms and
conditions modified on September 27, 2013, in order to adjust them to the rules of Bacen through Resolution No.
4,192 of March 1, 2013, which regulates the implementation of Basel III in Brazil. The changes were effective from
October 1, 2013, when the instruments were submitted to Bacen to obtain authorization to be included in the
Supplementary Capital (Tier I) of the Bank. The authorization was granted on October 30, 2013.
The bonds issued in June 2014 of USD 2,500,000 thousand, have the option of redemption at the discretion of the
Bank from June 18, 2024 or on each subsequent, semi-annual interest payment date, as long as it has been
previously authorized by the Central Bank of Brazil. If the Bank did not exercise the option to redeem in June 2024,
the interest on the bonds will be adjusted to 6.362% plus the traded rate on 10 year North American Treasury bonds.
If the Bank does not exercise the redemption option in April 2023 for the bonds issued in 2012, in April 2024 for the
bonds issued in 2013, and in June 2024 for the bonds issued in 2014, the rate of bond interest is adjusted on that
date and every 10 years according to the 10 year North American Treasury bondsat the time plus the initial credit
spread. The bonds have the following options of redemption, subject to prior authorization of Bacen:
(i) the Bank may, at its option, redeem the bonds in whole but not in part in April 2023 for the bonds issued in 2012, in April 2024 for the bonds issued in 2013, and in June 2024 for the bonds issued in 2014, and on each subsequent, semi-annual interest payment date, at the base redemption price;
(ii) the Bank may, at its option, redeem the bonds in whole, but not in part, after five years from the date of issue, as long as it is before April 2023, for the bonds issued in 2012, before April 2024 for the bonds issued in 2013, and before April 2024 for the bonds issued in 2014, as a result of a tax event, at the base redemption price;
(iii) the Bank may, at its option, redeem the bonds in whole but not in part, after five years from the date of issue, as long as it is before April 2023, for the bonds issued in 2012, and in April 2024 for the bonds issued in 2013, on the occurrence of a regulatory event, at the higher value between the base redemption price and the Make-whole amount;
(iv) the Bank may, at its option, redeem the bonds in whole but not in part, after five years from the date of issue as long as it is before June 2024 for the bonds issued in 2014, on the occurrence of a regulatory event at the base redemption price.
The bonds issued in October 2009 determine that the Bank suspends the semi-annual payments of interest and / or
accessories on those securities issued (which will not be due or accrued) if:
(i) the Bank does not comply or the payment of such charges does not allow the bank to comply with the levels of capital adequacy, operating limits, or its financial indicators are under the minimum level required by Brazilian regulations applicable to banks;
(ii) Bacen or the regulatory authorities determine the suspension of payment of such charges; (iii) any event of insolvency or bankruptcy occurs; (iv) a default occurs; or (v) the Bank has not distributed dividends or interest on equity to common shareholders for the period of
calculation of such interest and / or accessories.
The bonds issued in January and March 2012, in January 2013 and in June 2014 determine that the Bank suspend
the semi-annual payments of interest and/or accessories on those securities issued (which will not be due or
accrued) if:
(i) distributable income for the period are not sufficient for making the payment (discretionary condition of the Bank);
(ii) the Bank does not comply or the payment of such charges does not allow the Bank to comply with the levels of capital adequacy, operating limits, or its financial indicators are under the minimum level required by Brazilian regulations applicable to banks;
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
71
(iii) Bacen or the regulatory authorities determine the suspension of payment of such charges; (iv) any event of insolvency or bankruptcy occurs; or (v) a default occurs.
According to Basel III rules, the bonds issued in January 2012, March 2012, in January 2013 and in June 2014 have
mechanisms of loss absorption. Moreover, if the item (i) occurs, the payment of dividends by Bank to its shareholders
will be limited to the minimum required determined by applicable law until the semi-annual interest payments and / or
accessories on those titles have been resumed in full. Finally, these bonds will expire permanently and at the
minimum value corresponding to the balance recorded in the Tier I capital of the Bank if:
(i) the main capital of the Bank is less than 5.125% of the amount of risk-weighted assets (RWA); (ii) the decision to make a capital injection from the public sector or an equivalent capital contribution to the
Bank is taken, in order to maintain the bank’s viability; (iii) the Bank, on a discretionary assessment regulated by the CMN, sets out, in writing, the expiration of the
bonds to enable the continuity of the Bank.
e) Sundry
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Credit/debit card operations 18,542,786 20,727,736 17,729,946
Actuarial liabilities (Note 26.e) 9,624,662 9,513,475 7,854,507
Provisions for civil claims (Note 27.e) 7,060,224 7,150,581 6,280,869
Sundry creditors - domestic 6,979,465 7,429,931 6,759,637
Provisions for pending payments 5,389,097 5,251,114 4,517,829
Funds linked to loan operations 2,880,137 2,772,443 1,426,589
Provision for labor claims (Note 27.e) 2,391,106 2,169,106 2,030,543
Liabilities for rendering payment services 1,616,369 1,276,864 1,501,424
Liabilities for official agreements 1,177,322 1,072,568 992,050
Sundry creditors - abroad 903,360 1,097,487 1,181,469
Liabilities for premiums granted under customer loyalty schemes 773,271 772,616 735,053
Creditors of resources to be disbursed 605,871 623,633 794,479
Provisions for guarantees provided 501,898 541,312 301,401
Liabilities for operations linked to assignments 320,643 333,298 306,081
Liabilities for assets acquisition 294,297 584,440 406,541
Provision for losses with the Fundo de Compensação de Variação Salarial - FCVS
294,111 288,542 271,774
Liabilities for shares in investment funds 63,309 60,734 --
Guarantees on credits assigment 941 1,000 1,110
Other 278,862 99,246 232,879
Total 59,697,731 61,766,126 53,324,181
Current liabilities 54,695,512 48,561,791 42,483,313
Non-current liabilities 5,002,219 13,204,335 10,840,868
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
72
21 - OTHER OPERATING INCOME/EXPENSES
a) Service fee income
1st quarter/2016 1st quarter/2015
Fund Management 813,542 733,749
Insurance, pension and capitalization 697,247 695,791
Billing 418,908 418,418
Collection 260,010 259,669
Loans and guarantees provided 203,044 193,094
Interbank 202,493 185,787
National Treasury and official funds management 131,805 85,878
Consortium management fees 115,477 95,238
Fiduciary services 110,858 100,857
Capital market income 109,541 166,374
Account fee 93,946 80,171
Provided to related companies 59,466 51,840
Card income 33,619 443,716
From non-financial subsidiaries 7,127 11,729
Other services 362,032 311,704
Total 3,619,115 3,834,015
b) Bank fee income
1st quarter/2016 1st quarter/2015
Service packages 1,185,662 932,874
Card income 286,972 237,565
Loans and customer registration 156,943 157,430
Funds transfer 95,103 74,677
Investment funds management 92,717 79,622
Deposit account 59,949 54,251
Fiduciary services 18,104 12,676
Other 43,208 39,972
Total 1,938,658 1,589,067
c) Personnel expenses
1st quarter/2016 1st quarter/2015
Salaries (2,251,225) (2,132,948)
Personnel administrative provisions (883,057) (913,365)
Social charges (773,345) (782,301)
Benefits (662,843) (607,354)
Labor lawsuits (386,666) (271,736)
Pension plans (195,785) (170,872)
Directors' and advisors' fees (11,550) (10,398)
Training (11,197) (11,890)
Total (5,175,668) (4,900,864)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
73
d) Other administrative expenses
1st quarter/2016 1st quarter/2015
Amortization (838,245) (787,328)
Expenses with outsourced services (416,190) (397,114)
Rent (332,155) (319,192)
Communications (303,535) (342,459)
Depreciation (280,272) (271,553)
Security services (276,526) (256,049)
Transport (265,760) (303,864)
Maintenance and upkeep (191,525) (189,145)
Financial system services (188,544) (176,472)
Data processing (160,420) (185,695)
Water, electricity and gas (155,565) (118,761)
Specialized technical services (85,324) (73,110)
Promotion and public relations (60,323) (44,959)
Advertising and marketing (57,989) (58,957)
Materials (26,489) (31,814)
Domestic travel (16,367) (31,028)
Other (146,693) (149,346)
Total (3,801,922) (3,736,846)
e) Other operating income
1st quarter/2016 1st quarter/2015
Update of deposits in guarantee 666,229 546,148
Income on receivables 642,348 188,621
Surplus allocation update - Previ Plan 1 (Note 26.f) 378,372 450,871
Recovery of charges and expenses 362,442 257,932
Cards transactions 261,027 297,612
Reversal of provisions - civil and tax lawsuits 92,729 --
From non-financial subsidiaries 77,318 88,602
Reversal of provisions - administrative and personnel expenses 62,560 71,060
Adjustment of tax recoverable 35,931 31,360
Royalties and special participation 33,134 47,981
Income from specific credits ans special operations - National Treasury 23,010 56,101
Subsidy of the National Treasury - MPO 1,631 50,937
Reversal of provisions - labor -- 155,162
Previ - Defined benefit plan income -- 192,039
Other 221,805 209,415
Total 2,858,536 2,643,841
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
74
f) Other operating expenses
1st quarter/2016 1st quarter/2015
Actuarial liabilities update (365,329) (237,113)
Cards transactions (325,060) (488,761)
Civil and tax claims (312,402) (955,863)
Compensation for transactions of Banco Postal (298,186) (283,653)
Adjustment of the provision for deposit in court (Note 27.h) (240,003) (208,699)
Discounts granted on renegotiations (230,076) (134,924)
From non-financial subsidiaries (112,900) (132,657)
Failures/frauds and other losses (96,885) (50,712)
ATM Network (87,472) (42,914)
Business relationship bonus (79,898) (20,789)
Compliance bonus (72,181) (17,551)
Life insurance premium - consumer credit (39,055) (45,895)
INSS - Social Security (22,854) (6,331)
Proagro Expenses (9,200) (6,945)
Update of interest on own capital/dividends (6,294) (4,429)
Fees for the use of Sisbacen - Banco Central do Brasil System (3,571) (5,896)
Other (152,761) (240,762)
Total (2,454,127) (2,883,894)
22 - NON-OPERATING INCOME
1st quarter/2016 1st quarter/2015
Non-operating Income 68,029 5,815,168
Capital gains (1)
51,833 5,791,686
Profit on disposal of assets 3,307 4,778
Rental income 2,309 3,257
Reversal of provision for devaluation of other assets 960 2,033
Profit on disposal of investments / equity interest -- 1,356
Interest and inflation adjustment of debtors from disposal of property 949 1,255
Other non-operating income 8,671 10,803
Non-operating Expenses (31,437) (43,250)
Devaluation of other assets (4,200) (2,393)
Loss on disposal of assets (114) (1,313)
Capital losses (26,546) (39,353)
Other non-operating expenses (577) (191)
Total 36,592 5,771,918
(1) Includes, in 1st quarter/2015, the gain derived from the strategic partnership between BB Elo Cartões Participações with Cielo in the electronic means of payment business of R$ 5,787,797 thousand (Note 2).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
75
23- SHAREHOLDERS' EQUITY
a) Book value and market value per common share
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Shareholders' equity - Banco do Brasil 73,078,482 70,673,370 72,600,519
Book value per share (R$) (1)
26.17 25.31 28.86
Market value per share (R$) 19.77 14.74 22.91
Shareholders' equity - Consolidated (2)
84,155,791 81,536,173 83,598,039
(1) Calculated based on the equity of Banco do Brasil.
(2) Conciled with the equity of Banco do Brasil (Note 23.h).
b) Capital
The capital of Banco do Brasil, entirely subscribed and paid-in, in the amount of R$ 60,000,000 thousand
(R$ 54,000,000 thousand as of March 31, 2015 and R$ 60,000,000 thousand as of December 31, 2015) is divided
into 2,865,417,020 book-entry common shares without par value. The Federal Government is the largest
shareholder, holding control of the majority of our voting shares.
The increase of the capital for the period as of March 31, 2015 and of December 31, 2015, in the amount of
R$ 6,000,000 thousand, resulted from the use of Statutory Reserve to Operating Margin, approved by the Special
Meeting of Shareholders held on April 28, 2015, and Banco Central do Brasil authorization in July 20, 2015.
The Bank may, even without amending its by-laws, if approved by the Meeting of Shareholders, and in the conditions
established therein, increase its capital up to the limit of R$ 120,000,000 thousand by issuing common shares, for
which shareholders should be granted preference in the subscription in proportion to the number of held shares.
c) Instrument Qualifying to Common Equity Tier 1 Capital
On September 26, 2012, the Bank signed a Loan Agreement with the Federal Government, as hybrid capital and
debt instrument valued at up to R$ 8,100,000 thousand, without maturity date, with fixed remuneration, semiannual
interest payments, whose funds were allocated to finance agribusiness.
Until August 27, 2014, this instrument was authorized by Bacen to be included in the Tier I of the referential equity
(Additional Tier I Capital) and it was subject to the limitation set out in article 28 of the Resolution CMN 4,192 dated
March 1, 2013 (Note 28.b).
On August 28, 2014, in the terms of Law 12,793, dated April 2, 2013, an amendment to the contract was signed
aiming to make the instrument eligible as Common Equity Tier I Capital, in accordance with article 16 of Resolution
CMN 4,192/2013.
After the amendment in the contract, compensation became fully variable and the interest will be due on periods
matching with the fiscal year of the Bank, starting in January 1 and ending in December 31 of each year.
Remuneration for each fiscal year will be paid in a single annual installment adjusted by the Selic rate until the date of
effective payment, within 30 calendar days after making the payment of dividends for the result recorded in the fiscal
year.
The payment of compensation will be made exclusively with funds from profits and profit reserves that may be
distributed as at the year-end prior to the calculation date. Payment is ultimately at management`s discretion and
there will not be cumulative unpaid interest. If payment or dividend credit are not made (including in the form of
interest on own capital) before December 31 of the following fiscal year, the accrued amounts will no longer be due.
If the balance of retained earnings, of profit reserves, including legal reserve, and of the Bank’s capital reserve are
insufficient to absorb losses calculated in the closing balance of the fiscal year, this instrument will not be
remunerated and the Bank will use the accrued interest and the principal balance, in this order, up to the amount
necessary to offset the remaining losses, effectively constituting a pay down of the instrument.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
76
The instrument does not have maturity date and it can be payable only in situations of the dissolution of the issuing
institution or by repurchase operations authorized by Bacen. In case of dissolution of the Bank, the payment of the
principal and the debt charges will be subordinated to the payment of other liabilities.
There will not be, under any circumstances, preferred compensation of the instrument, including relating to other
equity elements classified in the Reference Equity.
On September 22, 2014, Bacen considered the instrument qualifying to the Common Equity Tier I Capital in the form
of CMN Resolution 4,192/2013 from August 28, 2014. So the instrument mentioned was reclassified to the
Shareholders` Equity, for purposes of disclosure in the consolidated financial statements.
d) Revaluation reserves
The revaluation reserves, totaling R$ 2,713 thousand (R$ 2,788 thousand as of March 31, 2015 and R$ 2,730
thousand as of December 31, 2015), refer to revaluations of assets made by the associates/subsidiaries.
In the first quarter of 2016, there was a reserve realization of R$ 17 thousand (R$ 17 thousand in the first quarter of
2015), due to depreciation, transferred to Retained Earnings (Accumulated Losses), net of taxes. In accordance with
CMN Resolution 3,565/2008, the remaining amount will be maintained until the date of its effective realization.
e) Capital and profit reserves
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Capital Reserves 15,740 14,326 13,992
Profit Reserves 29,060,181 29,031,090 25,393,416
Legal reserve 6,173,642 6,173,642 5,468,217
Statutory reserves 22,886,539 22,857,448 19,925,199
Operating margin 19,646,543 19,608,076 16,976,072
Equalization of dividends 3,239,996 3,249,372 2,949,127
The legal reserve is intended to ensure the integrity of the capital and can only be used to offset losses or increase
capital. The Legal reserve is increased by 5% of the net profit for the period, before any other allocation, as long as it
does not exceed 20% of capital.
The Statutory reserve for operating margin aims to guarantee an operating margin consistent with the development of
the Bank’s operations. It consists of up to 100% of net income, after the legal allocations, including dividends, and is
limited to 80% of the capital.
Statutory reserve for dividend equalization provides funds for the payment of dividends, consisting of up to 50% of
the net income, after legal allocations, including dividends, limited to 20% of the capital.
f) Earnings per share
1st quarter/2016 1st quarter/2015
Net income - Banco do Brasil (R$ thousand) 2,310,401 5,675,916
Weighted average number of shares (basic and diluted) 2,792,561,206 2,796,086,165
Earnings per share (basic and diluted) (R$) 0.83 2.03
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
77
g) Interest on own capital/dividends and destination of the income
Payment schedule of interest on own capital and dividends:
Amount Amount per share
(R$) Base date of payment Payment date
1st quarter/2016
Interest on own capital paid (1)
274,466 0.098 Mar 11,2016 Mar 31,2016
Complementary interest on own capital payable (1)
372,273 0.133 May 23,2016 May 31,2016
Total Destined to Shareholders 646,739 0.231
(1) Amounts subject to the rate of 15% Income Tax Withholding.
Amount Amount per share
(R$) Base date of payment Payment date
1st quarter/2015
Interest on own capital paid (1)
1,054,134 0.377 Mar 23, 2015 Mar 31, 2015
Dividends paid 1,261,460 0.451 May 21, 2015 May 29, 2015
Total Destined to Shareholders 2,315,594 0.828
(1) Amounts subject to the rate of 15% Withholding Tax.
In accordance with Laws 9,249/1995 and 9,430/1996 and the Bank's Bylaws, Management decided on the payment
of Interest on own capital to its shareholders, equivalent to 25% of the net income.
The interest on own capital is calculated based on adjusted net equity value and is limited on a pro rata die basis to
the variation of long-term interest rate, as long as there is profit (before the deduction of interest on own capital) or
reserves for retained earnings and profit reserves of at least twice its value.
To comply with the Income Tax legislation, the amount of interest on own capital was recorded as "Financial
expenses" and, for purposes of disclosure in these financial statements, reclassified to "Retained earnings". The total
interest on own capital in the first quarter of 2016, provided an expense reduction on tax charges totaling R$ 291,033
thousand (R$ 421,654 thousand in of first quarter 2015).
h) Reconciliation of net income and shareholders' equity
Net Income Shareholders’ Equity
1st quarter/2016 1st quarter/2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Banco do Brasil 2,310,401 5,675,916 73,078,482 70,673,370 72,600,519
Instrument qualifying to common equity tier 1 capital (1)
19,559 113,069 8,100,000 8,100,000 8,100,000
Unrealized gains (2)
29,091 29,365 (336,184) (365,275) (371,104)
Non-controlling Interests -- -- 3,313,493 3,128,078 3,268,624
BB-Consolidated 2,359,051 5,818,350 84,155,791 81,536,173 83,598,039
(1) The Instrument Qualifying as CET1 was registered in the liabilities in the Individual Financial Statements and its interest recognized as expenses with securities sold under repurchase agreements, meanwhile, this Instrument was reclassified to Shareholder’s Equity in the consolidated financial statements, aiming to improve the quality and transparency of these consolidated financial statements (Notes 3 and 23.c).
(2) In the first quarters of 2016 and 2015, there was the realization of unrealized results arising from the assignment of credits from the Bank to Ativos S.A.
i) Accumulated Other Comprehensive Income
1st quarter/2016 1st quarter/2015
Opening balance
Net change Tax effects Closing balance Opening balance
Net change Tax effects Closing balance
Securities available for sale
Banco do Brasil (2,760,383) 484,645 9,318 (2,266,420) (757,714) (827,015) 241,835 (1,342,894)
Subsidiary abroad (12,779) 34,177 (552) 20,846 30,118 (1,451) (136) 28,531
Associates and subsidiaries (351,322) 276,745 (74,851) (149,428) (191,869) 15,364 (6,160) (182,665)
Cash Flow Hedge
Associates and subsidiaries -- 2,080 (936) 1,144 1,716 834 (283) 2,267
Actuarial Gains/(Losses) on Pension Plans
(13,918,187) -- -- (13,918,187) (8,680,091) -- -- (8,680,091)
Total (17,042,671) 797,647 (67,021) (16,312,045) (9,597,840) (812,268) 235,256 (10,174,852)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
78
j) Noncontrolling interests
Shareholders’ Equity
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Banco Patagonia S.A. 881,003 1,006,300 1,086,205
Besc Distribuidora de Títulos e Valores Mobiliários S.A. 27 27 27
BB Tecnologia e Serviços S.A. 57 57 57
BB Seguridade S.A. 2,432,406 2,121,694 2,182,335
Non-controlling Interest 3,313,493 3,128,078 3,268,624
k) Shareholdings (number of shares)
Number of shares issued by the Bank to shareholders which, directly or indirectly, hold more than 5% of the shares:
Sharedholders Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Shares % Total Shares % Total Shares % Total
Federal Government 1,585,952,278 55.3 1,653,379,882 57.7 1,659,005,282 57.9
Ministério da Fazenda 1,453,487,115 50.7 1,453,487,115 50.7 1,453,487,115 50.7
Fundo Fiscal de Investimento e Estabilização 105,024,600 3.7 105,024,600 3.7 110,650,000 3.9
Caixa F1 Garantia Construção Naval 24,170,063 0.8 87,368,167 3.0 87,368,167 3.0
Fundo Garantidor para Investimentos 3,270,500 0.1 7,500,000 0.3 7,500,000 0.3
Caixa de Previdência dos Funcionários do Banco do Brasil - Previ 295,086,214 10.3 297,403,914 10.4 297,328,014 10.4
Treasury shares (1)
72,601,541 2.6 72,864,196 2.5 69,250,818 2.4
Other Shareholders 911,776,987 31.8 841,769,028 29.4 839,832,906 29.3
Total 2,865,417,020 100.0 2,865,417,020 100.0 2,865,417,020 100.0
Resident Shareholders 2,294,422,088 80.1 2,259,949,653 78.9 2,280,209,256 79.6
Non Resident Shareholders 570,994,932 19.9 605,467,367 21.1 585,207,764 20.4
(1) Includes, in the first quarter of 2016, 60,419 shares of the Bank held by BB DTVM (25,968 shares in the first quarter of 2015 and 42,709 in December 31,2015).
Number of shares issued by the Bank, held by the Board of Directors, the Executive Board and the Audit Committee:
Commom shares (ON)
(1)
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Board of Directors (except for Bank’s CEO, listed in the Bank’s Executive Committee)
2 1 10,004
Executive Committee 276,476 135,351 209,800
Fiscal Council 1,176 1,176 1,176
Audit Committee 10,075 10,075 75
(1) The shareholding interest of the Board of Directors, Executive Committee, Fiscal Council and Audit Committee represents approximately 0.01% of the Bank's capital stock.
l) Movement of shares outstanding/free float
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Total % Total % Total %
Free float at the period date 1,139,037,581 39.8 1,137,407,279 39.7 1,137,407,279 39.7
Disposal of shares by FFIE - Fundo Fiscal de Investmento e Estabilização
-- -- 5,625,400 -- -- --
Disposal of shares by Caixa F1 Garantia Construção Naval 63,198,104 -- -- -- -- --
Disposal of shares by Fundo Garantidor para Investimentos 4,229,500 -- -- -- -- --
Acquisition of shares - repurchase program -- -- (4,183,700) -- (560,000) --
Transfer of shares - share-based payment -- -- -- -- 190,758 --
Other Changes (1)
121,529 -- 188,602 -- (96,930) --
Free Float at the period end date (2)
1,206,586,714 42.1 1,139,037,581 39.8 1,136,941,107 39.7
Outstanding shares 2,865,417,020 100.00 2,865,417,020 100.0 2,865,417,020 100.0
(1) Refers mainly to changes coming from Technical and Advisory Bodies.
(2) According to the Law 6,404/1976 and the regulation of BM&FBovespa's New Market. The shares held by the Board of Directors and Executive committee are not included. The shares held by the Caixa de Previdência dos Funcionários do Banco do Brasil – Previ compose the free float shares.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
79
m) Treasury shares
On July 13, 2012, the Board of Directors approved the repurchase program of up to 50 million shares within 180 days
from that date, with the objective of acquiring shares to be held in treasury for subsequent sale or withdrawal without
further capital reduction, aiming to generate value for shareholders. This program was in effect until January 8, 2013,
and 20,200,000 shares were acquired for an amount of R$ 461,247 thousand. Minimum, average and maximum cost
per share are R$ 18.28, R$ 22.83 e R$ 26.78 respectively.
On June 13, 2013, the Board of Directors approved the repurchase program of up to 50 million shares, under the
same conditions as the previous program, however, valid for up to 365 days from that date. This program finished on
June 6, 2014, and 43,126,700 shares were acquired for R$ 1,014,504 thousand. The minimum, average and
maximum cost per share were R$ 18.84, R$ 23.52 and R$ 28.67 respectively.
On June 06, 2014, the Board of Directors approved the repurchase program of up to 50 million shares, under the
same conditions as the previous program. This program finished on May 18, 2015, and 6,021,900 shares were
acquired for R$ 155,481 thousand. The minimum, average and maximum cost per share were R$ 22.66, R$ 25.82
and R$ 29.27 respectively.
On May 18, 2015, the Board of Directors approved the repurchase program of up to 50 million shares, under the
same conditions as the previous program. Until March 31, 2016, no shares were acquired this repurchase program
and 3,623,700 shares for R$ 67,902 thousand. The minimum, average and maximum cost per share were R$ 17.90,
R$ 18.74 and R$ 21.10 respectively.
On March 31, 2016, the Bank had 72,601,541 treasury shares, amounting to R$ 1,691,986 thousand, of which
71,880,443 shares result from repurchase programs, 721,066 shares result from acquisition for share-based payment
and 32 were shares left over from mergers.
n) Share-based payment
The program of variable remuneration was developed under the CMN Resolution 3,921 as of November 25, 2010,
which describes the remuneration policy for executives of financial institutions and establishes that at least 50% of
variable remuneration shall be paid in shares or share-based instruments, of which at least 40% should be deferred
for future payment, over a minimum period of three years, defined according to the risks and activities overseen by
the executive. BB DTVM, as a result of this resolution, also adopted variable remuneration policy for its directors,
directly acquiring treasury shares of the Banco do Brasil. All shares acquired are BBAS3 and its fair value is the
quoted market price on the date of grant.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
80
We present the statement of acquired shares, its distribution and its transfer schedule:
Total Shares Purchased
Acquisition Average Cost
Shares Distributed Shares to Distribute Estimated Schedule
Transfers
2012 program
Banco do Brasil 212,301 26.78 159,238 53,063 Mar 08, 2017
Total shares to be distributed 53,063
BB DTVM 19,792 26.78 16,622 3,170 Mar 08, 2017
Total shares to be distributed 3,170
2013 program
Banco do Brasil 353,800 20.36 212,328 70,736 Mar 02, 2017
70,736 Mar 02, 2018
Total shares to be distributed 141,472
BB DTVM 24,546 23.83 9,825 4,907 Apr 18, 2016
4,907 Apr 17, 2017
4,907 Apr 16, 2018
Total shares to be distributed 14,721
2014 program
Banco do Brasil 316,683 24.08 126,720 63,321 Fev 27, 2017
63,321 Fev 27, 2018
63,321 Fev 27, 2019
Total shares to be distributed 189,963
BB DTVM 27,063 22.98 5,415 5,412 Apr 01, 2016
5,412 Apr 03, 2017
5,412 Apr 02, 2018
5,412 Apr 01, 2019
Total shares to be distributed 21,648
24 - TAXES
) Breakdown of income tax (IR) and social contribution expenses (CSLL) a
1st quarter/2016 1st quarter/2015
Current values (2,647,368) (4,261,540)
Domestic income tax and social contribution (2,517,083) (4,109,962)
Foreign income tax (130,285) (151,578)
Deferred values 1,602,527 3,769,474
Deferred tax liabilities 435,032 (671,690)
Leasing transactions - portfolio adjustment and accelerated depreciation (3,487) 668
Mark to Market (MTM) 308,222 (583,780)
Actuarial gains 219,711 (44,388)
Interest and inflation adjustment of fiscal judicial deposits (108,002) (83,479)
Foreign profits (4,292) (8,289)
Transactions carried out on the futures market 35,796 34,549
Recovered term credits (12,916) 13,029
Deferred tax assets 1,167,495 4,441,164
Temporary differences 699,373 3,869,786
Tax losses/CSLL negative bases (121,986) (102)
Mark to Market (MTM) 590,108 571,480
Total (1,044,841) (492,066)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
81
) Reconciliation of income tax and social contribution charges b
1st quarter/2016 1st quarter/2015
Profit before taxation and profit sharing 4,099,685 7,442,858
Total charges of IR (25%) and CSLL (15% up to August/2015 and 20% since September/2015) (1)
(1,844,858) (2,977,143)
Charges upon Interest on own capital 291,033 421,654
Equity in associates and joint ventures 460,829 398,977
Employee profit sharing 134,947 288,571
Other amounts (86,792) 1,375,875
Income Tax and Social Contribution (1,044,841) (492,066)
(1) The Provisional Measure 675 of May 21, 2015, converted into Law 13,169 of October 6, 2015, increased the rate of CSLL of financial institutions
and companies in the field of private insurance and capitalization from 15% to 20%, since September 1, 2015, increasing social contribution expenses, as well as corresponding tax credits.
) Tax expenses c
1st quarter/2016 1st quarter/2015
Cofins (895,811) (1,077,650)
ISSQN (226,185) (204,625)
PIS/Pasep (148,060) (201,646)
Other (117,109) (102,116)
Total (1,387,165) (1,586,037)
) Deferred tax liabilities d
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Arising from mark-to-market 1,013,735 1,314,159 989,160
Arising from interest and inflation adjustment of fiscal judicial deposits 510,116 498,412 463,008
Arising from recovered term credits 221,310 208,394 170,780
Arising from leasing portfolio adjustment 86,519 83,032 78,233
Arising from positive adjustments of benefits plans 61,284 61,284 324,021
Overseas entities 58,212 87,507 82,707
Related to foreign profit 4,292 -- 8,289
Arising from futures market transactions 3,797 43,472 19,855
Other 2,032 2,032 2,032
Total deferred tax liabilities 1,961,297 2,298,292 2,138,085
Income tax 866,273 1,050,205 1,199,980
Social contribution 564,280 694,446 679,656
Cofins 456,554 476,250 222,322
PIS/Pasep 74,190 77,391 36,127
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
82
) Deferred tax assets (Tax credit) e
Dec 31, 2015 1st quarter/2016 Mar 31, 2016 Mar 31, 2015
Balance Constitution Write-off Balance Balance
Temporary differences 38,432,357 5,424,187 (4,088,267) 39,768,277 26,879,401
Allowance for loan losses 22,608,880 3,503,650 (2,552,901) 23,559,629 16,616,780
Provisions 8,994,864 820,966 (614,039) 9,201,791 7,421,210
Mark to Market (MTM) 2,217,768 456,638 (779,297) 1,895,109 1,670,917
Negative adjustments of benefits plans 176,413 219,710 -- 396,123 165,954
Other provisions 4,434,432 423,223 (142,030) 4,715,625 1,004,540
CSLL written to 18% (MP 2,158/2001) 1,255,978 -- (273,707) 982,271 1,247,504
Tax losses/Excess depreciation 155,100 -- (9,758) 145,342 180,324
Tax losses/ negative bases 152,047 33,422 (122,314) 63,155 3,566
Total deferred tax assets 39,995,482 5,457,609 (4,494,046) 40,959,045 28,310,795
Income tax 21,895,424 3,081,210 (2,200,222) 22,776,412 17,118,892
Social contribution 17,894,105 2,331,751 (2,216,392) 18,009,464 11,010,599
Cofins 177,165 38,407 (66,609) 148,963 155,961
PIS/Pasep 28,788 6,241 (10,823) 24,206 25,343
) Deferred tax assets (Tax credit - not recorded) f
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Overseas tax credits 1,660,390 1,168,990 1,055,981
Temporary differences 89 -- --
Tax losses/ negative bases 1,492 -- --
Total tax credits 1,661,971 1,168,990 1,055,981
Income tax 1,038,905 730,619 659,988
Social contribution 623,066 438,371 395,993
Realization expectative
The expectation of realization of the deferred tax assets (tax credits) is based on a technical study, prepared in
December 31, 2015, and the present value is determined based on the average rate of funding of Banco do Brasil.
Future value Present value
In 2016 6,875,819 6,445,161
In 2017 6,770,408 6,023,241
In 2018 6,877,541 5,841,394
In 2019 6,879,664 5,609,772
In 2020 6,949,146 5,450,972
In 2021 4,908,131 3,725,519
In 2022 191,311 120,702
In 2023 165,378 90,974
In 2024 175,156 90,944
In 2025 202,928 98,579
Total tax credits December 31, 2015 39,995,482 33,497,258
In the first quarter 2016 it was possible to observe the realization of tax credits at Banco do Brasil, in the amount of
R$ 4,322,388 thousand corresponding to 63.86% of the projection of use for the period of 2016 contained in the
technical study prepared on December 31, 2015.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
83
The realization of the nominal value of tax credits registered, considering the recovery of those written-off during the
lawsuits (Note 27.h), based on a technical study conducted by Banco do Brasil on December 31, 2015, is projected
for 10 years in the following proportions:
Tax losses/CSLL
recoverable (1)
Diferences
intertemporary (2)
In 2016 23% 17%
In 2017 16% 17%
In 2018 18% 17%
In 2019 21% 17%
In 2020 16% 16%
From 2021 6% 16%
(1) Projected consumption linked to the capacity to generate IR and CSLL taxable amounts in subsequent periods.
(2) The consumption capacity results from the movements of provisions (expectation of reversals, write-offs and uses).
25 - RELATED PARTY TRANSACTIONS
The costs of salaries and other benefits granted to key management personnel of the Banco do Brasil Group
(Executive Board, Audit Committee, Board of Directors and Fiscal Council):
1st quarter/2016 1st quarter/2015
Short-term benefits 13,228 16,387
Fees and social charges 8,619 7,880
Executive Board 7,735 7,105
Audit Committee 654 576
Board of Directors 126 100
Fiscal Council 104 99
Variable remuneration (cash) and social charges 3,903 7,896
Other (1)
706 611
Benefits motivated by cessation of tenure 229 --
Share-based payment benefits 7,257 5,889
Total 20,714 22,276
(1) Includes contributions to pension plan and complementary healthy plan, housing and relocation benefits, group insurance, among others.
In accordance with the Bank’s policy of variable remuneration, established in compliance with CMN Resolution
3,921/2010, the variable remuneration of Executive Directors is paid in shares (Note 23.n).
The Bank does not offer post-employment benefits to its key management personnel, except for those who are part
of the staff of the Bank.
The Bank does not grant loans to the key management personnel, pursuant to the prohibition to all financial
institutions established by Banco Central do Brasil.
The transactions between the consolidated companies are eliminated in the consolidated financial statements. In
relation to transactions with entities controlled by the Tesouro Nacional (National Treasury) by joint control or
significant influence, the Bank discloses only the most significant transactions.
The Bank disclosure the transactions with National Treasury. Among the transactions, the operations of extension of
rural credit are highlighted, which are rights with the National Treasury, derived from cession of operations of rural
credit extensioned under the Resolution CMN 2,238/1996. The amounts receivable of National Treasury regarding
the interest rates equalization of programs encouraged by the Federal Government, under the Law 8,427/1992 are
highlighted too. The equalization of rates, a type of economical subsidy, represents a differential rate between the
funding cost, plus the administrative and tax costs, and the charges for the borrower of the rural credit. The amount of
equalization is adjusted by Selic Rate since its calculation to the payment from National Treasury, that is performed
according to budget programming of that Body, as established by legislation, preserving the remuneration of the
Bank.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
84
The Bank has banking transactions with these related parties, such as interest bearing and non-interest bearing
deposits, loans (except for key management personnel), sale and repurchase transactions and acquisition of loan
portfolios. There are also services rendered and guarantee agreed.
These transactions are conducted under terms and rates consistent with those practiced with third parties when
applicable. These transactions do not involve payment risks.
The resources applied in federal government securities and in funds and programs from onlendings of the Official
Institutions are listed in Notes 8 and 18, respectively.
The Bank has instituted the Fundação Banco do Brasil (FBB), which aims to promote, support, encourage and
sponsor actions in the fields of education, culture, health, social welfare, recreation and sports, science and
technology and assistance to urban-rural communities. In the 1st quarter/2016, the Bank made contributions to FBB
in the amount of R$ 22,785 thousand (R$ 21,722 thousand in the 1st quarter/2015).
The Bank granted to BB Elo Cartões Participações S.A., its wholly owned subsidiary, irrevocably and irreversibly, and
without accounting effect, the contractual rights on the receipt of interchange fees inherent to the activities of
management of post-paid bill payment transactions and management of purchasing functionality via debit in payment
arrangements, due to the formation of strategic partnership with Cielo (Note 2).
The information related to Bank's contributions and other transactions with other sponsored entities are disclosed in
Note 26.
Acquisition of portfolio of loans transferred by Banco Votorantim
1st quarter/2016 1st quarter/2015
Assignment with substantial retention of risks and rewards (with co-obligation) 3,244,095 3,146,769
Unrealized result, net of tax effects (balance) 4,608 34,695
Summary of related party transactions
Mar 31, 2016
Controller (1)
Joint ventures
and Associates
(2)
Key Management personnel
(3)
Other related parties
(4)
Total
Assets
Interbank deposits -- 1,410,605 -- -- 1,410,605
Securities -- 3,403,081 -- 546,202 3,949,283
Loan operations -- 17,217,679 -- 32,267,724 49,485,403
Receivables from related companies -- 271,017 -- 148 271,165
Other assets (5)
3,179,650 880,241 -- 78,594 4,138,485
Liabilities
Demand deposits 289,702 18,366 1,942 1,497,499 1,807,509
Saving deposits -- -- 3,510 345,678 349,188
Remunerated time deposits -- 1,541 478 9,302,509 9,304,528
Securities sold under repurchase agreements -- 1,933,084 -- 2,861,162 4,794,246
Borrowings and onlendings 561,086 -- -- 85,878,296 86,439,382
Other liabilities 226,899 1,193,997 -- 1,293,754 2,714,650
Guarantees and Other Coobligations (6)
-- 6,800,000 -- 663,344 7,463,344
1st quarter/2016
Income from interest, services and other income 1,420,557 1,961,510 -- 1,128,911 4,510,978
Expenses from raising funds (24,542) (176,884) (81) (1,445,508) (1,647,015)
(1) National Treasury and agencies under the direct administration of the Federal Government.
(2) Companies are listed in Note 3.b.
(3) Board of Directors, Executive Board, Audit Committee and Fiscal Council.
(4) Includes the most significant transactions with state-owned companies and private companies controlled by the Federal Government, such as: Petrobras, CEF, BNDES, Eletrobras, Fundo de Amparo ao Trabalhador – FAT, Fundo de Aval para Geração de Emprego e Renda – Funproger. In addition, entities linked to employees and sponsored entities: Cassi, Previ and others.
(5) The transactions with the Controller refer mainly to Extension of rural credits – National Treasury transactions (Note 11.a), interest rate equalization – agricultural crop and receivables – National Treasury (Note 11.b).
(6) Includes Contract of Opening of a Revolving Interbank Credit Line with Banco Votorantim.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
85
Mar 31, 2015
Controller (1)
Joint ventures
and Associates
(2)
Key Management personnel
(3)
Other related parties
(4)
Total
Assets
Interbank deposits -- 1,130,576 -- -- 1,130,576
Securities -- 3,478,096 -- -- 3,478,096
Loan operations -- 16,330,875 -- 27,953,401 44,284,276
Receivables from related companies -- 110,551 -- -- 110,551
Other assets (5)
17,154,029 3,575,117 -- 177,553 20,906,699
Liabilities
Demand deposits 433,364 68,892 1,052 1,761,063 2,264,371
Saving deposits -- -- 1,455 256,526 257,981
Remunerated time deposits -- 550,791 1,097 9,726,803 10,278,691
Securities sold under repurchase agreements -- 9,505,344 -- 2,838,245 12,343,589
Borrowings and onlendings 1,013,858 -- -- 89,675,070 90,688,928
Other liabilities 857,596 1,718,149 -- 184,523 2,760,268
Guarantees and Other Coobligations (6)
-- 6,800,000 -- 660,406 7,460,406
1st quarter/2015
Income from interest, services and other income 2,092,084 13,126,353 -- 708,689 15,927,126
Expenses from raising funds (20,724) (22,848) (86) (2,114,492) (2,158,150)
(1) National Treasury and agencies under the direct administration of the Federal Government.
(2) Companies are listed in Note 3.b.
(3) Board of Directors, Executive Board, Audit Committee and Fiscal Council.
(4) Includes the most significant transactions with state-owned companies and private companies controlled by the Federal Government, such as: Petrobras, CEF, BNDES, Eletrobras, Fundo de Amparo ao Trabalhador – FAT, Fundo de Aval para Geração de Emprego e Renda – Funproger. In addition, entities linked to employees and sponsored entities: Cassi, Previ and others.
(5) The transactions with the Controller refer mainly to Extension of rural credits – National Treasury transactions (Note 11.a), interest rate equalization – agricultural crop and receivables – National Treasury (Note 11.b).
(6) Includes Contract of Opening of a Revolving Interbank Credit Line with Banco Votorantim.
26 - EMPLOYEE BENEFITS
Banco do Brasil sponsors the following pension and health insurance plans for its employees:
Plans Benefits Classification
Previ - Caixa de Previdência dos Funcionários do Banco do Brasil
Previ Futuro Retirement and Pension Defined contribution
Plano de Benefícios 1 Retirement and Pension Defined benefit
Plano Informal Retirement and Pension Defined benefit
Cassi - Caixa de Assistência dos Funcionários do Banco do Brasil
Plano de Associados Health Care Defined benefit
Economus – Instituto de Seguridade Social
Prevmais Retirement and Pension Variable contribution
Regulamento Geral Retirement and Pension Defined benefit
Regulamento Complementar 1 Retirement and Pension Defined benefit
Grupo B’ Retirement and Pension Defined benefit
Plano Unificado de Saúde - PLUS Health Care Defined benefit
Plano Unificado de Saúde - PLUS II Health Care Defined benefit
Plano de Assistência Médica Complementar - PAMC
Health Care Defined benefit
Fusesc - Fundação Codesc de Seguridade Social Multifuturo I Retirement and Pension Variable contribution
Plano de Benefícios I Retirement and Pension Defined benefit
SIM - Caixa de Assistência dos Empregados dos Sistemas Besc e Codesc, do Badesc e da Fusesc
Plano de Saúde Health Care Defined contribution
Prevbep - Caixa de Previdência Social Plano BEP Retirement and Pension Defined benefit
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
86
Number of participants covered by benefit plans sponsored by the Bank
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Number of participants Number of participants Number of participants
Active Retired/Users Total Active Retired/Users Total Active Retired/Users Total
Retirement and Pension Plans
113,728 109,917 223,645 112,847 110,020 222,867 115,235 105,415 220,650
Plano de Benefícios 1 - Previ 18,534 92,472 111,006 18,658 92,582 111,240 23,499 88,470 111,969
Plano Previ Futuro 79,278 969 80,247 78,340 942 79,282 74,985 799 75,784
Plano Informal -- 3,472 3,472 -- 3,472 3,472 -- 3,709 3,709
Other plans 15,916 13,004 28,920 15,849 13,024 28,873 16,751 12,437 29,188
Health Care Plans 114,667 99,586 214,253 113,952 99,783 213,735 116,268 95,767 212,035
Cassi 102,265 92,353 194,618 101,528 92,515 194,043 103,270 88,441 191,711
Other plans 12,402 7,233 19,635 12,424 7,268 19,692 12,998 7,326 20,324
Bank’s contributions to benefit plans
1st quarter/2016 1st quarter/2015
Retirement and Pension Plans 336,072 290,696
Plano de Benefícios 1 - Previ (1)
132,530 125,973
Plano Previ Futuro 130,173 95,458
Plano Informal 40,250 39,476
Other plans 33,119 29,789
Health Care Plans 278,238 247,033
Cassi 246,023 219,124
Other plans 32,215 27,909
Total 614,310 537,729
(1) Refers to the contributions relating to participants subject to Agreement 97 and Plan 1, whereby these contributions occur by the realization of Fundo Paridade and Fundo de Utilização (Note 26.f). Agreement 97 aims to regulate the funding required to constitute a portion equivalent to 53.7% of guaranteed amount relating to the supplementary pension due to the participants who joined the Bank up to April 14, 1967 and who have retired or will retire after the aforementioned date, except for those participants who are part of the Plano Informal.
The Bank estimates that contributions to benefit plans (post-employment) in the first half of 2015 will be
approximately R$ 787,294 thousand.
Values recognized in income
1st quarter/2016 1st quarter/2015
Retirement and Pension Plans (321,206) (31,927)
Plano de Benefícios 1 - Previ (109,856) 138,929
Plano Previ Futuro (130,173) (95,458)
Plano Informal (45,270) (35,923)
Other plans (35,907) (39,475)
Health Care Plans (399,115) (325,815)
Cassi (366,411) (297,317)
Other plans (32,704) (28,498)
Total (720,321) (357,742)
) Retirement and pension plans a
Previ Futuro (Previ)
Participants in this plan include Bank employees hired after December 24, 1997. Depending on time of service and
salary, active participants may contribute between 7% and 17% of their salary (retired participants do not contribute).
The plan sponsor matches participants’ contributions up to 14% of their salaries.
Plano de Benefícios 1 (Previ)
Participants in this plan include Bank employees hired prior to December 23, 1997. Active and retired participants
may contribute between 1.8% and 7.8% of their salary or pension.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
87
Prior to December 15, 2000, the Bank contributed 2/3 of the total amount to this plan. As from December 16, 2000,
considering the Federal Constitutional Amendment nº 20, the Bank and the participants started to make equal
contributions. As a result of this contributive parity, the Parity Fund was set-up in December 2000, and its funds are
being used to offset the Bank’s contributions (Note 26.f).
Plano Informal (Previ)
Banco do Brasil is fully responsible for this plan. The Bank’s contractual obligations include to:
(i) providing retirement benefits to the initial group of participants and pension payments to the beneficiaries of
participants who died prior to April 14, 1967;
(ii) paying additional retirement benefits to plan participants who retired prior to April 14, 1967, or had the right to
retire based on time of service and at least 20 years of service with the Bank; and
(iii) increasing retirement and pension benefits due to judicial and administrative decisions related to changes in the
Bank’s career, salary and incentive plans (in excess of the plan’s original benefits).
The Bank and Previ formalized an agreement on December 31, 2012. Under the agreement, Banco do Brasil paid
100% of the mathematical reserves for the so-called Grupo Especial (for which it was fully liable) using funds from the
Fundo Paridade. As a result, this group migrated from the Plano Informal to Plano de Benefícios 1. The Grupo
Especial included participants from Plano de Benefícios 1 (Previ) listed in the paragraph of first clause of the contract
signed on December 24, 1997. These participants received additional retirement benefits due to administrative and/or
judicial decisions (Note 26.f).
Prevmais (Economus)
Participants in this plan include employees of Banco Nossa Caixa (a bank acquired by Banco do Brasil on November
30, 2009) who enrolled after August 01, 2006, or were part of the Regulamento Geral benefit plan and opted to
receive their vested account balances. The sponsor and participants make equal contributions, which may not
exceed 8% of participants’ salaries. The plan provides additional risk coverage, including supplemental health, work-
related accident, disability and death benefits.
Regulamento Geral (Economus)
Participants in this plan include employees of Banco Nossa Caixa who enrolled prior to July 31, 2006. This plan is
closed to new members. The sponsor and participants contribute equally, averaging 12.11% of participants’ salaries.
Regulamento Complementar 1 (Economus)
Participants in this plan include employees of Banco Nossa Caixa. This plan offers supplemental health benefits and
annuities upon death or disability. The sponsor, participants and retired/other beneficiaries fund the plan.
Grupo B' (Economus)
Participants in this plan include employees of Banco Nossa Caixa admitted between January 22, 1974, and May 13,
1974, and their beneficiaries. This plan is closed to new members. Benefit levels are based on the fulfillment of
certain conditions outlined in the plan regulation.
Multifuturo I (Fusesc)
Participants in this plan include employees of the State Bank of Santa Catarina – Besc (acquired by Banco do Brasil
on September 30, 2008) who enrolled after January 12, 2003, or were part of the Plano de Benefícios I (Fusesc) and
chose to participate in this plan. Participants may contribute from 2.33% to 7% of their salaries. The plan sponsor
matches these contributions.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
88
Plano de Benefícios I (Fusesc)
Participants in this plan include employees of Besc who enrolled prior to January 11, 2003. This plan is closed to new
members. The sponsor and participants contribute equally, averaging 9.89% of participants’ salaries.
Plano BEP (Prevbep)
Participants in this plan include employees of the State Bank of Piauí – BEP (acquired by Banco do Brasil on
November 30, 2008). The sponsor and participants contribute equally, averaging 3.58% of participants’ salaries.
) Health Care Plans b
Plano de Associados (Cassi)
The Bank sponsors a health care plan managed by Cassi. The plan covers health care services related to prevention,
protection, recovery and rehabilitation for participants and their beneficiaries. Each month, the Bank contributes 4.5%
of participants’ salaries or pension benefits. Monthly contributions by participants and pensioners total 3% of their
salary or pension, in addition to copayments for certain hospital procedures.
Plano Unificado de Saúde - PLUS (Economus)
Participants in this plan include employees from Banco Nossa Caixa. Participation in this plan requires a direct payroll
deduction of 1.5%, providing coverage for employees and certain preferred dependents. An additional 10%
copayment is required for each medical visit and low-cost exam performed by employees and their dependents (both
preferred and non-preferred).
Plano Unificado de Saúde - PLUS II (Economus)
Participants in this plan include employees from Banco Nossa Caixa. Participation in this plan requires a direct payroll
deduction of 1.5%, providing coverage for employees and certain preferred dependents. An additional 10%
copayment is required for each medical visit and low-cost exam performed by employees and their dependents and
adult children. This plan does not cover non-preferred dependents.
Plano de Assistência Médica Complementar - PAMC (Economus)
Participants in this plan include employees of Banco Nossa Caixa located in the state of São Paulo. The plan serves
disabled employees under the Complementar and Regulamento Geral and their dependents. Participant costs vary
based on usage and in accordance with a progressive salary table.
Plano de Saúde (SIM)
Participants in this plan include employees of Besc and other sponsors of the plan (including Badesc, Codesc,
Bescor, Fusesc and SIM). For active members, monthly contributions total 3.44% of salary, including their 13th
salary. For inactive members, monthly contributions total 8.86% of salary, while the plan sponsors contribute 5.42%.
Beneficiaries also contribute 0.75% per dependent. The plan requires a copayment for ambulatory care procedures.
) Risk factors c
The Bank may need to make unplanned contributions to Previ, Economus, Fusesc and Prevbep, which could
negatively affect operating income.
Determination of the Bank’s obligations to these entities is based on long-term actuarial and financial estimates and
the application and interpretation of current regulatory standards. Inaccuracies inherent to the estimation process
could result in differences between recorded amounts and the actual obligations in the future. This could have a
negative impact on the Bank’s operating results.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
89
) Actuarial valuations d
Actuarial evaluations are performed every six months. The information contained in the below tables refers to the
calculations at December 31, 2015 and 2014.
) Changes in present value of defined benefit actuarial obligations d.1
Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans
2015 2014 2015 2014 2015 2014 2015 2014
Opening balance (122,884,677) (113,522,849) (920,380) (1,004,111) (5,830,331) (6,333,578) (6,428,867) (5,971,976)
Interest cost (15,217,436) (14,412,148) (111,770) (121,305) (731,014) (755,247) (768,894) (750,257)
Current service cost (428,722) (502,741) -- -- (95,421) (116,703) (34,274) (38,970)
Past service cost -- -- (29,609) (25,402) -- -- -- --
Benefits paid net of retirees contributions 9,432,737 8,394,631 180,547 185,004 564,759 507,409 514,118 424,664
Remeasurements of actuarial gain/ (losses) 7,768,183 (2,841,570) (28,068) 45,434 (156,091) 867,788 415,996 (92,328)
Experience adjustment (198,997) (1,594,225) (35,065) 44,547 (616,729) 951,604 (183,233) (155)
Changes to biometric assumptions (2,626,460) -- (44,338) -- (125,433) -- 1,243 4,446
Changes to financial assumptions 10,593,640 (1,247,345) 51,335 887 586,071 (83,816) 597,986 (96,619)
Closing balance (121,329,915) (122,884,677) (909,280) (920,380) (6,248,098) (5,830,331) (6,301,921) (6,428,867)
Present value of actuarial liabilities with surplus (118,378,747) (122,884,677) -- -- -- -- (5,394,014) (5,115,870)
Present value of actuarial liabilities without surplus (2,951,168) -- (909,280) (920,380) (6,248,098) (5,830,331) (907,907) (1,312,997)
) Changes in fair value of plan assets d.2
Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans
(1)
2015 2014 2015 2014 2015 2014 2015 2014
Opening balance 135,145,646 144,420,740 -- -- -- -- 5,115,870 5,033,968
Interest income 16,362,156 17,611,011 -- -- -- -- 627,308 621,916
Contributions received 549,275 581,636 180,547 185,004 564,759 507,409 156,514 151,576
Benefits paid net of retirees contributions (9,432,737) (8,394,631) (180,547) (185,004) (564,759) (507,409) (514,118) (424,664)
Actuarial gain / (loss) on plan assets (24,245,593) (19,073,110) -- -- -- -- 8,440 (266,926)
Closing balance 118,378,747 135,145,646 -- -- -- -- 5,394,014 5,115,870
(1) Refers to the following plans: Regulamento Geral (Economus), Prevmais (Economus), Regulamento Complementar 1 (Economus), Multifuturo I (Fusesc), Plano I (Fusesc) and Plano BEP (Prevbep).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
90
) Amounts recognized in the balance sheet d.3
Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
1) Fair value of the plan assets 118,378,747 118,378,747 135,145,646 -- -- -- -- -- -- 5,394,014 5,394,014 5,115,870
2) Present value of actuarial liabilities (121,329,915) (121,329,915) (122,884,677) (909,280) (909,280) (920,380) (6,248,098) (6,248,098) (5,830,331) (6,301,921) (6,301,921) (6,428,867)
3) Surplus/(deficit) (1+2) (2,951,168) (2,951,168) 12,260,969 (909,280) (909,280) (920,380) (6,248,098) (6,248,098) (5,830,331) (907,907) (907,907) (1,312,997)
4) Surplus/(deficit) - plot sponsor (1,475,583) (1,475,583) 6,130,485 (909,280) (909,280) (920,380) (6,248,098) (6,248,098) (5,830,331) (711,040) (711,040) (916,046)
5) Amounts recognized in profit (1)
(109,856) -- 138,929 (45,270) -- (35,923) (265,676) -- (201,265) (29,486) -- (32,577)
6) Amounts received from funds (Note 26.f) (1)
132,530 -- 125,973 -- -- -- -- -- -- -- -- --
7) Benefits paid (1)
-- -- -- 40,251 -- 39,445 145,288 -- 124,693 26,208 -- 22,300
8) Net acturial (liability)/asset (4+5+6+7) (2)
(1,452,909) (1,475,583) 6,395,387 (914,299) (909,280) (916,858) (6,368,486) (6,248,098) (5,906,903) (714,318) (711,040) (926,323)
(1) Changes occurred after the actuarial valuation from December.
(2) Refers to the portion of the surplus/(deficit) due from the sponsor.
) Maturity profile of defined benefit actuarial obligations d.4
Duration(1)
Expected benefit payments
(2)
Up to 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Plano 1 (Previ) 8.62 11,392,965 11,302,396 33,052,272 193,368,286 249,115,919
Plano Informal (Previ) 4.47 171,701 150,708 347,437 656,225 1,326,071
Plano de Associados (Cassi) 11.37 497,334 491,728 1,445,651 14,963,368 17,398,081
Regulamento Geral (Economus) 8.14 447,864 443,849 1,302,678 6,909,588 9,103,979
Regulamento Complementar 1 (Economus) 12.65 1,500 1,612 5,565 85,343 94,020
Plus I e II (Economus) 6.85 49,188 46,658 125,446 488,940 710,232
Grupo B' (Economus) 8.18 14,278 14,250 42,377 231,461 302,366
Prevmais (Economus) 14 12,645 13,126 42,388 726,945 795,104
Multifuturo I (Fusesc) 10.33 5,690 5,707 17,180 149,106 177,683
Plano I (Fusesc) 10.29 35,084 36,417 117,976 1,058,282 1,247,759
Plano BEP (Prevbep) 10.2 2,694 2,721 9,464 80,842 95,721
(1) Weighted average duration, in years, of the defined benefit actuarial obligation.
(2) Amounts considered without discounting at present value.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
91
) Breakdown of the amounts recognized in statement of income relating to defined benefit plans d.5
Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans
1st quarter/2016 1st quarter/2015 1st quarter/2016 1st quarter/2015 1st quarter/2016 1st quarter/2015 1st quarter/2016 1st quarter/2015
Current service cost (56,183) (53,110) -- -- (19,762) (23,168) (3,621) (4,579)
Interest cost (2,273,897) (1,867,158) (33,289) (27,810) (245,914) (178,096) (126,966) (105,708)
Expected yield on plan assets 2,220,224 2,059,197 -- -- -- -- 101,100 77,710
Unrecognized past service cost -- -- (11,981) (8,113) -- -- -- --
Expense with active employees -- -- -- -- (100,735) (96,053) (39,124) (35,396)
(Expense)/income recognized in the Statement of Income (109,856) 138,929 (45,270) (35,923) (366,411) (297,317) (68,611) (67,973)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
92
) Composition of the plan assets d.6
Plano 1 - Previ Other plans
Dec 31, 2015 Dec 31, 2014 Dec 31, 2015 Dec 31, 2014
Fixed income 49,198,207 46,440,688 4,827,283 4,490,711
Floating income (1)
55,353,902 74,607,857 131,884 227,912
Real estate investments 8,203,647 8,177,129 205,422 165,839
Loans and financing 4,770,664 4,946,825 104,914 104,875
Other 852,327 973,147 124,511 126,533
Total 118,378,747 135,145,646 5,394,014 5,115,870
Amounts listed in fair value of plan assets
In the entity’s own financial instruments 7,887,153 10,940,267 22,087 25,537
In properties or other assets used by the entity 152,194 163,817 9,168 7,621
(1) Includes, in Plano de Benefícios 1 from Previ, the amount of R$ 20,521,220 thousand (R$ 28,835,180 thousand as of December 31, 2014), related to the assets that are not quoted in active markets.
) Main actuarial assumptions adopted d.7
Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans
Dec 31, 2015 Dec 31, 2014 Dec 31, 2015 Dec 31, 2014 Dec 31, 2015 Dec 31, 2014 Dec 31, 2015 Dec 31, 2014
Inflation rate (p.a.) 7.96% 6.07% 8.10% 6.23% 7.97% 6.04% 7.94% 6.07%
Real discount rate (p.a.) 7.35% 6.31% 7.37% 6.19% 7.28% 6.33% 7.35% 6.31%
Nominal rate of return on investments (p.a.)
15.90% 12.76% -- -- -- -- 15.88% 12.76%
Real rate of expected salary growth (p.a.)
1.01% 1.01% -- -- -- -- 0.88% 0.73%
Actuarial life table Soft AT-2000
(reduced by 10%)
AT-2000 Soft AT-2000
(reduced by 10%)
AT-2000 Soft AT-2000
(reduced by 10%)
AT-2000 AT-2000
Capitalization method Projected credit unit Projected credit unit Projected credit unit Projected credit unit
In order to determine the values for the defined benefit plans, the Bank uses methods and assumptions different from
those submitted by the entities sponsored.
CPC 33 (R1) prescribes the accounting, as well as the effects that occurred or that will occur in the entities that
sponsor employee benefits plans. However, the sponsored entities themselves must comply with the rules issued by
the Ministério da Previdência Social, through the Conselho Nacional de Previdência Complementar (CNPC) and the
Superintendência Nacional de Previdência Complementar (Previc). The most significant differences are in the
definition of the assumptions used in Plano 1 – Previ.
) Differences in assumptions of the Plano 1 - Previ d.8
Bank Previ
Real discount rate (p.a.) 7.35% 5.00%
Evaluation of assets - Exclusive funds Market value or discounted cash flow Discounted cash flow
Capitalization method Projected credit unit Aggregate Method
) Reconciliation of amounts calculated in Plan 1 - Previ/Bank d.9
Plan assets Actuarial liabilities Effect in surplus/(deficit)
Dec 31, 2015 Dec 31, 2014 Dec 31, 2015 Dec 31, 2014 Dec 31, 2015 Dec 31, 2014
Value determined - Previ 119,301,485 134,450,819 (135,862,751) (122,073,122) (16,561,266) 12,377,697
Incorporation of values from agreement 97 14,314,157 13,687,582 (14,314,157) (13,687,582) -- --
Incorporation of values from Grupo Especial 1,135,082 1,071,445 (1,135,082) (1,071,445) -- --
Adjustment in the value of plan assets (1)
(16,371,977) (14,064,200) -- -- (16,371,977) (14,064,200)
Adjustment in the liabilities - discount rate/ capitalization method -- -- 29,982,075 13,947,472 29,982,075 13,947,472
Value determined - Bank 118,378,747 135,145,646 (121,329,915) (122,884,677) (2,951,168) 12,260,969
(1) Refers mainly to adjustments made by the Bank in determining the fair value of the investments in Litel, Neoenergia and in securities held to maturity.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
93
) Sensitivity analysis d.10
The sensitivity analysis is performed for changes in a single assumption while maintaining all others constant. This is
unlikely in reality, since some of the assumptions are correlated.
The same methodology was used to perform the sensitivity analysis in each of the periods presented. However, the
discount rate was updated to reflect market conditions.
Dec 31, 2015 Life table Salary increase Interest rate
+1 age -1 age +0.25% -0.25% +0.25% -0.25%
Plano 1 (Previ) Present value of defined benefit actuarial obligations 121,329,915 119,009,618 123,605,991 121,329,928 121,329,901 118,943,061 123,808,910
Surplus/(deficit) in the plan (2,951,168) (630,870) (5,227,243) (2,951,180) (2,951,153) (564,313) (5,430,162)
Plano Informal (Previ) Present value of defined benefit actuarial obligations 909,280 876,741 942,443 -- -- 898,895 919,928
Surplus/(deficit) in the plan (909,280) (876,741) (942,443) -- -- (898,895) (919,928)
Plano de Associados (Cassi)
Present value of defined benefit actuarial obligations 6,248,098 6,135,019 6,374,477 6,252,956 6,236,810 6,122,869 6,394,907
Surplus/(deficit) in the plan (6,248,098) (6,135,019) (6,374,477) (6,252,956) (6,236,810) (6,122,869) (6,394,907)
Regulamento Geral (Economus)
Present value of defined benefit actuarial obligations 4,940,666 4,884,837 4,993,937 -- -- 4,847,075 5,038,013
Surplus/(deficit) in the plan (773,457) (717,620) (826,720) -- -- (679,857) (870,796)
Regulamento Complementar 1 (Economus)
Present value of defined benefit actuarial obligations 31,699 33,106 30,336 -- -- 30,756 32,685
Surplus/(deficit) in the plan 2,123 716 3,486 -- -- 3,066 1,137
Plus I e II (Economus) Present value of defined benefit actuarial obligations 349,859 338,251 361,193 -- -- 343,987 355,822
Surplus/(deficit) in the plan (349,859) (338,251) (361,193) -- -- (343,987) (355,822)
Grupo B' (Economus) Present value of defined benefit actuarial obligations 124,157 121,514 126,717 -- -- 121,963 126,425
Surplus/(deficit) in the plan (124,157) (121,514) (126,717) -- -- (121,963) (126,425)
Prevmais (Economus) Present value of defined benefit actuarial obligations 190,497 190,103 190,905 193,468 187,254 185,114 196,176
Surplus/(deficit) in the plan 119,277 119,671 118,868 116,306 122,520 124,660 113,598
Multifuturo I (Fusesc) Present value of defined benefit actuarial obligations 62,472 61,894 63,024 -- -- 61,081 63,921
Surplus/(deficit) in the plan 101,229 101,807 100,677 -- -- 102,620 99,780
Plano I (Fusesc) Present value of defined benefit actuarial obligations 558,486 557,617 559,498 558,487 558,485 552,738 564,442
Surplus/(deficit) in the plan 70,092 70,961 69,080 70,091 70,093 75,839 64,136
Plano BEP (Prevbep) Present value of defined benefit actuarial obligations 44,085 43,492 44,736 44,215 43,956 43,347 44,931
Surplus/(deficit) in the plan 46,845 47,437 46,194 46,715 46,974 47,583 45,999
) Overview of actuarial asset/(liability) recorded by the Bank e
Actuarial assets Actuarial liabilities
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Plano 1 (Previ) -- -- 6,395,387 (1,452,909) (1,475,583) --
Plano Informal (Previ) -- -- -- (914,299) (909,280) (916,858)
Plano de Associados (Cassi) -- -- -- (6,368,486) (6,248,098) (5,906,903)
Regulamento Geral (Economus) -- -- -- (413,392) (406,498) (543,438)
Regulamento Complementar 1 (Economus) 971 753 -- -- -- (543)
Plus I e II (Economus) -- -- -- (350,349) (349,859) (360,840)
Grupo B' (Economus) -- -- -- (125,227) (124,157) (125,925)
Prevmais (Economus) 61,186 59,638 39,110 -- -- --
Multifuturo I (Fusesc) 51,938 50,615 28,662 -- -- --
Plano I (Fusesc) 36,379 35,046 15,465 -- -- --
Plano BEP (Prevbep) 24,176 23,422 21,186 -- -- --
Total 174,650 169,474 6,499,810 (9,624,662) (9,513,475) (7,854,507)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
94
) Allocations of the Surplus - Plano 1 f
1st quarter/2016 2015 1st quarter/2015
Fundo Paridade
Opening balance 120,378 118,889 118,889
Restatement 5,042 18,413 6,500
Contributions to Plano 1 - Agreement 97 -- (11,829) --
Early contribution to amortize - Grupo Especial (1) (1)
-- (5,095) (857)
Closing balance 125,420 120,378 124,532
Fundo de Utilização
Opening balance 8,959,543 8,155,243 8,155,243
Contributions to Plano 1 (132,530) (532,351) (125,116)
Restatement 373,330 1,336,651 444,371
Closing balance 9,200,343 8,959,543 8,474,498
Total funds allocated surplus 9,325,763 9,079,921 8,599,030
(1) Refers to the payment of 100% of the mathematical reserves for guarantees of additional supplemental retirement for the Grupo Especial.
) Fundo Paridade f.1
In 2000, the cost of switching to equal contributions was based on the Plano de Benefícios 1’s surplus at the time.
The agreement (between Banco do Brasil and participants) allowed the Bank to recognize an asset of
R$ 2.227.254 million in Allocation funds surplus. The asset is recalculated each month based on the actuarial goal:
INPC (the National Consumer Price Index published by the Brazilian Institute of Geography and Statistics – IBGE) +
5% p.a..
Since January 2007, the asset has been used to offset financial liabilities related to the agreement signed with Previ
in 1997. This agreement granted additional benefits to participants in Plano 1 (Previ) who joined the plan prior to April
14, 1967, and had not yet retired.
) Fundo de Utilização f.2
This fund contains resources transferred from the Allocation Fund (because of the plan’s surplus), which the Bank
can use for repayments or to reduce future contributions (after first meeting all applicable legal requirements). The
Fundo de Utilização is recalculated based on the actuarial target (INPC + 5% p.a.).
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
95
27 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES - TAXES AND SOCIAL SECURITY
a) Contingent assets
According to CPC 25 – Provisions, Contingent Liabilities and Contingent Assets contingent assets are not recognized
in the financial statements.
b) Labor lawsuits
The Bank is defendant to labor lawsuits mainly filed by former employees or trade unions of the banking industry. The
allowance for probable losses represents various claims, such as: compensation, overtime, distortion of the working
day, additional function and representation amongst others.
c) Tax lawsuits
The Bank, in spite of its conservative profile, is subject to tax inquiries (inspections conducted by the tax authorities),
which may eventually lead to tax assessments, such as: the composition of the calculation of the taxable profit for
income tax/social contribution (deductibility) and discussion regarding the incidence of taxes, when certain taxable
event occur. Most assessments are related to tax on services of any kind – ISSQN, income tax, social contribution,
social integration program/contribution to social security financing – PIS/COFINS, IOF tax and employer social
security contributions. As a guarantee for some of them, the Bank has pledged cash, bonds, real estate or made
judicial deposits when necessary, preventing the Bank to be included in restrictive registration, as well as not to
obstruct the semiannual renewal of its tax regularity certificate.
d) Civil lawsuits
Civil lawsuits consist mainly of: lawsuits of customers and users of our network asking for material and moral
damages indemnity related to banking products and services and Economic Plans.
The indemnities for material and moral damages are based on consumer protection laws and are generally settled in
Special Civil Courts, whose value is limited to forty times the minimum wage.
The Bank is a defendant in proceedings seeking the payment of the difference between the actual inflation rate and
the inflation rate used for the adjustment of financial investments when economic plans were implemented in the late
1980’s and early 1990’s, known as the Bresser Plan, the Verão Plan and the Collor Plans I and II (or Economic
Plans).
Although the Bank complied with the laws and regulations in place at the time, these lawsuits have been recorded in
provisions, taking into consideration the claims where the Bank is the defendant and the outcome of loss is judged to
be probable, which is determined after the analysis of each demand, based on the current decision of the Superior
Court of Justice (STJ).
Regarding disputes relating to economic plans, the Federal Supreme Court (STF) suspended the prosecution of all
cases on appeal, until the Court issues a definitive pronouncement on the right under litigation.
e) Provisions for labor, tax and civil claims - probable loss
The Bank recorded a provision for labor, civil and tax demands with risk of loss "likely", quantified using individual or
mass methodology (includes processes with the author's probability of success equal to remote, possible or
probable), according to the nature and / or process value.
The estimates of outcome and financial effect are determined by the nature of the actions, the management's
judgment, by the opinion of legal counsel on the basis of process elements, complemented by the complexity and the
experience of similar demands.
The Management considers to be sufficient the allowance for losses of labor, tax and civil claims.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
96
e.1) Changes in the provisions for civil, tax and labor claims classified as probable
1st quarter/2016 1st quarter/2015
Labor lawsuits
Opening balance 2,169,106 2,179,821
Addition 340,810 76,954
Reversal of the provision (7,186) (16,254)
Paid out (166,571) (279,509)
Inflation correction 54,947 69,531
Closing balance 2,391,106 2,030,543
Tax lawsuits
Opening balance 245,695 206,515
Addition 66,211 12,275
Reversal of the provision (12,158) (15,638)
Paid out (4,068) (2,184)
Inflation correction 2,865 4,339
Closing balance 298,545 205,307
Civil lawsuits
Opening balance 7,150,581 5,536,595
Addition 716,493 1,060,514
Reversal of the provision (517,810) (202,502)
Paid out (370,354) (254,267)
Inflation correction 81,314 140,529
Closing balance 7,060,224 6,280,869
Total labor, tax and civil 9,749,875 8,516,719
e.2) Expected outflows of economic benefits
Labor Tax Civil
Up to 5 years 2,330,282 159,550 5,750,458
From 5 to 10 years 60,731 106,681 1,279,304
Over 10 years 93 32,314 30,462
Total 2,391,106 298,545 7,060,224
The scenario of unpredictability of the duration of proceedings, and the possibility of changes in the case law of the
courts, make values and the expected outflows of economic benefits uncertain.
f) Contingent liabilities – possible loss
The lawsuits, tax and civil risks classified as possible loss do not require provisions when the final outcome of the
process is unclear and when the probability of losing is less than more-likely-than-not and higher than the remote.
f.1) The balances of contingent liabilities classified as possible loss
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Labor lawsuits 188,070 215,042 169,451
Tax lawsuits (1)
8,582,997 12,777,102 11,179,071
Civil lawsuits 2,646,082 3,270,906 3,238,697
Total 11,417,149 16,263,050 14,587,219
(1) The main contingencies originate from (i) assessment for the payment of social security - INSS contributions on: salary bonus paid under the collective agreements in the period from 1995 to 2006, in the amount of R$ 2,869,114 thousand; public transport benefits and the use of private car by employees of Banco do Brasil, in the amount of R$ 255,038 thousand; and employee profit share payments corresponding to the period from April 2001 to October 2003, in the amount of R$ 79,093 thousand and (ii) notices of tax assessment made by the Treasuries of the Municipalities, claiming ISSQN totaling R$ 966,703 thousand.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
97
g) Deposits in guarantee
g.1) Deposits given in guarantee of contingencies
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Labor lawsuits 4,661,408 4,532,105 4,132,164
Tax lawsuits 6,950,698 6,836,107 6,436,818
Civil lawsuits 16,751,314 15,991,552 12,148,277
Total 28,363,420 27,359,764 22,717,259
h) Legal obligations
The Bank has a record in Other liabilities - tax and social security the amount of R$ 14,316,074 thousand
(R$ 14,076,071 thousand on December 31,2015 and R$ 13,350,098 thousand on March 31,2015) relating to the
following action:
On January 29, 1998, the Bank filed for a writ of mandamus, distributed to the 16th Federal Court of Federal District
(16º Vara da Justiça Federal do Distrito Federal) claiming full compensation of accumulated losses for income tax
purposes and negative basis for the calculation of Social contribution on net income (CSLL). Since then, the Bank
has been fully offsetting the tax loss and the negative basis of social contribution against income tax and social
contribution, and has made judicial deposits for the full amount due (70% of the amount offset). These deposits
prompted the 16º Vara da Justiça Federal do Distrito Federal to issue an order recognizing the suspension of
chargeability of these taxes based on article 151, item II, of the National tax code (Código Tributário Nacional - CTN).
The case was dismissed in the first instance and an appeal brought by the Bank was denied by the Federal Regional
Court (Tribunal Regional Federal – TRF) of the First Region. The decision was challenged by extraordinary appeal
filed by the Bank on October 1, 2002. Today, the appeal is pending in the TRF of the First Region awaiting the
judgment by the STF of another Extraordinary Feature (RE No. 591,340), which was recognized by the Supreme
Court as setting a relevant judicial precedent.
The offsetting of tax loss carry forward and recoverable CSLL has resulted in the write-off of deferred tax credits,
observing the limitation of 30%.
Deferred taxes including corporate income tax (IRPJ) and Social contribution on net income (CSLL) on the interest /
inflation restatements of judicial deposits are being offset with the tax credits resulting from the provision related to
that judicial deposit, in conformity with article 1, item II, paragraph 2 of CMN Resolution 3,059/2002, with no impact
on income.
Based on the hypothesis of a successful outcome to this lawsuit, in September 2005 and January 2009, the Bank
would have consumed the entire stock of tax loss carry forward and recoverable social contribution. Therefore, since
October 2005 and February 2009, the amounts of IRPJ and CSLL are being paid in full. Moreover, there would be a
reclassification of resources from the account used to record judicial deposits to that of cash and cash equivalents.
Tax credits for the escrow deposits (main value) would be written-off against the allowance of IRPJ and CSLL and
would be reversed against income, the provision for tax risks related to the restatement of the deposits amounts to
R$ 7,744,401 thousand.
If the Bank were unsuccessful in its lawsuit (situation in which the amounts deposited judicially would be converted
into income in favor of the Fazenda Nacional (Federal Tax Authority)), the portions of IRPJ tax credits on tax losses
and CSLL to offset would be reclassified to the representative asset account IRPJ recoverable and CSLL
recoverable, that could be used since the accrual period starting October 2005 and February 2009, observing the
limitation of 30%. The taxes recoverable, which would result from the adjustments to prior year Statements of
economic-fiscal information of businesses, corresponds to R$ 5,664,279 thousand as of March 31, 2016 and
updating by the Selic rate results in a further recoverable amount of R$ 3,058,904 thousand. This sum adjusts the
provision for tax risks with respect to the updating of court deposits so that it will be sufficient to fully cancel the risk of
a loss.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
98
h.1) The amounts related to this matter
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Judicial Deposits 16,650,943 16,399,235 15,637,858
Amount realized (70%) 7,817,011 7,817,011 7,817,011
Inflation correction 8,833,932 8,582,224 7,820,847
Legal Obligations - provision for lawsuit 14,316,074 14,076,071 13,350,098
Tax losses of IRPJ 3,002,033 3,002,033 3,002,033
CSLL negative bases/ CSLL recoverable 3,569,640 3,569,640 3,569,640
Provision for restatement of judicial deposit 7,744,401 7,504,398 6,778,425
28 - RISK AND CAPITAL MANAGEMENT
) Risk management process a
Banco do Brasil considers risks and capital management as one of the main vectors for the decision-making process.
The Institution has a process of identification of risks that will be part of the Institution's risks inventory, performed by
analysing the business segments that are explored, direct and indirectly, considering the Entities Related to Banco do
Brasil. The risks below are part of Banco do Brasil's Financial Conglomerate Relevant Risks Corporate Range:
a) Credit Risk; b) Counterparty Credit Risk; c) Concentration Risk; d) Liquidity Risk; e) Operational Risk; f) Market Risk; g) Banking Book Interest Rate Risk; h) Strategic Risk; i) Reputational Risk; j) Environmental Risk; k) Legal Risk; l) Participations Risk; m) Complementary Pension Fund Entities and Private Health Insurance Plan Operators for Employees Risk;
and n) Model Risk.
In the Bank, the collegiate risk management is performed completely segregated from the business units. Risk
management policies are approved by the Board of Directors. The Global Risk Superior Committee (CSRG), a forum
composed of the President and Vice-Presidents, is responsible for implementation and monitoring of these policies.
The guidelines issued by the CSRG are conducted by specific executive committees (credit, market, liquidity and
operational), which are groups formed by Directors.
To learn more about the risk management process in Banco do Brasil, visit the information available in the Risk
Management Report at the website bb.com.br/ri.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
99
Financial instruments - fair value
Financial instruments recorded in balance sheet accounts, compared to fair value:
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Unrealized gain/loss, net of tax effects
Book value Fair value Book value Fair value Book value Fair value On income On shareholders’ equity
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Assets
Short-term interbank investments 361,801,817 360,005,062 352,741,787 352,737,420 349,526,386 349,547,527 (1,796,755) (4,367) 21,141 (1,796,755) (4,367) 21,141
Securities 118,054,169 117,791,132 113,923,018 113,683,766 112,839,594 112,642,841 (4,870,258) (5,349,992) (2,304,270) (263,037) (239,252) (196,753)
Adjustment of securities available for sale (Note 8.a)
-- -- -- -- -- -- (4,607,221) (5,110,740) (2,107,517) -- -- --
Adjustment of securities held to maturity (Note 8.a) -- -- -- -- -- -- (263,037) (239,252) (196,753) (263,037) (239,252) (196,753)
Derivative financial instruments 3,567,711 3,567,711 3,362,032 3,362,032 2,683,486 2,683,486 -- -- -- -- -- --
Loan operations 610,165,415 610,872,142 627,877,787 614,463,025 606,441,494 595,265,322 706,727 (13,414,762) (11,176,172) 706,727 (13,414,762) (11,176,172)
Liabilities
Interbank deposits 36,885,394 37,744,097 41,482,547 42,491,031 36,736,128 36,871,767 (858,703) (1,008,484) (135,639) (858,703) (1,008,484) (135,639)
Time deposits 202,573,182 202,439,616 204,542,130 204,319,982 211,894,634 212,077,385 133,566 222,148 (182,751) 133,566 222,148 (182,751)
Liabilities related to repurchase agreement 354,408,359 351,595,018 333,521,648 331,363,071 329,165,719 327,923,075 2,813,341 2,158,577 1,242,644 2,813,341 2,158,577 1,242,644
Borrowings and onlendings 113,313,382 113,607,034 119,731,066 119,978,533 115,819,948 116,351,016 (293,652) (247,467) (531,068) (293,652) (247,467) (531,068)
Derivative financial instruments 3,635,643 3,635,643 3,289,172 3,289,172 4,301,519 4,301,519 -- -- -- -- -- --
Other liabilities 209,217,150 208,306,377 204,140,873 201,344,954 192,676,379 189,216,849 910,773 2,795,919 3,459,530 910,773 2,795,919 3,459,530
Unrealized gain/(loss), net of tax effects (3,254,961) (14,848,428) (9,606,585) 1,352,260 (9,737,688) (7,499,068)
Determination of fair value of financial instruments
Short-term interbank investments: The fair value was obtained by discounting future cash flows, using interest rates traded by the market in similar operations on the balance sheet
date.
Securities: Securities are accounted for by market value, as allowed for in Bacen Circular No. 3,068/2001, except for securities held to maturity. The fair value of the securities,
including those held to maturity, is obtained from rates practised in the market.
Loan operations: The fair value of fixed rate operations has been estimated through the future cash flow discount method, considering the interest rates utilized by the Bank when
originating similar operations at the balance sheet date. For operations that are remunerated by floating rates, the fair value was equivalent to the book value itself.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
100
Interbank deposits: The fair value has been calculated by the discount of the future cash flows using rates currently
applicable in the market for fixed rate deposits. In case of floating operations the maturities of which are less than 30
days, the book value was deemed approximately equivalent to the fair value.
Time deposits: The same criteria adopted for interbank deposits are utilized in the determination of the fair value.
Liabilities related to repurchase agreement: For operations at fixed rates, the fair value was determined calculating
the discount of the estimated cash flows adopting a discount rate equivalent to the rates applied in contracting similar
operations on the last trading day. For floating operations, book values have been deemed approximately equivalent
to market value.
Borrowing and onlendings: Such operations are exclusive to the Bank with no similar operations in the market. Given
their specific characteristics, the exclusive rates for each fund, the inexistence of an active market or similar traded
instruments, the fair values of such operations are considered equivalent to the book value.
Other liabilities: Fair values have been determined by the discounted cash flow method, which takes into account
interest rates offered in the market for obligations with similar maturities, risks and terms.
Derivatives financial instruments: According to Bacen Circular No. 3,082/2002, derivatives are recorded at market
value. The market value of derivatives was estimated in accordance with internal pricing models, with the use of the
rates disclosed for transactions with similar terms and indices on the last business day of the period.
Other financial instruments: Included or not in the balance sheet, fair value is approximately equivalent to the
corresponding book value.
Source of information regarding assets and liabilities measured at fair value in the balance sheet
According to the source of information in the measurement at fair value, the assessment techniques used by the
Bank are classified as follows:
Level 1 – Prices used are quoted in active markets for identical financial instruments. A financial instrument is
considered quoted in an active market if the quoted prices are readily and regularly available and these prices
represent real market transactions which occur regularly on an arm's length basis.
Level 2 – Other available information, excepted that from Level 1, is used, in which the prices are quoted in non-
active markets or for similar assets and liabilities, or other available information is used or that can be corroborated by
information observed in the market to support the assessment of the assets and liabilities.
Level 3 – Information that is not available in the market is used in the definition of the fair value. If the market for the
financial instrument is not active, the Bank establishes the fair value using the valuation technique which takes into
account internal data that is consistent with the economic methodologies accepted for pricing of financial instruments.
Assets and liabilities measured at fair value in the balance sheet
Balance at Mar 31,
2016 Level 1 Level 2 Level 3
Assets 117,873,815 67,698,983 50,174,832 --
Trading securities, measured by market value 8,105,030 6,500,847 1,604,183 --
Derivative financial instruments 3,567,711 -- 3,567,711 --
Available-for-sale securities, measured by market value 106,201,074 61,198,136 45,002,938 --
Liabilities (3,978,443) -- (3,978,443) --
Hedge funding (342,800) -- (342,800) --
Derivative financial instruments (3,635,643) -- (3,635,643) --
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
101
Balance at Dec 31,
2015 Level 1 Level 2 Level 3
Assets 113,420,484 62,764,151 50,656,333 --
Trading securities, measured by market value 7,860,341 6,546,397 1,313,944 --
Derivative financial instruments 3,362,032 -- 3,362,032 --
Available-for-sale securities, measured by market value 102,198,111 56,217,754 45,980,357 --
Liabilities (3,627,472) -- (3,627,472) --
Hedge funding (338,300) -- (338,300) --
Derivative financial instruments (3,289,172) -- (3,289,172) --
Balance at Mar 31,
2015 Level 1 Level 2 Level 3
Assets 111,815,040 60,663,649 51,151,391 --
Trading securities, measured by market value 10,032,622 9,519,667 512,955 --
Derivative financial instruments 2,683,486 -- 2,683,486 --
Available-for-sale securities, measured by market value 99,098,932 51,143,982 47,954,950 --
Liabilities (4,637,195) -- (4,637,195) --
Hedge funding (335,676) -- (335,676) --
Derivative financial instruments (4,301,519) -- (4,301,519) --
Sensitivity analysis (CVM Instruction No. 475/2008)
Banco do Brasil manages its risks in a dynamic process, identifying, assessing, monitoring, and controlling market
risk exposure arising on its positions. In this context, the Bank takes into account the risk limits defined by the
Strategic Committees and possible scenarios, to act in a timely manner to reverse any adverse results.
In accordance with CMN Resolution No. 3,464/2007 and with Bacen Circular No. 3,354/2007, to manage more
efficiently its transactions exposed to market risks, Banco do Brasil separates its transactions, including derivative
financial instruments, as follows:
1) Trading Book: consisting of own positions held for trading or as a hedge for its trading portfolio, for which there is
an intention of trading prior to their contractual expiry, subject to normal market conditions and that do not have a
non-trading clause.
2) Banking Book: consisting of transactions not classified in the Trading Book whose feature is held to maturity.
The sensitivity analysis for all the operations with assets and liabilities of the Balance Sheet, in compliance with CVM
Instruction No. 475/2008 does not adequately reflect the market risk management process or the accounting
practices adopted by the Bank.
In order to determine the sensitivity of the Bank's capital to the impacts of market volatility, simulations were
performed with three likely scenarios, two of which assume adverse movements for the Bank. The scenarios used
are set out below:
Scenario I: Likely situation, which reflects the perception of the Bank’s senior management, the scenario most likely
to occur for a 3-month horizon, considering macroeconomic factors and market information (BM&FBovespa, Anbima,
etc.). Assumptions: exchange rate real/dollar of R$ 3.70 maintaining the Selic rate in 14.25% per annum based on
market conditions observed at March 31, 2016.
Scenario II: Possible situation. Assumptions adopted: parallel shock of 25.00% in the risk variables, based on market
conditions observed on March 31, 2016 considering the worst losses by risk factor and, therefore, ignoring the
dynamics of correlation between macroeconomic factors.
Scenario III: Possible situation. Assumptions adopted: parallel shock of 50.00% in the risk variables, based on market
conditions observed on March 31, 2016 considering the worst losses by risk factor and thus ignoring the dynamics of
correlation between macroeconomic factors.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
102
The tables below summarize the results for the Trading Portfolio (Trading), composed of public and private securities,
derivative financial instruments and funds obtained through repurchase agreements:
Risk Factor Concept
Scenario I
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Variation of rates
Income/ (expense)
Variation of rates
Income/ (expense)
Variation of rates
Income/ (expense)
Prefixed rate Risk of variation of prefixed interest
rates Maintenance -- Increase 131 Increase (996)
TMS and CDI indices Risk of variation of interest rate
indices Increase (1) Increase (3) Increase (2)
IPCA index Risk of variation of inflation indices Maintenance -- Increase 678 Increase (4,847)
Foreign currency coupons (US Dollars)
Risk of variation of foreign currency indices
-- -- -- -- Increase 50
Exchange rates variation Risk of variation of foreign
exchange rates Increase 11,327 Increase 13,706 Decrease (14,467)
Risk Factor Concept
Scenario II
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Variation of rates
Income/ (expense)
Variation of rates
Income/ (expense)
Variation of rates
Income/ (expense)
Prefixed rate Risk of variation of prefixed interest
rates Decrease (7,386) Decrease (959) Increase (6,567)
TMS and CDI indices Risk of variation of interest rate
indices Decrease -- Decrease (1) Increase --
IPCA index Risk of variation of inflation indices Increase (3,192) Increase (1,140) Increase (14,823)
Foreign currency coupons (US Dollars)
Risk of variation of foreign currency indices
-- -- -- -- Decrease (72)
Exchange rates variation Risk of variation of foreign
exchange rates Decrease (71,422) Decrease (92,657) Decrease (78,398)
Risk Factor Concept
Scenario III
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Variation of rates
Income/ (expense)
Variation of rates
Income/ (expense)
Variation of rates
Income/ (expense)
Prefixed rate Risk of variation of prefixed interest
rates Decrease (16,246) Decrease (2,866) Increase (13,393)
TMS and CDI indices Risk of variation of interest rate
indices Decrease (1) Decrease (2) Increase --
IPCA index Risk of variation of inflation indices Increase (6,324) Increase (2,225) Increase (29,304)
Foreign currency coupons (US Dollars)
Risk of variation of foreign currency indices
-- -- -- -- Decrease (145)
Exchange rates variation Risk of variation of foreign
exchange rates Decrease (142,845) Decrease (185,314) Decrease (156,796)
For transactions classified in the Banking Book, appreciations or depreciations resulting from changes in interest
rates practiced in the market do not imply in a significant financial or accounting impact on the Bank's income as a
result of the portfolio composition which is principally: loan operations (consumer credit, agribusiness, working capital,
etc.); retail funding (demand, time, and savings deposits), and securities, which are recorded in the books using the
contracted interest rates. In addition, it should be pointed out that these portfolios, except the securities available for
sale, have as their principal characteristic the intention to hold the respective operations to maturity and, hence they
are not subject to the effects of fluctuating interest rates, or the fact that such transactions are naturally related to
other instruments (natural hedge), hence minimizing the impacts of a stress scenario.
The tables below show a summary of the Trading Portfolio (Trading) and Non Trading (Banking) for the financial and
non-financial entities controlled by the bank:
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
103
Risk Factor Concept
Scenario I
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Variation of rates
Income/
(expense) Variation of
rates Income/
(expense) Variation of
rates Income/
(expense)
Prefixed rate Risk of variation of prefixed
interest rates Maintenance -- Increase (3,478,743) Increase (1,867,480)
TR
Risk of variation of interest rate indices
Increase 25,740 Increase 1,361,365 Increase 943,070
TBF Increase 5,511 Decrease (42) Increase 1,647
TJLP Maintenance -- Increase (5,022) Decrease 563
TMS and CDI Increase 26,906 Increase 32,171 Increase (4,046)
IGP-M
Risk of variation of inflation indices
Maintenance -- Increase (142,841) Increase (30,961)
IGP-DI Maintenance -- Increase (144) Increase (95)
INPC Maintenance -- Increase (111,745) Increase (53,757)
IPCA Maintenance -- Increase (601,591) Increase (320,158)
Foreign currency rates Risk of variation of foreign
currency indices Decrease (745,875) Decrease (1,113,147) Increase 850,966
Exchange rate Risk of variation of foreign
exchange rates Increase (84,997) Increase (60,592) Decrease (113,851)
Risk Factor Concept
Scenario II
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Variation of rates
Income/
(expense) Variation of
rates Income/
(expense) Variation of
rates Income/
(expense)
Prefixed rate Risk of variation of prefixed
interest rates Increase (11,128,173) Increase (12,538,082) Increase (11,063,978)
TR
Risk of variation of interest rate indices
Decrease (5,463,048) Decrease (5,590,381) Decrease (5,828,484)
TBF Decrease (3,323) Decrease (3,991) Decrease (3,733)
TJLP Decrease (12,571) Increase (23,159) Increase (42,267)
TMS and CDI Decrease (23,939) Increase (13,651) Increase (20,826)
IGP-M
Risk of variation of inflation indices
Increase (151,525) Increase (230,618) Increase (89,184)
IGP-DI Increase (272) Increase (236) Increase (225)
INPC Increase (184,263) Increase (177,195) Increase (154,313)
IPCA index Increase (1,046,403) Increase (1,069,492) Increase (975,769)
Foreign currency rates Risk of variation of foreign
currency indices Decrease (876,179) Decrease (1,383,209) Decrease (1,007,398)
Exchange rate Risk of variation of foreign
exchange rates Increase (535,957) Increase (409,627) Decrease (616,951)
Risk Factor Concept
Scenario III
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Variation of rates
Income/
(expense) Variation of
rates Income/
(expense) Variation of
rates Income/
(expense)
Prefixed rate Risk of variation of prefixed
interest rates Increase (21,183,605) Increase (23,646,296) Increase (21,085,653)
TR
Risk of variation of interest rate indices
Decrease (10,895,015) Decrease (11,394,648) Decrease (11,831,883)
TBF Decrease (6,684) Decrease (8,035) Decrease (7,504)
TJLP Decrease (26,631) Increase (47,175) Increase (83,254)
TMS and CDI Decrease (47,852) Increase (27,300) Increase (41,627)
IGP-M
Risk of variation of inflation indices
Increase (297,220) Increase (439,872) Increase (180,076)
IGP-DI Increase (542) Increase (472) Increase (449)
INPC Increase (361,107) Increase (346,949) Increase (302,546)
IPCA index Increase (1,970,249) Increase (2,008,991) Increase (1,837,493)
Foreign currency rates Risk of variation of foreign
currency indices Decrease (1,801,197) Decrease (2,857,467) Decrease (2,076,584)
Exchange rate Risk of variation of foreign
exchange rates Increase (1,071,914) Increase (819,254) Decrease (1,233,901)
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
104
The scenarios used for preparing the framework for sensitivity analysis must use situations of deterioration of at least
25% and 50% of the variable risks, on an individualized basis, as determined by CVM Instruction No. 475/2008.
Thus, the combined analysis of the results does not reflect real expectations, for example, simultaneous shocks of
increase in the prefixed interest rate and reduction of the TR rate are not consistent from the macroeconomic
perspective.
The derivative transactions classified in the Banking Book, do not represent a relevant market risk to Banco do Brasil,
as these positions are usually originated with the following objectives:
Swapping the index of funding and lending transactions performed to meet customer needs;
Hedging market risk, the purpose and effectiveness of which are described in Note 8.d. Also in this transaction, the interest and exchange rate variations have no effects on the Bank's income.
On March 31, 2016, the Banco do Brasil did not enter into any transaction classified as an exotic derivative, as
described in CVM Instruction No. 475/2008 - Attachment II.
) Capital management b
On June 30, 2011, aligned with Pillar II of Basel, the Brazilian regulator, Banco Central do Brasil (Bacen), issued the
Conselho Monetário Nacional (CMN) Resolution No. 3,988, which established the requirement for financial
institutions to implement a capital management framework. Applying CMN Resolution, Banco do Brasil defined as
part of its structure Accounting, Risk Management, Controlling and Finance Units. Furthermore, in line with the CMN
Resolution, the Board of Directors appointed the Controller as responsible for Capital Management within Banco
Central do Brasil.
Banco do Brasil has approaches that enable the identification and evaluation of significant risks incurred, including
those not covered by the Minimum Referential Equity Required (MRER) related to the Pillar I risks. Its policies and
strategies, as well as the capital plan, enable the maintenance of capital at a consistent level given the risks faced by
the institution. Stress tests are performed on a monthly basis and their impacts are assessed from a capital
perspective. Capital adequacy management reports are distributed to corporate units and to strategic committees,
which provide support to the decision making process of the Senior Management of the Bank.
The CMN Resolution No. 3,988/2011 also established the need for an Internal Capital Adequacy Assessment
Process (ICAAP), which was implemented by Banco do Brasil starting June 30, 2013. The responsibility for
coordinating ICAAP was assigned to the Bank’s Risk Management Unit. Meanwhile, the Internal Controls Unit, an
independent area segregated from the capital management structure, is responsible for the validation of ICAAP.
Finally, Internal Audit holds the institutional responsibility for annually evaluating the process of capital management.
To learn more about the capital management at Banco do Brasil, visit the website bb.com.br/ri.
Capital adequacy ratio
The Capital Adequacy Ratio was determined according to the criteria established by CMN Resolutions No.
4,192/2013 and No. 4,193/2013, which refer to the calculation of the Referential Equity (RE) and the Minimum
Referential Equity Required (MRER) in relation to Risk Weighted Assets (RWA).
On October 1, 2013, Brazil adopted a set of legislation that implemented the recommendations of the Basel
Committee on Banking Supervision regarding the capital structure of financial institutions, known as Basel III. The
new rules adopted addressed the following issues:
I - new methodology for calculating regulatory capital, which continues to be divided into Tier I and II. The Tier I
consists of the Common Equity Tier I Capital – CET1 (net of Regulatory Adjustments) and Additional Tier I Capital
(AT1);
II - new methodology for calculating the capital required to be maintained, adopting minimum requirements for
Referential Equity, Tier I and Common Equity Tier I Capital (CET1), and the introduction of the Additional CET1.
From January 1, 2016, the percentage of deduction of prudential adjustments listed below increased to 60%:
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
105
goodwill;
intangible assets constituted after October 1, 2013;
actuarial assets related to defined benefit pension funds net of deferred tax liabilities;
non-controlling interests;
investments, directly or indirectly, above than 10% of the capital of unconsolidated entities similar to financial institutions, and insurance companies, reinsurance companies, capitalization companies and open pension entities (significant investments);
tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for their realization;
tax credits resulting from tax loss of excess depreciation;
tax credits resulting from tax losses and negative base for social contribution on net income.
According to CMN Resolution No. 4,192/2013, these deductions will be gradually implemented at 20% per year, from
2014 to 2018, with the exception of deferred assets and funding instruments issued by institutions authorized to
operate by Banco Central do Brasil (Bacen) which have been fully deducted since October 2013.
On August 28, 2014, the Hybrid Instrument in the amount of R$ 8,100,000 thousand, was authorized by Banco
Central do Brasil to compose the Common Equity Tier 1 Capital of the Bank.
According to Bacen Resolution No. 4,192/2013 and No. 4,193/2013, from January 2015, the calculation of the
Regulatory Equity (RE) and the amount of Risk-Weighted Assets (RWA) should be elaborated based on Prudential
Conglomerate.
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Prudential
RE - Referential equity 128,443,802 135,551,196 128,704,988
Tier I 89,977,516 95,713,963 91,297,640
Common equity Tier 1 capital (CET1) 65,336,289 68,677,378 69,739,142
Shareholders' equity 73,623,327 71,314,421 73,315,647
Instrument qualifying as CET1 8,100,000 8,100,000 8,100,000
Regulatory adjustments (16,387,038) (10,737,043) (11,676,505)
Additional Tier 1 capital (AT1) 24,641,227 27,036,585 21,558,498
Hybrid instruments authorized in accordance with CMN Resolution No. 4,192/2013
19,481,692 21,375,495 19,484,955
Hybrid instruments authorized in accordance with regulations preceding the CMN Resolution No. º 4,192/2013
(1)
5,159,535 5,661,090 2,073,543
Tier II 38,466,286 39,837,233 37,407,348
Subordinated debt qualifying as capital 38,466,314 39,839,840 37,425,368
Subordinated debt authorized in accordance with CMN Resolution No. 4,192/2013 - financial bills
5,748,299 5,786,606 5,291,355
Subordinated debt authorized in accordance with regulations preceding the CMN Resolution No. 4,192/2013
32,718,015 34,053,234 32,134,013
Funds obtained from the FCO (2)
23,239,453 22,994,912 21,075,691
Funds raised in financial bills and CD (3)
9,478,562 11,058,322 11,058,322
Deduction from Tier II (28) (2,607) (18,020)
Funding instruments issued by financial institution (28) (2,607) (18,020)
Risk Weighted Assets (RWA) 790,701,579 840,508,940 803,429,615
Credit risk (RWACPAD) 731,373,597 785,773,084 753,727,844
Market risk (RWAMPAD) 27,619,507 18,346,766 19,584,874
Operational risk (RWAOPAD) 31,708,475 36,389,090 30,116,897
Minimum referential equity requirements (4)
78,081,781 92,455,983 88,377,258
Margin on the minimum referential equity required 50,362,021 43,095,213 40,327,730
Tier I ratio (Tier I / RWA) 11.38% 11.39% 11.36%
Common equity Tier 1 capital ratio (CET1 / RWA) 8.26% 8.17% 8.68%
Capital adequacy ratio (RE / RWA) 16.24% 16.13% 16.02%
(1) On March 31, 2016, based on the orientation of Bacen, it was considered the balance of the hybrid capital and debt instrument authorized by Bacen to compose the Tier 1 Capital of the Referential Equity according CMN Resolution 3,444/2007 and do not meet the relevant entry criteria, also related with the orientation established on article 28, sections I to X of CMN Resolution 4,192/2013.
(2) According to CMN Resolution No. 4,192/2013, balances of the FCO are eligible to compose the RE.
(3) On March 31, 2016, it was considered the balance of subordinated debt instruments that composed the RE in December 31, 2012, applying on it the limit of 60%, as determined by CMN Resolution No. 4,192/2013.
(4) According to CMN Resolution No. 4,193/2013, corresponds to the application of the "F" factor to the amount of RWA, where "F" equals: 11%, from October 1, 2013 to December 31, 2015; 9.875% from January 1, 2016 to December 31, 2016; 9.25%, from January 1, 2017 to December 31, 2017; 8.625% from January 1, 2018 to December 31, 2018 and 8%, from January 1, 2019.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
106
Regulatory adjustments deducted from CET1:
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Prudential
Tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for its realization (amount above 10% threshold)
(1)
(5,537,669) (3,425,235) (619,575)
Significant investments and tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for their realization (amount exceeding the 15% threshold)
(1) (2)
(4,598,474) (2,846,808) (358,945)
Intangible assets constituted after October 2013 (1)
(3,382,398) (2,346,233) (2,048,234)
Goodwill (1) (3)
(1,563,486) (1,075,845) (1,343,455)
Tax credits resulting from tax losses and negative base for social contribution on net income
(1)
(606,484) (561,777) (499,011)
Non-controlling interests (1)
(528,618) (402,531) (434,493)
Tax credits resulting from tax loss of excess depreciation (1)
(87,205) (62,040) (72,129)
Actuarial assets related to defined benefit pension funds net of deferred tax liabilities
(1)
(68,020) -- (2,470,316)
Deferred assets (4)
(14,684) (16,574) (25,686)
Funding instruments issued by financial institutions (2) (4)
-- -- (3,804,661)
Total (16,387,038) (10,737,043) (11,676,505)
(1) Regulatory Adjustments subject to phase-in, according to the CMN Resolution No. 4,192/2013.
(2) According to Resolution CMN No. 4,442/2015, from november/2015, the methodology of deduction of the investment in Banco Votorantim S.A. was modified. This way, on 03.31.2016, R$ 1,621,474 thousand were integrally deductec from the Referential Equity and R$ 2,413,919 thousand were risk-weighted at 250%.
(3) The base value for calculating the goodwill is composed of: R$ 923,234 thousand in the investment line and R$ 1,682,576 thousand in the intangible assets line. The value in Intangible assets refers to the goodwill paid for the acquisition of Banco Nossa Caixa, merged in November/2009.
(4) Regulatory Adjustments that are being fully computed since October, 2013, in accordance with CMN Resolution No. 4,192/2013.
) Fixed asset ratio c
On March 31, 2016, the Fixed Asset Ratio for the Prudential Conglomerate, totalized 15.79% (16.70% on December
31, 2015 and 24.26% on March 31, 2015), and it was calculated in compliance with CMN Resolutions No. 4,192/2013
and No. 2,669/1999.
29 - STATEMENT OF COMPREHENSIVE INCOME
1st quarter/2016 1st quarter/2015
Net income presented in the Statement of Income 2,359,051 5,818,350
Other comprehensive income
Accumulated other comprehensive income (Note 23.i) 797,647 (812,268)
Banco do Brasil 484,645 (827,015)
Subsidiaries abroad 34,177 (1,451)
Associates and subsidiaries 278,825 16,198
Income and social contribution taxes related to unrealized (gains) / losses (Note 23.i) (67,021) 235,256
Other comprehensive income, net of income and social contribution taxes 730,626 (577,012)
Comprehensive income 3,089,677 5,241,338
Comprehensive income - Non-controlling interests 389,476 404,904
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
107
30 - OTHER INFORMATION
a) Distribution of dividends and interest on own capital
During a meeting held on February 23, 2016, the Board of Directors approved the setting of the payout rate
equivalent to the minimum of 25% of net income for the year 2016, fulfilling the policy for payment of dividends yield
and/or interest on own capital on a quarterly basis, pursuant to article 45 of the Bank's By-Laws.
b) Investiment funds management
Funds managed by BB Gestão de Recursos - Distribuidora de Títulos e Valores Mobiliários S.A.:
Numbers of Funds/Portfolios (in Units) Balance
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015 Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Managed funds 631 611 614 644,831,703 603,232,935 594,841,810
Investment Funds 620 603 606 629,542,152 587,725,096 582,167,916
Managed Portfolios 11 8 8 15,289,551 15,507,839 12,673,894
c) Details in relation to overseas branches, subsidiaries and associates
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Assets
BB Group 84,490,065 90,325,257 75,069,990
Third parties 109,792,092 133,050,500 124,533,316
TOTAL ASSETS 194,282,157 223,375,757 199,603,306
Liabilities
BB Group 23,412,604 25,795,399 22,944,441
Third parties 160,047,020 185,321,366 164,913,179
Shareholders' Equity 10,822,533 12,258,992 11,745,686
Attributable to parent company 9,941,530 11,252,692 10,659,473
Non-controlling interests 881,003 1,006,300 1,086,213
TOTAL LIABILITIES 194,282,157 223,375,757 199,603,306
1st quarter/2016 1st quarter/2015
Net Income (627,383) 156,176
Attributable to parent company (695,001) 71,498
Non-controlling interest 67,618 84,678
d) Consortium funds
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Monthly forecast of purchase pool members receivable funds 204,529 202,928 197,739
Obligations of the groups due to contributions 8,557,887 8,321,348 8,178,158
Purchase pool members - assets to be delivered 7,632,250 7,440,232 7,348,793
(In Units)
Quantity of groups managed 560 564 554
Quantity of active purchase pool members 639,908 644,779 586,544
Quantity of assets deliverable to members (drawn or winning offer) 60,354 61,990 57,027
1st quarter/2016 1st quarter/2015
Quantity of assets (in units) delivered in theperiod 26,911 20,054
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
108
e) Assignment of employees to outside agencies
Federal government assignments are regulated by Law 10,470/2002 and Decree No. 4,050/2001.
1st quarter/2016 1st quarter/2015
Quantiy of Employees
Ceded(1)
Cost in the Period
Quantiy of Employees
Ceded (1)
Cost in the Period
With costs for the Bank
Labor unions 218 8,985 224 8,812
Other organizations/entities 2 196 2 192
Subsidiaries and associates 2 331 2 316
Without cost to the Bank
Federal, state and municipal governments 278 -- 288 --
External organizations (Cassi, Previ, Economus, Fusesc and PrevBep) 586 -- 603 --
Employee entities 82 -- 88 --
Subsidiaries and associates 595 -- 551 --
Total 1,763 9,512 1,758 9,320
(1) Balance on the last day of the period.
f) Remuneration of employees and managers
Monthly wages paid to employees and Directors of the Banco do Brasil (in Reais):
Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
Lowest salary 2,449.98 2,449.98 2,227.26
Highest salary 40,992.27 40,992.27 37,265.70
Average salary 6,763.52 6,869.98 6,357.71
Management
President 65,196.08 65,196.08 62,388.59
Vice-President 58,355.29 58,355.29 55,842.38
Director 49,457.30 49,457.30 47,327.56
Council members
Fiscal Council 5,638.43 5,638.43 5,395.63
Board of Directors 5,638.43 5,638.43 5,395.63
Audit Committee - Member 44,511.57 44,511.57 42,594.80
g) Insurance policy of assets
Despite the reduced level of risk to which its assets are subject, the Bank contracts insurance cover for its assets in
amounts considered to be sufficient to cover any losses.
Insurance contracted by the Bank in force on March 31, 2016
Covered Risks Amounts Covered Value of the Premium
Property insurance for the relevant fixed assets 1,123,599 6,341
Life insurance and collective personal accident insurance for the Executive Board (1)
885 3
Total 1,124,484 6,344
(1) Refers to individual coverage for members of the Executive Board.
Notes to the Consolidated Financial Statements
1st
quarter 2016
In thousands of Reais, unless otherwise stated
109
h) Law 13,169/2015 (Provisional Measure No. 675/2015 converted into law)
The provisional measure 675/2015 was converted into the Law 13,169 on October 6, 2015 and increased the rate of
the Social Contribution on Net Income (CSLL) applicable to financial institutions, legal entities of private insurance
and capitalization from 15% to 20% for the period from September 1, 2015 to December 31, 2018. The law also
establishes the return of the social contribution rate to 15% for the periods beginning on or after January 1, 2019.
i) Provisional Measure No. 694/2015
The provisional measure 694/2015, from September 30, 2015, brings a new limit for the payment of interest on own
capital (JCP), and the value of the variation of TJLP or 5% per year, whichever is less, should be considered in the
calculation. In addition, the percentage of income tax withholding at the time of payment or credit of JCP to the
beneficiary was raised to 18%. The Provisional Measure devices that deals with this issue take effect for the periods
beginning on or after January 1, 2017.
j) Credit intelligence bureau
The Bank has entered, collectively, into a non-binding Memorandum of Understanding with Banco Bradesco S.A.,
Banco Santander (Brasil) S.A., Caixa Econômica Federal and Itaú Unibanco S.A., the parties, in order to create a
credit intelligence bureau (CIB).
CIB will develop a data base aiming to aggregate, reconcile and treat registration data and credit information of
individuals and companies that expressly authorize their inclusion in such data base as required by applicable law.
This action will increase the exchange of information of such individuals and companies, enabling higher levels of
efficiency and improvement on credit management activities. This initiative shall facilitate, for participants of the
Brazilian Banking Industry and other companies on the credit market, the granting of credit lines at long and medium
terms.
CIB will be structured as a corporation and the parties, each of them holding a 20% equity ownership, will share its
control. The board of directors of CIB shall be formed by members appointed by the Parties and its executives will be
exclusively dedicated to the business, preserving the independent nature of CIB’s management.
The technical implementation of CIB shall be performed together with LexisNexis® Risk Solutions FL Inc., technical
partner selected to develop and implement the technical and analytical platform of CIB, by means of a service
rendering agreement.
CIB’s incorporation is subject to the execution of definitive documents among the parties, as well as the compliance
with certain conditions precedent, including the approval by applicable regulatory authorities. Its creation reaffirms the
banks’ confidence in the future of Brazil and of the credit market, and allows a stronger and more sustainable market.
KPMG Auditores Independentes
Abril de 2016
KPDS 150207
Banco do Brasil S.A.
Report on the review of interim
consolidated financial information
Quarter ended as at March 31,
2016
(a free translation of the original
report in Portuguese containing the
Interim Financial Statements
prepared by management in
accordance with the accounting
practices adopted in Brazil applicable
to institutions authorized to operate
by the Central Bank of Brazil)
2
KPMG Auditores Independentes
SBS - Qd. 02 - Bl. Q - Lote 03 - Salas 708 a 711
Edifício João Carlos Saad
70070-120 - Brasília/DF - Brasil
Caixa Postal 8587 - CEP 70312-970 - Brasília/DF - Brasil
Telefone 55 (61) 2104-2400, Fax 55 (61) 2104-2406
www.kpmg.com.br
Report on the review of interim consolidated
financial information
To
The Board of Directors, Shareholders and Management of
Banco do Brasil S.A.
Brasília – DF
Introduction
We have reviewed the consolidated statement of financial position of Banco do Brasil
S.A. (“Banco do Brasil”), as at March 31, 2016 and the related consolidated
statements of income, changes in shareholders' equity and cash flows for the quarter
then ended, as well as the summary of significant accounting policies and other
explanatory notes (“the interim consolidated financial information”).
Management is responsible for the preparation and fair presentation of this interim
consolidated financial information in accordance with the accounting practices
adopted in Brazil applicable to institutions authorized to operate by the Central Bank of
Brazil. Our responsibility is to express a conclusion on this interim consolidated
financial information based on our review.
Scope of review
We conducted our review in accordance with Brazilian and International Standards on
Review (NBC TR 2410 – Revisão de Informações Intermediárias Executada pelo
Auditor da Entidade and ISRE 2410 – Review of Interim Financial Information
Performed by the Independent Auditor of the Entity, respectively). A review of interim
financial information consists of making inquiries, primarily to persons responsible for
financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with
auditing standards and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an audit.
Therefore, we do not express an audit opinion.
3
Conclusion
Based on our review, we are not aware of any facts that would lead us to believe that
the interim consolidated financial information mentioned above were not prepared, in
all material respects, in accordance with the accounting practices adopted in Brazil
applicable to institutions authorized to operate by the Central Bank of Brazil..
Other matter
Interim statement of value added
We also reviewed the consolidated statement of value added (DVA) for the quarter
ended as at March 31, 2016, which was prepared under Banco do Brasil’s
Management responsability, and which presentation is required under the rules
issued by Brazilian Securities and Exchange Commission (CVM), and is considered a
supplementary information in accordance with the accounting practices adopted in
Brazil applicable to institutions authorized to operate by the Central Bank of Brazil that
do not require the disclosure of DVA. This statement was subject to the same review
procedures described above and based on our review, we are not aware of any facts
that would lead us to believe it was not prepared, in all material respects, consistently
with the interim consolidated financial information taken as a whole.
Brasília, May 11, 2016
KPMG Auditores Independentes
CRC SP-014428/O-6 F-DF
Original report in Portuguese signed by
Marcelo Faria Pereira
Accountant CRC RJ-077911/O-2
Consolidated Financial Statements
1st
quarter 2016
MEMBERS OF MANAGEMENT
PRESIDENTAlexandre Corrêa Abreu
VICE-PRESIDENTSAntonio Mauricio MauranoGeraldo Afonso Dezena da SilvaJoão da Silva MaiaJosé Mauricio Pereira CoelhoJulio Cezar Alves de OliveiraOsmar Fernandes DiasPaulo Roberto Lopes RicciRaul Francisco MoreiraWalter Malieni Junior
DIRECTORSAdriano Meira RicciAntonio Pedro da Silva Machado Carlos Alberto Araujo NettoCarlos Célio de Andrade SantosCarlos Renato BonettiEdmar José CasalatinaEdson Rogério da CostaEduardo Cesar PasaGustavo de Faria BarrosHamilton Rodrigues da SilvaIlton Luís SchwaabJoão Pinto Rabelo JúniorJosé Caetano de Andrade Minchillo José Carlos Reis da SilvaLeonardo Silva de Loyola ReisLuís Aniceto Silva CavicchioliLuiz Cláudio LigabueLuiz Henrique Guimarães de FreitasMárcio Luiz MoralMarco Antonio Ascoli MastroeniNilson Martiniano MoreiraOtaviano Amantéa de Souza CamposRogério Magno PancaSandro Kohler MarcondesSimão Luiz KovalskiTarcísio HübnerWilsa Figueiredo
BOARD OF DIRECTORS Fabrício da Soller Alexandre Corrêa Abreu Beny Parnes Juliana Públio Donato de Oliveira Luiz Serafim Spinola Santos Manoel Carlos de Castro Pires Miguel Ragone de Mattos Francisco Gaetani FISCAL COUNCIL Aldo César Martins Braido Giorgio Bampi Marcos Machado Guimarães Mauricio Graccho de Severiano Cardoso Felipe Palmeira Bardella AUDIT COMMITEE Antonio Carlos Correia Egidio Otmar Ames Elvio Lima Gaspar Luiz Serafim Spinola Santos ACCOUNTING DEPT. Eduardo Cesar Pasa General Accountant Accountant CRC-DF 017601/O-5 CPF 541.035.920-87 Daniel André Stieler Accountant CRC-DF 013931/O-2 CPF 391.145.110-53
Members of Management