Banco Bradesco 1Q17 Results

SAO PAULO, April 27, 2017 /PRNewswire/ -- The main figures reported by Bradesco (BM&FBovespa: BBDC3; BBDC4, NYSE: BBD) in the first quarter of 2017, with emphasis on the consolidation, from July 1, 2016, of HSBC Bank Brasil S.A. and its subsidiaries (HSBC Brasil):

1. Adjusted Net Income ⁽¹⁾ for the first quarter of 2017 stood at R$4.648 billion (a 13.0% increase compared to the Adjusted Net Income of R$4.113 billion recorded in the first quarter of 2016), corresponding to earnings per share of R$3.19 and return on Average Adjusted Shareholders' Equity ⁽²⁾ of 18.3% ⁽²⁾.

2. As for the source, the Adjusted Net Income is composed of R$3.274 billion from financial activities, representing 70.4% of the total, and of R$1.374 billion from insurance, pension plans and capitalization bond operations, which together account for 29.6%.

3. In March 2017, Bradesco's market capitalization stood at R$178.208 billion⁽³⁾, showing a growth of 24.0% over March 2016.

4. Total Assets, in March 2017, stood at R$1.294 trillion, an increase of 17.5% over the March 2016 balance. The return on Average Total Assets was 1.4%.

5. In March 2017, the Expanded Loan Portfolio ⁽⁴⁾ reached R$502.714 billion, an increase of 8.5% over March 2016. Operations with individuals totaled R$171.820 billion (an increase of 16.3% over March 2016), while operations with companies totaled R$330.894 billion (a 4.9% increase over March 2016).

6. Assets under Management stood at R$1.944 trillion, a 22.3% increase over March 2016.

7. Shareholders' Equity totaled R$104.558 billion in March 2017, 12.0% higher than in March 2016. The Basel III Ratio, based on the Prudential Conglomerate stood at 15.3%, 12.0% of which is Tier I Capital.

8. The sum of R$1,845 billion was paid and provisioned to shareholders as Interest on Shareholders' Equity for the profit generated in the first quarter of 2017, R$300.551 million of which were paid in the form of monthly installments, and R$1.544 billion were provisioned.

9. The Interest-Earning Portion reached R$15.900 billion in the first quarter of 2017, exhibiting growth of 7.9% compared to the first quarter of 2016.

10. The 90-day Delinquency Ratio stood at 5.6% in March 2017, being reduced to 5.2% disregarding a specific corporate client that was already fully provisioned (5.5% in December 2016 and 4.2% in March 2016).

11. The Efficiency Ratio (ER) ⁽⁵⁾ in March 2017 was 40.8% (37.2% in March 2016), while the "risk-adjusted" efficiency ratio stood at 53.1% (47.1% in March 2016).

12. Insurance Written Premiums, Pension Plan Contributions and Capitalization Bond Income totaled R$17.948 billion in the first quarter of 2017, up 18.2% when compared with the same period of 2016. Technical provisions stood at R$229.433 billion, an increase of 25.4% compared with the balance in March 2016.

13. Investments in infrastructure, information technology and telecommunications amounted to R$1.408 billion in the first quarter of 2017, up 1.3% over the first quarter of 2016.

14. Taxes and contributions paid or recorded in provision, including social security, totaled R$9.700 billion in the first quarter of 2017, of which R$3.531 billion was related to taxes withheld and collected from third parties, and R$6.169 billion, was calculated based on activities developed by the Bradesco Organization, equivalent to 132.7% of the Adjusted Net Income ⁽¹⁾.

15. Bradesco has an extensive Customer Service Network in Brazil, with 5,122 Branches and 3,971 Customer Service Points (PAs). The following are also available to Bradesco clients: 1,004 ATMs located on company premises (PAEs), 38,525 Bradesco Expresso customer service points, 36,095 Bradesco ATMs, and 20,584 Banco24Horas Network ATMs.

16. Payroll, plus charges and benefits totaled R$4.244 billion in the first quarter of 2017. Social benefits provided to all 106,644 employees of the Bradesco Organization and their dependents amounted to R$1.133 billion, while investments in education, training and development programs totaled R$31.451 million.

17. Major Awards and Acknowledgments in the period:

• It enjoyed pride of place in the "IT Executive of the Year" award, in the Banking category, with the case entitled "BIA - Bradesco Artificial Intelligence – Branch Service Center - with Watson (Study by IT Mídia in partnership with Korn Ferry);
• UniBrad won the international award "GlobalCCU Awards 2017" for best corporate university in the world (Global Council of Corporate Universities);
• It was one of the winners in the "2016 Information Technology Professional" award, in the Banking segment (Informática Hoje Magazine);
• Bradesco BBI was awarded as "Best Investment Bank in Brazil in 2017" and appeared, in 2017 and YTD, in first place in the ranking of mergers and acquisitions, domestic debt, international debt and equity (Best Investment Banks in the World Edition - Global Finance Magazine);
• BRAM was rated AMP-1 (very strong) by the agency Standard & Poor's, which is considered the highest on the management quality scale of S&P Global Ratings;
• BRAM features in a prominent position in the report on small-cap stock funds, for having the most profitable funds of 2017 (IstoÉ Magazine);
• Bradesco Seguros Group won two trophies in three categories in the "Brazil Insurer Award": Best Performance, Best Sales Growth and Global Market Leader (Editora Brasil Notícias);
• Bradesco Seguros Group won the "Outstanding Companies" award in the Insurance, Health, Pension and Capitalization segment (Centro de Inteligência Padrão – CIP (Standard Intelligence Center), in partnership with Consumidor Moderno magazine); and
• Bradesco became the leader of the Capitalization Bond market in 2016 (Superintendence of Private Insurance – Susep).

Bradesco Organization is fully committed to the socio-economic development of the country. We set our business guidelines and strategies with a view of incorporating the best corporate sustainability practices, considering the context and the potential of each region, thus contributing to the generation of shared value in the long term. To reinforce this position, we emphasized adherence to globally recognized business initiatives, such as: Global Compact, Equator Principles, CDP (Carbon Disclosure Program), Principles for Responsible Investment (PRI), GHG Protocol Program (Brazilian Greenhouse Gas Emissions Program) and Companies for Climate Change (EPC). Our governance structure includes the Sustainability Committee, comprised by member of the Board of Directors and Vice-Presidents, which is responsible for advising the Board of Directors on establishing guidelines and corporate actions for this area, and with the Executive Multi-departmental Committee responsible for coordinating the strategy's implementation. Excellence in business management is recognized by the main indexes of Sustainability, such as the Dow Jones Sustainability Index (DJSI) – "Emerging Markets", of the New York Stock Exchange, the Corporate Sustainability Index (ISE), and the Carbon Efficient Index (ICO2), both from B3 (current name of BM&FBovespa and CETIP).

With a broad social and educational program put in place 60 years ago, Fundação Bradesco operates 40 schools across Brazil. In 2017, a budget of R$625.944 million will benefit approximately 104,228 students enrolled in its schools at the following levels: Basic Education (from Kindergarten to High School and Higher Secondary Technical-Professional Education), youth and adult education; and preliminary and continued vocational training, focused on creating jobs and income. In addition to the guarantee of free, quality education, the students enrolled in the Basic Education system, numbering over 43 thousand, also receive uniforms, school supplies, meals, and medical and dental assistance. Fundação also expects to benefit 630 thousand students via distance learning (EaD), through its e- Learning portal "Escola Virtual" (Virtual School). where students can conclude at least one of the courses offered in its schedule. Another 15,040 students are taking part in projects and actions in partnership with the Program Educa+Ação and in Technology courses.

The Financial Statements can be found on Bradesco's Investor Relations website at bradesco.com.br/ir.

⁽¹⁾ According to the non-recurring events described on page 8 of this Economic and Financial Analysis Report; ⁽²⁾ As of the first quarter of 2016, the annualized profitability has been calculated on a linear basis, and also, it excludes mark-to-market effect of Available-for-Sale Securities recorded under Shareholders' Equity; ⁽³⁾ Number of shares (excluding treasury shares) multiplied by the closing price for common and preferred shares on the last trading day of the period; ⁽⁴⁾ Includes sureties and guarantees, letters of credit, advances on credit card receivables, co-obligations in loan assignments (receivables-backed investment funds and mortgage-backed receivables), co-obligations in rural loan assignments and operations bearing credit risk – commercial portfolio, which includes debentures and promissory notes; and ⁽⁵⁾ In the last 12 months.

CONTACT: Eduardo Braga Potério +011-55-11-2194-0924, eduardo.b.poterio@bradesco.com.br or Carlos Tsuyoshi Yamashita, +011-55-11-2194-0920, carlos.yamashita@bradesco.com.br, both from Banco Bradesco.