Liquidity and Risk Management - Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) are key metrics for liquidity risk management, ensuring sufficient liquid instruments for net cash outflows in stress scenarios and structural funding for long-term assets [203]. - The company has established limits for liquidity metrics, which can be strategic or operational, triggering different governance levels based on their usage percentage [203]. - The operational risk management process includes identifying, evaluating, and monitoring operational risks, as well as assessing risks associated with new products and services [205]. - Compliance risk management includes advising on compliance matters, training programs, and monitoring adherence to ethical conduct codes and regulations [220]. - Cybersecurity risk management framework ensures governance compatible with the company's size and risk profile, focusing on confidentiality, availability, and integrity of critical IT assets [223]. - The company conducts ongoing socio-environmental assessments of suppliers to mitigate risks in the supply chain, evaluating compliance with environmental and labor standards [215]. - The Risk Control Commission (CCR) oversees the monitoring of cybersecurity risks and advises the Executive Risk Management Committee on methodologies and controls [230]. - The corporate crisis management process includes prevention, preparation, response, and recovery steps, with four levels of impact defined [232]. - Model risk assessment involves qualitative analysis and independent evaluation, categorizing models into five risk levels from Minimum Risk to Very High Risk [236]. - Internal controls are managed proactively, with risk maps reviewed monthly and high residual risks reported to relevant committees [239]. Climate and Socio-Environmental Management - The socio-environmental risk management process incorporates a questionnaire addressing environmental, social, and governance aspects, ensuring compliance with Central Bank of Brazil's resolutions [208]. - The company has been a signatory to the Equator Principles since 2004, categorizing projects into High, Medium, or Low Risk based on their socio-environmental impacts [209]. - Climate risk management is aligned with Central Bank of Brazil's resolutions, focusing on identifying and monitoring climate risks in the credit approval process [217]. - The company has committed to climate goals by joining the NZBA and subscribing to the PRI, participating in initiatives to develop climate risk management methodologies [218]. Cybersecurity and Fraud Prevention - Continuous investment in cybersecurity includes critical server processes, technology tools, and security testing labs to combat threats [241]. - The company has a dedicated fraud prevention area that monitors transactions 24/7 to mitigate financial and reputational risks [250]. - The company employs statistical methodologies and predictive models to develop prevention strategies against document and transactional fraud [250]. - Cybersecurity incidents are classified according to severity factors, considering financial, regulatory, and reputational impacts [227]. - The company employs a cybersecurity risk measurement methodology based on internal and external information sources, including ISO/IEC 27005:2018 and NIST Cybersecurity Framework [226]. - The company has a Security Operations Center (SOC) that monitors the environment 24/7 and develops prevention measures based on intelligence information [253]. Financial Performance and Growth - In 2022, Bradesco's banking segment generated R98.8 billion in 2021 [270]. - The net income for Bradesco in 2022 was R16.70 billion in 2021, reflecting a decrease of approximately 8.5% [270]. - The total assets of Bradesco reached R1.49 trillion in 2021, indicating a growth of about 5.5% [270]. - Bradesco's client base expanded to 77.1 million by the end of 2022, demonstrating the company's commitment to financial inclusion and accessibility [272]. - The company maintained a market share of 22.5% in the Brazilian insurance market, with total revenues of R663.3 billion in 2022, compared to R3.1 billion and fee income from consortiums of R362 billion across various investment banking products [323]. - In 2022, Bradesco BBI coordinated 10 equity operations totaling around R118 billion [325]. - The total equity under administration by Bradesco for investment funds reached R956.49 billion in 2021 [321]. - As of December 31, 2022, Bradesco Asset managed 1,786 funds and 454 portfolios, serving 3.7 million investors, with total equity under management reaching R624.98 billion in 2021 [316][317]. Market Position and Competition - The Brazilian deposit market is highly concentrated, with the five largest institutions holding 69.4% of total deposits [384]. - The investment banking market in Brazil is competitive, with Bradesco BBI achieving significant recognition among national and international players [388]. - The credit card market is highly competitive, with digital banks increasing their importance alongside traditional banks [386]. - The pension plan sector has seen increased competition due to government policies, with Bradesco Vida e Previdência leveraging its brand and extensive branch network [392]. - The capitalization bonds sector is competitive, with Bradesco offering low-cost products and a higher number of prize drawings, competing against firms that represent about 65.4% of total market revenue [393].
Bradesco(BBDO) - 2022 Q4 - Annual Report