Korea News Digest

SAO PAULO, July 31, 2014 /PRNewswire/ — The main figures obtained by Bradesco in the first half of 2014 are presented below:

1. The Adjusted Net Income⁽¹⁾ for the first half of 2014 stood at R$ 7.277 billion (an increase of 22.9% compared to the Adjusted Net Income of R$ 5.921 billion recorded in the same period in 2013), which is equivalent to R$ 3.23 per share, and returns of 20.7% on the Adjusted Average Equity⁽²⁾.
2. Adjusted Net Income is composed of R$ 5.165 billion from financial activities, representing 71.0% of the total, and
   R$ 2.112 billion from insurance, pension plan and capitalization bond operations, which together accounted for 29.0%.
3. Bradesco’s market capitalization on June 30, 2014 was R$ 134.861 billion⁽³⁾, up 8.1% compared to June 30, 2013.
4. Total Assets stood at R$ 931.132 billion in June 2014, up 3.8% over June 2013. Return on Average Assets was 1.6%.
5. In June 2014, the Expanded Loan Portfolio⁽⁴⁾ reached R$ 435.231 billion, up 8.1% over June 2013. Operations with individuals totaled R$ 135.068 billion (up 9.6% over June 2013), while operations with companies totaled R$ 300.163 billion (up 7.5% over June 2013).
6. Assets under Management stood at R$ 1.305 trillion, up 5.8% over June 2013.
7. Shareholders’ Equity stood at R$ 76.800 billion in June 2014, up 16.3% on June 2013. The Capital Adequacy Ratio stood at 15.8% in June 2014, 12.1% of which was classified as Common Equity/Tier I.
8. Interest on Shareholders’ Equity relative to the first half of 2014 was paid and recorded in provision to shareholders, in the amount of R$ 2.396 billion,being R$ 0.497 billion in monthly installments and R$ 1,899 billion recorded in provision.
9. The Interest Earning Portion of the Net Interest Income stood at R$ 22.805 billion, up 8.2% compared to the first half of 2013.
10. The Delinquency Ratio over 90 days dropped 0.2 p.p. in the last 12 months and stood at 3.5% on June 30, 2014 (3.7% on June 30, 2013).
11. Efficiency Ratio (ER)⁽⁵⁾ in June 2014 was 40.9% (41.8% in June 2013), whereas the adjusted-torisk ratio stood at 50.0% (52.6% in June 2013). It is worth mentioning that, in the second quarter of 2014, we recorded the best quarterly ER (38.6%) in the past 5 years.
12. Insurance Written Premiums, Pension Plan Contributions and Capitalization Bond Income totaled R$ 25.442 billion in the first half of 2014, up 5.2% over the same period in 2013. Technical Reserves stood at R$ 142.731 billion, up 8.3% compared to June 2013.
13. Investments in infrastructure, information technology and telecommunications amounted to R$ 2.211 billion in the first half of 2014.
14. Taxes and contributions, including social security, paid or recorded in provision, amounted to R$ 14.116 billion, of which R$ 5.156 billion referred to taxes withheld and collected from third parties, and R$ 8.960 billion from Bradesco Organization activities, equivalent to 123.1% of the Adjusted Net Income⁽¹⁾.
15. Bradesco has an extensive customer service network in Brazil, with 4,680 Branches and 3,497 Service Branches – PAs. Customers can also use any of 1,175 PAEs – ATMs (Automatic Teller Machines), 48,186 Bradesco Expresso service points, 31,509 Bradesco Dia & Noite ATMs and 16,103 Banco24Horas ATMs across the country.
16. Payroll, plus charges and benefits, totaled R$ 5.651 billion. Social benefits provided to the 99,027 employees of the Bradesco Organization and their dependents amounted to R$ 1.401 billion, while investments in training and development programs totaled R$ 53,581 million.
17. In May 2014, Bradesco BBI participated as one of the coordinators and joint bookrunners of a securitization transaction for Ford Motor Credit Company in the U.S., involving a US$ 1.04 billion transaction; this is the second time Bradesco BBI participates in funding operations for the U.S. automaker.
18. In May 2014, Banco Bradesco and Banco do Brasil, via its subsidiary Companhia Brasileira de Solucoes e Servicos (“CBSS”), created the company LIVELO S.A. (“LIVELO”). The coalition loyalty program allows customers to accumulate and redeem points from multiple partners. The effective deployment of operations is conditioned to due compliance with applicable legal and regulatory formalities.
19. In July 2014, Banco Bradesco signed a new “Tecban Shareholders’ Agreement”, including the main Brazilian retail banks, covering the consolidation of external ATM networks by the Banco24Horas ATM Network within a fouryear term, ultimately enhancing the efficiency and quality/reach of customer services rendered. The effectiveness of such Shareholders’ Agreement is subject to preceding conditions, including due approval from competent regulatory entities.
20. In July 2014, Bradesco entered into a strategic partnership with IBM Brazil, which will take over the operational structure and all maintenance and support contracts entered between Scopus Servicos, an Organization Bradesco company, and its other customers.
21. Major Awards and Acknowledgments in the period:

• For the third consecutive year, Bradesco was named “Best Brazilian Bank” by Euromoney Awards for Excellence. In addition Bradesco BBI was chosen as best Brazilian Investment Bank (Euromoney magazine);
• Among financial institutions, Bradesco led the ranking of most valuable brands in Brazil (IstoE Dinheiro magazine and BrandAnalytics/Milward Brown Optimor consulting firm); and
• Stood out as the only Brazilian bank ranked among the “Best Companies to Work for in Latin America” for the second consecutive year, under the “Companies with over 500 employees” category (Great Place to Work consulting firm).

The Bradesco Organization fully complies with best global sustainability and corporate governance practices, particularly: Global Compact, PRI (Principles for Responsible Investment), Equator Principles, Carbon Disclosure Project and Green Protocol. Our sustainability actions, strategies and guidelines are guided by best corporate governance practices. The Organization’s main activities focus on banking inclusion, social and environmental variables for loan approvals and product offerings, based on social and environmental aspects. Regarding responsible management and engagement with stakeholders, we highlight activities geared towards valuing professionals, improving the workplace, client relations, managing suppliers and adopting environmental management practices. We also highlight the Organization’s role in Brazilian society as one of its leading social investors, supporting education, environment, culture and athletic programs.

With its 57-year history of extensive social and educational work, Fundacao Bradesco has been a stalwart supporter of such programs, and operates 40 schools across Brazil. In 2014, an estimated budget of R$ 523.434 million will benefit approximately 105,672 students in its schools, in Basic Education (from Kindergarten to High School and Vocational Training at the High School level), Education for Youth and Adults, and Preliminary and Continuing Qualification focused on the creation of jobs and generation of income.

(1) According to the non-recurring events described on page 8 of this Report on Economic and Financial Analysis; (2) Excludes mark-to-market effect of Securities Available for Sale 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 of 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.

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