ON THE COMPANY
4.A. History and Development of the Company
We are a sociedade
anônima organized under the laws of Brazil. Our headquarters are in Cidade de Deus, Vila Yara, 06029-900, Osasco, São
Paulo, Brazil, and our telephone number is +55 (11) 3684-4011. Our Investor Relations website is located at bradescori.com.br. Our New
York Branch is located at 450 Park Avenue, 32nd and 33rd floors, New York 10022.
We were founded
in 1943 as a commercial bank under the name “Banco Brasileiro de Descontos S.A.”. In 1948, we began a period of aggressive
expansion, which led to our becoming the largest private sector (non-government controlled) commercial bank in Brazil by the end of the
1960s. We expanded our activities nationwide during the 1970s and became well established in both urban and rural markets in Brazil. In
1988, we merged with our real estate financing, investment bank and consumer credit subsidiaries to become a multiple service bank and
changed our name to “Banco Bradesco S.A.”.
With a national
and international presence, our extensive banking network enables us to be closer to our clients, thereby enabling our managers to develop
knowledge regarding economically active regions and other important conditions for our business. This knowledge helps us assess and mitigate
risks in loans, among other risks, as well as meet the specific needs of our clients.
We offer a wide
range of banking and financial products and services in Brazil and abroad to individuals, micro, small, medium-sized and large enterprises
and major local and international corporations and institutions. Our products and services consist of banking operations such as: loans
and advances, deposit-taking, credit card issuance, purchasing consortia, insurance, capitalization, leasing, payment collection and processing,
pension plans, asset management and brokerage services, among others.
4.A.10 Acquisitions, divestitures and other strategic
alliances
4.A.10.01 Recent Acquisitions
Ø Hospital Santa Lúcia
On August 31,
2023, Atlântica Hospitals e Participações S.A. (Atlântica), a company indirectly controlled by us and by Bradseg
Participações S.A. (member of the Grupo Bradesco Seguros), entered into an Investment, Purchase and Sale Agreement of Shares
and other Agreements with Hospital Santa Lucia S.A. (HSL), its subsidiaries (Grupo Santa) and its current partners (Family Leal) for Atlântica
to acquire 20% of the share capital of HSL. Grupo Santa is the largest hospital network in the Midwest region of Brazil, with presence
in the Federal District, Goiás, Mato Grosso and Mato Grosso do Sul. On September 30, 2024, after complying with the previous legal
and regulatory conditions, the acquisition was completed.
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Ø Hospital Mater Dei
On December 21,
2023, Atlântica Hospitais e Participações S.A. (Atlântica), a company indirectly controlled by us and by Bradseg
Participações S.A. (member of the Grupo Bradesco Seguros), entered into an Investment Agreement for the Establishment of
a Specific Purpose Entity (SPE) with Hospital Mater Dei S.A. (Mater Dei) in which Atlântica will hold a 51% stake, and Mater Dei
a 49% stake, with the aim of developing and operating a new general hospital located in the north of the city of São Paulo. The
hospital will be built on a property owned by one of our subsidiaries, which will be part of our Group, which will be responsible for
the development and lease of the building to the SPE, in the “built to suit” modality. The completion of the transaction is
subject to compliance with certain suspensive terms, including the applicable regulatory conditions.
Ø Atlântica and Rede D´Or Partnership
On May 8, 2024,
Atlântica Hospitais e Participações S.A. (Atlântica), a company indirectly controlled by us and by Bradseg Participações
S.A. (a member of the Grupo Bradesco Seguros - our Group's insurance division), signed an Investment Agreement with the Rede D´Or
São Luiz S.A. group (Rede D´Or) for the creation and joint action in a new hospital network (Atlântica D’Or)
to make investments, construction, development and operation of general hospitals in the regions of Macaé - RJ, Alphaville - SP
and Guarulhos - SP, as well as for the analysis of a potential partnership to develop future new hospitals in other cities, particularly
in Taubaté and Ribeirão Preto. Atlântica D’Or will be organized by the parties through a corporate structure,
in the proportion of 50.01% for Rede D’Or and 49.99% for Atlântica. On August 15, 2024, after fulfilling the previous legal
and regulatory conditions, the transaction was completed.
As a result of
this partnership, additional investment agreements were entered into, as described below:
· Hospital São Luiz Campinas (Extension of the Atlântica and Rede D´Or Partnership)
On November 1,
2024, Atlântica Hospitais e Participações S.A. (“Atlântica”), a company indirectly controlled by
us and by Bradseg Participações S.A. (a member of our insurance group), signed an Investment Agreement with the Rede D´Or
São Luiz S.A. (“Rede D´Or”) to include Hospital São Luiz Campinas in the “Atlântica D´Or”
hospital network (“Transaction”), thus expanding the partnership entered into with Rede D´Or, announced on May 8, 2024.
On March 31, 2025, after complying with the previous legal and regulatory conditions precedent, the acquisition was completed.
· Hospital Glória D´Or (Extension of the Atlântica and Rede D´Or Partnership)
On September 1, 2025, Atlântica
Hospitais e Participações S.A. (“Atlântica”), a company indirectly controlled by us and by Bradseg Participações
S.A. (a member of our insurance group), entered into an Investment Agreement with Rede D’Or São Luiz S.A. group (“Rede
D’Or”) for the inclusion of Hospital Glória D’Or in the Atlântica D’Or hospital network (“Transaction”),
thus expanding the partnership signed with Rede D’Or, as informed to the market on May 8 and November 1, 2024 retaining the existing
corporate shareholding, with a 50.01% stake for Rede D’Or and 49.99% stake for Atlântica. On January 30, 2026, after complying
with the previous legal and regulatory conditions precedent, the acquisition was completed.
· Maternidade São Luiz Star (Extension of the Atlântica and Rede D´Or Partnership)
On November 10,
2025, Atlântica Hospitais e Participações S.A. (“Atlântica”), a company indirectly controlled by
us and by Bradseg Participações S.A. (a member of our insurance group), firmed an Investment Agreement with the Rede D´Or
São Luiz S.A. group (“Rede D’Or”) for the inclusion of Maternidade São Luiz Star, a maternity hospital
located in the city of São Paulo, in the structure “Atlântica D’Or”, maintaining the existing corporate
structure, with a share of 50.01% for Rede D’Or and 49.99% for Atlântica. On February 26, 2026, after meeting all required
conditions and receiving the applicable regulatory approvals, the partnership was completed.
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Ø
Tender Offer - Cielo
On February 5,
2024, our indirect subsidiaries Quixaba Empreendimentos e Participações Ltda. (Quixaba), Elo Participações
Ltda. (Elo), Livelo S.A. (Livelo) and Alelo Instituição de Pagamento S.A., along with BB Elo Cartões Participações
S.A., notified Cielo S.A. – Instituição de Pagamento (Cielo), of their decision to proceed with the conversion of
the public company registration from category “A” to “B”, and consequent delisting from B3 S.A. – Brasil,
Bolsa, Balcão listing segment Novo Mercado. This process was carried out through a public tender offer for the acquisition
of shares (OPA), in accordance with the applicable regulations and the Cielo’s bylaws. On September 26, 2024, after meeting certain
conditions precedent, including the necessary regulatory approvals, the OPA was completed with Quixaba holding 30.61%, Livelo having 20.52%
and Elo having 19.70% of Cielo’s common shares.
Ø Incorporation of Bradesco Asset (BRAM)
On July 31, 2024,
after fulfillment of the applicable conditions, we completed the merger of our direct subsidiary, Bradesco Asset Management S.A. Distribuidora
de Títulos e Valores Mobiliários (BRAM), as approved by our shareholder’s meeting held on March 11, 2024. We succeeded
BRAM in all their responsibilities, rights and obligations, including the provisions set out in records, registers, contracts and any
document to which BRAM was a party to as of July 31, 2024. The merger does not affect the ability to manage our resources or those of
third parties, as we will maintain the existing structure of governance segregation as well as the existing physical and functional structure
to avoid any conflict of interest, aiming to preserve the independence of the third-party resource management operations from our other
business activities.
Bradesco Asset
is the asset management department of Banco Bradesco S.A. and has developed important alliances and continues to focus its strategy on
internationalization. Through personal management and agreements with partners, we offer Brazilian investors the opportunity to invest
in fixed and non-fixed equity funds, balanced and alternative, with global, regional and thematic exposure, as well as global ESG (Environmental,
Social and Governance) strategies. In Europe and Latin America, we have been offering “Bradesco Global Funds” UCITS (domiciled
in Luxembourg) to overseas investors since 2009. These funds have different strategies and incorporate ESG aspects in accordance with
Luxembourg law. In Japan, Mitsubishi UFJ Asset Management (MUAM), our partner since 2008, offers a fund managed by Bradesco Asset to retail
investors wishing to invest in the Brazilian markets. In 2025, Bradesco Asset entered into agreements with the Shanghai and Shenzhen stock
exchanges to facilitate the listing of Chinese ETFs in Brazil and Brazilian ETFs on the Chinese exchanges.
Ø John Deere Bank
On August 8,
2024, we, through our direct subsidiaries, firmed an Investment Agreement with John Deere Brasil S.A. (John Deere Brasil), a wholly owned
subsidiary of Deere & Company (USA), one of the global leaders in the supply of agricultural, construction and forestry equipment.
Through this agreement, we hold a 50% stake in Banco John Deere S.A. This strategic partnership aims to further strengthen our position
in the agribusiness and construction sectors by expanding the supply of financing and financial services to clients and dealers in the
acquisition of John Deere group’s equipment, parts and services. On February 10, 2025, after fulfilling the usual, legal, and regulatory
preceding conditions, the investment was completed.
Ø Consolidation of Bradesco Group’s Health Businesses into Odontoprev
On February 27, 2026, we
entered into a binding agreement for a corporate reorganization, involving common controlled entities by Bradesco, that will consolidate
the entire healthcare business segment of the Bradesco Organization under a single publicly listed entity, Odontoprev S.A. (“Odontoprev”).
Under the terms of the agreement, we will become the direct controlling shareholder of Odontoprev, holding a 91.35% interest, and Odontoprev
will be renamed “Bradsaúde S.A.”, serving as the holding company for all of our healthcare operations. The transaction
involves a partial spin-off of Bradseg Participações S.A. and the merger of shares of Bradesco Gestão de Saúde
S.A. into Odontoprev. The reorganization aims to simplify our corporate structure and integrate our healthcare businesses to capture operational
and commercial synergies. The transaction terms were negotiated by an independent committee of Odontoprev and were supported by a fairness
opinion issued by Citigroup Global Markets Inc.
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On March 6, 2026, in continuation
of the agreement entered into on February 27, 2026, we informed shareholders and the market in general of the following developments regarding
the Transaction: (i) the disclosure of the information resulting from the valuation report (dated March 5, 2026) of BGS’s shares,
at fair market value, for purposes of determining the amount of Odontoprev’s capital increase arising from the Share Merger, pursuant
to Articles 8 and 252 of Law No. 6,404/1976; and, as a result of the completion of such procedures; and (ii) the call of an Extraordinary
General Meeting of Odontoprev’s shareholders (“Odontoprev EGM”) to, in summary, resolve on: (a) the approval of the
Share Merger (as defined in the Material Fact regarding the Transaction) of BGS by Odontoprev, including the Merger Protocol and Justification
(as defined in the Material Fact regarding the Transaction), as amended by the First Amendment, and the respective valuation reports;
(b) the resulting capital increase of Odontoprev; (c) the amendment of Odontoprev’s bylaws, including the change of its corporate
name to “Bradsaúde S.A.”; and (d) the Asset Contribution (as defined in the Material Fact regarding the Transaction)
to Mediservice Operadora de Planos de Saúde S.A.; all as described in the Material Fact regarding the Transaction.
Completion of the transaction
is subject to shareholder approvals and authorization from the National Supplementary Health Agency (ANS), among other customary conditions.
4.A.10.02 Recent divestitures
There have been
no recent divestitures.
4.A.10.03 Other strategic alliances
There have been
no other recent strategic alliances.
4.B. Business Overview
We operate and
manage our business through two segments: (i) the banking segment; and (ii) the insurance, pension plans and capitalization bond segment.
4.B.10 Strategy
4.B.10.01 Business strategy
The year 2025 was one more
year of transformation for us. In our strategic plan, we committed to increase profitability by bringing the bank closer to the return
above the cost of capital, streamlining our operation and management model, fostering greater autonomy and enhancing agility decision
making.
This plan reaffirms
our ambition to be a full-service and profitable bank, prepared to compete in the short and long term. This ambition translates into the
following aspirations:
· Physical bank with adequate cost and focused on high return clients;
· Efficient digital bank with humanized experience and AI;
· Operational efficiency that ensures competitiveness and return;
· Capture of greater market share in the main segments;
· Focus on new customer experience;
· Cultural evolution; and
· • Advances in time to market.
We
have adjusted our organizational structure by creating Business Units (“BUs”):
Wholesale, Wealth, Retail, Digital Business, Credit and Treasury and Economic Research, as well as Specialized Support Units, to accelerate
decision-making and increase customer-centricity.
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All BUs have established
dedicated client-focused areas responsible for defining value propositions, maintaining economic balance and coordinating products and
channels. Wholesale, Wealth, Retail and Digital Business BUs are responsible for serving our clients in different segments.
In Retail, we
are adjusting our service model to better align with client preferences, balancing financial sustainability, while ensuring customer-centricity
and profitable growth of the client base.
In Wealth, we launched Bradesco
Principal in 2024, a new client segmentation with an aspirational value proposition to seek more centricity in the relationship with our
clients.
In small and
medium enterprises segment (SMEs), we focus on initiatives that result in efficiency improvements, client base growth and improvements
in customer experience.
4.B.10.02 Strategic Planning
With what we
believe to be a robust and accelerated approach, we focus on an agenda of ten key strategic priorities, divided into business areas and
enabling functions, aligning our actions with our ambitions.
We
highlight the following as certain initiatives started in 2024 and continue to be developed, which are the result of the work carried
out by our strategic areas, aligned with our transformation agenda:
· Implementation of our new organizational structure, with a reduction of layers, review of the team sizes, hiring c-level professionals in the market and expansion of our IT teams;
· Optimization of our fast paced footprint;
· Reinforcing customer-centricity, we are enabling the new global solutions platform for 100% of our wholesale clients;
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· Launch of Bradesco Principal, a new client segmentation initiative, in November 2024, offering a comprehensive portfolio of solutions, a fresh service concept, and a differentiated value proposition for high-income clients. Opening of 62 offices in strategic cities until the end of 2025 and continuing process of expansion; and
· in the Corporate and Business (Empresas e negócios) segmentation the expansion in SME services with 150 new branches, Relationship Managers (RMS) with new account load and 10 middle market platforms in the first quarter of 2025. In the second quarter we highlight new customer experience with online and free account opening for MEI with 50 thousand individual microentrepreneurs ("MEI") clients using the new App until August 2025.
These achievements
are complemented by the #SouBradesco, a cultural evolution initiative designed to align our actions with our strategic goals. This movement
is intended to foster a transformative culture, enabling us to become a scalable, customer-centric bank while upholding our core values.
4.B.10.03 Corporate Sustainability
Sustainability
is one of our strategic drivers, as we understand that the management of ESG issues has become key to our survival and growth in an environment
that is increasingly dynamic and challenging. Through our business and operations, we are committed to the sustainable development of
the country, generating shared and long-term value for investors, employees, suppliers, clients and society.
4.B.10.03-01
Guidelines and governance
Our actions
in Sustainability are guided by policies and standards which incorporate the best market practices in sustainability management, in addition
to voluntary commitments that we have undertaken.
The Corporate
Sustainability Policy aims to promote our sustainability goals and provide guidance on the actions related to the socio-environmental
aspects of our business. Other policies and rules incorporate these guidelines, consolidating the practices of socio-environmental responsibility,
including from a risk management perspective.
The Socio-Environmental
and Climate Responsibility Standard (PRSAC) defines the main compliance procedures for the socio-environmental criteria in business, stakeholder
relations and subject governance. The Socio-Environmental and Climate Risk Standard establishes the scope and approach for managing these
risks, and is discussed in more detail in section “4.B.10.03-04 Social, environmental and climate criteria for business decisions”.
The main governing
body presiding over the area is the Sustainability and Diversity Committee, composed of members of the Board of Directors and the Board
of Executive Officers, including the Chief Executive Officer. The Committee is advised by the Sustainability Committee, an executive body
consisting of executive officers and officers of various areas, responsible for ensuring the implementation of the strategy and monitoring
the execution of projects and their impact on our performance. With regards to social, environmental and climate risks, the main decision-making
forums are the Executive Risk Management Committee and the Integrated Risk Management and Capital Allocation Committee.
4.B.10.03-02
Sustainability Strategy
Our sustainability
strategy is based on promoting change focused on three important themes:
Sustainable business Climate change Financial Citizenship
Promote businesses with a positive impact that foster socio-environmental development. Ensure that our businesses are prepared for climate challenges, raising awareness and engaging our clients regarding risks and opportunities. Promote education and financial inclusion to leverage socio-economic development.
These strategic
objectives are aligned with the 2030 Agenda of the United Nations and incorporate the commitment to contribute to the Sustainable Development
Goals (SDGs), with an emphasis on six goals that we prioritize:
4 – Quality
education;
5 – Gender
equality;
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8 – Decent
work and economic growth;
9 – Industry,
innovation and infrastructure;
10 –
Reduce inequalities; and
13 –
Climate action.
4.B.10.03-03
Voluntary commitments
Our practices
and strategies are continuously strengthened through dialogue with various stakeholders and the incorporation of internationally recognized
initiatives and voluntary commitments. Among them, the following stand out: Global Compact Initiatives, SDGs, Equator Principles, Principles
for Responsible Investment (PRI), Principles for Sustainable Insurance (PSI), Principles for Banking Responsibility (PRB), Women’s
Empowerment Principles (WEPs), Partnership for Carbon Accounting Financials (PCAF), among others.
One of the
focuses of our strategy of action in sustainability is our commitment to raise awareness and finance our clients in the transition to
a low-carbon economy, as well as advancing the decarbonization of our loan and investment portfolios, with the goal to achieve zero net
emissions by 2050.
4.B.10.03-04
Social, environmental and climate criteria for business decisions
We seek to
incorporate and constantly improve our analysis of the social, environmental and governance criteria relevant to business decisions and
the offer of credit, investments and insurance.
· Credit
We have a governance
structure, consisting of committees, policies, standards and procedures, which is intended to identify, measure, mitigate, monitor and
report social, environmental and climate risks. This structure complies with the Central Bank of Brazil’s Resolutions and observes
the principles of relevance and proportionality, which are necessary given the complexity of financial products and the profile of our
activities.
· Investments
Bradesco Asset, in accordance
with the guidelines of its Responsible Investment Policy, applies an analysis methodology that considers Environmental, Social, and Governance
factors for all types of assets under its management.
In addition,
Bradesco Asset strives to engage companies and business partners to adopt best practices in their respective segments. Annually, it publishes
the results of this work in the Transparency Report of Principles for Responsible Investment (PRI), to which it is a signatory. The PRI
is considered in all investment and relationship activities with Bradesco Asset stakeholders.
In the year
ended December 31, 2025, Bradesco Asset managed R$997.7 billion in investment funds, of which R$997.1 billion take into account ESG issues,
representing 99.94% of the total assets in investment funds.
· Insurance
Our Group's insurance
division (Grupo Bradesco Seguros) integrates the ESG (Environmental, Social and Governance) aspects into its business based on a governance
aligned with global practices and supported by policies, such as the Sustainability Policy, and internal rules applicable to its operations.
The governance structure
is supported by internal bodies such as the Sustainability Commission of Bradseg Participações, consisting of executives
dedicated to the continuous evolution of ESG practices. The commission reports directly to the Steering Committee and the Board of Directors.
Since May 2022, Grupo
Bradesco Seguros has adhered to the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD), an international
framework that provides guidance on the disclosure of climate-related financial risks and opportunities, which served as a reference
for the identification, analysis and dissemination
of risks and opportunities related to climate issues within its insurance operations.
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4.B.10.03-05
Socio-environmental management of operating activities
The management
of our operations incorporates socio-environmental criteria and related best practices, focusing on resource optimization and reduction
of the socio-environmental impacts. Among the main initiatives, we highlight:
· Continuous work to identify new initiatives and projects that contribute to our goals of reducing water consumption throughout our branches, offices and headquarters;
· We have been working to reduce energy consumption through a monthly follow up. We have also set annual targets for energy, water, waste and greenhouse gas emission indicators;
· Having achieved our commitment to ensure that 100% of our operations are supplied by renewable energy sources, in 2025 we further strengthened this position by including 523 branches, administrative buildings and schools of the Fundação Bradesco in the Free Energy Market. We also have more than 350 units consuming energy from eight photovoltaic power plants through the distributed generation project;
· We evaluate regulatory, commercial, economic-financial and socio-environmental compliance when approving companies that provide service to us. The socio-environmental issues analyzed include compliance of labor practices with public certifications, such as the prohibition of slave or child labor, environmental risks, and negative media. Suppliers belonging to sectors considered critical from a socio-environmental point of view are submitted to additional documental analysis and allocated a socio-environmental risk rating, submitted to socio-environmental auditing with the objective of identifying, managing and mitigating the risks found, as well as promoting their development;
· In addition, we monitor our operational indicators through the Operational Eco-Efficiency Master Plan (2019–2030 cycle), which covers the consumption of water, energy, waste and greenhouse gas emissions. Reduction targets of our operational emissions follow the Science Based Target Initiative (SBTi) methodology, with the commitment of reducing by 50% these emissions by 2030, which represents an annual reduction of 4.6%;
· Since 2020, we have been implementing the Aterro Zero program in our branches and buildings in the state of São Paulo. Through this program, the waste generated by our operations is destined for recycling, composting or transformed into CDR (Waste-derived Fuel); and
· Since 2023, 100% of our business was certified with the environmental management system by an independent third party. Administrative buildings were certified through ISO 14001 and bank branches through Bradesco Environmental Management System (SGAB), an internal certification based on the referenced standard’s guidelines.
4.B.10.03-06
Climate Change
Climate change
is generating significant short, medium and long-term changes in our society and economy. Its impacts are physical and transitional –
such as rising global temperatures and increasingly extreme weather events, each day more severe and frequent – and those that result
from political and market changes, as new public policies and changes in consumption and production patterns arise.
In this context,
we seek to ensure that our operations and businesses are prepared for climate challenges, strengthening governance related to the subject
and implementing relevant risk management strategies and processes. Our main objectives are stated below:
· To reduce and mitigate the generation of greenhouse gases in our operations and manage the exposure of our operational structures to climate risks (for more information, see the “4.B.10.03-05 Socio-environmental management of operating activities” section);
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· To integrate current and future climate risk assessments and opportunities into the decision-making and management processes of our business (for more information, see “4.B.10.03-04 Social, environmental and climate criteria in business decisions”);
· To provide financial solutions that support consumption and production patterns with lower carbon generation and those that are more resilient to climate impacts, such as financing low-carbon agriculture and solar power generation panels; and
· To promote engagement and awareness of the topic among our stakeholders, including employees, partners and suppliers, clients and entities of civil society.
More information
on our climate change related actions is available in our Integrated Report.
4.B.10.03-07
Performance of 2025
· In 2025, we achieved our goal of allocating R$350 billion to sectors and activities with socio-environmental benefits through ESG transactions and related initiatives. These included ESG operations, such as ESG-labeled bonds and loans—comprising green bonds, blue bonds, green loans and sustainability-linked loans—aimed at supporting sustainable projects and performance-based environmental and social commitments. We also offered social and environmental products, consisting of solutions with positive social and environmental impact, including credit for the acquisition of electric and hybrid vehicles, solar energy systems and microcredit. In addition, we expanded credit issuance for companies and projects aligned with Febraban’s green taxonomy, covering strategic sectors that contribute to sustainable development. Our efforts were complemented by the structuring of enabling instruments, such as bank guarantees and revolving credit lines, designed with sustainability criteria. We remain committed to the generation of sustainable business and to support our clients in their transition to a greener, more resilient and more inclusive economy; and
· Creation of Ecora, Brazilian carbon credit certifier, in partnership with BNDES and EcoGreen fund, with technical support from Aecom, as an investment in future capacity aimed at strengthening the infrastructure of the carbon market in Brazil.
4.B.10.03-08
Transparency
Our Integrated
Report and ESG Report are part of a set of annual reports, designed to provide transparency on ESG (environmental, social and governance)
matters. They offer a comprehensive and integrated view of our business and operations detailing the results achieved in the period, our
strategic priorities, voluntary commitments assumed and how we create long-term value for our stakeholders.
In addition,
we disclose specific content, including the ESG Indicators and our Climatic Change Report. The documents are available on our Investor
Relations and Sustainability websites and are not incorporated by reference in this annual report.
4.B.20 Business management
To
ensure our operational activities are aligned with our strategies, we have developed management processes that are aligned with best market
practices and business models, among which we highlight:
4.B.20.01
Risk management
Our
risk management is highly strategic due to the increasing complexity of products and services and the globalization of our business. The
dynamic nature of the markets means that we are constantly improving our risk management strategies.
We
carry out corporate risk control in an integrated and independent manner, maintaining and encouraging a collective decision-making environment
and developing and implementing methodologies, models and tools for measurement and control. We promote the dissemination of a risk culture
to all employees, at all hierarchical levels, from the business areas to the Board of Directors.
Ø Corporate Risk Management Process
The
corporate risk management and controls methodology is in compliance with the main international risk management frameworks, allowing us
to identify, measure, mitigate, monitor and proactively report risks.
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Considering
the complexity of the products and services we offer, as well as the nature of our activities, it is essential to establish a robust risk
management framework. As such, our approach follows the Three Lines Model, ensuring that every stakeholder plays a certain role in safeguarding
our security:
· The First line, represented by businesses and support areas, is responsible for identifying, evaluating, responding to risk, reporting and managing inherent risks as part of day-to-day activities, while maintaining risks within acceptable levels;
· The Second line, represented by oversight areas, is responsible for establishing risk management and compliance policies and procedures for the development and/or monitoring of first line controls, in addition to the independent validation of the models; and
· The Third line, represented by the Global Internal Audit Area, is responsible for evaluating, in an independent manner, the effectiveness of risk and internal controls management, including how the first and second lines reach their objectives, reporting the results of their work to the Board of Directors, Audit Committee, Fiscal Council and Senior Management.
Ø Risk and capital management structure
The
risk and capital management structure is composed of several committees, commissions and areas that support the Board of Directors, the
Chief Executive Officer, the Chief Risk Officer (CRO) and the Board of Executive Officers in their strategic decision-making.
Risk and capital
management governance is shown in the following figure:
Among the governance
forums related to the topic of risks, we highlight:
· The Board of Directors approves and reviews risk management strategies, policies, and structures for risk and capital management, including risk appetite and exposure limits by risk types, as well as well as the stress testing program, including its results, applied scenarios, and underlying assumptions;
· Risk Committee: its purpose is to evaluate the framework of our risk management and, eventually, propose improvements and challenge our risk structure in the face of new trends and/or threats, as well as advise the Board of Directors on the performance of its attributions in risk and capital management and control;
· The Integrity and Ethical Conduct Committee aims to propose actions regarding the dissemination and compliance with our Corporate and Sectoral Codes of Ethical Conduct, and the conduct rules related to integrity, anti-corruption, and competition, to ensure their effectiveness and efficiency;
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· The Audit Committee reviews the integrity of financial statements and recommends to the Executive Officers corrections or improvements to policies, practices, and procedures identified in accordance with their scope of responsibilities; and
· Integrated Risk Management and Capital Allocation Committee – COGIRAC aims to advise our Chief Executive Officer in the performance of his duties related to the management and control of all risks and our capital allocation resources.
Ø Risk Appetite Statement (RAS)
Our risk appetite
defines the types and levels of risks we are willing to accept in pursuit of our business and objectives. The Risk Appetite Statement
(RAS) is an important tool for strengthening the spread of our risk culture.
The Risk Appetite
Statement is reviewed annually or whenever necessary by the Board of Directors and permanently monitored by Senior Management forums and
business and control areas.
Our risk appetite
is monitored through the established indicators, through effective processes of controls, in which managers are informed about the exposures
to risks and the respective use of the current limits. The report is carried out through an alert system, which facilitates communication
and highlights the possible exceptions, which require adequacy measures, permeating all spheres of the Group, supporting Senior Management
in their evaluation to ensure results are cohesive with our risk appetite.
4.B.20.01-01
Credit risk
As provided above
(see “Item 3.D — Risk Factors — 3.D.20.02 Credit Risk”), we are subject to this risk. Credit risk management is
a continuous and evolving process of mapping, developing, assessing and diagnosing risk through the use of models, instruments and procedures,
thus requiring a high degree of judgment, discipline and control during the analysis of operations to preserve the integrity and independence
of the processes.
We seek to control
our exposure to credit risk, which mainly derives from the loan operations, credit commitments, financial guarantees, securities and derivative
financial instruments.
To avoid compromising
the quality expected from the portfolio, committees monitor relevant aspects of the lending process, such as concentration, collateral
requirements, maturities, and other aspects.
We outline the
activities that can potentially generate exposure to credit risk, considering credit classification, size and probability of default,
as well as establishing measurement and mitigation plans for those activities.
4.B.20.01-01.01 Lending
We believe the
diversity of our business model enables us to reach various audiences through directed and convenient channels in the various regions
of Brazil. Segmentation strategies, both for individuals and legal entities, allow for good relationships with clients and the offering
of products and services.
We believe this
positioning has a positive impact on our credit profile, which is reflected in a diversified portfolio, both in terms of products and
segments. This is balanced with the risks undertaken and appropriate levels of provisioning and concentration.
The Credit Area
is responsible for the lending procedures which are guided by our Credit Policy. The policy aims to ensure security, quality and liquidity
for lending. The process is guided by risk management governance and complies with the rules of the Central Bank of Brazil.
The methodologies
adopted value business agility and profitability, with targeted and appropriate procedures aimed at granting credit transactions and establishing
operating limits.
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When we evaluate
and classify clients or economic groups, the quantitative (economic and financial indicators) and qualitative (personal, behavioral and
transactional data) aspects associated with the client’s capacity to honor their obligations are considered.
All loan proposals
are subject to operational limits, which are included in our Loan Guidelines and Procedures. At our branches, the delegation of powers
for submitting a proposal depends on its amount, our total exposure to the client, the collaterals and guarantees posted, the level of
restriction and their credit risk rating. All loan proposals are submitted for technical analysis and approval by the Credit Area.
The Executive
Credit Committee was created to determine, within its authority, queries about the granting of limits or loans proposed by business areas
which have been previously analyzed with the opinion of the Credit Department. Depending on the size of the operations/limits proposed,
this Committee may then submit the proposal for approval by the Board of Directors.
Loan proposals
pass through an automated and standardized system with parameters set to provide important information for the analysis, granting and
subsequent monitoring of loans, minimizing the risks inherent in the operations.
There are exclusive
Credit and Behavior Scoring systems for the granting of retail credit, which allows for a quick and reliable process, in addition to standardizing
procedures in the process of credit analysis and approval of loans.
We believe our
business is diversified, widespread and aimed at individuals and legal entities with a proven payment capacity and solvency. We seek to
support loans granted with collaterals and guarantees that are adequate for the risk assumed, in line with the amounts, objectives and
maturities of the loans granted.
4.B.20.01-01.02 Credit risk
classification
We believe we
have a robust governance process, practice and monitoring system. Governance practices include our Governance of Concession Limits and
Credit Recovery, which, depending on the amount of the operation or the total exposure to the counterparty, require approval from the
CEO or the Board of Directors. In addition, follow-ups on the portfolio are made frequently. We evaluate the portfolio progression, delinquencies,
provisions, vintage studies and capital, as well as other factors.
In addition to
the governance process for approving loan and recovery operations, within the risk appetite defined by us, the concentration limits of
operations for each Economic Group, Sector of Economic Activity and Transfer (concentration by countries). In addition to the concentration
indicators, we also established indicators of quality of new loans, level of default and problematic assets, margin of economic capital
and expenditure of provision for expected losses.
The credit risk
assessment methodology provides data to establish the minimum parameters for lending and risk management. It also allows for the possibility
of defining Special Credit Rules and Procedures according to client characteristics and size. The methodology provides the basis for both
the correct pricing of operations and for defining the appropriate guarantees for each operation.
The methodology
applied also follows the requirements established by CMN Resolution No. 4,945/21 and includes social and environmental risk analyses in
projects, which seek to evaluate compliance with relevant legislation by clients, as well as to meet the “Equator Principles”,
a set of rules that establish minimum social and environmental criteria that must be met for lending.
In line with
the commitment to constant methodological improvement, the classification of credit risk of contracted operations is distributed into
homogeneous risk groups according to the criteria established by CMN Resolution No. 4,966/21 for the purpose of establishing the provision
for expected losses associated with credit risk.
The risk classifications
of loan operations are determined on the basis of the credit quality of economic groups/clients defined by the Client Rating, guarantees
relating to the contract, characteristics of credit product, past behavior of delinquencies, value of credit granted, among other characteristics
of the operation.
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Client Rating
for economic groups is based on standardized statistical procedures and judgment, and on quantitative and qualitative information. The
ratings are established by economic group and periodically monitored to preserve the quality of the loan portfolio.
For individuals
in general, Client Rating classifications are also based on statistical procedures and the analysis of variables that distinguish risky
behavior, performed through the application of statistical models for credit evaluation.
The Client
Rating is used, in conjunction with several decision variables, to analyze the granting and/or renewal of operations and credit limits,
as well as to monitor the deterioration of the client’s risk profile.
4.B.20.01-01.03 Credit risk
management process
The credit
risk management process is carried out company-wide. This process involves several areas with specific attributes, ensuring an efficient
structure for the credit risk management process. The measurement and control of credit risk is carried out in a centralized and independent
manner.
Both the governance
process and the existing limits are validated by COGIRAC and submitted for approval by the Board of Directors, being reviewed at least
once a year.
The credit
risk management structure plays a fundamental role in our second line, actively participating in the process of improving client risk
classification models, supervising high risks through periodically monitoring key default events and providing levels of provisioning
against expected and unexpected losses.
This structure
acts continuously in the review of internal processes, including roles and responsibilities, training and demands of information technology,
as well as in the periodic review of the risk assessment process aiming at the incorporation of new practices and methodologies.
The attributes
of the credit risk management structure follow our defined precepts of compliance. Integration with the other lines occurs on a continuous
and frequent basis, enabling effective identification, measurement and control of credit risk, thereby ensuring the efficiency and security
of the credit risk management process.
4.B.20.01-01.04 Credit risk
mitigation
Potential credit
losses are mitigated using different types of collateral documented through different legal instruments, such as conditional sales, liens
and mortgages, and financial instruments such as credit derivatives. The efficiency of these instruments is evaluated considering the
recovery time and the amount of value to be realized in respect of the collateral, its market value, the guarantor’s counterparty
risk and the legal safeguards of each type of instrument. The main types of collateral include: term deposits; financial investments and
securities; residential and commercial properties; and movable properties such as vehicles and aircraft. Additionally, collateral may
include commercial bonds such as invoices, checks and credit card bills. Sureties and guarantees can also include bank guarantees.
Credit derivatives
are bilateral contracts in which one counterparty hedges credit risk on a financial instrument. Its risk is then transferred to the counterparty
selling the hedge. Normally, the latter is remunerated throughout the period of the transaction. In the case of default by the borrower,
the buying party will receive a payment intended to compensate the loss in the financial instrument. In this case, the seller receives
the underlying asset in exchange for the payment.
4.B.20.01-01.05 Control and
monitoring
Our credit risk
has its corporate control and monitoring carried out by the independent credit risk area, which calculates the risk of open positions,
consolidates the results and carries out the reports determined by the existing Governance process.
This area holds
monthly meetings with officers and heads of products and segments to ensure they are informed on the development of the loan portfolio,
delinquencies, distressed assets, restructuring, adequacy of the provisions for non-performing loans, credit recovery, losses, portfolio
limits and concentrations, the allocation of economic and regulatory capital and other items.
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In addition,
the area tracks each internal and/or external event that may significantly impact our credit risk, such as mergers, bankruptcies or crop
failures, and monitors economic sectors where we have the most representative exposures.
4.B.20.01-02 Counterparty credit risk
Counterparty
credit risk represents the possibility of loss due to non-compliance by a given counterparty with settlement obligations related to transactions
involving the trading of financial assets or derivative financial instruments.
We maintain
full control over the replacement cost and potential future exposure to transactions in which there is counterparty credit risk. Therefore,
all exposure related to this risk is part of the general credit limits granted to our clients.
The management
of counterparty credit risk includes modeling and monitoring (i) the use of the counterparty’s credit limit; (ii) the portion of
the fair value adjustment regarding the credit of the CVA (Credit Value Adjustment) of the derivatives portfolio; and (iii) the respective
regulatory and economic capital. The methodology we adopted establishes that the portfolio’s credit exposure to a given counterparty
can be calculated from the Replacement Cost (RC) of its operations in different financial market scenarios, which is made possible by
the Monte Carlo simulation process.
We carry out
capital projection studies, such as the ICAAP Stress Test (Capital Adequacy Assessment) and the TEBU (Bottom-Up Stress Test). These multidisciplinary
programs involve, at a minimum, the business areas and the Economic, Budget/Results and Risk Departments.
To mitigate
the counterparty credit risk to which we are exposed, we adopt a composition of guarantees including margin deposits and the disposal
of government bonds (being operations conducted on behalf of clients), which are carried out by our own counterparty or in other custodian
institutions, and which also have their own counterparty risks duly assessed.
Additionally,
the calculation of the amount of exposure related to the counterparty’s credit risk, arising from operations with derivative financial
instruments subject to the calculation of the capital requirement using the standardized approach (RWAcpad), was updated for the SA-CCR
Approach (Standardized Approach for Counterpart Credit Risk), following Annex I pursuant to BCB Resolution No. 229/22.
4.B.20.01-03 Market risk
As provided
above (see “Item 3.D — Risk Factors — 3.D.20.01 Market Risk”), we are subject to this risk, that is identified,
measured, mitigated, controlled and reported for us. Our exposure profile to market risk is in line with guidelines established by the
governance process, with limits that are monitored in a timely manner and on an independent basis.
All operations
exposing us to market risk are mapped, measured and classified according to probability and magnitude, with the whole process approved
at governance level.
In line with
what we believe to be best practices of corporate governance, aiming to preserve and strengthen our management of market risks, as well
as meet the requirements of CMN Resolution No. 4,557/17, as amended, the Board of Directors approved the Market Risk Management Policy.
This policy is reviewed at least once a year by the relevant committees and the Board of Directors, providing the main operational guidelines
for approving, controlling and managing market risk.
In addition
to this policy, we have several specific rules that regulate the market risk management process, including the:
· classification of operations;
· reclassification of operations;
· trading in government or private securities;
· use of derivatives; and
· hedging.
For more information
on the market risk, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.
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4.B.20.01-04 Liquidity risk
As provided
above (see “Item 3.D — Risk Factors — 3.D.20.03 Liquidity Risk”), we are subject to liquidity risk. Understanding
and monitoring this risk is crucial, especially in the context of settling transactions in a timely and secure manner.
4.B.20.01-04.01 Liquidity risk
management process
The management
of liquidity risk is carried out at the corporate level and permeates all layers of governance. The following table lists the responsibilities
of the departments responsible for the management and control of liquidity risk:
Ø Treasury
· Perform the day-to-day cash and liquidity management;
· Propose limits liquidity risk control indicators, as well as oversee the levels for any flagging alerts;
· Comply with established strategic and operational limits; and
· Report on matters related to the liquidity management [to] the Asset and Liability Management and Treasury Executive Committee.
Ø Liquidity Risk Area
· Propose the metrics for liquidity control and concentration, considering the appropriate established governance approval process;
· Calculate and disclose the the monitoring and liquidity control indicators periodically;
· Provide tools for simulation of the main indicators implemented; and
· Report matters related to the control and liquidity risk monitoring to the commissions and executive committees.
Ø Support Area
· Execute the cash flows projection for liquidity monitoring, including intraday;
· Prepare cash flow projections forecast for the next 12 months and send them to the relevant departments;
· Check and ensure consistency, integrity and completeness of the database made available daily to managers and liquidity risk controllers;
· Provide management information on the cash flow to the Treasury, as well as on any significant changes in the levels of reserves of the Banks of the Conglomerate; and
· Provide management information on the mismatch mapping of the Treasury.
4.B.20.01-04.02 Control and
monitoring
Our liquidity
risk management is carried out through tools developed by robust platforms and validated by the independent areas of the business. Among
the main metrics and indicators considered in the liquidity risk framework, we highlight:
· Liquidity Coverage Ratio (LCR): consists of verifying whether liquid instruments are sufficient to honor our net cash outflows in the next thirty days in a stress scenario;
· Net Stable Funding Ratio (NSFR): consists of verifying the structural funding sufficiency to finance the long-term assets of our balance sheet;
· Deposit losses for different time horizons;
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· Funding concentration maps by different variables (product, term and counterparty); and
· Integrated stress exercises in which different risk dimensions are addressed.
For the main
metrics, limits have been established, which can be strategic (approved up to the level of the Board of Directors) or operational (approved
by the Executive Committee), based on flags, which trigger different levels of governance according to the percentage of use (consumption)
of their respective limits.
4.B.20.01-05 Compliance risk
To ensure compliance,
risk management(as indicated in “Item 3.D — Risk Factors — 3.D.20.06 Compliance Risk”) is carried out in an integrated
and coordinated manner, and the following activities are performed:
· Advise on compliance issues;
· Promotion of a range of activities for executives, employees, interns, apprentices and associates, as well as including of training programs and activities focused on compliance issues;
· Establishment of rules and procedures aimed at ensuring our adherence to the Code of Ethical Conduct and external standards on client conduct, competition and anti-corruption;
· Evaluation and certification of legal and regulatory aspects concerning our products, services and partnerships;
· Coordination to meet the demands of regulatory bodies, supervisors, self-regulated entities counterparties and correspondent banks;
· Identification, evaluation, treatment and monitoring of compliance risks inherent in our activities;
· Management of the Program of Expected Behaviors;
· Monitoring and disclosure of new regulations and legislation applicable to our, as well as certifying the actions taken by managers to ensure compliance with these updated regulatory requirements; and
· Monitoring the implementation of policies and procedures.
These procedures
are in line with the compliance activities management cycle, distributed in actions aimed at strategy, prevention, detection, response,
remediation, and reporting.
4.B.20.01-06 Cybersecurity risk
As provided above,
we are subject to cybersecurity risk (see “Item 3.D — Risk Factors — 3.D.20.09 Cybersecurity Risk”). For information
on the management of this risk, see “Item 16.K — Cybersecurity”.
4.B.20.01-07 Business Continuity
Management (BCM)
We base our BCM
program on the standard of the Brazilian Association of Technical Standards/Brazilian Standards - ABNT NBR ISO 22,301, which defines Business
Continuity as “the Group’s ability to continue to deliver products or services at a previously defined acceptable level following
the occurrence of an interruption incident”.
The procedures
adopted after an interruption incident, and which aim to guarantee the acceptable operational level of critical business processes –
internal or outsourced – are contained in a Business Continuity Plan (BCP) or in a defined continuity strategy, which seek to resume
activities and minimize possible impacts on our clients.
The organizational
and governance structure established for Business Continuity includes corporate policies and standards which define roles and responsibilities
and aim to ensure that the plans and strategies employed are up-to-date and efficient, by requiring periodic tests and exercises to be
carried out within the business units. These policies also consider the critical processes carried out by service providers.
These policies
and internal rules are in line with the regulations of the Central Bank of Brazil and recommendations of the Basel Committee on Banking
Supervision. The Business Continuity Management process is under the responsibility
of the Cyber Risks and Operational Resilience, area of Resilience, Continuity and Crises.
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4.B.20.01-08 Corporate crisis
management
We define incident
and crisis as follows:
· Incident: momentary event, of low complexity and with possible repercussion to stakeholders. The incident, depending on severity, is classified as relevant or critical, and
· Crisis: it is the occurrence of an extremely adverse event (or combination of events), rare, unstable and complex that may result in a deterioration of relationship with stakeholders as well as pose a potential threat to strategic objectives, reputation or even our existence.
The corporate
crisis management process helps to ensure that any signs of crisis are timely identified, evaluated and classified according to their
severity, so that actions can be promptly taken to reestablish the normal course of activities and strengthen our operational resilience.
The corporate
crisis management process consists of the following steps:
· Prevention: Identify vulnerabilities and develop scenarios that could result in an incident and/or a crisis;
· Preparation: Develop incident and/or crisis response plans and conduct training;
· Response: Trigger incident and crisis management process and execute response plans; and
· Recovery: Identify opportunities to improve incident and crisis management processes and plans.
In order to help
judge the severity of an incident and/or a crisis, we have established levels of impact that determine the optimization of resources and
the necessary steps to be taken in light of the event that presents itself: relevant incident, critical incident and crisis.
Internal communication
relating to corporate incidents and crisis management is carried out in a timely manner, through the issuance of bulletins and reports
according to established governance.
Detailed information
regarding our risk management, reference equity, as well as risk exposures can be found in the Risk Management Report – Pillar 3,
available on the Investor Relations website (not incorporated by reference in this report).
4.B.20.02
Independent validation of management and measurement models for risks and capital
The model is
defined as the information that supports decision-making processes, derived from any method, hypotheses, techniques and quantitative system
or approach, among others, that applies statistical, economic, financial or mathematical theories to transform data into estimates.
The use of models
in supporting business decision-making is an increasingly widespread practice in financial institutions. These tools facilitate the synthesis
of complex information, standardize and automate decision making processes and enable the reuse of both internal and external data. As
a result, they improved efficiency by reducing our costs associated with manual analysis and decision making.
We employ models
to support decision-making, financial reporting and regulatory compliance, and to provide predictive insights across various business
areas, such as risk management, capital calculation, stress testing and other estimates from models to assess financial or reputational
impacts. Thus, we recognize the existence of the risk associated with the use of the models and the importance of the process of managing
this risk. The coordination of this process involves the AVIM – Independent Model Assessment Area.
AVIM is responsible
for assessing whether the models are performing as expected, according to its development and usage objectives. It identifies potential
limitations, assessing possible impacts. It is also responsible for establishing guidelines for procedural standardization related to
the Corporate Inventory of Organization Models and measuring and controlling the Model Risk.
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4.B.20.03
Internal controls
The Internal
Controls area acts proactively in the management of the risks existing in the processes, as well as in the effectiveness of the controls,
in order to keep them at acceptable levels to us.
The
scope and activities of our Internal Control area are aligned with the Frameworks issued by COSO – the Committee of Sponsoring Organizations
of the Treadway Commission (Internal Control – Integrated Framework (2013) and Enterprise Risk Management – Integrated
Framework) and with the guidelines established by the Information Systems Audit and Control Association
(ISACA) through the Control Objectives for Information and Related Technology (COBIT 5).
The
Internal Controls team works with first-line areas to identify and assess risks and controls. The results are captured in risk maps for
each business unit, which are reviewed against the annual action plan issued by Internal Controls. The team also conducts thematic reviews
to strengthen the evaluation of the control environment on specific topics, with findings presented in dedicated reports. Any risks or
weaknesses identified are then incorporated into the risk maps of the relevant areas.
Risk management
topics, issues and internal controls are observed and discussed at all levels of our Group, according to the established current governance
framework. They are promptly reported to risk forums to ensure appropriate handling resolution.
In addition,
the systematic monitoring of activities of the internal controls system is consolidated, at least once a year, in a report that is submitted
to the responsible governance forums.
4.B.20.04
Corporate Security Area
The Corporate
Security area is responsible for providing security solutions by creating, implementing, maintaining, and updating rules and processes
aligned with our business activities.
It operates corporately
and strategically in Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF), International Sanctions, Prevention of Electronic
Fraud, Debit/Credit Card Fraud, Document Fraud Prevention, Physical and Property Security, and Projects. It also works on specifying systemic
solutions and security processes for electronic channels and information systems, assessing, addressing, and proposing improvements. In
addition, it is responsible for issuing technical opinions related to strategic security aspects, as well as the implementation of products,
services, and processes. The main areas and activities include:
· Electronic Fraud Prevention: App Bradesco, Internet Banking, Net Empresa, Fone Fácil, BIA WhatsApp, Debit and Credit Card Products, Fraud Prevention in account opening and acquisition of financial products. This area is responsible for anticipating and mitigating risks in our operations. We continuously monitor our data and transactional environments 24 hours a day, 7 days a week, issuing real-time alerts for suspicious transactions, supported by integrated technology, robust processes, and highly specialized teams.
Our products
and services are continuously evaluated by dedicated teams whose mission is to prevent and correct actions to ensure the security of the
systems that support our businesses, while considering customer experience and usability.
We use
data-driven intelligence, including advanced facial and behavioral biometrics, supported by statistical methodologies and predictive fraud
models. These solutions ensure full compliance with regulatory requirements for customer identification and validation, promoting greater
security for all parties involved and contributing to the integrity and strength of the Brazilian Financial System (SFN).
As evidence of this,
we hold the Fraud Prevention Seal granted by an independent audit conducted by the National Confederation of Financial Institutions, which
aims to establish centralized, optimized, and standardized actions for handling occurrences in the financial system;
· AML/CTF: Responsible for defining internal guidelines to prevent and mitigate risks related to the improper use of our structure and/or products and services for Money Laundering or Terrorist Financing. Activities include the development and maintenance of policies, rules, and procedures; internal risk assessment; maintenance of detection systems; continuous monitoring of operations; and reporting of suspicious matters to COAF. The area also conducts training, provides support to business units, and interacts with regulatory bodies to ensure compliance and standardized conduct aligned with national and international best practices;
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· International Sanctions: Responsible for defining internal guidelines and ensuring compliance with legislation and regulations on international sanctions, aimed at protecting our business and relationships with stakeholders, including the prevention and combat of terrorist financing, drug trafficking, criminal organizations, and arms proliferation. Activities include identifying, blocking, and reporting sanctioned individuals and transactions, monitoring restrictive lists, analyzing suspicious transactions, and promoting a culture of compliance through training; and
· Physical and Property Security: Responsible for safeguarding people and preserving the integrity of employees, customers, and third parties, as well as our physical assets. The area manages access controls in buildings, branches, and critical environments, ensuring traceability and periodic reviews to maintain effectiveness and continuous improvement. It monitors facilities through alarm systems and CCTV and oversees private security services, ensuring compliance with the Brazilian federal police security plan and applicable legislation, including Law No. 14,967/24.
The area is also responsible
for investigating attacks against us, conducting intelligence analyses, and cooperating with law enforcement agencies and the Public Prosecutor’s
Office in the prevention and repression of crimes and fraud.
It develops and reviews
operational standards and procedures and promotes training and awareness campaigns related to physical and property security. Finally,
it oversees security services, manages equipment such as safes, alarms, and monitoring systems, administers action plans, and responds
to internal and external audits related to physical risks and associated operational controls.
4.B.20.05 Data processing
Our technological infrastructure
is supported by a continuous upgrade program and a dedicated data center (CTI, 11,900 m²), designed to ensure constant service availability.
The operation is supported by three IT Operations Centers (NOCs), responsible for 24x7 monitoring and coordinated response to incidents
involving service channels, systems, applications and infrastructure. This model combines reactive actions, which reduce performance losses,
with proactive initiatives aimed at improving Service Level Agreements (SLAs) and optimizing operational resources. Capacity planning
complements this process by monitoring consumption and anticipating future needs for processing, storage and memory.
Additionally, the Infra
Cloud platform provides robust and innovative solutions in a hybrid and multicloud model, with a technological architecture based on microservices
and self-service capabilities, allowing development and operations teams to manage resources autonomously, in a standardized and secure
manner. This distributed architecture enhances flexibility, scalability and efficiency.
Data is continuously
replicated to a secondary site in Alphaville, which is capable of taking over critical system operations in the event of CTI unavailability.
The process is supported by a Disaster Recovery Plan (DRP), with annual tests conducted under independent audits to ensure service continuity
in a contingency environment. Backup copies are maintained and regularly validated at both sites, following environmental standards and
controls that ensure the confidentiality, integrity and availability of information.
Our main service channels
rely on telecommunications infrastructure designed to operate from either of the two sites, strengthening resilience. Internet infrastructure
is segmented by user group (retail customers, corporate clients and employees), ensuring enhanced security and service quality.
Our IT processes are structured
based on widely recognized frameworks. These include the adoption of COBIT 5 for IT governance and corporate management, which establishes
principles, objectives and controls that align technology with business needs, maximize value generation and properly manage risks. Additionally,
for IT Service Management (ITSM), we adopt ITIL as a library of best practices guiding operational processes such as service management,
incident management, change management and capacity planning. The effectiveness of these processes and controls is regularly assessed
by independent external and regulatory audits, promoting compliance and continuous improvement.
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We maintain SOC 2 Type
II and SOC 3 assurances, which are issued annually by an independent specialized audit firm, attesting the effectiveness of security controls,
availability, processing integrity, confidentiality and privacy. Additionally, we hold ISO/IEC 27001 certification, confirming the effectiveness
of the Information Security Management System (ISMS) implemented in the technology environment.
CTI implements
access controls with barriers, dual containment and authentication through badge and vascular biometrics. The facilities are monitored
by cameras and have 72 hours of energy autonomy, with the possibility of continuous operation through generator fueling.
For more information
regarding the IT Infrastructure, see “Item 16.K. Cybersecurity.”
4.B.20.06 Bradesco Integrity
Program
Our main corporate
integrity commitments consists of:
· conducting our business and developing our various relationships based on integrity, ethics and transparency, concepts that permeate our organizational culture and constitute our values and principles, which, in turn, are formalized by the Corporate and Sector-based Codes of Ethical Conduct, with the support of our Senior Management; and
· preventing and combatting all forms of corruption and bribery.
These commitments are continually
upheld through the Bradesco Integrity Program, which brings together a structured set of mechanisms and measures, including our Codes
of Ethical Conduct, the Corporate Anti-corruption Policy and Standard, the Integrity Program itself, the Giveaways, Gifts, and Amenities
(Public Sector) Standard, the Receipt of Gifts, Presents and Hospitality - Private Sector (Suppliers and Business Partners) Standard,
in addition to other standards, procedures, processes, and controls. These instruments aim at preventing, detecting, reporting and remedying
acts related to corruption and bribery, including fraud against the Government or private administration.
Supported by the Integrity and
Ethical Conduct Committee and by the Board of Directors, our Program establishes guidelines, responsibilities, procedures and controls
related, among other topics, to granting and receiving giveaways, gifts and amenities; analysis of donations and sponsorships, due diligence
on suppliers and service providers, participation in bids with the Brazilian government; political contributions; relationship with public
agents and politically exposed persons (“PEP”), including officials classified or related to PEPs; merger and acquisition
processes; obtaining licenses and permits; handling complaints and ensuring non-retaliation against whistleblowers in good faith. All
these practices are conducted in accordance with the applicable laws and regulations in Brazil and in the countries where we maintain
operations.
Our Integrity Program applies
to managers, employees, interns, apprentices, suppliers and services providers, banking correspondents in Brazil, business partners, controlled
companies and other companies that are members of the our Group, guiding their interactions and daily decisions based on high standards
of integrity, conduct and ethics. To ensure its effectiveness, we continuously review, evaluate and improve the Program, with the aim
of strengthening its governance and controls, in line with national and international best practices to combat corruption.
We aim to continually promote
an ethical and integrity-based culture through the Code of Ethical Conduct and the Integrity Program, with the continuous engagement of
our managers, employees, interns, apprentices, suppliers and services providers.
In February, April and October
2025, we held meetings with the Senior Management and with the Integrity Ambassadors, in which we addressed the topics “Moral, Sexual
Harassment and Sexual Misconduct”, “Discrimination” and “The Role of the Integrity Ambassador”. The events
were held in hybrid format (in-person and virtual), with external speakers, officers and employees allocated in our offices throughout
Brazil and in units abroad where we have business operations. In addition, in September 2025, we held a lecture directed to suppliers
and service providers, conducted by the Global Compact on the following subject “The Global Compact Approach to Combating Corruption
and Promoting Integrity”.
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4.B.20.07 Competition Compliance Program
We respect and
value free competition, regardless of any dominant position in certain segments. In our relationships with clients, suppliers, service
providers, banking and nonbanking correspondents in the U.S. and abroad, business partners, and competitors, we act with integrity and
always within the limits of the law.
For example, any
contract for the provision of products and services our Group signs, must contain a competition clause, ensuring compliance with Law No.
12,529/11 (Competition Law or Antitrust Law), by both parties.
In strengthening
our culture, the Bradesco Competitive Compliance Program focuses on curbing inappropriate conduct of our managers, employees, interns,
apprentices and associates (third parties), both in Brazil and abroad, and is composed of a set of policies, standards and procedures
aimed at preventing, monitoring, detecting and responding to harmful acts provided for in Law No. 12,529/11 and in international legislation.
This program is
structured to permeate all of our internal areas. In the case of units located abroad, we make the necessary adaptations to the Competitive
Compliance Program, striving to maintain at least the conducts already required in Brazil and adequate to specific local laws.
4.B.20.08 Treasury activities
The main objective
of the Treasury Area is to maximize results with available resources and manage risks, by complying with the limits set by our Senior
Management and the guidelines issued by Financial Risk Management Area.
The main activities
are as follows:
· planning and managing our local and foreign currency cash flows;
· developing and implementing our asset and liability management strategy;
· managing maturity, rate and liquidity gaps arising from our activities;
· defining costs for assets and liabilities operations;
· obtaining price estimates and managing our business operations that involve risks such as: market, interest rate, foreign exchange, commodities and price index risks;
· performing proprietary trading operations aimed at opportunities found within the range of our prospective scenario and market prices; and
· taking part in analyses and decisions regarding directed credit and capital management.
4.B.20.09 Inovabra
Inovabra is
our corporate venture to fund strategic investments, and it aims to create opportunities for the progress of people and the sustainable
development of companies and society. We believe that we can improve our customer experience through innovation. In this way, we create
an innovation ecosystem, the Inovabra, capable of supporting and inspiring the institution, creating paths and conditions that put it
at the forefront of financial and non-financial products and services.
We work on
three fronts:
· Accelerate new features or improvements in existing products;
· Foster new products and services within existing businesses; and
· Explore, suggest and experiment with emerging technologies.
To meet the
challenges of these three fronts, we work together with our business unities (BUs) and technology areas to set priorities and develop
a portfolio of initiatives and ensure long-term business competitiveness. Inovabra has the following corporate innovation pillars:
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· Business Innovation: dedicated advisory team that supports the design, construction of the business case, validation of the business model, experimentation and scalability in production;
· R&D - Multidisciplinary research team: mapping of industry trends, identifying business problems and proposing solutions, including benchmarks, market studies and pilot development projects with partners from Brazil and abroad (companies, universities and research institutes). In addition to enhancing and disseminating best practices under the BTRL (Bradesco Technology Readiness Level) methodology, as well as keeping the Emerging Technologies Radar updated regarding technologies that affect and/or impact the banking sector;
· Open Innovation: physical and digital environment of collaboration with startups, large companies, consultants and investors for business generation and acceleration of solutions. As of December 31, 2025, we had 346 resident startups and 3,100 connected through partner hubs, as well as 46 participating companies;
· Experimental laboratory (Design and Experiment): a secure environment for testing cutting-edge technologies, enabling prototyping, product design, and experimentation with startups and big techs. It includes an Innovation Sandbox that simulates the banking core, allowing more precise testing, reducing integration uncertainties, and accelerating the time-to-market of solutions; and
· Culture & Communication: expedite communication around innovation initiatives and raise awareness of the Inovabra ecosystem, established partnerships, and trends, through press releases, social media, sponsorship of innovation events, and internal communication for employees, as well as development programs and the dissemination of innovation practices integrated with SOU Bradesco.
Ø Inovabra results for 2025:
· Evolution in technological readiness in ten emerging technologies: Cryptoassets, Defi (Decentralized Finance) and Smart Contracts, Graphs, Multimodal AI, Multi-agent systems, Synthetic Data, Quantum Computing, SLM (Small Language Models), Digital Identity and AML (Anti-Money Laundering) for LLMs (Large Language Models);
· 73 solutions of new initiatives experienced in the areas of business and technology;
· Training of more than 16 thousand employees through technological literacy, training and immersion experiences that have broadened the repertoire of employees on emerging topics such as Quantum Computing, Artificial Intelligence (AI), tokenized economy, new digital architectures, translating technological trends into practical applications in everyday life; and
· 30 studies completed and presented to internal areas on topics related to innovation trends, hyper-personalization, Open Finance, future of experience empowered by AI, Digital Identity, etc.
Ø Co-innovation environment:
· More than 30 thousand visitors in about 400 events, including open meetings, presentations, immersions and co-creation activities;
· Approximately 90 new incoming companies; and
· 110 deals and 90 co-innovation activities in the community.
Ø inovabra Awards and 2025 Cases
· Global Finance: we were recognized as the most innovative bank in Latin America, and inovabra was selected for the sixth consecutive year as one of the best financial innovation labs in the world;
· Valor Inovação: we ranked first in the banking sector and 31 among the most innovative companies in Brazil;
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· Banking Innovation Awards | Qorus: we achieved first place in the “Product and Service Innovation” category with the Digital Identity solution;
· 100 Open Startups Ranking: we ranked third among the Top Open Corporations and were winners of the “Champions of the Decade” category for our open innovation engagement with startups over the past 10 years. In addition, inovabra ranked fourth in Top Ecosystem, in recognition of its support to startups and corporations in their open innovation journeys;
· Eye On Innovation Awards | Gartner: we were the winner in the Americas with the Digital Identity solution, and the Renda BRA 5.0 project placed 2nd; and
· Corporate Startup Star Awards | ICC: we were listed among the Top 100 Corporate Startup Stars for global best practices in open innovation.
4.B.30 Business segment
The data for
these segments was compiled from reports prepared for management to assess performance and make decisions about the allocation of funds
for investments and other purposes. Our Management uses various data, including financial data in conformity with the accounting standards
applicable to institutions authorized to operate by the Central Bank of Brazil and non-financial metrics. For further information on
differences between the results on a consolidated basis and by segment, see “Item 5.A. Operating Results – 5.A.20.01 Results
of operations for the year ended December 31, 2025, compared with the year ended December 31, 2024”.
We do not break
down our revenues by geographic regions within Brazil, and less than 3.5% of our revenues come from international operations. For more
information on our international operations, see “4.B.30.01-02.10 International operations”.
As of December
31, 2025, according to the sources cited in parentheses below, we were:
· one of the leading banks in terms of savings deposits, with R$124.5 billion, accounting for 12.0% of Brazil’s total savings deposits (according to the Central Bank of Brazil);
· one of the leaders in BNDES onlendings, with R$12.0 billion in disbursements (BNDES);
· leader in leasing transactions in Brazil, with an outstanding amount of R$7.6 billion; through our subsidiary Bradesco Leasing S.A. Arrendamento Mercantil, or “Bradesco Leasing” (according to ABEL);
· one of Brazil’s largest private fund and investment managers, through our department Bradesco Asset, with R$997.7 billion in assets under management (according to ANBIMA), including managed portfolios;
· one of the leaders in asset management, with R$1.4 trillion in assets, of which R$582.5 billion are managed through our subsidiary BEM DTVM (according to ANBIMA);
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· the leader by number of outstanding purchasing consortium quotas, through our subsidiary Bradesco Administradora de Consórcios Ltda., or “Bradesco Consórcios”, with 1,674,444 quotas across three segments: (i) automobiles and motorcycles, with 1,166,899 quotas; (ii) real estate, with 355,643 quotas; and (iii) trucks, with 151,912 quotas (according to the Central Bank of Brazil); and
· the largest company in the Brazilian insurance market, operating in all lines of this segment, with a 22.8% market share (according to SUSEP/ANS data as of September 2025) through us, Grupo Bradesco Seguros, and our subsidiaries, in the segments of Insurance, Open Pension and Capitalization, through the following companies: Bradesco Seguros S.A., Bradesco Auto/RE Companhia de Seguros, Bradesco Vida e Previdência S.A., Bradesco Capitalização S.A, Bradesco Saúde, Bradesco Argentina de Seguros S.A., Mediservice, Bradesco Saúde Operadora de Planos S.A. and Odontoprev S.A. The total revenues of Grupo Bradesco Seguros amounted to R$118.5 billion in insurance premiums, pension plan contributions and capitalization bond income in 2025.
4.B.30.01 Banking
In our banking
segment, we offer a range of products and services to our clients including deposit-taking, granting of loans and advance payments, debit
and credit card services and custody, through our extensive distribution network.
We have a diverse
client base that includes individuals and small, medium-sized and large enterprises in Brazil. Historically, we have cultivated a strong
presence among the broadest segment of the Brazilian markets, including middle- and low-income individuals.
The following
table shows the statements of income and other selected financial data for our banking segment for the periods indicated.
As of and for the year ended December 31, Banking - R$ in thousands
2025 2024 2023
Revenue from financial intermediation 235,516,116 169,745,125 164,122,043
Expenses from financial intermediation (154,883,751) (98,810,413) (97,495,630)
Financial margin 80,632,365 70,934,712 66,626,413
Expected Credit Loss Associated with Credit Risk (36,370,035) (33,123,621) (37,110,675)
Gross income from financial intermediation 44,262,330 37,811,091 29,515,738
Fee and commission income and income from banking fees 39,563,634 36,213,830 34,269,254
Personnel /Administrative Expenses (46,173,552) (44,525,627) (42,122,774)
Tax expenses (7,520,187) (6,313,204) (6,582,213)
Share of profit (loss) of associates and jointly controlled companies (225,416) 121,511 151,414
IR/CSI and Other income/expenses (15,496,030) (13,425,161) (9,198,676)
Net income 14,410,779 9,882,440 6,032,743
Total assets 2,036,011,553 1,811,529,557 1,661,529,233
Investments in associates and joint ventures 86,292,770 79,828,981 73,163,988
Total liabilities 1,820,238,662 1.607,412,734 1,468,271,968
.
4.B.30.01-01 Clients
We aim to provide
services to the largest number of people, thus fulfilling our mission of democratizing access to banking products and services, in addition
to encouraging financial inclusion, social mobility and entrepreneurship. As of December 31, 2025, our client base was composed of 74.3
million clients.
A wide presence
allows us to act on a large scale, with diversification as a differentiator of our business model. We do not make distinctions, but aim
to serve every client with the same level of excellence, remaining aware of each client’s profile and continuously improving the
way we provide services. These values extend to clients who are non-account holders.
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4.B.30.01-01.01 Segmentation
of Clients
To ensure we
provide a high level of service to our clients, we operate a segmented business structure, for clients of Banco Bradesco, both individuals
and companies, which we believe allows us to offer agility and convenience in all areas, with a focus on a quality customer experience.
Companies
Ø Bradesco Corporate
Bradesco Corporate
is responsible for serving business groups and is focused on both large and medium-sized enterprises. Based on a value proposition of
physical proximity and fostering client relationships, its offices are located in the main financial centers on the national and international
scene, offering customized services and a highly skilled team to fulfill clients’ needs through a wide portfolio of products, structured
solutions and financial services.
To provide these
solutions, it is important to strengthen the relationship with clients and to deliver a robust value proposition. Bradesco Corporate is
segmented according to sector, market, size and nature of its client companies, among other criteria, and consists of the following areas:
· Corporate: Client segmentation aimed mainly at the middle market, with specialized service. Clients with an annual turnover of between R$50 million and R$1 billion;
· Large Corporate: Offers a specialized service structure for large companies, with customized operations by market sector. Clients with an annual turnover of between R$1 billion and R$5 billion;
· Ultra Corporate: With a highly qualified team and a sector-based approach, this segment offers customized consultancy to large corporations on a national and global basis. Clients with annual turnover of R$5 billion or more;
· Global Corporate: our Global Corporate business unit is targeted at global companies with Brazilian subsidiaries, with customer service offices in Brazil and subsidiaries in Hong Kong, Luxembourg and New York. It provides a differentiated service, with specialized professionals, financial solutions and services for a better operation in the country; and
· Corporate Agribusiness: Responsible for serving Individual and Corporate clients with activities focused on Agribusiness. It has a specialized team working on dedicated Platforms in the national territory.
Ø Bradesco Institucional
Bradesco Institucional
centralizes relationships with asset managers, investment funds, pension foundations, pension funds, brokers, securities distributors
and the investment arm of insurance companies. In addition, it promotes synergy with across several products and services of the Group,
such as Investment Banking, Global Markets, Treasury, Custody and Financial Services, Exchange, and Credit, among others.
Ø Bradesco Empresas e Negócios
Bradesco Empresas
e Negócios is a client segmentation prepared to meet the needs of micro, small and medium-sized enterprises, with annual revenue of
up to R$50 million, through strategically distributed units throughout the national territory.
· Subsegments
o MEI
100% digital
and personalized service for Individual Microentrepreneurs, with solutions for credit, receipts and day-to-day management, always with
trained professionals who understand their challenges.
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o Business
Aimed at companies
with revenues of up to R$4.8 million, offering credit lines, financing, payment services, investments and service by dedicated managers,
in a broad branch network.
o Companies
For companies
with revenues of up to R$50 million, with assistance in 150 exclusive branches and specialized teams in Credit, Cash Management and Investments.
We develop tailor-made solutions, following the core business and driving results.
Individuals
Ø Bradesco Global Private Bank
Bradesco Global
Private Bank offers exclusive, personalized service and works side-by-side with clients to preserve and manage family wealth and provide
support for current and new generations.
Bradesco Global
Private Bank designs innovative solutions to meet clients’ individual objectives and needs, and has a complete Wealth Management
structure, which involves liquid and illiquid assets and investment structures for the perpetuation of wealth.
Bradesco Global
Private Bank clients have access to, what we believe is, a differentiated portfolio of local and international investments, and access
to a multidisciplinary team of specialists, in addition to all of our business solutions including, among others, Banco de Investimentos
BBI, Bradesco Asset, Ágora Corretora, Insurance and Pension Funds.
Bradesco Global
Private Bank has exclusive service in Miami through Bradesco Bank and in Luxembourg through Bradesco Europa.
In Brazil, there
are 13 offices located in São Paulo, Rio de Janeiro, Belo Horizonte, Blumenau, Campinas, Curitiba, Fortaleza, Goiânia, Manaus,
Porto Alegre, Recife, Ribeirão Preto and Salvador, thus ensuring presence in the local and international market for our clients.
Ø Bradesco Principal
Bradesco Principal
is the client segmentation dedicated to high-net-worth individuals, launched in 2024 and to be rolled out across Brazil. Designed to deepen
client relationships, it offers a value proposition built on solid pillars:
· Dedicated Customer Service: With a Relationship Manager who acts as a financial concierge, Bradesco Principal connects clients to tailored banking solutions. Service is available during extended hours, in reformulated offices to provide differentiated financial advice and exclusive events;
· Customized Investments: An Investment Advisor offers the best opportunities, aligned with each clients’ financial profile and life stage, combining our proprietary funds with the open investment platform of Ágora Corretora e Previdência (Broker and Pension). The Wealth Planning structure supports asset management for clients with investable assets above R$5 million;
· Exclusive Products: It offers a portfolio of exclusive products, such as the Bradesco Principal credit card, which provides access to VIP rooms with free advanced reservation and fast pass;
· International Account: It offers a full-service American checking account with debit and credit card, investment opportunities and real estate financing in the United States; and
· Benefits Program: It includes digital protection insurance at no cost for 12 months from the date of contracting, discounts on purchases and travel, exemption of toll tags, up to 15 days interest-free in the overdraft, and extended service to the family group, among others.
Bradesco Principal was created
from the expectations and needs of our clients, aiming to build long-term relationships through personalized journeys and sophisticated
experiences. Currently available in 36 cities and 62 offices, with more than 320 thousand clients. Our expansion plan foresees the presence
in more than 70 cities by the end of 2026.
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Ø Bradesco Prime
Operating across
Brazil, Bradesco Prime is focused on quality of service and the provision of appropriate solutions for our clients through its well-trained
teams that add value to shareholders, within ethical and professional standards. Besides a broad branch network, it has exclusive platforms
to serve digital clients.
Our clients have
access to the full relationship model, with carefully conceived solutions for each profile and stage of life, plus numerous benefits such
as:
· Relationship manager: qualified professionals who support clients in managing their resources, considering their needs and stage of life;
· Extensive Network: an extensive network of branches, Bradesco Prime Spaces and Platforms throughout the country, offering convenience and total privacy so clients can tend to their business affairs;
· Program of benefits: a discount of up to 100% on the value of our service package and an exemption from the annuity of our credit cards, depending on the volume of investments and/or concentration of the client’s spending, plus up to 12 days without interest on overdrafts depending on the volume of investments;
· Viva Prime program: a relationship platform that offers discounts on gastronomy, entertainment, travel and miscellaneous products, exclusive experiences in Cinemark Rooms, Teatro Bradesco (theater), Livelo and Menu Program, among others;
· Recommended investment portfolios: suggested by a certified and qualified team based on the economic conditions and the analysis of the investor’s profile (API) that seeks to achieve the best balance between risk and return;
· Investment specialists: to support the client to make decisions regarding their portfolio according to the investor profile and their current life circumstances; and
· PIC (Prime International Center): remote service for foreign clients in Brazil.
Throughout its
existence, the Bradesco Prime has invested in technology, the improvement of relationships and the training of its professionals, which
has resulted in it holding a prominent position in the Brazilian market of banking services for middle and high-income clients and has
consolidated its position as one of the largest banks in the client segmentation.
One of Bradesco
Prime’s primary objectives continues to be to provide “the best experience to its clients”, always seeking to make the
relationship between clients and the bank more satisfactory and sophisticated.
Ø Digital retail
Digital retail is the entry-level
client segmentation and operates through two models: i) physical service; and ii) digital service. In this client segmentation, clients
will have a portfolio of products and services and solutions that guarantee convenience and security for their daily life, including chat
feature in the Bradesco App, which has priority online service through the BIA, Chat and Easy Phone (Fone Fácil) channels.
with experts ready to provide support in various banking matters.
This makes our client’s
experience more practical, reducing the need to go to a branch. This service is offered 24 hours a day, 7 days a week, allowing the client
to solve many of their financial necessities online.
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Ø Non-Account Holders
Individual clients or corporate
clients consumers of our products that do not have a bank account.
4.B.30.01-02 Products and banking
services
In order to meet
the needs of each client, we offer the following banking products and services:
4.B.30.01-02.01 Deposit accounts
We offer a variety
of deposit accounts to our clients, including:
Ø checking accounts, such as:
· Conta Fácil (Easy Account) – a checking account and a savings account with the same bank account number, accessed by the same card, for individuals and legal entities;
· Click Conta (Click Account) – checking accounts for children and young people from 0 to 17 years of age, with an exclusive website, debit card, automatic pocket money service, free online courses and exclusive partnerships, among other benefits;
· Conta Universitária (Academic Account) – low fee checking account for college students, with subsidized credit conditions, student loans, an exclusive website, free online courses and exclusive partnerships, among other benefits; and
· Conta Corrente (Checking Account) – accounts intended for companies and public entities of a specific legal nature, which do not have a linked savings account.
Ø traditional savings accounts, which currently earn interest at the Brazilian reference rate, or taxa referencial (TR), plus 0.5% monthly interest if the SELIC rate target is higher than 8.5% p.a., or TR plus 70.0% of the SELIC rate target if the SELIC rate target is equal to or lower than 8.5% p.a.; and
Ø time deposits, which are represented by Bank Deposit Certificates (Certificados de Depósito Bancário or CDBs) and earn interest at a fixed or floating rate.
As of
December 31, 2025, we had 37.7 million checking account holders. As of the same date, we had 38.9 million saving account
holders.
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4.B.30.01-02.02 Loans and advances
to customers
The following
table shows loans and advances to customers, net of provision for expected credit losses broken down by product type on the dates indicated:
As of December 31, % of total portfolio R$ in thousands
2025 2025 2024 2023
Companies 44.3% 350,445,791 316,936,343 269,421,350
Financing and On-lending 17.4% 137,576,819 132,471,486 104,729,799
Financing and export 4.4% 34,763,790 40,904,095 28,957,241
Housing loans 4.4% 34,911,156 30,655,876 24,534,805
Onlending BNDES/Finame 3.1% 24,475,073 20,475,116 17,515,937
Vehicle loans 2.9% 23,074,448 21,934,635 22,316,453
Import 1.6% 12,986,200 12,505,529 7,183,123
Leases 0.9% 7,366,152 5,996,235 4,222,240
Borrowings 24.7% 195,880,958 169,958,833 151,245,208
Working capital 18.1% 143,640,424 100,012,698 82,843,536
Rural loans 1.7% 13,324,492 11,811,476 12,807,395
Other 4.9% 38,916,042 58,134,659 55,594,277
Limit operations (1) 2.1% 16,988,014 14,506,024 13,446,343
Individuals 55.7% 441,022,363 403,303,243 360,265,349
Financing and On-lending 20.4% 161,548,810 144,876,576 127,765,221
Housing loans 14.2% 112,626,278 102,627,589 89,315,143
Vehicle loans 5.3% 41,797,766 34,962,102 31,408,501
Onlending BNDES/Finame 0.8% 6,616,649 6,927,661 6,866,782
Other 0.1% 508,117 359,224 174,795
Borrowings 24.0% 189,710,201 177,325,731 155,605,725
Personal credit 20.9% 165,277,140 140,843,129 122,269,986
Rural loans 2.2% 17,680,946 15,530,021 12,534,155
Other 0.9% 6,752,115 20,952,581 20,801,584
Limit operations (1) 11.3% 89,763,352 81,100,936 76,894,403
Total portfolio 100.0% 791,468,154 720,239,586 629,686,699
(1) Refers to
outstanding operations with pre-established limits linked to checking accounts and credit cards, which limits are automatically restored
as the amounts used are paid.
The following
table presents the proportion of our outstanding loans and advances represented by each borrower or group of borrowers on the dates indicated:
As of December 31, 2025 2024 2023
Borrower
Largest borrower 0.5% 0.7% 1.1%
10 largest borrowers 3.5% 4.4% 5.0%
20 largest borrowers 5.4% 7.0% 7.7%
50 largest borrowers 8.7% 10.9% 11.4%
100 largest borrowers 11.5% 14.0% 14.4%
Ø Financing and Onlending
· Financing for export and import
Our Brazilian
foreign-trade-related business consists of providing financial services to our clients in their export and import activities.
In import financing/refinancing,
we directly transfer funds in foreign currency to foreign exporters, fixing the payment in local currency for Brazilian importers. In
export financing, exporters obtain advances in reais on closing an export forex operation in exchange for future receipt of foreign
currency on the contract due date. Export financing can be carried out in the pre- or post-shipment/execution stages, and are referred
to as an Advance on Exchange Operations, or AOCs, when the resources received are used in the manufacture of the goods or execution of
services to be exported, or as a way of anticipation of sales made on deferred goods or services already shipped or executed.
There are other
forms of export financing, such as Export Prepayments, onlendings from BNDES-EXIM funds, Export Credit Notes and Bills (referred to locally
as NCEs and CCEs), and Export Financing Program with rate equalization – PROEX.
Our foreign trade portfolio
is funded primarily by credit lines from correspondent banks. We maintain relationships with various American, European, Asian and Latin
American financial institutions for this purpose, relying on large network of correspondent banks worldwide, comprising 832 institutions,
of which 54 granted us credit lines as of December 31, 2025.
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· Real Estate Financing
Real Estate Financing are
provided for: (i) the acquisition of residential and commercial real estate, and plots of land; and (ii) the construction of residential
and commercial developments. As of December 31, 2025, we had 381 thousand active contracts.
Loans for the
acquisition of residential real estate have a maximum term of up to 35 years and annual interest rates of 12.09% to 13.99% p.a. and are
indexed to TR, or annual interest rates of 7.82% p.a. and are indexed to the savings account remuneration. Commercial real estate financings
have a maximum term of up to 20 years and annual interest rates up to 13.99% p.a. and are indexed to TR.
Loans for construction,
also known as the Businessman Plan, has a construction term of up to 36 months plus a grace period for transfers to borrowers, which varies
between 6 and 12 months. The interest rates of these loans are priced individually at the time of contracting and are indexed to TR or
savings rates.
Central Bank
of Brazil regulations require us to grant at least 65.0% of the balance of savings accounts as real estate financing. The remaining funds
are to be used for financings and other operations permitted under the terms of the legislation in force.
· BNDES/Finame onlending
BNDES is the main agency
of the Federal Government to boost Brazil’s economic and social development. It supports entrepreneurs of all sizes — including
individuals and rural producers — in the modernization, expansion and creation of new businesses, always focusing on job generation,
income and social inclusion.
Its portfolio offers products
and programs with favorable conditions, such as long-term financing, competitive rates and government’s own resources, aimed at
stimulating sustainable growth.
Our institution acts as
a transfer agent of BNDES resources to companies from various sectors of the economy. We take on the risk of the operations, define the
margin of return based on the credit profile of the borrowers and carry out the transfer with appropriate guarantees.
· Vehicle loans
Vehicle Loans are granted
for the purchase of light and heavy vehicles, both new and used, to individuals and legal entities. We offer these products through our
branch network, via the Bradesco App in a totally digital process, and Bradesco Financiamentos, through a broad nationwide network banking
correspondents for the acquisition of light vehicles, motorcycles, trucks, buses, machinery and equipment.
· Leasing
As of December
31, 2025, we had 4,305 active leasing agreements. According to ABEL, our leasing company is the sector leader, with a 37.3% market share
in Brazil, based on the market portfolio of leases of R$19.3 billion.
Financial leasing involves
trucks, cranes, aircraft, ships and heavy machinery. In this same period, 58% of the released amounts referred to our aircraft transactions.
We conduct our
leasing transactions through our leasing subsidiary, Bradesco Leasing.
Ø Borrowings
· Working Capital
This is a credit line
intended for corporate customers, aimed at meeting companies’ operational cash flow needs. It covers requirements such as investments,
acquisition of goods and raw materials, as well as cash reinforcement to maintain financial balance.
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· Personal Loans / Payroll-Deductible Loans
Personal loans
are loans with a pre-approved limit for an unspecified purpose. Payroll-deductible loans are available to INSS pension plan beneficiaries
and retirees, to public servants and to the private sector.
· Rural loans
The provision
of loans and financing to the agribusiness sector is made available from the following resources:
Ø The demand deposit, due to the requirement by the Central Bank of Brazil for the investment of 31.5% of the Value Subject to Collection (VSR), which is called Obligatory Resources (RO), in the agribusiness sector, and which has interest rates from 2.0% p.a. to 14.0% p.a. as per the rule of investment of the Manual of Rural Credit (MCR);
Ø Free, coming from the Bank’s Treasury for operations; and
Ø BNDES onlending and use of own resources equalized by the national treasury, which only covers the difference between our funding cost plus the spread in relation to the rural product rate (subsidized rate), through lines directed to the Agribusiness sector, destined for investments in equipment, machinery, infrastructure, recovery of pasture, etc.
The majority
of loans have semiannual or annual payments with payment terms matched to periods of the harvest cycle. The guarantees are usually tied
to the disposal/mortgage of property and machines, the latter valid for the financing of goods in addition to agricultural or livestock
lien.
Ø Operations with limits
· Credit card
We offer a comprehensive
range of credit cards to our clients including Elo, American Express, Visa, MasterCard and private label cards, which stand out due to
the extent of benefits and convenience offered to associates.
We earn revenues
from our credit card operations through:
Ø exchange fees on purchases carried out in commercial establishments;
Ø annual fees;
Ø interest on credit card balances;
Ø interest and fees on cash withdrawals through Automated Teller Machine (ATMs); and
Ø interest on cash advances to cover future payments owed to establishments that accept credit cards.
We offer our
clients a complete line of credit cards and related services, including:
Ø credit cards for different audiences for purchases and withdrawals in Brazil and abroad;
Ø credit cards directed toward high-net-worth clients, such as “The Centurion Card Bradesco”, “The Platinum Card”, “Visa Infinite”, “Mastercard Black”, “Elo Nanquim”, “Elo Diners” and “Visa Aeternum” from Elo, Visa, American Express and MasterCard brands;
Ø cards destined for corporate clients, geared toward business expenses and control of expenditure;
Ø multiple cards that combine credit and debit features in a single card, which may be used for traditional banking transactions and shopping;
Ø co-branded credit cards, which we offer through partnerships with companies; and
Ø private label credit cards, which we only offer to clients of certain retailers, designed to increase business and build client loyalty for the corresponding retailer. These cards may or may not have a restriction on making purchases elsewhere, among other restrictions.
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We hold 50.01% of the shares
of Elopar, an investment holding company with shares in Alelo (benefit and prepaid cards), Livelo (coalition loyalty program) and Elo
Serviços (a card brand). We have joint control of Cielo S.A. (payment solutions) and we increased our shareholding through Elopar.
We also have
a card business unit abroad, Bradescard Mexico, operating exclusivity in leading retail chains in Mexico.
We have several
partners to whom we have offered co-branded/hybrid and private label credit cards. This has allowed us to deepen our relationships with
our clients and offer banking and insurance products to our credit card clients, such as financing and insurance.
The following
table shows our volume of transactions and the total number of transactions by credit cards for the years indicated:
In millions
2025 2024 2023
Transaction Volume - R$ 360,449.6 333,497.8 318,360.4
Number of transactions 2,714.0 2,568.2 2,536.3
Ø Credit policy
Our credit policy
is focused on:
· ensuring the efficient management of lending and credit maintenance and ensuring the profitability and strong growth of our assets;
· ensuring a maximum level of commitment and/or exposure, based upon the nature of the client, individual or legal entity, and of the business; and
· minimizing risks inherent in loan operations.
Our credit policy
defines criteria for assigning limits and concessions and maintenance of credits. In accordance with the rules set out in our internal
policy, credit approvals are decided by our credit department, committees, CEO and by the Board of Directors (BD).
Our transactions
are diverse and target individuals and legal entities that show an ability to pay and remain in good standing. In all cases, we aim to
have them secured by appropriate collateral to compensate for the risks involved, considering the use of funds and repayment periods,
as well as risk ratings. The Central Bank of Brazil’s risk rating system has nine categories ranging from “excellent”
to “very poor”. In line with our commitment to the ongoing development of our methodologies, the credit risk rating for our
clients/economic groups is based on a range of 19 levels for Corporate clients, of which 14 represent performing loans. This adheres to
the requirements set forth in the Basel Accords. For more information, see “Item 4.B. Business Overview – 4.B.70 Regulation
and Supervision – 4.B.70.02 Banking Regulations – 4.B.70.02-11 Treatment of Loans and Advances”.
We have credit
limits for each type of loan. We also pre-approve some credit limits for individual and corporate clients.
We review the
credit limits of our clients every 180 days. However, in general, the review process takes place every 90 days. For wholesale customers,
the term can reach up to 1 year.
Our maximum exposure
per client (e.g., individuals, legal entities or other economic groups) is determined by client rating and the aggregate maximum exposure
is limited to 8.0% of our Reference Equity.
Any cases in
which the maximum level of exposure per client exceeds the thresholds as set out in the table below or with limits defined by the credit
exception rules which are required to be submitted for our Board of Directors' approval.
The table below
refers to the maximum percentages of exposure to Level 1 Reference Equity of the Bank by Client Rating in the Wholesale and Retail segment:
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Rating As a % of Tier I Capital
AA1 8.0
AA2 7.5
AA3 7.0
AA4 6.5
A1 6.0
A2 5.0
A3 4.0
A4 3.0
B1 2.0
B2 1.5
B3 1.0
B4 0.75
C1 0.50
C2 0.40
C3 0.30
C4 0.00
D1 0.00
D2 0.00
D3 0.00
Our credit policy
is continuously developing and as part of our risk management process, we continue to improve our credit granting procedures, including
procedures to gather data on borrowers, calculate potential losses and assess applicable classifications. Additionally, we assess our
institutional credit risk management in view of the recommendations by the Basel Accords, including by:
Ø refining our methodology to calculate possible losses;
Ø identifying and implementing changes in our reporting processes to improve our loan portfolio management;
Ø restructuring our information control structure; and
Ø assessing the organizational structure of our loan assessment practices, including analyzing the demand for technology and addressing new issues.
· Lending
We use systems
which are continually supervised and reviewed for loans operations analysis, allowing us to build a level of flexibility and accountability,
as well as standardize the procedures for conceding loans.
With these tools,
we believe our branches can respond quickly to clients, keep costs low, and control the risks inherent in credit process in the Brazilian
markets.
The following
table shows approval limits established for loan analysis:
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Total Risk Amount R$ in thousands
Decision-making authority
Superintendent up to 60,000
Credit officer up to 200,000
Executive Credit Committee up to 500,000
Plenary Credit Committee Starting from 500,000
Board of Directors Proposals with specificities defined by the Credit strategy
In order to
serve our clients’ needs as quickly as possible and securely, the Credit Department uses segmented analyses with different methodologies
and instruments for credit analysis in each segment, in particular:
Ø in the “Retail”, “Prime”, “Principal” and “Global Private Bank – Individuals” client segmentation, we consider the individual’s reputation, credit worthiness, profession, monthly income, assets (goods and real property, any liabilities or interests in companies), bank indebtedness and history of their relationship with us, compliance with payment dates and rates in loans and advances, as well as the guarantees involved;
Ø in the Companies and Business (Empresas e Negócios) segment, in addition to the points mentioned above, we focus on the owners of the relevant company, as well as considering the length of time in business and monthly revenues;
Ø in the “Corporate”, “Large Corporate”, “Ultra Corporate”, “Global Corporate” and “Corporate Agribusiness” client segmentation, we consider management capability, the Company/Group’s positioning in the market, its size, its economic development, cash flow capability, and business perspectives. Our analysis includes the applicant, its parent company/subsidiaries, and the type of business; and
Ø our analysis also extends to socio-environmental risks for projects that require clients to show compliance with socio-environmental regulations and the Equator Principles, consisting of socio-environmental criteria as conditions for loans, which were introduced in 2002 by the International Finance Corporation (IFC), the World Bank’s financial arm.
· Collection and Loan Recovery
We aim to ensure our financial
sustainability through efficient delinquency management, while maintaining client relationships and complying with corporate governance
standards.
We apply proprietary analytical
models, which are continuously updated, to segment borrowers by risk level and credit analysis. These models support differentiated strategies,
improving operational efficiency and decision-making accuracy.
Collection activities are
carried out through an integrated, multichannel structure, including branch network, call centers, digital channels, and specialized firms
responsible for both amicable and judicial collection. Matters of greater relevance are submitted to the Credit Collection and Recovery
Committee or Executive Committee, in accordance with established governance approval process.
When conventional measures
are exhausted, we conduct structured processes for the sale of non performing loans through auctions, allowing resources to be optimized
and efforts to be focused on portfolios with higher recovery potential.
4.B.30.01-02.03 Cash Management
Solutions
Ø Management of accounts payable and receivable – In order to meet the cash management needs of our clients in both public and private sectors, we offer a broad portfolio of high-quality products and services of accounts payable and receivable, supported by our network of branches, banking correspondents, digital channels and the Bradesco App, all of which provide more speed, stability and security for client data and transactions. Our solutions include receipt and payment services and resource management, enabling our clients to pay suppliers, salaries, and taxes and other levies to governmental or public entities.
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These
solutions, which can also be customized, facilitate our clients’ day-to-day tasks and help to generate more business. We also earn
revenues from fees and investments related to collection, check custody, credit order, and payment processing services, and from funds
in transit received up to the date of their availability to the related recipients.
Ø Solutions for receipts and payments – In the year ended December 31, 2025, we settled 1.0 billion invoices through the services of Cobrança Bradesco and 436.9 million receipts pertaining to tax collection systems and utility bills (such as water, electricity, telephone and gas), check custody service, identified deposits and credit orders.
Ø Global Cash Management – Global Cash Management aims at structuring solutions for foreign companies that want to operate in the Brazilian markets and for Brazilian companies conducting business in the international market. By way of customized solutions, partnerships with international banks and access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, our exclusive client service team offers customized products and services to identify solutions for companies. In addition, the Global Cash Management area centralizes the receipt of all Formal Requests for Proposals (RFPs) of corporate clients, coordinating together with the other departments of the bank the drafting of technical and commercial proposals to send to the clients, as well as the centralization of public authority bids for cash management services.
Ø Niche Markets – We operate in various niche markets, such as franchises, condominiums, education, associations and notary offices, among others, where our clients have the support of a specialized team with the mission of structuring customized solutions that add value to their business.
As an example,
the franchising niche has a team of franchising specialists who, through their relationship with franchising brands, identify opportunities
to finance and provide services to all franchisees and their employees. The partnership with the franchise networks occurs through structured
commercial activities in synergy with the managing departments, commercial segments, and affiliated companies. The focus on the peculiarities
of this sector creates a competitive and sustainable position by structuring appropriate solutions and, in particular, through the strategy
of providing differentiated and specialized services. We have more than 600 agreements in place with franchising brands, generating numerous
opportunities to open new checking accounts and leveraging business with the respective franchisees.
4.B.30.01-02.04 Public authority
solutions
We have a specific
area dedicated to serving the public administration, which offers specialized services to identify business opportunities and structure
customized solutions to entities and bodies of the Executive, Legislative and Judiciary branches at federal, state and municipal levels,
in addition to independent governmental agencies, public foundations, state-owned and mixed companies, the armed forces (army, navy and
air force) and the auxiliary forces (federal and state police forces).
Our exclusive
website, developed for our clients, offers corporate solutions for federal, state and municipal governments for payments, receipts, human
resources and treasury services.
Our commercial
relationships with such public authorities are conducted by specialized business managers located in distribution platforms throughout
the country, which can be identified on our website. We have 12 Specialized/Mix platforms in the high public power segment to assist governments,
capitals, courts, class councils, chambers, prosecutors, public defenders and the largest municipalities based on Brazilian GDP, and 26
Platforms providing services to the City Halls and other Authorities.
In 2025, we
took part and were successful in payroll bidding processes sponsored by the Brazilian government. Furthermore, according to INSS, we continue
to be leaders in payments of INSS benefits, with more than 10.8 million retirees and pensioners.
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4.B.30.01-02.05 Management and
administration of third-party funds
We provide fiduciary
administration services to investments funds and managed portfolios, with regulatory responsibility for operation of investments funds.
Bradesco Asset
also conducts management of third-party resources, being responsible for investment decisions:
· mutual funds;
· managed portfolios;
· exclusive funds;
· FIDCs (Receivable Funds);
· FIIs (Real Estate Investment Funds);
· ETFs (Exchange Traded Funds); and
· FIPs (Private Equity Investment Funds).
Ø Management of funds and portfolios – As of December 31, 2025, Bradesco Asset managed 1,937 funds and 598 portfolios, providing services to 3.5 million investors. Among its biggest clients are all of our client segmentation (for more information on our segmentation, see “Item 4.B.30.01-01.01 Segmentation of Clients”) and Grupo Bradesco Seguros, in addition to institutional investors in Brazil and abroad. These funds comprise a wide group of fixed-income, non-fixed income, investments abroad and multimarket funds, among other types.
The following tables show
the fair value of the funds and managed portfolios which are under our management, the number of investors and the number of investment
funds and managed portfolios for each period:
Equity under Management by Type of Investment as of December 31 R$ in thousands (1)
2025 2024
Investment Funds
Fixed income 846,664,687 722,686,033
Equities 20,215,495 14,071,893
Multimarket 56,965,004 44,397,812
Total 923,845,187 781,155,739
Managed Portfolios
Fixed income 65,459,572 68,595,389
Equities 8,435,528 5,632,104
Total 73,895,100 74,227,493
Total 997,740,287 855,383,232
(1) Source:
ANBIMA. We present these amounts in order to give an indication of the scale of our fund activities. We generally earn administration
and/or management fees at a percentage of the equity amount of the fund.
As of December 31, 2025 2024
Number Quotaholders Number Quotaholders
Investment Funds 1,937 3,414,383 1,787 3,484,566
Managed Portfolios 598 628 458 799
Total 2,535 3,415,011 2,245 3,485,365
Ø Administration of third-party funds – As of December 31, 2025, we provided administration services to 4,304 funds, 628 portfolios and 44 investment clubs, providing services to 3.9 million investors.
The
following tables show the fair value of the funds and managed portfolios which are under our administration, the number of investors
and the number of investment funds and managed portfolios for each period:
72 – Form 20-F 2025 | Bradesco
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Equity under Management by Type of Investment as of December 31 R$ in thousands (1)
2025 2024
Investment Funds
Fixed income 1,153,332,055 1,031,054,525
Equities 42,476,002 35,057,281
Third party share funds 134,545,335 122,365,832
Total 1,330,353,393 1,188,477,639
Investment Clubs and Managed Portfolios
Fixed income 65,459,572 68,595,389
Equities 8,435,528 5,632,104
Third party share funds 5,218,675 5,400,987
Total 79,113,775 79,628,479
Total 1,409,467,167 1,268,106,118
(1) Amounts
shown are funds of third parties and are estimated by us based on the records we keep as administrator of the funds, investment clubs
and managed portfolios. We present these amounts in order to give an indication of the scale of our fund activities. We generally earn
administration and/or management fees at a percentage of the equity amount of the fund.
As of December 31, 2025 2024
Number Quotaholders Number Quotaholders
Investment Funds 4,304 3,904,291 4,386 3,941,575
Managed Portfolios 628 - 481 -
Investment Clubs 44 276 47 318
Total 4,976 3,904,567 4,914 3,941,893
4.B.30.01-02.06 Services related
to capital markets and investment banking activities
As our investment
bank, Bradesco BBI is responsible for (i) originating and executing project financing operations; (ii) originating and executing mergers
and acquisitions; (iii) originating, structuring, syndicating and distributing fixed income securities in Brazil and abroad; and (iv)
originating, structuring, syndicating and distributing issuances of securities of equity in Brazil and abroad.
In 2025, Bradesco
BBI won some major awards:
Ø Best Bank for Green, Social and Sustainable Bonds by Global Finance;
Ø Best M&A Bank in Latin America by Global Finance;
Ø Best Investment Bank for Infrastructure Financing in Latin America by Global Finance;
Ø Best Investment Bank in Industries and Chemicals;
Ø Best Investment Bank by Euromoney; and
Ø Best Deals of the Year by Latin Finance.
Bradesco BBI
advised its clients in multiple operations in all investment banking products, including:
Ø Mergers and acquisitions – Bradesco BBI provides advisory services in merger and acquisition and corporate purchase and sale transactions, including the sale of companies and assets, private placements, creation of joint ventures, financial and corporate restructuring, and privatizations. In 2025, Bradesco BBI advised 41 transactions totaling around R$92 billion.
Ø Equity – Bradesco BBI coordinates public offerings of shares in national and international markets. In 2025, Bradesco BBI coordinated five operations totaling approximately R$13 billion.
Ø Fixed income – Bradesco BBI coordinates public offerings of securities of fixed income in the local and international debt capital markets. In 2025, Bradesco BBI coordinated a total of R$532 billion in the capital market and a total of 487 transactions. In Fixed Income, we highlight:
· Operations in the Local Market – Bradesco BBI ended the year having coordinated 295 transactions in the local fixed income market, involving a total amount of approximately R$234 billion;
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· Project finance – Bradesco BBI acts as advisor and structuring agent in the areas of “Project” and “Corporate Finance”, seeking to optimize financing solutions for projects across various industries through both credit and capital markets operations. In 2025, Bradesco BBI advised 126 structured operations for different clients, totaling approximately R$55 billion;
· Structured operations – Bradesco BBI structures customized financial solutions for its clients based on their needs, by offering a number of funding tools to companies. Such tools include: investments, acquisitions, corporate reorganization, share repurchase, improved financial ratios, capital structure streamlining, and assets and risk segregation. Additionally, Bradesco BBI has a strong presence in the acquisition finance segment. In 2025, Bradesco BBI advised 35 structured operations for different clients, with a total amount of approximately R$56 billion; and
· Operations in the International Market – Bradesco BBI also featured in the international capital market, coordinating 31 transactions, totaling approximately R$186 billion.
4.B.30.01-02.07 Investment Advisory
We offer to
our clients an exclusive investment advisory services, remotely and in person, contemplating the products of Bradesco Asset, Ágora
Investimentos, Treasury and the entire Bradesco Previdência portfolio. We strive to always consider the moment of life, the objectives
and the profile of the client in relation to their risk tolerance. The client also benefits from the recommended portfolios, combining
a diversity of financial products, elaborated monthly based on their profile and perspectives of the national and international markets.
In addition to having the service of the managers of the branch network, we have a team of investment advisors, who are available to our
clients through telephone, online chat in the Bradesco App or in the Internet Banking.
4.B.30.01-02.08 Intermediation
and trading services
Ø Ágora Investimentos
Ágora, our official
brokerage, is a complete ecosystem of financial solutions for investors in the Retail and Institutional client segmentation.
In the Retail
vertical, it offers a complete and open platform for Bradesco account holders and non-account holders. With 1,724 investment options from
more than 107 institutions, it connects individuals and legal entities to opportunities in the market. The portfolio includes fixed income,
variable income, funds, shares, public offers and private pension. All this with technology, security and the credibility of one of the
largest financial groups in the country.
All clients have
access to specialized advice and expertise from Ágora Insights, with economic analysis and recommendations to more than 140 companies
and 42 real estate funds in different formats, such as reports, live streams and podcasts, at no additional cost. Its educational platform,
Ágora Academy, was developed in partnership with reference institutions, such as the Fundação Instituto de Administração
(FIA) and UNIBRAD, and offers 124 courses, more than 60 free of charge, which reinforces its commitment to the democratization of financial
education.
As of December
31, 2025 it reached 1.4 million clients and surpassed the R$128 billion mark in assets under custody.
On the Institutional
side, it has a complete investment analysis service, covering the main sectors and companies in the Latin American market, and has as
its objective the mediation of the purchase and sale of shares, commodities futures contracts, financial assets, indexes, options, share
rental, swaps and forward contracts, in the primary and secondary markets, and negotiations in B3 and in the organized over-the-counter
market, which are tailored to the needs of large corporate and institutional investors.
The team dedicated to the
Institutional client segmentation is composed of industry experts, economists and fixed income analysts. Through it, more than 384 reports
are made available monthly, in Portuguese and English, to investors around the world, including some domiciled in Brazil, the United States,
Europe and Asia.
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In the year ended
December 31, 2025, Ágora traded R$582 billion through B3, occupying the seventh place in the trading ranking of B3 itself.
Ágora
Investimentos continues to adhere to the Operational Qualification Program (PQO), ensuring its relevant role in the development of the
Brazilian capital market.
4.B.30.01-02.09 Custody and
Financial Services
In the year ended
December 31, 2025, we were one of the main service providers for the local and international capital market, with a prominent position
for the leadership in qualified custody of securities in the domestic and global market according to ANBIMA. We also won an award by Revista
Global Finance (magazine) for the third consecutive year of the best sub-custodian bank in Latin America for non-resident investors.
Among the main
services we offer are: fiduciary administration for investment funds, qualified custody of securities for funds, clubs and investment
portfolios, representation and custody for non-resident investors, custody of shares for the guarantee of depositary receipts; asset and
liability controllers for investment funds and investment clubs; asset bookkeeping (shares, Brazilian Depositary Receipts (BDRs), quotas
of investment funds, certificates of real estate receivables (CRIs), certificates of agribusiness receivables (CRAs) and debentures);
registering bank for loan of shares, liquidating bank, escrow account-trustee, qualified agent for guarantees in the energy market in
the scope of the electric energy trade council (CCEE) and clearing agent.
Bradesco Custódia
e Serviços Financeiros has Quality Management System ISO 9001:2015 certifications and GoodPriv@cy certifications. We also hold
an ISAE 3402 (International Standard on Assurance Engagements) certification, which includes the issuance of the Control Assurance report
in a Service Provider Organization that guarantees the high standard of quality and security in the services provided.
4.B.30.01-02.10 International
operations
As a private
commercial bank, we offer a wide range of international services, such as foreign trade finance, foreign currency working capital, foreign
exchange operations and international sureties for individuals and legal entities through our Corporate and Global Private Banking platforms.
The service to multinational companies is carried out both by supporting foreign multinationals operating in Brazil or Brazilian companies
with operations abroad, and in acting as the main communication link between prospective multinational clients and Bradesco Brasil.
The table below
shows our units abroad. As of December 31, 2025, we had two Branches, nine Subsidiaries and two Representative Offices.
Branches
New York Banco Bradesco S.A.
Grand Cayman Banco Bradesco S.A.
Subsidiaries
Luxembourg Banco Bradesco Europa S.A.
New York Bradesco Securities, Inc.
London Bradesco Securities UK Limited
Hong Kong Bradesco Securities Hong Kong Limited
Bradesco Trade Services Limited
Mexico Bradescard México Sociedad de Responsabilidad Limitada
Miami Bradesco Bank
Bradesco Investments Inc.
Bradesco Global Advisors Inc.
Representative Office
Hong Kong Banco Bradesco S.A.
Guatemala Representaciones Administrativas Internacionales, S.A.
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Our Global
Trade & Finance Area in Brazil and abroad coordinates our international transactions, through a team of experts in foreign exchange
and foreign trade business, providing technical support to our clients and to the Wholesale and Retail segmentation, for exchange products,
Trade Finance (financing for export and import), financial transfers and Direct External Loans. We also have a team specialized in structured
operations (syndicated loans, club deals, risk participations, bridge facilities, among others) and international guarantees, in addition
to Digital Exchange, a team dedicated to customer service that use our digital channels (Net Empresa, mobile and internet banking) to
contract foreign exchange operations.
Ø Foreign branches and subsidiaries
Our foreign branches
and subsidiaries principally provide financing in foreign currency (particularly foreign trade finance operations) to Brazilian and non-Brazilian
clients. Total assets of the foreign branches, considering the elimination of intra-group transactions, amounted to R$70.2 billion, as
of December 31, 2025, denominated in currencies other than the real.
Funding required for the
financing of Brazilian foreign trade is primarily obtained from the international financial community, through credit lines granted by
correspondent banks abroad. We issued debt securities in international capital markets, which amounted to US$3.5 billion during in the
year ended December 31, 2025.
The following
is a brief description of our subsidiaries abroad:
· Bradesco Securities (U.S., U.K. and H.K.) – Bradesco Securities, our wholly-owned subsidiary, is a broker dealer in the United States, England and Hong Kong:
o Bradesco Securities U.S. focuses on facilitating the intermediation of operations of fixed income and variable income of Brazilian companies for global institutional investors; raising of short-term funds, placement of Equity Capital Market (ECM) and Debt Capital Market (DCM) operations; distribution of research reports and corporate access services;
o Bradesco Securities U.K. focuses on the intermediation of equities and fixed income operations for Brazilian companies with global institutional investors; short-term fund-raising activities for us in Euro Certificate of Deposit (Euro CD) program and Global Medium-Term Note program (MTN); and sale of research reports and services of corporate access by subscriptions to institutional investors in Europe; and the sale of variable-income and fixed-income regional transactions to European institutional investors (IPOs, secondary public offerings, etc.); and
o Bradesco Securities H.K. focuses on the trading of ADRs and public and private securities issued by Brazilian companies to global institutional investors.
· Bradesco Trade Services – A non-financial institution and a subsidiary of our branch in the Cayman Islands, which we incorporated in Hong Kong in January 2007, in partnership with the local Standard Chartered Bank;
· Bradescard Mexico – The business unit of a credit card issuer;
· Bradesco Bank – A commercial bank in the United States with deposits guaranteed by the FDIC, providing banking products and services to resident and non-resident individuals, and corporate and institutional clients;
· Bradesco Investments Inc. – A broker dealer that offers a complete and open platform of investments to Private, high-income, corporate and institutional clients; and
· Bradesco Global Advisors Inc. – An investment advisory firm that manages discretionary and non-discretionary portfolios for Private and high-income clients.
Ø Revenues from Brazilian and foreign operations
The table below
breaks down revenues (interest and similar income, and fee and commission income) from our Brazilian and foreign operations for the periods
shown:
76 – Form 20-F 2025 | Bradesco
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For the years ended December 31, 2025 2024 2023
R$ in thousands % R$ in thousands % R$ in thousands %
In Brazil 287,668,135 96.5% 231,157,674 96.3% 232,103,211 97.4%
Overseas 10,518,856 3.5% 8,912,530 3.7% 6,312,026 2.6%
Total 298,186,991 100.0% 240,070,204 100.0% 238,415,237 100.0%
Ø Banking operations in the United States
In January 2004,
the United States Federal Reserve Bank authorized us to operate as a financial holding company in the United States. As a result, we may
do business in the United States directly or through a subsidiary and, among other activities, may sell insurance products and certificates
of deposit, provide underwriting services, act as advisors on private placements, provide portfolio management and merchant banking services
and manage mutual fund portfolios.
We believe
Bradesco Bank is positioned to meet the demands of Brazilian and other Latin American clients who wish to diversify their assets in the
global market, by offering investment, banking and financing solutions.
Ø Import and Export Financing
See information
in “Financing and Onlending Operations – Import and Export Financing”, item “4.B.30.01-02.02 Loans and advances
to customers”.
Ø Foreign exchange products
In addition to
import and export financing, our clients have access to a range of services and foreign exchange products such as:
· foreign loans to clients;
· working capital abroad;
· web and mobile exchange operations;
· collecting import and export receivables;
· cross border money transfers;
· advance payment for exports;
· accounts abroad in foreign currency;
· non-resident checking account in Brazil in domestic currency;
· cash holding in other countries;
· structured foreign currency transactions; through our overseas units;
· service agreements – receiving funds from individuals abroad via money orders;
· global accounts in American dollars (individuals);
· purchasing and selling of currency paper;
· cashing checks denominated in foreign currency; and
· clearance certificate (international financial capacity certificate).
4.B.30.01-02.11 Consortia
In Brazil, persons
or companies that wish to purchase certain goods may set up a group known as a consortium. Consortia in Brazil are made up of pooled funds
for the purpose of financing an acquisition. Consortia groups that are formed for the purchase of real estate, vehicles, motorcycles,
trucks and other assets have a fixed term and quota, both previously determined by its members, and are run by an administrator.
Bradesco Consórcios
manages groups of consortia and, as of December 31, 2025, registered a total of 1,674,444 outstanding quotas; net income of R$2.6
billion; fee and commission income from consortia of R$3.1 billion; and accrued revenue of R$130.5 billion.
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4.B.30.02 Insurance, pension plans
and capitalization bonds activities
We offer insurance
products, pension plans and capitalization bonds through several legal entities, referred to collectively as Grupo Bradesco Seguros.
The following
table shows selected financial data for our insurance, pension plans and capitalization bonds segment for the periods indicated:
As of and for the year ended December 31, Insurance, pension plans and capitalization bonds - R$ in thousands
2025 2024 2023
Financial income from insurance, pension plans and capitalization bonds(1) 22,376,285 18,797,441 16,849,884
Fee and commission income and income from banking fees 2,061,017 1,923,437 1,164,685
Personnel /Administrative Expenses (5,138,904) (4,571,572) (4,717,591)
Tax expenses (1,484,930) (1,391,406) (1,436,686)
Share of profit (loss) of associates and jointly controlled entities 610,771 243,403 421,723
IR/CSI and Other income/expenses (8,354,473) (5,945,008) (3,468,750)
Net income 10,069,766 9,056,295 8,813,265
Total assets 507,789,849 451,777,909 409,370,722
Total liabilities 463,807,578 416,694,321 370,561,631
(1)
It comprises the following captions of the statement of income: financial margin and other income from insurance,
pension plans, and capitalization bonds.
4.B.30.02-01 Insurance products
and services, pension plans and capitalization bonds
With the objective
of meeting the needs of each client, we offer a range of products and services, such as:
Ø Life
4.B.30.02-01.01 Life and personal
accident insurance
We offer life
and personal accident insurance, as well as insurance against miscellaneous events, such as job loss, through our subsidiary Bradesco
Vida e Previdência. As of December 31, 2025, there were 24.5 million life insurance policyholders.
Ø Health
4.B.30.02-01.02 Health insurance
Health insurance
policies cover medical/hospital expenses. We offer health insurance policies through Bradesco Saúde for small, medium-sized enterprises
or large companies wishing to provide benefits to their employees.
As of December
31, 2025, Bradesco Saúde and its subsidiary Mediservice Administradora de Planos de Saúde S.A., along with Bradesco Saúde
Operadora de Planos S.A., had approximately 3.9 million beneficiaries covered by company plans and individual/family plans. Around 173
thousand companies in Brazil pay into plans provided by Bradesco Saúde and its subsidiaries, including 42 of the 100 largest companies
in the country.
As of December
31, 2025, it included 9,618 laboratories, 15,977 specialized clinics, 15,536 physicians and 1,825 hospitals located throughout the country.
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Ø Non-life
4.B.30.02-01.03 Auto and property/casualty
insurance
We provide car
insurance through our subsidiary Bradesco Auto/RE.
We offer a range
of insurance products, from leaner and more affordable product, such as the insurance Auto Light Referenced Network, to a comprehensive
coverage such as Auto Lar, which protects both the vehicle and the residence.
There are also
specialized products for motorcycle, truck, fleets and our account holders, with several differentials. For motorcycle, for example, we
offer coverage for accessories, such as jacket, gloves and helmet. Additionally, we offer hospital medical expense coverage and funeral
assistance amongst others.
Our coverage
is comprehensive, it includes damage caused to the vehicle, passengers and to third parties, with several options of a supplemental agreement,
and a complete Bradesco Seguros App to facilitate access to the (insurance-related) services.
Retail property
and casualty insurance includes protection for residential, condominiums, business and equipment risks, among other products, with personalized
coverage according to the needs of each business or residence. We highlight “Lar Mais Seguro” and “Residencial
Sob Medida” for individuals with several customization options, and “Bradesco Seguro Equipamento” for individuals
and companies, with complete coverage for several segments, such as agricultural, construction, medical, musical, electric-portable equipment
and forestry. Our insurance business also offers comprehensive coverage for various segments, such as Office, Clinics and Surgeries, Construction,
Teaching, Culture and Leisure, etc.
As of December
31, 2025, Bradesco Auto/RE had 1.68 million insured automobiles and 1.75 million property and casualty policies, making it one of Brazil’s
main insurance companies.
4.B.30.02-01.04 Capitalization
bonds
Bradesco Capitalização
is a market leader among companies in the sector, with a market share of 21.8% until December 2025, according from SUSEP. Our clients
can purchase capitalization bonds with single or monthly payments starting at R$10 and compete for cash prizes of up to R$6.0 million
(net premium).
In December 2025,
we ended the year with 3.2 million active clients and 8.2 million traditional capitalization securities.
The traditional
modality is the most representative of our operation, in which the client saves money and competes for prizes as a tool of financial discipline.
At the end of the term of the plan, the client will receive 100% of the amounts paid in, plus interest based on the TR rate.
Ø Pension Plans
4.B.30.02-01.05 Pension plans
We have managed
individual and corporate pension plans since 1981 through our wholly-owned subsidiary Bradesco Vida e Previdência, which is now
one of the leading pension plans managers in Brazil, as measured by investment portfolio and technical provision criteria, based on information
published by FENAPREVI and SUSEP.
Bradesco Vida
e Previdência offers and manages a range of individual and group pension plans.
As of December
31, 2025, Bradesco Vida e Previdência accounted for 23.1% of the pension plans in terms of contributions, according to SUSEP. As
of December 31, 2025, Bradesco Vida e Previdência accounted for 21.7% of all pension plan assets under management: 21.0% of VGBL
(Vida Gerador de Benefício Livre), 20.2% of PGBL (Plano Gerador de Benefício Livre) and 43.0% of traditional
pension plans, according to FENAPREVI.
As of December
31, 2025, we managed open pension plans covering 3.2 million participants, with a total balance of R$385.7 billion in collateral assets.
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These plans can be contracted
either individually or via business plans. As of December 31, 2025, individual plans represent 53.6% and business plans 46.4% of the total
number of participants. The business plans account for 12.4% and individual for 87.6% of the technical provisions.
In summary, Bradesco
Vida e Previdência earns revenues from:
· pension plan contributions, PGBL and VGBL, life insurance and personal accidents premiums;
· revenues from management fees charged to pension plan participants in accordance with mathematical provisions; and
· interest income.
4.B.40 Distribution channels
4.B.40.01 Banking
The following
table shows our main distribution channels as of the dates indicated below:
Distribution Channels - Units 2025 2024 2023
Customer Service Points 85,476 82,914 83,147
- Service Network 4,605 6,003 7,388
Branches (1) 2,009 2,305 2,695
Retail + Prime 1,684 1,996 2,485
Companies & Business 150 150 67
Corporate 83 83 73
Digital Platform 92 76 70
Principal 14 - -
Service Centers 1,441 2,051 3,351
Electronic Service Centers 431 469 522
Business Units (1) 724 728 820
Retail + Prime 676 727 820
Principal 48 1 -
- Banco24Horas Network 20,574 17,931 17,967
- Bradesco Expresso (Banking Correspondents) 39,335 39,059 38,264
- Bradesco Financiamentos 20,949 19,908 19,514
- Branches, Subsidiaries and Representation Office Abroad 13 13 14
ATMs 39,245 39,586 43,768
- Onsite Network - Bradesco 12,540 15,376 19,582
- Banco24Horas Network 26,705 24,210 24,186
(1)
It considers the grouping of branches and in Central Bank of Brazil considers the counting per active CNPJ
(Corporate Taxpayer’s ID).
4.B.40.02 Insurance, pension plans
and capitalization bonds activities
We sell our insurance,
pension plan and capitalization bonds products through our website, our branches, brokers based in our network of bank branches and non-exclusive
brokers throughout Brazil, all of whom are compensated on a commission basis. Our capitalization bonds are offered through our branches,
the Internet, our call center, ATMs and external distribution channels.
The following
table shows the distribution of sales of these products through our branches and outside our branches:
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% of total sales, per product
2025 2024 2023
Insurance products
Sales through the branches 35.9% 36.4% 33.9%
Sales outside the branches 64.1% 63.6% 66.1%
Pension plans products
Sales through the branches 93.0% 91.5% 89.2%
Sales outside the branches 7.0% 8.5% 10.8%
Capitalization bonds
Sales through the branches 37.0% 49.9% 63.8%
Sales outside the branches 63.0% 50.1% 36.2%
4.B.40.03 Partnerships with retail
companies – Bradesco Expresso
Bradesco Expresso
enables us to expand our share of the correspondent bank segment through partnerships with supermarkets, drugstores, grocery stores, department
stores and other retail chains. These companies provide basic banking services through the employees of the establishments themselves,
while decisions regarding lending or opening of accounts are made by us.
The main services
we offer through Bradesco Expresso are:
· receipt and submission of account application form;
· receipt and submission of loans, financing and credit card application form;
· withdrawals from checking account and savings account;
· Social Security National Service (INSS) benefit payments;
· checking account, savings account and INSS balance statement;
· receipt of utility bills, bank charges and taxes; and
· prepaid mobile recharge.
As of December
31, 2025, the Bradesco Expresso network totaled 39,335 service points, with an average of 25.5 million monthly transactions or 1.2 million
transactions per business day.
4.B.40.04 Digital Channels
We offer products
and services through digital channels such as mobile, internet banking, ATM and contact center. These channels allow access to banking
operations, at any time, ensuring greater reach and efficiency in the provision of services. In 2025, digital channels concentrated 99%
of transactions carried out in Bradesco, with predominance of mobile platforms and internet banking, which accounted for 96% of this total.
Below is a brief
description of each digital channel:
Ø Mobile App – At the end of December 2025, the channel registered 28.5 million active individual clients, considering accounts that have carried out transactions in the last three months. This volume represents a growth of more than 670 thousand compared to December 2024, evidencing the expansion in the use of the App. The trend is to consolidate and continuously evolve this platform in the coming years.
The App,
available for iOS and Android systems, allows the execution of various operations such as payments, transfers, Pix, the contracting of
loans, consortia, foreign exchange operations and access to non-financial benefits. In addition, it offers integration with the Ágora
App, Bradesco’s investment platform, which provides content such as tips, market news and expert analysis, accessible through the
single sign-on feature.
Our mobile channel
continues to grow and consolidate itself as the main means of requesting credit for individuals. Financial transactions grew by 15%, driven
by the growth of more than 20% in the personal loan lines and public payroll-deductible loan in 2025 when compared to 2024.
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Corporate
clients use the Bradesco Net Empresa App for their banking operations, such as payments, transfers, Pix, TED, check deposits, factoring
of receivables, purchase of loans, among other transactions. The App also allows the full online contracting of the instant QR Code for
cash terminals (TEF), POS and e-commerce besides Cielo solutions, such as the payment machine and payment link.
The Bradesco Empresas
e Negócios App was launched, aimed at MEI clients. Among the features are access via CPF, 100% digital account opening and chat
service, WhatsApp and BIA with generative AI technology. The App incorporates security features, including the monitoring of suspicious
transactions, screens masking while sharing with others, and warnings about scams related to the false call center.
Ø BIA – Bradesco Artificial Intelligence is a relationship and financial solutions agent, developed to provide intelligent support to clients and employees.
Initially created
in 2016 to assist customer service routines, it evolved into a digital product integrated to the main channels of Bradesco, providing
personalized, safe and problem-solving experiences.
The solution acts
as a conversational agent, able to understand intentions and interpret information either by text or voice commands, conducting structured
dialogs through contextual consistency. In 2025, its technological architecture began to operate with generative AI models on its own
platform, expanding the capacity of understanding and interaction in multiple scenarios. BIA is present in channels such as mobile App,
WhatsApp, Corporate Portal, IVR (Interactive Voice Response) and other internal widgets, providing access to information, guidance and
self-service features.
Key skills
include financial operations such as text and voice Pix, bank slip payments, statement queries, limits and invoices, card activation and
fraud alerts. With a growing presence and measurable impact, BIA has consolidated itself as one of the pillars of the digital transformation
strategy, contributing to operational efficiency, cost reduction, improving the experience and security.
Ø Internet – This platform is organized in two main prongs: the institutional website, which gathers structured information objectively about our performance, and the Internet Banking, which provides a wide range of financial services to individual clients.
At the
end of December 2025, the channel registered 1.8 million active individual clients, considering accounts that have carried out transactions
in the last three months.
In Bradesco
Net Empresa, a corporate client can check account information, make transfers, operations via Pix, investments, send files and perform
other transactions in a simple and secure way. In addition, the Digital MEI Platform provides financial and non-financial services, through
partners, to meet the main needs of the individual microentrepreneur.
Ø ATMs – Focusing on innovation, evolution, and availability, self-service machines aim to simplify our customers’ daily lives, allowing accessibility and intuitive journeys.
Currently
there are over 39 thousand active machines with 12,540 distributed among our own network and 26,705 distributed among our shared network
– Banco24Horas. All machines are equipped with biometric reading, bringing more security and convenience for biometric transactions
without using the card.
We also
have recycling machines, aiming for greater efficiency and cost reduction, because they do not use envelopes. There are currently 6,965
machines that operate with the recycling of banknotes, which enables the cash deposit with immediate credit in the account of the beneficiary.
The features of the channel also contribute to sustainability as well as sending receipts by email. Since 2022, the cash deposit without
an envelope has also been made available on the 4,725 recycling machines of Banco24Horas.
Thinking
about our clients’ experience, we also have disruptive features, such as buying dollars and euros (with more than 120 machines)
– foreign exchanges of two currencies in a single machine – which had a representative participation in our foreign exchange
operations. In 2021, we also deployed the Virtual Safe,
in which the client has autonomy in purchasing foreign currency via the Bradesco App and withdrawing from the BDNs.
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In addition,
since 2020 proxies have gained greater autonomy in the movement of Individual client accounts, with the possibility of access to self-service
machines, being able to perform several transactions intuitively and safely through registration of biometrics and password of 6 unique
digits.
Ø Telephone services – Fone Fácil (Contact Center) – Easy Phone (Fone Fácil) is our call center for clients that offers two forms of service:
· Self-service with Artificial Intelligence (BIA): Through voice commands, clients request the desired service and completes their demand without having to listen to several options and choose at the end of the recording. BIA is prepared to perform the main financial services, such as payments, transfers between Bradesco accounts, TED (electronic transfer), and investments, among others; and
· Personalized Service: For more complex demands or questions, the client relies on our experts who offer complete support.
Ø Social Networks – We believe we are innovators and pioneers in social media, being active on social networks since 2009. The focus is on communication, relationship, content creation and business activation. The Social Networks team is present with the user @bradesco on Instagram, Facebook, X (formerly Twitter), YouTube, TikTok and Linkedln and monitors, analyzes and interacts with people who seek us or mention our brand, relying on the participation of segments, managers and branches to resolve demands. This work strengthens the relationship with our clients and protects us. The team is also responsible for answering queries, complaints, suggestions and conducting relationship interactions with the user.
The following
table shows the number of digital clients:
2025 2024 2023
Customers with Digital Profile - In million
Individuals 28.8 28.1 26.5
Companies 1.4 1.5 1.5
Total 30.2 29.6 28.0
4.B.40.05 Digio
Banco Digio is an integral
part of our Group and offers a portfolio of fully a digital products, which include: payment accounts, personal loans, credit cards,
payroll-deductible loans, insurance products, investments (CDB), financial service Marketplace a white-label platform for partners.
The main goal for 2026 is
to expand the payroll-deductible loan portfolio, as well as to monetize the base of cards and accelerate opportunities using the whitelabel
platform. This year’s roadmap provides several goals for the evolution of our technological platform and portfolio of payroll-deductible
loans solutions.
Banco Digio closed the year
2025 with 10.0 million unique clients, registering a growth of 7% compared to the previous year. The total portfolio closed the period
with R$20.5 billion, while revenues reached R$4.2 billion, in relation to the previous year.
As for the perception
of the services offered, Digio continues to be well-rated by customers in app stores, on Google My Business and on Reclame Aqui.
4.B.50 Seasonality
We generally
experience some seasonality in certain parts of our business. There is certain seasonality in our consumer financing business (including
our credit card business, financing of goods and others), with increased levels of credit card transactions and financing of goods at
the end of the year and a subsequent decrease in these levels at the beginning of the year. We also experience certain seasonality in
our fee collections at the beginning of the
year, which is when taxes and other fiscal contributions are generally paid in Brazil. For our PGBL and VGBL business, seasonality is
seen at the end of the year, when the 13th salary and profit-sharing distributions are usually paid.
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4.B.60 Competition
We face significant
competition in all of our principal areas of operation, since the Brazilian financial and banking services markets are highly competitive.
The following table presents the market share of our main products and services in the periods indicated:
Market Share - In % 2025 2024 2023
Source: Bacen
Banks
Demand Deposits 6.6 (1) 8.0 9.8
Savings Deposits 12.0 (1) 12.5 13.1
Time Deposits 11.8 (1) 11.7 12.5
Loans 10.4 10.1 10.2
Loans - Private Institutions 17.7 17.6 17.8
Loans - Vehicles Individuals (CDC + Leasing) 10.8 10.6 11.4
Payroll-Deductible Loans 14.1 14.3 14.7
- INSS 15.2 15.6 17.0
- Private sector 6.6 11.8 11.6
- Public sector 14.8 13.7 13.4
Housing loans 9.6 9.6 10.4
Consortia
Real estate 12.7 12.8 14.4
Auto 21.8 23.4 25.3
Trucks, Tractors and Agricultural Implements 16.4 16.6 19.1
International Area
Export Market 11.0 10.6 13.5
Import Market 9.1 8.4 8.7
Source: Insurance Superintendence (Susep), National Agency for Supplementary Healthcare (ANS) and National Federation of Life and Pension Plans (Fenaprevi)
Insurance Premiums, Pension Plan Contributions and Capitalization Bond Income 22,8 (1) 22.9 22.7
Technical provisions for insurance, pension plans and capitalization bonds 21,4 (1) 21.7 21.8
Pension Plan Investment Portfolios (including VGBL) 21,7 (2) 22.1 21.8
Source: Anbima
Investment Funds and Managed Portfolios 16.3 16.7 16.6
Source: Social Security National Institute (INSS)/Dataprev
Benef it Payment to Retirees and Pensioners 25.7 27.2 30.1
Source: Brazilian Association of Leasing Companies (ABEL)
Leasing Operations 38.0(2) 33.6 28.0
Data base: (1) September/25
and (2) November/25.
As of September 30, 2025,
public-sector financial institutions held 34.3% of the SFN assets, followed by domestic private financial institutions (taking into consideration
financial conglomerates) with a 48.9% share and foreign-controlled financial institutions, with a 16.8% share. September 2025 is the latest
information available from the Central Bank of Brazil.
Public-sector
financial institutions play an important role in the banking sector in Brazil. Essentially, they operate within the same legal and regulatory
framework as private-sector financial institutions, except that certain banking transactions involving public entities must be made exclusively
through public-sector financial institutions (including, but not limited to, depositing federal government funds or judicial deposits).
The competitive environment
of the National Financial System is shaped by a regulatory framework that establishes entry barriers through requirements governing the
authorization, organization and operation of financial institutions, including, among others, the obligation to submit certain acts of
economic concentration to the Central Bank of Brazil for approval. At the same time, Brazilian regulation also promotes market opening
by allowing, for example, simplified operational models and encouraging the operation of credit fintechs and institutions aimed at financing
micro and small-sized enterprises, expanding the offer in these segments. For more information on the main standards to which we are subject,
see item “4.B.70 Regulation and Supervision”.
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4.B.60.01 Deposits
The deposit market
is highly concentrated, with our main competitors being Itaú Unibanco, Caixa Econômica Federal, Banco do Brasil and Santander.
In September 2025, the five largest institutions held 63.4% of deposits in the Brazilian markets.
4.B.60.02 Loans and advances
Competition in
loans and advances has been increasing in recent years. Our main competitors are Itaú Unibanco, Banco do Brasil, Santander Brasil
and SICREDI.
4.B.60.03 Credit cards
The credit card
market in Brazil is highly competitive. Our primary competitors in the market are the major banks. However, digital banks have increased
their importance in the Brazilian markets. Management believes that the primary competitive factors in this area are card distribution
channels, both physical and digital, and the services and benefits offered, in addition to better user experiences for the cardholder.
4.B.60.04 Consortia
In December 2025,
according to the Central Bank of Brazil, the consortia market included 130 administrators, divided between the bank, manufacturer and
independent administrators.
Our main competitors
are Ademicon and Banco do Brasil in the real estate segment; Banco do Brasil and Itaú in the movable property segment.
One of our competitive
advantages is the credibility of our brand, the number of our monthly draws, being the Management Company with most draws, which reinforces
our capacity to manage the groups and the resources of the consortium clients, and our extensive distribution network, with the largest
service network throughout Brazil.
4.B.60.05 Investment Bank
The investment
bank market in Brazil is very competitive, involving the participation of national and international financial institutions. Among the
main players are Itaú BBA, BTG Pactual, Santander and other national and international institutions. Bradesco BBI has nonetheless
achieved significant success in this market, obtaining recognition from renowned international agencies that follow the sector globally.
4.B.60.06 Leasing
In general, our
main competitors in the Brazilian leasing market are Daycoval Leasing, Santander Leasing and HP Financial. We believe we currently enjoy
certain competitive advantages, as we have a larger service network than any of our private sector competitors.
4.B.60.07 Asset management
In 2025, the
asset management industry in Brazil managed funds worth R$10.7 trillion in shareholders’ equity, according to ANBIMA’s investment
funds management ranking. Bradesco Asset held a portion of R$923.8 billion or 8.6% of the market share. We are one of the leading institutions
as measured by the number of investment fund clients with 3.4
million shareholders. Our main competitors are BB DTVM and Itaú Unibanco.
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4.B.60.08 Insurance
According to SUSEP/ANS,
the Grupo Bradesco Seguros maintained the leadership position on the Brazilian insurance market in 2025. This segment is competitive,
with operations of national and international insurers. Key competitive factors include price, financial strength, operational efficiency
and quality of service and claims management.
Our principal competitors
are Sul América, Porto, BB Seguridade, HDI and Tokio, which accounted for approximately 35.1% of the market as of September 2025.
In the health segment, in addition to national operators, there is relevant competition from regional companies.
Our service network has
a capillary presence, as we are established in all municipalities of Brazil, contributing to efficiency and commercial reach.
4.B.60.09 Pension plans sector
Bradesco Vida
e Previdência’s main competitive advantages are our brand, our extensive branch network, our strategy and our record of being
in the forefront of product innovation.
Our main competitors
are BrasilPrev, Caixa Seguridade, Itaú Seguridade, Zurich/Santander, Icatu and XP Previdência.
4.B.60.10 Capitalization bonds sector
Our competitive
strengths in this sector include our offering of low-cost products with a higher number of prize drawings, security, financial stability,
and brand recognition.
Our main competitors
are BrasilCap, Santander, Cia. Itaú de Capitalização, Icatu, Caixa Seguridade and Porto, which together represent
approximately 62.5% of the total capitalization revenue generated in the market, according to information provided by SUSEP.
4.B.70 Regulation and Supervision
The basic institutional
framework of the Brazilian Financial System was established in 1964 by Law No. 4,595/64, known as the “Banking Reform Law”.
The Banking Reform Law dealt with monetary, banking and credit policies and institutions, and created the CMN and the Central Bank of
Brazil.
4.B.70.01 Principal regulatory agencies
4.B.70.01-01 CMN
The CMN is responsible
for overall supervision of monetary, credit, budgetary, fiscal and public debt policies in Brazil, according to Law No. 4,595/64, including
regulating loans and advances granted by financial institutions, the currency issue, supervising the reserves of gold and foreign exchange,
and regulating capital markets.
Within its functions,
the CMN provides, through Resolution No. 3,427/06, as amended, for the adoption by the CVM of the risk-based supervision model as general
guidance for its activities, on which the Risk Based Supervision System (SBR) was created. The SBR is also regulated by CVM Resolution
No. 53/21, which defines its objectives.
4.B.70.01-02 Central Bank of
Brazil
The Central Bank
of Brazil is the primary executor of the guidelines of the CMN, responsible for, among other roles, ensuring the purchasing power of the
national currency. Its main activities: implement currency and credit policies; regulate and supervise
financial and payment institutions; control the flow of foreign currency; and oversee the Brazilian financial market.
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In the exercise
of its supervisory functions, the Central Bank of Brazil determines minimum capital requirements and compulsory reserves, authorizes corporate
acts and changes in equity control, requires audited financial statements, monitors compliance with applicable regulations and, where
necessary, intervenes or liquidates financial institutions, in addition to sanctioning institutions that fail to comply with their rules.
Through Complementary
Law No. 179/21 the Central Bank of Brazil guaranteed its technical, operational, administrative and financial autonomy, which gave it
greater in the use of monetary instruments for the fulfillment of goals established by the CMN. Through this law, price stability was
defined as the primary objective of the Central Bank of Brazil, in addition to ensuring the stability and efficiency of the financial
system, smoothing out fluctuations in levels of economic activity and promoting full employment. The Central Bank of Brazil is considered
an autonomous entity of a special nature, characterized by the absence of any ties to a ministry.
4.B.70.01-03 CVM
The CVM is an
autonomous entity under a special regime, linked to the Ministry of Finance, with its own legal personality and its own equity, independent
administrative authority, absence of hierarchical subordination, fixed mandate, stability of its managers, and financial and budgetary
autonomy. It was created with the objective of overseeing, standardizing, regulating and developing the Brazilian securities markets in
accordance with the general guidelines of the CMN and, in the exercise of its attributions, seeks to ensure the integrity, efficiency
and regular functioning of the capital market, as well as protecting investors and stimulating the development and expansion of this market
share in the financing of the economy. In this context, the public entity regulates and supervises issuers, intermediaries, investment
funds and other equity market participants, promoting compliance with applicable standards, improvement of market practices, transparency
standards, supervision and sanctioning action.
4.B.70.02 Banking regulations
4.B.70.02-01 Main limitations
and restrictions on activities of financial institutions
Banks operating in Brazil
are subject to a comprehensive set of rules that regulate their constitution, functioning, corporate structure, capitalization and prudential
conduct. The banking activity depends on prior authorization from the Central Bank of Brazil, including the recognition of national interest
for the establishment of foreign financial institutions. Institutions must be constituted as corporations, adopt in their name the word
“Bank”, integrate capital exclusively in national currency and observe regulatory limits for corporate investments and credit
concentration, including restrictions for exposures above 25% of the Reference Equity Level 1 per client and aggregate concentration limits.
There are also,
among the various requirements and restrictions, property restrictions, such as the possibility of maintenance only of properties of own
use, except for regulatory exceptions, and restrictions such as the non-issuance of debentures and beneficiary parties. There is also
a restriction to operations with related parties (defined according to CMN Resolution No. 4,693/18), with specific exceptions provided
for in Law No. 4,595/64. Specific rules also regulate exchange rates in payment arrangements, interest limits on payroll-deductible loans
and a charge cap on revolving credit on the credit card.
The regulation
also imposes prudential and capital requirements. Joint Resolution No. 14/25, for example, introduced updated methodology for calculating
the minimum share capital and the required shareholders’ equity, requiring, in the case of banks, a fixed additional contribution
of R$30 million.
4.B.70.02-02 Punitive instruments
applicable to Financial Institutions
Law No. 13,506/17
and BCB Resolution No. 131/21, as amended, and CVM Resolution No. 45/21 regulate the administrative sanctioning process in the sphere
of activity of the Central Bank of Brazil and CVM and, significantly amending the punitive
instruments in the context of banking supervision, in the spheres of the capital market, the Brazilian Payment System, Payment Institutions
and Consortium.
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4.B.70.02-03 Capital adequacy
and leverage
Financial institutions
based in Brazil are subject to capital measurement and standards based on a weighted risk-asset ratio, according to CMN Resolutions No.
4,958/21 and No. 4,955/21, as amended. The parameters of this methodology resemble the international framework for minimum capital measurements
according to the Basel Accord. For further information on Basel III, see “Item 5.B – Liquidity and Capital Resources –
5.B.40 Capital Compliance – Basel III”.
In accordance
with Basel III recommendations, Circular No. 3,748/15 and CMN Resolution No. 4,615/17 provide for the minimum requirement for the Leverage
Ratio (LR). The institutions classified in Segment 1 (S1) and Segment 2 (S2), must comply with the minimum requirement for LR of 3%. Additionally,
Basel III introduced the liquidity indicators LCR (short-term) and NSFR (long-term).
According to
CMN Resolution No. 4,950/21, financial institutions must keep consolidated accounting records (for calculating their capital requirements)
of their investments in companies whenever they hold, directly or indirectly, individually or together with partners, a controlling interest
in the investee companies. If their interest does not result in control of a company, financial institutions may choose to recognize the
interest as equity in the earnings of unconsolidated companies instead of consolidating such interests.
Under certain
conditions and within certain limits, financial institutions may include eligible instruments when determining their capital requirements
in order to calculate their operational limits, provided that this instrument complies with the requirements of the regulation in force.
4.B.70.02-04 Risk Weighting
Pursuant to
BCB Resolution No. 229/22, as amended, the Central Bank of Brazil consolidated the RWA weighting factors applied to different exposures
in order to calculate capital requirements through a standardized approach (RWAcpad). Risk-weight factors applicable to different exposures
are often changed by the Central Bank of Brazil. The mitigating instruments of the RWA portion concerning credit risk exposures subject
to the calculation of RWAcpad are established in Circular No. 3,809/16, which was last updated on December 19, 2024, effective from January
2025.
Circular No.
3,921/18 governs the FPR, which is a percentage applied to the exposure of financial institutions to different types of assets to determine
the minimum capital they need to reserve to cover potential losses, whereby there are variables in this percentage according to the type
of exposure of the institution. In addition, there are specific standards of the Central Bank of Brazil to determine procedures to calculate
the portion of risk-weighted assets related to other exposures. In March 2022, BCB Resolution No. 202/22 was issued by the Central Bank
of Brazil, as amended, which now establishes the calculation of the portion of RWAs related
to the calculation of capital required for risks associated with payment services (RWAsp) established in CMN Resolutions No. 4,958/21
and No. 4,606/17 and BCB Resolutions No. 200/22 and No. 201/22, issued by the Central Bank of Brazil, as amended.
The total consolidated
exposure of a financial institution to foreign currencies, gold and transactions subject to exchange variation limits up to 30.0% of its
Reference Equity (RE), pursuant to CMN Resolution No. 4,956/21. This limit may be altered by the Central Bank of Brazil, observing the
minimum value of 15% and the maximum value of 75% of the Reference Equity (RE). It should be noted that compliance with the above limit
must take place in a consolidated manner for institutions that are members of the same prudential conglomerate.
Financial institutions
authorized to operate by the Central Bank of Brazil shall disclose (i) exposure in gold, foreign currency and operations subject to the
exchange rate variation; (ii) the RWAMint portion (concerning market risk exposures subject to the calculation of the capital requirement
by the internal model authorized by the Central Bank of Brazil) of the RWA amount; and (iii)
to the RWAMpad portion (related to the calculation of capital required for operational risk by standardized approach) of the RWA amount
and its components, daily, being available to the Central Bank of Brazil for a period of five years, as established in BCB Resolution
No. 100/21, as amended.
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For more information
on our capital ratios, see “Item 5.B – Liquidity and Capital Resources – 5.B.40 Capital Compliance – Basel III”.
In addition,
the Central Bank of Brazil amended BCB Resolution No. 229/22, as amended, which establishes the procedures for the calculation of the
portion of the RWAs relating to exposure to credit risk subject to the calculation of capital requirements through the standardized approach
(RWAcpad), which is regulated by CMN Resolution No. 4,958/21, of October 2021, and BCB Resolution No. 200/22, of March 2022, as amended.
BCB Resolution
No. 229/22 aims to address two main points: (i) the methods of measuring the value of exposures, also admitting the use of a method of
calculating the mark-to-market value for a specific asset class (this methodology can be used even if the Accounting Standard of the institutions
regulated by the Central Bank of Brazil (Cosif) does not cover this); and (ii) Risk Weighting Factors (FPR), especially on exposures to
sovereign entities and multilateral bodies (EMD), financial institutions, non-financial, retail, and real estate legal entities.
In February
2023, the Central Bank of Brazil issued BCB Resolution No. 291/23, which establishes the procedures for calculating the portion of the
RWA regarding exposures to the risk of variation in the value of derivative instruments due to the variation in the credit quality of
the counterpart (RWACVA), in addition to amending the Circular No. 3,646/13, which also provides for the calculation method of the RWAMint
portion.
4.B.70.02-05 Compulsory Deposits
The Central
Bank of Brazil periodically sets compulsory deposit and related requirements for financial institutions based in Brazil. The Central Bank
of Brazil uses reserve requirements as a mechanism to control liquidity in the SFN.
According to
the Central Bank of Brazil’s rules, we must place a percentage of the demand deposits, savings deposits and time deposits we receive
from our clients with the Central Bank of Brazil:
Ø Time deposits: we are obliged to deposit 20.0% of the arithmetic mean of the Value Subject to Collection (VSR) established on the working days of the calculation period, deducted from R$30 million, in accordance with BCB Resolution No. 145/21;
Time
deposits are represented by bank deposit certificates (CDBs) and financial bills (income tax exempt); and pay either a fixed or a floating
rate, which is typically a percentage of the interbank interest rate (CDI), as disclosed by COPOM.
Ø Demand deposits: we are required to deposit 21.0% of the arithmetic mean of the VSR, on each working day, determined in the calculation period, deducting R$500.0 million, pursuant to the provisions of BCB Resolution No. 189/22, as amended. The verification of compliance with these requirements is made according to established positions on each day of the period of transactions and the calculation period begins on Monday of one week and ends on Friday of the following week; and
Ø Savings deposits: according to BCB Resolution No. 188/22, in an account with the Central Bank of Brazil, an amount equivalent to 20.0% of the arithmetic average of the sum of the balances entered under the headings of Savings Deposits and Resources of Associated Savers, according to BCB Resolution No. 188/22, as amended, which defines and consolidates the rules of compulsory collection on savings deposit resources. The balance of the account is remunerated by the “TR” (Taxa Referencial), a Brazilian economic index created in 1991 to control inflation and used to correct savings values and real estate financing plus interest, among other amounts.
In
February 2013, the Central Bank of Brazil defined rules for financial cost collection on non-compliance with compulsory deposit, reserve
or compulsory assignment requirements. The financial cost charged to institutions that failed to comply with these requirements was adjusted,
according to the calculation formula present in Resolution BCB No. 189/22.
In
February 2022, BCB Resolution No. 188/22 was amended, which defines and consolidates the rules of compulsory collection on savings deposit
resources. In the same month in 2022, BCB Resolution No. 190/22 was issued, extinguishing the enforceability regarding the compulsory
collection of deposit resources and guarantees made, which was incorporated in BCB Resolution No. 189/22.
Additionally,
Central Bank of Brazil regulations, require that we:
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· allocate a minimum of 31.5% of demand deposits to providing rural loans;
· maintain investments of at least 2.0% of demand deposits in targeted productive microcredit program operations in accordance with CMN Resolution No. 4,854/20; and
· allocate a minimum of 65.0% of the total amount of deposits in savings accounts to finance residential real estate, observing that on October 10, 2025, CMN issued Resolution No. 5,255/25, which amended BCB Resolution No. 4,676/18, which required that 100% of the total amount of deposits received should be allocated to savings accounts for real estate as from the effective date of the resolution (January 1, 2027).
Standards on
compulsory deposits and additional reserve requirements are periodically altered by the Central Bank of Brazil.
4.B.70.02-06 Asset composition
requirements
According to
CMN Resolution No. 4,677/18, as amended, financial institutions headquartered in Brazil must limit their exposure to a single client to
a maximum amount of 25.0% of Tier 1 of its RE, or 15% of Tier 1 of its RE if the institution is listed as systemically important in the
global scope by the Financial Stability Board (FSB). The total concentrated exposures should not exceed 600% of Tier 1 of the institution’s
RE.
Also, according
to CMN Resolution No. 4,957/21, financial institutions must observe the maximum limit of 50% of the Reference Equity (RE), calculated
in accordance with CMN Resolution No. 4,955/21 for the amount of resources applied to the Permanent Asset.
4.B.70.02-07 Repurchase transactions
Repurchase
transactions are subject to operational capital limits based on the financial institution’s equity, as adjusted in accordance with
Central Bank of Brazil regulations. According to BCB Resolution No. 525/25, a financial institution may only hold repurchase transactions
in an amount up to 30 times its Reference Equity (RE). Within that limit, repurchase transactions involving private securities may not
exceed five times the amount of the financial institution’s RE. Limits on repurchase transactions involving securities issued by
Brazilian governmental authorities vary in accordance with the type of security involved in the transaction and the perceived risk of
the issuer, as established by the Central Bank of Brazil, since limits for repurchase transactions to the public sector are always higher.
In September
2016, the Central Bank of Brazil prohibited the execution, extension or renewal of repurchase transactions of securities issued or accepted
from associated institutions, or institutions that are members of the same prudential conglomerate.
Subsequently,
in September 2021, BCB Resolution No. 76/21 was issued, which provides on the instruments of operation of the Central Bank of Brazil in
the Brazilian exchange market for the purpose of implementing the exchange policy. This Resolution provides that the Central Bank of Brazil
may perform the following operations in the Brazilian exchange market, among others: (i) purchase of foreign currency with resale commitment,
in conjunction with a repurchase commitment, made by the counterpart, for settlement on a predefined date; and (ii) sale of foreign currency
with a repurchase commitment, in conjunction with a resale commitment, made by the counterpart, for settlement on a predefined date.
4.B.70.02-08 Onlending of funds
borrowed abroad
Financial institutions
and leasing companies are permitted to borrow foreign currency-denominated funds in the international markets (through direct loans or
the issuance of debt securities) in order to on-lend such funds in Brazil. These onlendings take the form of loans denominated in reais
but are indexed to the foreign currency. The terms of the onlending transaction must reflect the terms of the original transaction. The
interest rate charged on the underlying foreign loan must also conform to international market practices. In addition to the original
cost of the transaction, the financial institution may only charge onlending commission.
Furthermore,
the amount of any loan in foreign currency should be limited to the sum of foreign transactions undertaken by the financial institution
to which loan funds are to be directed.
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4.B.70.02-09 Foreign currency
position
Operations in
Brazil involving the sale and purchase of foreign currency may be conducted only by institutions authorized by the Central Bank of Brazil
to operate in the foreign exchange market.
In 1999, Brazil adopted
the floating exchange regime, with specific interventions by the Central Bank of Brazil to control the volatility of the exchange rate,
a possibility conferred by Law No. 4,595/64.
The Central Bank
of Brazil does not impose limits on long and short positions in foreign exchange operations for banks authorized to operate in the foreign
exchange market.
In December 2022,
Law No. 14,286/21 entered into force, which deals with the Brazilian foreign exchange market, the Brazilian capital abroad, the foreign
capital in the country and the provision of information to the Central Bank of Brazil, with the aim of modernizing, simplifying and bringing
greater legal certainty regarding such matters, considering the best international standards and practices as well as the positioning
of Brazil in the global economy. In view of this, CMN published CMN Resolutions No. 5,042/22 and No. 5,056/22, and the Central Bank of
Brazil published BCB Resolutions No. 277/22, No. 278/22, No. 279/22, No. 280/22 and No. 281/22, aiming to regulate foreign exchange operations.
One of the key changes introduced
is the elimination of the mandatory execution of simultaneous exchange transactions, along with the simplification of procedures for opening
and maintaining Brazilian real accounts held by non-residents in Brazil.
4.B.70.02-10 Registration of
cross-border derivatives and hedging transactions and information on derivatives
In December 2009,
the Central Bank of Brazil issued specific rules that became effective in February 2010, requiring Brazilian financial institutions to
register their cross-border derivative transactions with a clearing house regulated by the Central Bank of Brazil and the CVM. Specifically,
cross-border derivative transactions must (i) be registered within two business days; and (ii) cover details of underlying assets, values,
currencies involved, terms, counterparties, means of settlement and parameters used.
In January 2010,
registration rules were extended to cover hedging transactions in foreign OTC markets or exchanges.
In November 2010,
to facilitate the management of derivatives-related risk incurred by financial institutions, the CVM stipulated that market participants
should create mechanisms in order to share information on derivatives contracts traded or registered in their systems, subject to banking
confidentiality rules.
The sharing mechanism
was preserved with the publication of the most recent standard on the subject, CVM Resolution No. 135/22.
Currently, CMN
Resolution No. 4,966/21 has revoked the previous rules governing the registration and operation of derivatives and hedge contracts abroad,
and since January 1, 2025, now regulates the matter. In addition, CMN Resolution No. 5,070/23 establishes the framework for executing
loan derivative operations in Brazil.
4.B.70.02-11 Treatment of loans
and advances
Until December
31, 2024, for regulatory reporting purposes, financial institutions were required to classify their loans and advances into nine categories
(AA to H), based on criteria defined by the Central Bank of Brazil. This methodology was replaced by a model based on expected loss, which
considers historical information, current conditions and future projections, including macroeconomic scenarios, to estimate the risk of
delinquency during the life of the financial instrument.
The nine-category
classification remained for internal use in the classification of clients with criteria related to the conditions of the debtor and the
guarantor, such as their economic and financial situation, level of indebtedness, capacity for generating profits, cash flow, delay in
payments, contingencies and credit limits.
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In the case of
corporate borrowers, of the nine categories that we used, five are considered performing loans and four are doubtful loans.
The following
are the performing loan categories:
Rating Our Classification Bradesco Concept
AA Excellent First-tier large company or group, with a long track record, market leadership and excellent economic and financial concept and positioning.
A Very Good Large company or group with sound economic and financial position that is active in markets with good prospects and/or potential for expansion.
B Good Company/group that, regardless of size, has a good economic and financial situation.
C Acceptable Company or group with a satisfactory economic and financial situation but with performance subject to economic variations.
D Fair Company or group with economic and financial positioning in decline or unsatisfactory accounting information, under risk management.
The categories
of doubtful loans are classified, from expected loss, as per E-H ratings as follows:
Rating Our Classification
E Deficient
F Bad
G Critical
H Uncollectible
A similar nine-category
ranking system exists for transactions with individuals. We grade credit based on data including the individual’s income, equity
and credit history, as well as other registration, behavioral and transactional information considering internal information and market
sources (credit score and behavior score).
Financial institutions
must make their lending and loan classification policies available to the Central Bank of Brazil and their independent accountants. They
are also required to submit information relating to their loan portfolio to the Central Bank of Brazil, together with their financial
statements. This information must include:
· a breakdown of the business activities and nature of borrowers;
· maturities of their loans; and
· amounts of rescheduled, written-off and recovered loans.
The Central Bank
of Brazil requires authorized financial institutions to compile and submit information on their portfolio of loans and advances.
For further information
about treatment of loans and advances, in accordance with IFRS Accounting Standards, see Note
40.2 to our consolidated financial statements in “Item 18. Financial Statements”.
As of January
1, 2025, CMN Resolution No. 4,966/21 came into force with the main objective of improving credit risk assessment and aligning accounting
practices with IFRS Accounting Standards. The implementation of CMN Resolution No. 4,966/21
primarily impacts the calculation of provisions for credit losses and other financial instruments based on expected loss.
Key
aspects of the new approach
· Extended scope: The standard applies not only to loans and advances, but also to other financial assets subject to credit risk.
· Measurement based on expected loss: provisions are calculated based on internal models that estimate expected losses, considering:
o characteristics of the debtor and guarantors (economic and financial situation, cash generation capacity, credit history);
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o characteristics of the operation (nature, term, guarantees); and
o macroeconomic information and future projections.
· Risk stage classification: operations are segmented into three stages:
o Stage 1: Operations without significant increase in credit risk since initial determination (provision for 12 months of expected loss);
o Stage 2: Operations with significant increase in credit risk (provision for expected loss over the economic life of the asset); and
o Stage 3: Transactions with evidence of credit loss (default or relevant deterioration).
· Minimum provision for delays over 90 days: BCB Resolution No. 352/23 introduces minimum provision parameters for operations with arrears exceeding 90 days, applicable according to the portfolio and the delinquent period. Portfolios segment operations according to their level of regulatory risk, nature and characteristics of operations; and
· Continuous monitoring: Institutions should periodically review the parameters and scenarios used in their models, ensuring that they reflect current conditions and future expectations.
Financial
institutions must maintain internal policies and models for calculating the expected loss, submitting detailed information to the Central
Bank of Brazil and to independent auditors, including portfolio composition, renegotiations, write-offs and recoveries.
4.B.70.02-12 Exclusivity in
loans and advances to customers
As provided for
in Circular No. 3,522/11 of the Central Bank of Brazil, financial institutions that provide services and loans are prohibited from entering
into agreements, contracts or other arrangements that prevent or restrict the ability of their clients to access loans and advances offered
by other institutions, including payroll-deductible loans. The purpose of this rule is to increase competition among credit providers
and prevent exclusivity agreements between state-owned banks and government bodies with respect to payroll-deductible loans.
4.B.70.02-13 Debit balance of
the credit card bill
Through CMN Resolution
No. 4,549/17, as amended, the Central Bank of Brazil began to regulate the financing of the debit balance of credit card bills and other
postpaid instruments not settled in full at maturity, a situation in which we are no longer allowed to finance clients’ outstanding
balances through revolving credit facilities for more than a month.
Law No. 14,690/23,
in turn, establishes a 100% limit on the interest and charges of revolving credit and credit card spread payment, in effect since January
2024, preventing the total debt from exceeding twice the original amount, aiming at overcoming over-indebtedness (i.e., the revolving
credit may be charged until it covers the total amount of the original debt).
In this sense,
CMN Resolution No. 5,112/23 changed CMN Resolution No. 4,549/17, to regulate the conditions for spread payment and renegotiation of the
debt of the revolving credit so that the debtor will be less prone to enter into a situation of over-indebtedness. The spread payment
of the total debt (revolving credit + original debt) should always occur under conditions more beneficial than the one for revolving credit.
4.B.70.02-14 Overdraft
In April 2018,
the Self-Regulation Council of the Federação Brasileira de Bancos (Brazilian Federation of Banks) – FEBRABAN,
published Regulatory Standard No. 19/18 (Regulatory Standard on the Conscious Use of Overdraft), with new guidelines to promote the proper
use of overdraft facilities.
Among the Regulatory
Standard No. 19/18 main guidelines, we highlight that: (i) financial institutions which have signed the regulatory standard shall, at
any time, provide more advantageous conditions to the consumer to settle his overdraft balance,
including the possibility of installment payments; (ii) if the consumer uses more than 15% of the overdraft limit available during 30
consecutive days, and as long as the value is above R$200.00, the financial institution shall proactively offer the consumer alternatives
for the settlement of the balance; and (iii) financial institutions shall promote financial guidance on use of the overdraft, especially
with respect to its use in emergency situations and on a temporary basis.
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In November 2019, the
CMN published Resolution No. 4,765/19, as amended, which provides for overdrafts granted by financial institutions for cash deposit accounts.
This Resolution sets forth that the interest rates charged on the amount used for natural persons and MEI are limited to 8% per month.
4.B.70.02-15 Brazilian Payments
System (Sistema de Pagamentos Brasileiro, or SPB)
The SPB was regulated
and restructured under Law No. 12,865/13. These regulations are intended to streamline the system by adopting multilateral clearing and
boost security by reducing systemic default risk and financial institutions’ credit and liquidity risks.
SPB comprises
the entities, systems and procedures related to the processing and settlement of transactions of transfers of funds, operations with foreign
currency or with financial assets and securities. The subsystems in the SPB are responsible for maintaining security mechanisms and rules
for controlling risks and contingencies, loss sharing among market participants and direct execution of custody positions of contracts
and collateral by participants. In addition, clearing houses and settlement service providers, as important components of the system,
set aside a portion of their assets as an additional guarantee for settlement of operations.
Currently, responsibility
for settlement of a transaction has been assigned to the clearinghouses or service providers responsible for it. Once a financial operation
has been submitted for clearing and settlement, it generally becomes the obligation of the relevant clearinghouse and/or settlement service
provider to clear and settle, and it is no longer subject to the risk of bankruptcy or insolvency on the part of the market participant
that submitted it for clearing and settlement.
CMN Resolution
No. 4,952/21 defines the activities of the clearing and payment (settlement) chambers and service providers under the Brazilian Payments
System in such a way as to enable the SPB to be structured in accordance with principles that ensure the safety, efficiency, integrity
and reliability of the clearing and payment (settlement) chambers and service providers that operate in it.
The Central Bank
of Brazil and the CMN have the power to regulate and monitor the SPB. The SPB includes payment institutions authorized to operate by Central
Bank of Brazil, payment arrangements that: (i) are not classified for a limited purpose, (ii) do not have financial volume, calculated
considering the group of participants in the last 12 months, below: (a) R$20 billion of the total value of the transactions; and (b) 100
million transactions; and (iii) the payment instrument accepted there is not offered under the benefit program issued by the federal,
state or municipal government (e.g. Worker’s Meal Program); and financial institutions that integrate an open and full payment arrangement
of the SPB (e.g. Pix, Elo).
BCB Resolution
No. 80/21, as amended, regulates the constitution and operation of payment institutions, establishes the parameters for filing applications
of authorization for operation on the part of these institutions and provides for the provision of services for the payment by other institutions
authorized to operate by the Central Bank of Brazil. BCB Resolution No. 81/21 regulates the processes of authorization related to the
operation of payment institutions and to the provision of services of payment by other institutions authorized to operate the Central
Bank of Brazil.
In March 2022,
the Central Bank of Brazil issued BCB Resolution No. 205/22, amending BCB Resolution No. 81/22, in order to include the possibility (i)
of investment funds holding qualified participation in payment institutions; and (ii) that the provisions applicable to the individual
or legal entity holding a qualified holding as determined by BCB Resolution No. 81/21 also cover the shareholders of the investment fund
who effectively have the power to conduct their operations, in addition to preventing the possibility of an investment fund being a controller,
or a member of a control group, of a payment institution.
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BCB Resolution
No. 150/21, as amended, consolidates rules on payment arrangements, approves the rules that regulate the provision of the payment service
within the framework of payment arrangements that are part of SPB.
Pix is an instant
payment arrangement established by the Central Bank of Brazil and regulated by BCB Resolution No. 1/20, and subsequent standards. The
Instant Payments System (SPI, “Sistema de Pagamentos Instantâneos” in Portuguese), regulated by BCB Resolution
No. 195/22, as amended, came into operation in November 2020. Since then, several features have been implemented, including Pix Billing
(for immediate and due payments), Automatic Pix and Scheduled Pix.
The institutions participating
in Pix must follow several operating manuals issued by Central Bank of Brazil, which regulate
on aspects such as brand use, transaction processing flows, user experience, security, communication interfaces and dispute resolution.
BCB Resolution No. 293/23
regulates the establishment of partnerships between Pix participants. BCB Resolution No. 361/23 and BCB Normative Instruction No. 513/24
regulate the operational procedures related to the Automatic Pix, Scheduled Pix and Pix Billing. After postponements, at the end of 2025
the Central Bank of Brazil decided to temporarily suspend the launch of Pix Parcelado
(installment payments), which would have provided for the possibility of entering into credit transactions to allow payments via Pix to be made in installments,
directly competing with credit cards.
Ø Open Finance
Open Finance is seen as
one of the ways to foster innovation and competition (for more information about competition in the SFN, see item “4.B.60 Competition”).
The implementation was instituted by Joint Resolution No. 01/ 20, released by the Central Bank of Brazil and the National Monetary Council
with the aim of promoting competition in the National Financial System and the Brazilian Payment System. For this purpose, it stipulates
that systemic integration standards must be adopted among participating institutions.
Institutions
authorized to operate by the Central Bank of Brazil assume the following roles as participants in Open Finance:
a) transmitting the data;
b) receiving the data;
c) holding a demand, savings deposit account or prepaid payment account;
d) initiating the payment transaction; and
e) original proposing institution or creditor, as applicable, in connection with loan portability operations.
Due to our importance in
the National Financial System and the characteristics of its activities, we implemented Open Finance as a participant in the roles “a”,
“c” and “e”. Despite being optional, we will participate in the other roles based on business opportunities with
data receiver and payment initiator.
The implementation
of Open Finance in Brazil consists of four stages, according to the schedule established by the Central Bank of Brazil.
Our Open Finance
Squad has highly qualified professionals, focused on developing solutions for the financial system. Divided into multi-functional groups,
our squads work with an agile mindset and exercise an end-to-end vision to create intuitive and personalized client journeys and achieve
increasingly positive results. We structured a specific area to foster the use of Open Finance data together with the business area, with
the aim of adding more value to clients.
4.B.70.02-16 Special Temporary
Administrative, Intervention and Extrajudicial Liquidation Regimes – Under Law No. 6,024/74
Ø Intervention
The Central Bank
of Brazil will intervene in the operations and management of any financial institution not controlled by the Federal Government if the
institution:
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· suffers losses due to mismanagement, putting creditors at risk;
· repeatedly violates banking regulations; or
· is insolvent.
Intervention
may also be ordered upon the request of a financial institution’s management and may not exceed 12 months. During the intervention
period, the institution’s liabilities are suspended in relation to overdue obligations, maturity dates for pending obligations contracted
prior to intervention, and liabilities for deposits in the institution existing on the date intervention was ordered.
Ø Administrative liquidation
The Central Bank
of Brazil will liquidate a financial institution if:
· the institution’s economic or financial situation is at risk, particularly when the institution ceases to meet its obligations as they fall due, or upon the occurrence of an event that could indicate a state of bankruptcy;
· management commits a material violation of banking laws, regulations or rulings;
· the institution suffers a loss that subjects its unsecured creditors to severe risk; or
· upon revocation of the authorization to operate, the institution does not initiate ordinary liquidation proceedings within 90 days, or, if initiated, the Central Bank of Brazil determines that the pace of the liquidation may impair the institution’s creditors.
As a consequence
of administrative liquidation:
· lawsuits pleading claims on the assets of the institution are suspended;
· the institution’s obligations are accelerated;
· the institution may not comply with any liquidated damage clause contained in unilateral contracts;
· interest does not accrue against the institution until its liabilities are paid in full; and
· the limitation period of the institution’s obligations is suspended.
The Central Bank
of Brazil may end the extrajudicial settlement of a financial institution, if any of the following occurs:
· full payment of unsecured creditors;
· change of the institution’s scope to an economic activity that is not part of the SFN;
· transfer of the institution’s control;
· conversion into an ordinary settlement; and
· sale/loss of the institution’s assets, upon its completion and the distribution of the proceeds among the creditors, even if the debts are not fully paid; or
· absence of liquidity or difficult completion of the institution’s remaining assets, as recognized by the Central Bank of Brazil.
Ø Temporary Special Administration Regime
The Temporary
Special Administration Regime, known as (RAET), is a less severe form of intervention in financial institutions by the Central Bank of
Brazil, allowing institutions to continue to operate as normal. RAET may be ordered in the case of an institution that:
· repeatedly makes transactions contravening economic or financial policies under federal law;
· faces a shortage of assets;
· fails to comply with compulsory deposit rules;
· has reckless or fraudulent management; or
· has other operations or circumstances requiring an intervention.
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4.B.70.02-17 Credit Guarantee
Fund (Fundo Garantidor de Crédito)
In the case of
a financial institution’s liquidation, employees’ wages, indemnities and tax claims have the highest priority among claims
against the bankrupt institution. In November 1995, the Central Bank of Brazil created the Credit Guarantee Fund (FGC) to guarantee the
payment of funds deposited with financial institutions in case of intervention, administrative liquidation, bankruptcy, or another state
of insolvency. Members of the FGC are financial institutions that accept demand, time and savings deposits as well as savings and loans
associations. The FGC is funded principally by mandatory contributions from all financial institutions based in Brazil accepting deposits
from clients.
The FGC is a
deposit insurance system that guarantees a certain maximum amount of deposits and certain credit instruments held by the same client against
a financial institution (or against member financial institutions of the same financial group). The liability of the participating institutions
is limited to the amount of their contributions to the FGC, with the exception that in limited circumstances, if FGC payments are insufficient
to cover insured losses, the participating institutions may be asked for extraordinary contributions and advances. The payment of unsecured
credit and client deposits not payable under the FGC is subject to the prior payment of all secured credits and other credits to which
specific laws may grant special privileges.
The maximum amount
of the guarantee provided by the FGC foreseen by CMN currently is R$250,000.00, maintained until the present date, with a maximum limit
of R$1,000,000.00 of total guarantee, per CPF (Individual Taxpayer’s ID) or CNPJ (Corporate Taxpayer’s ID), which renews every
period of four years, covering values in different financial institutions.
CMN Resolution
No. 4,653/18 was also responsible for instituting an additional monthly contribution, to be collected when the Reference Value is four
times higher than the Adjusted Shareholders’ Equity. In November 2019, the CMN amended Resolution No. 4,764/19, increasing the amount
of the additional contribution and stating that such contribution shall be collected as of July 2020.
The Central
Bank of Brazil enacted BCB Resolution No. 102/21, which revoked Circular No. 3,915/18 and which established the new obligation on financial
institutions to provide information to the FGC, with the result that these institutions should have systems and controls that can produce
and supply such information in up to two working days in an electronic file with various data listed in the Circular. BCB Resolution No.
377/24, of May 9, 2024, established additional requirements for sending information to the Central
Bank of Brazil.
Credit cooperatives
have their own fund, FGCoop, whose latest version of the by-laws was published with CMN Resolution No. 4,933/21 and has specific requirements
for contribution by the cooperatives slightly different from the FGC.
4.B.70.02-18 Internal compliance procedures
All financial
institutions must have in place internal policies and procedures to control:
· their activities;
· their financial, operational and management information systems; and
· their compliance with all applicable regulations.
The board of
executive officers of a financial institution is responsible for implementing an effective structure for internal controls by defining
responsibilities and control procedures and establishing corresponding goals and procedures at all levels of the institution. The board
of executive officers is also responsible for ensuring compliance with all internal procedures.
4.B.70.02-19 Restrictions on
foreign investment
Under Article
52 of the Transitional Constitutional Provisions Act (ADCT), foreign participation in the capital of Brazilian financial institutions
depends on prior authorization from the government. In 2019, Decree No. 10,029/19 gave the Central Bank
of Brazil the competence to recognize the interest of the government and verify the viability of the operations, since Circular No. 3,977/20
of the Central Bank of Brazil recognized as of interest to the Brazilian government the participation of non-residents in the capital
of financial institutions in Brazil, provided that the applicable regulatory requirements are met.
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We were authorized to create
our ADR program for preferred shares and, subsequently, for common shares, where it was established that the share of foreign investors
in our voting capital is limited to up to 30% of the total common shares issued. Regarding the preferred shares, there is no restriction
of shares. For more information on the rules applicable to non-resident investors, see "Item 10.D – Exchange Controls".
4.B.70.02-20 Anti-money laundering
regulations, banking secrecy and financial operations linked to terrorism
According to Law No. 9,613,
of March 3, 1998 (“Law No. 9,613/98”), which provides for crimes of "money laundering" or concealment of goods,
rights and values, and as regulated by Circular No. 3,978/20 of the Central Bank of Brazil, financial institutions must: (i) identify
and keep up-to-date the registration information of its clients, including verification of final beneficiaries and PEPs; (ii) keep records
of all operations and transactions; (iii) implement risk-based internal controls, covering "know your client", "know your
employee" and "know your partner/supplier" procedures; (iv) monitor operations to detect suspicious situations; and (v)
report to COAF, without the client’s awareness, any operations classified as suspicious, within one working day after the decision
of the institution.
Circular No. 3,978/20 consolidated
the prevention and anti-money laundering devices with a risk-based approach. Financial institutions (including regional offices and subsidiaries
abroad) should implement internal policies that include: defining roles and responsibilities; prior assessment of new products and services;
risk and effectiveness assessment procedures; promoting a prevention organizational culture; and training of employees, including correspondents.
Records must be kept for five to ten years, depending on the nature of the information. Failure to comply may subject the institution
and its managers to fines, ineligibility from holding positions in financial institutions and cancellation of the operating license.
Law No. 9,613/98
also established the COAF, linked to the Ministry of Finance, which promotes cooperation between government agencies to combat money laundering
and terrorist financing, examining and identifying suspicions of illegal activities.
Law No. 13,260/16
defined the crimes of terrorism in Brazil. Financial and payment institutions must comply with specific regulations to prevent terrorist
financing and the proliferation of weapons of mass destruction. Circular Letter No. 4,001/20, as amended, lists a non-tax list of suspected
money laundering situations, covering transactions in kind, atypical transactions, credit and investment operations, international operations
and situations involving suspicious people or entities, among other categories.
BCB Resolution
No. 44/20 establishes procedures for compliance with sanctions imposed by the United Nations Security Council, including the unavailability
of assets of people and sanctioned entities. The institutions must follow the determinations and immediately communicate to the Central
Bank of Brazil, the Ministry of Justice and the COAF any unavailability or attempt to transfer assets.
From a capital markets regulation
point of view, CVM Resolution No. 50/21, which replaced Normative Instruction No. 617/19, establishes the rules of AML/TF in a very similar
way to Circular No. 3,978/20, defining the roles of the responsible officer, the stages in which the policy of getting to know your client
should be applied and providing greater details on the warning signs to be monitored and the points that must integrate the analysis of
the operation or atypical situation detected, when dealing with transactions involving the capital markets.
On November 6,
2014, SUSEP established the Permanent Committee on Anti-money Laundering and Combating Terrorism Financing in the Insurance, Reinsurance,
Capitalization and Private Pension Plan Markets (CPLD). The CPLD is a permanent governing body acting to prevent money laundering and
curtail terrorism financing, both in connection with SUSEP and the insurance, reinsurance, capitalization and private pension plan markets.
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In August 2020,
SUSEP issued Circular No. 612/20, amended by Circular No. 622/21 and by Circular No. 705/24, which provides for the policies, procedures
and internal controls intended specifically for preventing and combating the crimes of money laundering or concealment of assets, rights
and values, or the crimes that they can relate to, as well as preventing and combating the terrorism financing. This Circular also relies
on a risk-based approach policy such as rules of the CVM and Central Bank of Brazil.
Ø Politically Exposed People
According to Circular No.
3,978/20, financial institutions should adopt differentiated procedures for establishing, or maintaining, customer relationships classified
as PEP. These procedures include identifying clients that fall within the PEP definition; the need for analysis and authorization by senior
management for the beginning or maintenance of the business relationship; and the enhanced monitoring of their financial transactions.
According to
Article 27 of the said circular, PEPs are considered holders of elective mandates, occupying high-ranking positions in the Executive,
Legislative and Judiciary, members of higher courts, the Public Prosecutor and court of auditors, as well as leaders of political parties,
in the federal, state and municipal spheres. Foreign heads of State or government, occupying government positions of higher education
abroad and leading public or private international law entities are also considered PEPs. In addition, family members (up to a second
degree, spouse, partner and stepchildren) and close employees of these persons, including those who maintain joint participation in legal
entities, mandate or arrangements created for their benefit, are considered PEPs.
The PEP condition
must be applied for five years following the date on which the person is no longer classified within the categories above.
Ø Banking Secrecy
All transactional
information related to transactions carried out to and from Bradesco clients is protected by banking secrecy. The Banking Secrecy Act,
as it is known by Complementary Law No. 105/01, establishes that financial institutions are obliged to keep confidential information about
the transactions and financial position of their clients, in order to protect the privacy and security of banking relationships.
However, this
protection is not absolute and presents exceptions, such as in cases where there is expressed authorization from the client, in situations
of criminal investigation, when there is a court order or even in cases of supervision by regulatory agencies. Thus, law enforcement seeks
to balance the protection of privacy of clients with the need for transparency and combating money laundering and other illicit practices,
allowing competent authorities to access information when necessary.
4.B.70.02-21 Anti-corruption
Law
In August 2013,
Law No. 12,846/13 was enacted to regulate civil and administrative liability of legal entities for performing acts against public management,
either domestic or foreign. Based on this legal provision, legal entities shall be strictly liable, in both the administrative and civil
spheres, for the practice of harmful acts to their exclusive or non-exclusive interest or benefit.
Decree No. 11,129/22
regulates the application of Law No. 12,846/13. Among other things, it establishes the guidelines with respect to the calculation of the
fines to be imposed in cases involving corruption scandals. The basis of calculation for the application of any financial penalty will
be the gross legal entity billing in the last year (prior to the establishment of the Administrative Accountability Procedure), excluding
taxes. Articles 22 and 23 of the Decree relate to the “compromise” of the fine, providing for “mitigating” and
“aggravating” factors. In the first case, there are provisions regarding the non-consummation of the infraction, compensation
for damages, level of cooperation, non-existence or lack of proof of advantage and damage resulting from the injurious act, spontaneous
communication, preparation of the program of governance and internal structure of compliance; in the second, as “aggravating factors”,
it provides for the continuity of the conduct during the relevant period, number of harmful acts, any tolerance by the Board of the company,
suspension of construction or public service and positive economic situation, recurrence. If it is not possible to use the revenue as
a parameter for the calculation of the fine, the values to be applied may be between R$6 thousand, minimum, and R$60.0 million, maximum.
An additional 3% fine will be levied if within five years after confirmation of “corrupt” conduct, such “corrupt”
conduct is repeated.
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4.B.70.02-22 Independent audit
partner rotation requirements
Under Brazilian
regulations, all financial institutions must:
· be audited by an independent accounting firm; and
· have the specialist in charge, officer, manager or audit team supervisor periodically replaced without the need to change the independent auditor firm itself. Rotation must take place after five fiscal years at most and replaced professionals may be reintegrated three years later. Terms of responsible specialists, officers, managers, partners or audit team supervisors begin on the day the team begins work on the audit.
Each independent
accounting firm must immediately inform the Central Bank of Brazil of any event that may materially adversely affect the relevant financial
institution’s status.
According to
CMN Resolution No. 4,910/21 and BCB Resolution No. 130/21, the financial and payment institutions (respectively) that are registered as
publicly-held companies or are conglomerate leaders classified within Segment S1, S2 or S3 (or that meet the criteria for classification
in these segments) must constitute a statutory body called the Audit Committee, which will be responsible for the fulfillment of the attributions
and responsibilities of the Resolution.
For the entities
regulated by SUSEP, the applicable standards determine the replacement of the actuary and members responsible for the independent accounting
audit, every five fiscal years (Article 107 of CNSP Resolution No. 432/21). According to Article 119, VIII, of aforementioned CNSP Resolution
No. 432/21, amended by CNSP Resolution No. 448/22, both revoking CNSP Resolution No. 321/15, the member responsible for the independent
accounting audit is the technical responsible, officer, manager, supervisor or any other member in a management function that is a member
of the team responsible for independent accounting audit work. A member responsible for the independent accounting audit can only return
three years after being replaced.
For the entities
regulated by ANS, the applicable standards in effect since 2016 determine that the professional responsible for signing the auditor’s
report should change at least every five fiscal years, requiring a minimum interval of three years from its replacement.
The members of
the Board of Directors elected under Article 141, paragraph 4 of the Brazilian Corporate Law, will have veto rights, provided that in
a reasoned manner, to appoint or remove the independent audit firm.
For additional
information on the auditors of the consolidated financial statements included in this annual report, see “Item 16.C. Principal Accountant
Fees and Services”.
4.B.70.02-23 Auditing requirements
We are registered
as an open capital publicly traded company on the local stock exchange (B3 S.A. – Brazilian
Exchange & OTC) and, because we are a financial institution, we are required to have our financial statements, prepared in
accordance with accounting practices adopted in Brazil applicable to institutions authorized to operate by the Central Bank of Brazil,
audited every six months, a requirement which is applicable to institutions authorized to operate by the Central Bank of Brazil. Quarterly
financial information filed with the CVM is also subject to review by independent auditors. Additionally, under CMN Resolution No. 4,818/20,
we are required to publish annual consolidated financial statements prepared in accordance with IFRS
Accounting Standards, accompanied by the independent auditor’s report and the management’s report on corporate business
and the main administrative events of the period.
CMN Resolution
No. 4,818/20 consolidates the general criteria for the preparation and disclosure of financial statements and other institutions authorized
to operate by the Central Bank of Brazil, with the exception of the managers of consortia
and payment institutions. These institutions must draw up and publish annual financial statements relating to the fiscal year, and semiannual
financial statements, relating to the six months ended June 30 and December 31, which consist of the: (i) balance sheet; (ii) income statement;
(iii) comprehensive statement of income; (iv) statement of cash flows; and (v) statement of changes in shareholders’ equity.
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In addition,
in December 2020, the CMN enacted CMN Resolution No. 4,877/20, which contains provisions on the general criteria for the measurement and
recognition of social and labor obligations by institutions authorized to operate by the Central Bank of Brazil (except consortium managers
and payment institutions). Pursuant to this resolution, the authorized institutions are obliged to recognize as a monthly liability, when
drawing up trial balance or balance sheets, the values due on the portions of the results of the period allotted or to be allotted to
employees, managers or to funds and assistance and other obligations with employees.
The independent
auditors must also declare to the audited company’s management that their provision of these services does not affect the independence
and objectivity required for external auditing services.
CMN issued Resolution
No. 4,910/21, which revoked Resolution No. 3,198/04, establishes that financial institutions and other institutions authorized to operate
by the Central Bank of Brazil that: (i) are registered as publicly traded entity; (ii) are leaders of a prudential conglomerate classified
in segment S1, S2 or S3, according to specific regulations; or (iii) meet the criteria laid down in the specific regulations for the framework
in S1, S2 and S3, must form a statutory body called the Audit Committee.
This resolution
defined the minimum requirements to be observed by financial institutions when electing members for the Audit Committee, establishing
the composition, mandate, and duties. For more information, see “Item 16.D. Exemptions from the listing standards for Audit Committees”.
The Audit Committee
is responsible for recommending to the Board of Directors which independent accounting firm to engage, reviewing the company’s financial
statements, including the notes thereto, and the auditor’s opinion prior to public release, evaluating the effectiveness of the
auditing services provided and internal compliance procedures, assessing Management’s compliance with the recommendations made by
the independent accounting firm, among other matters. Our Bylaws were amended in December 2003 to stipulate the existence of an Audit
Committee. In May 2004, our Board of Directors approved the internal regulations for the Audit Committee and appointed its first members.
Our Audit Committee has been fully operational since July 2004.
The audit committee
shall make the audit committee’s report available to the Central Bank of Brazil and the board of directors for a minimum period
of five years, counted from its preparation. In addition, institutions should disclose, together with their individual and consolidated,
semi-annual and annual financial statements, a summary of the Audit Committee’s report, showing the main information contained in
this document.
4.B.70.02-24 Operations in other
jurisdictions
We have branches
and subsidiaries in several other jurisdictions, such as New York, Florida, London, Grand Cayman, Hong Kong, Mexico, Guatemala, and Luxembourg.
The Central Bank of Brazil supervises Brazilian financial institutions’ foreign branches, subsidiaries and corporate properties,
and prior approval from the Central Bank of Brazil is necessary to establish any new branch, subsidiary or representative office or to
acquire or increase any interest in any company abroad. In any case, the subsidiaries’ activities should be complementary or related
to our own principal activities. In most cases, we have had to obtain governmental approvals from local central banks and monetary authorities
in foreign jurisdictions before commencing business. In each jurisdiction in which we operate, we are subject to supervision by local
authorities.
4.B.70.02-25 Asset management
Asset management is subject
to CVM regulation, particularly CVM Resolution No. 175/22, which modernized the regulatory framework of investment funds. For our activities,
we highlight four core guidelines of our standards: (i) transparency requirements strengthening in connection with the management and
performance of service providers, including greater clarity on compensation and comparability of information; (ii) individualized accountability
of administrators, managers and other essential service providers for acts and omissions in the scope of their positions within the Group;
(iii) definition of specific criteria for the composition, diversification and liquidity of portfolios, according to the type of asset;
and (iv) the adoption of proper rules for liquidity management mechanisms.
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4.B.70.02-26 Brokers and securities
dealers
Broker and dealer
firms are part of the SFN and are subject to CMN, Central Bank of Brazil and CVM regulation and supervision. Brokers and securities dealers
must be authorized by the Central Bank of Brazil and are the only institutions in Brazil authorized to trade on Brazil’s stock exchanges.
Both brokers and dealers may act as underwriters for public placement of securities and engage in the brokerage of foreign currency in
any foreign exchange market.
Brokers must
observe B3 rules of conduct previously approved by the CVM, and must designate a statutory officer responsible for observance of these
rules.
Broker and dealer
firms may not:
· with few exceptions, execute transactions that may be characterized as the granting of loans to their clients, including the assignment of rights;
· collect commissions from their clients related to transactions of securities during the primary distribution; or
· acquire assets, including real estate properties, which are not for their own utilization, with certain exceptions.
Broker and dealer
firms’ employees, managers, partners, controlling and controlled companies may trade securities on their own account only through
the broker they are related to.
In March 2022,
CMN Resolution No. 5,008/22 completely revoked CMN Resolution No. 4,750/19, which previously amended the regulation applicable to brokers
and dealers, allowing them to act as issuers of electronic money. CMN Resolution No. 5,008/22 provides for the constitution, organization
and operation of securities dealers (CTVM) and brokers (DTVM).
Ø Internet brokerage services
The CVM approved
regulations on Internet brokerage activities, which may be carried out only by registered companies. Brokers’ websites must contain
details of their systems, fees, security and procedures for executing orders. They must also contain information about how the market
functions generally and the risks involved with each type of investment offered.
Brokers that
carry out transactions over the Internet must guarantee the security and operability of their systems, which must be audited at least
twice a year.
4.B.70.02-27 Leasing
The basic legal
framework governing leasing transactions is established by Law No. 6,099/74, as amended (the Leasing Law) and related regulations issued
periodically by the CMN. The Leasing Law provides general guidelines for the incorporation of leasing companies and the business activities
they may undertake. The CMN, as the regulator of the Financial System, is responsible for issuing regulations related to the Leasing Law
and overseeing transactions made by leasing companies. Laws and regulations issued by the Central Bank of Brazil for financial institutions
in general, such as reporting requirements, capital adequacy and leverage regulations, asset composition limits and treatment of doubtful
loans, are also applicable to leasing companies.
The accounting
criteria applicable to leasing operations contracted by consortium managers and by payment institutions authorized to operate by the Central
Bank of Brazil are set out in BCB Resolution No. 178/22.
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Additionally,
leasing operations must be formalized and comply with the requirements set out in CMN Resolution No. 5,004/22.
4.B.70.03 Insurance, health and pension
plans regulation
4.B.70.03-01 Principal regulatory
agencies
4.B.70.03-01.01 CNSP
The CNSP is the governmental
regulatory body responsible for defining the guidelines and standards of private insurance policies in Brazil, covering insurance, open
pension, capitalization and reinsurance. The collegiate board regulates the constitution and operation of supervised entities, establishes
technical, accounting and capital requirements, regulates contracts and operations of the sector and guides the activity of brokers and
brokerage companies.
4.B.70.03-01.02 SUSEP
The SUSEP is
responsible for implementing and overseeing CNSP’s policies and ensuring compliance by insurance companies, insurance brokers and
insured individuals. SUSEP has, among others, the main functions of regulating and supervising the market, defining operational conditions
and capital requirements, supervising technical reserves, applying sanctions and ensuring stability, solvency and consumer protection
in supervised markets.
4.B.70.03-01.03 ANS
The ANS is a
municipality linked to the Ministry of Health, with operations throughout Brazil, and is an agency that regulates, standardizes, controls
and supervises activities which ensure the qualification of health care in the supplemental health sector.
The main objectives
of the ANS are to stimulate the quality of the supplemental health sector and encourage programs to promote the prevention of diseases
in the sector in which it operates. Thus, among its main functions are to define regulatory guidelines of the sector, supervise health
plan operators, promote qualification and prevention actions, and coordinate policies and initiatives together with other institutions.
4.B.70.03-02 Insurance regulation
Decree No.
73/66 established the regulatory framework of the insurance sector in Brazil and created the CNSP, responsible for defining the guidelines
of the private insurance policy, and SUSEP. The insurance operation depends on previous authorization from SUSEP, as well as the specific
approval to market each of its products.
The recent Law No. 15,040/24
establishes private insurance rules and revokes the previous provisions of the Brazilian Civil Code and amends Decree No. 73/66, seeking
to ensure that insurers protect the legitimate interests of the insured and beneficiaries from predetermined risks by paying a premium.
The main points of the law include (i) transparency strengthening in contractual relations; (ii) adjustments in claim regulation; and
(iii) requirement of prior authorization from SUSEP for the partial or total transfer of the insurance portfolio. This law came into force
in December 2025, and is still pending, on the date of this annual report, part of the sub-legal regulation necessary for its full implementation.
Insurance companies
must set aside reserves in accordance with CNSP criteria. Investments covering these reserves, rules for which were consolidated by CNSP
Resolution No. 321/15, revoked by CNSP Resolution No. 432/21 and later amended by CNSP Resolution No. 448/22 and CNSP Resolution No. 453/22,
must be diversified and meet certain liquidity, solvency and security criteria. The insurance companies are major investors in the Brazilian
financial markets and are subject to CMN rules and conditions for their investments and coverage of technical reserves.
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Currently, insurance companies
must maintain technical provisions, according to the criteria established by the CNSP. Investments that guarantee coverage of technical
provisions need to be diversified and meet certain liquidity, solvency and security criteria. Insurance companies are subject to several
rules and conditions imposed by the CMN on the investment intended to cover technical provisions.
It is forbidden for insurance
companies, among others, to (i) carry out activities typical of financial institutions, such as the concession of credit or the provision
of financial guarantees outside the insurance scope; (ii) carry out transactions with securities beyond the assumptions and limits provided
for in the applicable regulation; and (iii) make investments in disagreement with the criteria, limits and classes of assets established
by the CMN, CNSP and SUSEP, including with regard to overseas investments.
Insurance companies
must operate within certain retention limits approved by SUSEP pursuant to CNSP rules. These rules reflect the economic and financial
situation of insurance companies and the conditions of their portfolios. Insurance companies must also meet certain capital requirements,
as provided by SUSEP regulations.
Regarding the
assignment of the risk, under Complementary Law No. 126/07, the ceding party (local insurance or reinsurance companies) must offer local
reinsurers preference when contracting reinsurance or retrocession in the percentage of 40% of risks ceded. The Complementary Law also
places more severe restrictions on ceding risk to foreign reinsurance companies and contracting of insurance abroad. Insurance companies
must reinsure amounts exceeding their retention limits.
Currently, the
main regulations governing the matter are CNSP Resolution No. 451/22, which provides for the operations of transfer and acceptance of
reinsurance and retrocession and its intermediation, as well as on the operations of coinsurance, on foreign currency transactions and
insurance contracts abroad and SUSEP Circular No. 683/22, which provides for the operational procedures applicable to situations regulated
by the aforementioned CNSP Resolution No. 451/22. These rules regulate the operational procedures related to the preferential offer to
local reinsurance companies, maintaining the percentages established in the legislation and providing that, for the purposes of their
compliance, the insurance company should conduct formal consultation with one or more local reinsurance companies of their free choice,
in accordance with the current regulations.
Resolution No.
432/21, as amended, regulates: technical provisions, assets which reduce the need for coverage of technical provisions, risk capital,
adjusted shareholders’ equity, solvency regularization plans, retention limit, criteria for investments, accounting standards, accounting
and independent actuarial audits, and the Audit Committee applicable to insurance companies, open pension fund entities (EAPCs), capitalization
companies and reinsurance companies.
Insurance companies
do not submit to the ordinary bankruptcy procedures applicable to corporate companies in general. In case of deterioration of their economic
and financial situation, they are subject to special supervision and resolution regimes administered by SUSEP, including preventive prudential
measures, fiscal management and extra-judicial liquidation. CNSP Resolution No. 444/22 provides for preventive prudential measures aimed
at preserving the stability and soundness of the National Private Insurance System, the National Capitalization System and the Supplementary
Pension System and ensuring the solvency, liquidity and regular functioning of those supervised. Extra-judicial liquidation can be decreed
voluntarily or compulsorily.
Resolution No.
383/20 issued by CNSP in March 2020, as amended, established that insurance companies, EAPCs, capitalizations companies and local reinsurance
companies must record their operations of insurance, open pension plan, capitalization and reinsurance, as the case may be, in a registration
system which has been previously approved by SUSEP and which is managed by a registration entity accredited by SUSEP, in order to enhance
the control of the operations carried out by these companies.
There are currently
no restrictions on foreign investment in insurance companies.
4.B.70.03-03 Health insurance
Health insurance
and private health plans are regulated by Law No. 9,656/98, and subsequent amendments, which we know as the “Health Plan Law”,
which establishes the general provisions applicable to health plan operators and products
operated by them, including insurance companies specialized in health care plans, according to Law No. 10,185/01.
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ANS is responsible,
for example, for the regulation and supervision of the activities of private health care plan operators and to ensure compliance with
the standards related to their operation.
Until 2001, SUSEP had authority
over insurance companies who were authorized to offer private health care plans. Since Law No. 10,185/01, competence has been transferred
to the ANS, so that only insurance companies specialized in private health care plans could offer such products. To cover this legal requirement,
we constituted Bradesco Saúde in 1999. Under applicable law, insurance companies specialized in health insurance continue to be
subject to the rules regarding the investment of the assets that guarantee the technical provisions, as issued by the CMN.
4.B.70.03-04 Pension plans
EAPCs and insurance
companies operating pension plans are subject, for inspection and control purposes, to the authority of the CNSP and SUSEP and, with regard
to investments and management of assets that guarantee technical provisions, the CMN, CVM and the Central Bank of Brazil may issue regulations
pertaining to supplementary pension funds.
Supplementary pension entities
must set aside reserves and technical provisions as collateral for their liabilities acquired from the participants, assisted and beneficiaries.
EAPCs and insurance companies
have been permitted to create, trade and operate investment funds with segregated assets since January 2006, whose operation required
specific regulation of SUSEP and CVM. Currently CVM Resolution No. 175/22 regulates the constitution, operation and disclosure of information
of investment funds linked exclusively to open supplementary pension plans, as well as the provision of services to the funds.
As part of the guarantees
to be provided, the CMN determined new rules to govern the application of reserves, provisions and funds of insurance companies, capitalization
companies and EAPCs. The CMN Resolution No. 4,993/22 provides for the rules governing the investment of technical reserve resources by
provisions and funds of insurance companies, capitalization companies, EAPCs and local reinsurers, and the investment of resources required
in Brazil to guarantee the obligations of reinsurers admitted and on the portfolio of Individual Scheduled Retirement Funds (FAPI) and
was later amended by CMN Resolution No. 5,016/22.
At the same time,
CNSP edited CNSP Resolution No. 432/21, which, among various subjects, also regulates the investments by insurance companies, EAPCs, capitalization
companies and local reinsurance companies.
Currently, CNSP
Resolution No. 463/24, CNSP Resolution No. 464/24, SUSEP Circular No. 698/24 and SUSEP Circular No. 699/24, and Supplementary Law No.
109/01, regulate the Pension Plan activity.
4.B.70.03-05
Reinsurance
The reinsurance
market in Brazil is regulated by a set of legal and inflexible rules that govern both the assignment and the acceptance of risks, as well
as the operational limits applicable to insurance companies and reinsurance companies.
Insurance companies
must operate with reinsurers registered with SUSEP, and may, exceptionally, contract out reinsurance or retrocession operations to unauthorized
reinsurers to operate in Brazil, when local and foreign reinsurers lack sufficient capacity.
Currently, pursuant
to Decree No. 10,167/19, Brazilian law provides that the insurance companies or the cooperative society may concede to occasional reinsurers
up to 95% of premiums ceded in reinsurance, calculated based on the totality of its operations in each calendar year. In the same way,
the local reinsurer may also concede up to 95% of the premiums issued relating to risks they have underwritten, also calculated on the
basis of the totality of its operations in each calendar year. It is worth noting that some lines or insurance modalities may have greater or lesser
restrictions on the percentages of premiums that may be ceded in reinsurance.
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Previously, certain
minimum limits were established by SUSEP for the transfer of risks to local reinsurers, as well as maximum limits for certain lines, for
the transfer of risks to companies in the same financial conglomerate based abroad. Currently, CNSP Resolution No. 451/22 indicates that,
for the purposes of fulfilling the preferential offer related to Brazilian reinsurers, the insurance company must observe the percentage
established in the current legislation, applicable to each automatic or optional contract. In addition, it establishes that insurance
companies should submit to SUSEP, by March 31 of the following calendar year, technical justification for a percentage of reinsurance
assignment in excess of 90%, considering the totality of their operations, per calendar year. In addition, reinsurance and retrocession
operations carried out between companies linked or belonging to the same financial conglomerate must occur under balanced conditions of
competition, and the parties involved will be responsible for demonstrating compliance with these conditions.
CNSP Resolution
No. 380/20 extended the list of entities that can purchase reinsurance, including: (i) Open Supplementary Pension Fund Entity (EAPC) (Article
2, paragraph 1); and (ii) Closed Supplementary Pension Fund Entity (EFPC) and operators of private health care plans (Article 2, paragraph
2). Although it was revoked by CNSP Resolution No. 451/22, the rules were maintained.
4.B.80 Taxes on our main transactions
4.B.80.01 Taxes on financial operations
(IOF)
4.B.80.01-01 Loan operations
The loans subject
to IOF have as their taxable event the placement of the obligation amount or its delivery to borrowers.
The applicable daily IOF
rate is 0.0082% on the principal amount made available to the borrower, whether an individual or a legal entity. For fixed-principal loan
operations, the daily charge cannot exceed the equivalent of the investment amount multiplied by 365 days. For revolving credit facilities,
the calculation is based on the sum of daily outstanding balances, determined on the last day of each month.
Since January 2008, loan
operations and advances have also been subject to an additional flat IOF rate of 0.38%, regardless of the loan term. Accordingly, for
fixed-principal loans to legal entities, the maximum effective IOF rate is 3.373% (the daily rate multiplied by 365 days, plus 0.38%).
IOF applies to loan operations
between residents of Brazil and to transactions where the creditor is resident in Brazil, even if the debtor is abroad. However, IOF does
not apply when the creditor is abroad and the debtor is in Brazil, without prejudice to the application of IOF on foreign exchange transactions.
4.B.80.01-02 Insurance operations
IOF levied on
insurance operations has as its taxable event the receipt of premium. The main applicable rates are as follows:
· 0.0% for: (i) reinsurance operations; (ii) mandatory insurance, linked to residential loans by SFH; (iii) insurance operations for export credits and international merchandise transportation; (iv) aeronautical insurance and civil liability of airlines; (v) premiums intended to life insurance plans with survival coverage; and (vi) guarantee insurance, among others;
· 0.38% of premiums paid, in the case of life insurance and similar policies, for personal or workplace accidents, including mandatory insurance for personal injuries caused by vehicles or ships;
· 2.38% for private health insurance business;
106 – Form 20-F 2025 | Bradesco
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· 5% of the contributions to the cost of a life insurance plan with survival coverage paid by individuals from January 1, 2026, provided that the sum of the amounts contributed in all insurance plans of the policyholder in the year, even if of different insurance companies, is more than R$600,000.00, only on the value that exceeds R$600,000.00 per annum; and
· 7.38% for all other insurance transactions.
As of 2027, in addition
to the fact that there is no constitutional basis for the IOF-Insurance, insurance operations will be qualified as “financial services”
for the purposes of taxation by the Goods and Services Tax (IBS) and the Goods and Services Contribution (CBS). For more information on
this new regime, see item “3 3.D Risk Factors - 3.D.10.01-07 Changes in taxes and other fiscal assessments may adversely affect
us”.
4.B.80.02 Income tax and social
contribution on profit
Federal taxes
on company profits include two components, income tax known as IRPJ and tax on net income, known as CSLL. Both are calculated on the basis
of adjusted net income. Income tax charges are calculated based on a rate of 15.0% plus a surcharge of 10.0% on taxable income exceeding
R$240 thousand per annum, corresponding to a combined rate of around 25.0%. Regarding the Social Contribution we have three rates in force:
20% for banks, 15% for financial institutions (non-banking) and 9% for non-financial companies.
It is important to
note that legal entities in Brazil are taxed on their worldwide income, and not only on income generated exclusively in Brazil.
In 2024, through
Law No. 15,079/24, Brazil incorporated the "GloBE Rules," a model established by the OECD that introduces a minimum effective
tax rate of 15% on profits for multinational groups with annual revenue exceeding 750 million euros (approximately R$4.8 billion). This
legislation adopts the Qualified Domestic Minimum Top-up Tax ("QDMTT"), which prioritizes the jurisdiction
where profits were generated by imposing a minimum tax on income. In the event that we tax our profit at an effective rate lower than
15%, we must collect an additional CSLL to reach the required minimum. In 2025, we did not have any collection of additional CSLL.
4.B.80.03 PIS and COFINS
PIS and COFINS
are federal taxes levied on gross revenues of legal entities. Some revenues are excluded from the calculation basis, such as dividends,
the result of holdings in non-consolidated companies, profit in the sale of non-circulating assets and, generally, export revenues. Revenue
corresponding to the receipt of interest on own capital is subject to the incidence of PIS and COFINS.
In 2002 (PIS)
and 2003 (COFINS), the government implemented the non-cumulative collection system, allowing the discount of credits related to certain
operations, with consequent increase in rates. As of May 2004, collection on the import of goods or services was introduced.
The rates of
PIS and COFINS on financial revenues of legal entities subject to the non-cumulative regime are currently 0.65% and 4.0%, respectively
(Decree No. 8,426/15). The zero rate is the financial revenue resulting from exchange rate changes in exports and hedge operations carried
out on the stock exchange or on organized OTC market (Decree No. 8,451/15).
Financial institutions
remain subject to PIS and COFINS by the "cumulative" system, without discount of credits (Article 10, I, Law No. 10,833/03),
but may exclude certain expenses from the calculation basis (such as expenses of financial intermediation and claims indemnities). As
such, the applicable rates are 0.65% (PIS) and 4.0% (COFINS).
After the end of
the transition process of the Tax Reform (2026-2033), PIS and COFINS will be replaced by the CBS, according to Constitutional Amendment
No. 132/23 and Complementary Law No. 214/25. It is not possible to estimate the impacts of implementation of the Tax Reform on the company’s
operations. For more information on this new regime, see item “3.D Risk Factors - 3.D.10.01-07 Changes in taxes and other fiscal
assessments may adversely affect us”.
107 – Form 20-F 2025 | Bradesco
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4.B.80.04
Compliance with the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) (Tax Compliance Laws for Foreign Accounts)
We
maintain the commitment to observe the laws and regulations applicable to our business, strictly complying with the criteria established
by the international treaties FATCA and CRS, which aim to combat tax evasion, money laundering and terrorist financing.
FATCA,
established by the United States government to identify financial accounts of U.S. taxpayers residing in other countries, was incorporated
in Brazil by Decree No. 8,506/15, of the Executive Branch.
The
CRS, developed under the coordination of the OECD (Organization for Economic Co-operation and Development) with the participation of the
main countries of the world, was regulated in Brazil by the Federal Revenue Service through Normative Instruction No. 1,680/16. Like FATCA,
CRS aims to identify financial accounts of foreign taxpayers belonging to countries that are signatories to the agreement.
To meet national
and international requirements, we have established internal Compliance standards that ensure transparency of information and implement
effective measures to control, monitor and continuously improve processes.
4.B.90 Centralized
Registration and Deposit of Financial Assets and Securities
In
August 2017, the Brazilian Congress converted Provisional Measure (PM) No. 775/17, issued by the President of Brazil in April 2017, into
Law No. 13,476/17. The new law consolidates the provisions on the creation of liens over financial assets and securities. On the same
day, the CMN issued Resolution No. 4,593/17, as amended, to regulate the provisions set by Law No. 13,476/17 and consolidate the regulation
on centralized deposits and registration of financial assets and securities issued or owned by financial institutions and other institutions
authorized to operate by the Central Bank of Brazil. Resolution No. 4,593/17, as amended, presents a clearer definition of financial assets,
which includes, in addition to traditional financial instruments such as certificates and bank deposit receipts, credit securities subject
to discount and credit card receivables. In addition, the rule establishes that the recording of financial assets and securities is applicable
to bilateral operations (meaning operations directly with clients), with some exemptions in certain situations, and that the centralized
deposit is applicable to credit securities with payment obligations and securities issued by financial institutions or other institutions
authorized to operate by the Central Bank of Brazil, and are conditions for engaging in certain negotiations and in the assumption of
custody. The Central Bank of Brazil will issue regulations governing the implementation of such rules, including the creation of an electronic
system for the constitution of liens and encumbrances.
From
December 2020, pursuant to BCB Normative Instruction No. 61/20, the financial institutions and other institutions authorized to operate
by the Central Bank of Brazil must disclose the standardized identifier of the loan (IPOC), as provided for in Circular No. 3,953/19 as
amended by BCB Resolution No. 36/20, in the registry of financial instruments, which is representative of loan and leasing operations,
including those subject to assignment of credit, chattel and portability and in the form of credit rights, in systems of registration
and financial settlement of assets authorized by the Central Bank of Brazil.
In
March 2023, the Central Bank of Brazil issued BCB Resolution No. 308/23, which provides for the conditions for the exercise of the activities
of registration and centralized deposit of real estate receivables by central financial assets registrars and depositories. Among these
conditions, this resolution provides that the contracts must establish, among others, that the real estate receivables of the enterprise
will be registered or deposited exclusively in the registered entity or in the contracted central depositary, admitting the portability.
For
the purposes of BCB Resolution No. 308/23, the real estate credit right constituted or to be constituted is considered receivable, which
is the result of a purchase and sale contract or a promise of purchase and sale, with or without the issuance of a Real Estate Credit
Bill (CCI), executed between the syndicator or developer and buyer or promising buyer of autonomous real estate unit or lot.
108 – Form 20-F 2025 | Bradesco
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4.B.100 SELECTED
STATISTICAL INFORMATION
The selected
statistical information shown in this section is derived from our accounting books and records, which are the basis for preparing our
audited consolidated financial statements in accordance with IFRS Accounting Standards.
We
have included the following information for analytical purposes. For a more complete understanding,
for the years ending December 31, 2025, 2024, and 2023, this information should be read in conjunction with “Item 5. Operating and
Financial Review and Prospects” and with our consolidated financial statements in “Item 18. Financial Statements”.
109 – Form 20-F 2025 | Bradesco
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4.B.100.01
Average Statement of Financial Position and Yield Data
The following
tables present the average balances of our interest-earning assets and interest-bearing liabilities, and non interest-earning assets and
non interest-bearing liabilities, related interest income and expenses, and the average rate for each period. The interest accrued on
Brazilian financial assets and liabilities comprise both fixed interest rates and any monetary correction. Monetary correction may be
the result of changes to an inflation index, changes to foreign exchange rates (usually against the U.S. dollar) or changes to other floating
interest rates. The fixed interest rate and monetary correction accrue at the end of each month to the principal balance of each operation.
The updated value then becomes the new basis for the accrual of the following month’s fixed interest rate and monetary correction.
In this section,
we refer to each of interest and similar income and interest and similar expense, including other amounts such as fair value adjustment
to trading securities and derivative financial instruments and foreign exchange gains and losses on financial assets and financial liabilities,
as financial income and financial expense. In this section, the average balances are calculated as the average of twelve-monthly averages
(where each monthly average is calculated as the sum of the balance at the end of the current and prior month divided by two). The average
rate for each of the periods indicated has been calculated based on the interest and similar income (or expense) for the period, divided
by the average balances.
Ø Interest-earning and non-interest earning assets
As of and for the year ended December 31, R$ in thousands, except %
2025 2024 2023
Average balance Interest and similar expense Average rate Average balance Interest and similar expense Average rate Average balance Interest and similar expense Average rate
Interest-earning assets
Financial assets at fair value through profit or loss 440,072,220 52,873,127 12.0% 358,109,730 27,842,234 7.8% 329,916,678 28,363,663 8.6%
Financial assets at fair value through other comprehensive income 126,865,196 13,719,216 10.8% 210,390,801 24,537,302 11.7% 200,721,638 16,906,668 8.4%
Financial assets at amortized cost 253,759,850 32,407,932 12.8% 184,945,971 20,118,794 10.9% 184,953,791 25,277,210 13.7%
Loans and advances to banks 211,129,632 36,244,964 17.2% 176,390,408 27,775,382 15.7% 150,828,467 28,323,764 18.8%
Loans and advances to customers 714,418,608 119,910,827 16.8% 665,696,054 102,544,122 15.4% 636,390,316 102,617,786 16.1%
Compulsory deposits with the Central Bank 103,319,030 11,905,271 11.5% 101,402,567 8,894,336 8.8% 95,234,018 9,943,391 10.4%
Other interest-earning assets 109,830 52,008 - 110,419 21,547 - 101,068 25,992 -
Total interest-earning assets 1,849,674,366 267,113,345 14.4% 1,697,045,950 211,733,717 12.5% 1,598,145,976 211,458,474 13.2%
Non-interest-earning assets
Cash and balances with banks 17,046,984 - - 18,487,553 19,701,167
Compulsory deposits with the Central Bank 17,012,576 - - 25,601,111 - - 19,410,897 - -
Financial assets available for sale (shares) 20,680,919 - - 19,422,626 - - 19,492,990 - -
Non-performing loans and advances to customers (1) 30,044,414 - - 35,366,886 - - 40,894,885 - -
Investments in associates and joint ventures 12,303,627 - - 10,353,499 - - 9,365,720 - -
Premises and equipment, net 9,286,394 - - 10,663,767 - - 11,558,601 - -
Intangible assets and goodwill, net 24,047,629 - - 22,795,807 - - 19,836,394 - -
Current and deferred income tax 119,101,501 - - 109,041,427 - - 101,970,451 - -
Other non-interest-earning assets 99,530,361 - - 92,172,700 - - 77,457,313 - -
Total non-interest-earning assets 349,054,405 - - 343,905,376 - - 319,688,418 - -
Expected loss on loans and advances (47,503,696) - - (46,917,379) - - (55,147,243) - -
Total assets 2,151,225,075 - - 1,994,033,947 - - 1,862,687,151 - -
(1)Over 90
days past due.
110 – Form 20-F 2025 | Bradesco
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Ø Interest-bearing and non-interest-bearing liabilities
As of and for the year ended December 31, R$ in thousands, except %
2025 2024 2023
Average balance Interest and similar expense Average rate Average balance Interest and similar expense Average rate Average balance Interest and similar expense Average rate
Interest-bearing liabilities
Savings deposits 126,483,184 9,041,498 7.1% 130,078,185 7,977,114 6.1% 129,189,256 9,017,597 7.0%
Time deposits (1) 493,232,274 47,663,471 9.7% 445,762,404 36,525,027 8.2% 424,465,761 44,206,372 10.4%
Securities sold under agreements to repurchase 302,570,320 38,659,676 12.8% 284,206,503 29,159,155 10.3% 252,162,308 31,529,801 12.5%
Borrowing and on-lending 68,366,424 7,858,916 11.5% 57,204,642 7,768,802 13.6% 50,430,934 5,834,892 11.6%
Securities issued 281,006,523 32,910,202 11.7% 254,247,051 26,420,100 10.4% 231,100,602 25,887,914 11.2%
Subordinated debt 56,807,177 8,397,038 14.8% 51,982,186 6,378,786 12.3% 49,562,546 7,007,236 14.1%
Insurance contracts liabilities 399,368,446 49,312,952 12.3% 382,989,590 30,050,169 7.8% 341,187,944 32,892,243 9.6%
Total interest-bearing liabilities 1,727,834,348 193,843,753 11.2% 1,606,470,561 144,279,153 9.0% 1,478,099,351 156,376,055 10.6%
Non-interest-bearing liabilities
Demand deposits 33,635,697 - - 43,798,351 - - 46,551,331 - -
Other non-interest-bearing liabilities 215,834,279 - - 176,944,542 - - 173,069,018 - -
Total non-interest-bearing liabilities 249,469,976 - - 220,742,893 - - 219,620,349 - -
Total liabilities 1,977,304,324 - - 1,827,213,454 - - 1,697,719,700 - -
Equity attributable to controlling shareholders 173,400,853 - - 166,248,794 - - 164,367,077 - -
Non-controlling interest 519,898 - - 571,699 - - 600,374 - -
Total equity and liabilities 2,151,225,075 - - 1,994,033,947 - - 1,862,687,151 - -
(1) Includes
interbank deposits.
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4.B.100.02 Changes in interest and
similar income interest and similar expense – volume and rate analysis
The following
table shows the effects of changes in our interest and similar income interest and similar expense resulting from changes in average volumes
and average yield/rates for the periods presented. We allocated the net change from the combined effects of volume and rate proportionately
to the average volume and rate, in absolute terms, without considering positive and negative effects.
As of and for the year ended December 31, R$ in thousands
2025/2024
Increase/(decrease) due to changes in
Average volume (1) Average yield/rate (1) Net change (1)
Interest-earning assets
Financial assets at fair value through profit or loss 7,399,724 17,631,169 25,030,893
Financial assets at fair value through other comprehensive income (9,142,281) (1,675,805) (10,818,086)
Financial assets at amortized cost 8,373,227 3,915,911 12,289,138
Loans and advances to banks 5,808,691 2,660,891 8,469,582
Loans and advances to customers 7,807,600 9,559,105 17,366,705
Compulsory deposits with the Central Bank 171,095 2,839,840 3,010,935
Other interest-earning assets (116) 30,577 30,461
Total interest-earning assets 20,417,940 34,961,688 55,379,628
Interest-bearing liabilities
Savings deposits (225,687) 1,290,071 1,064,384
Time Deposits 4,252,446 6,885,998 11,138,444
Securities sold under agreements to repurchase 1,980,462 7,520,059 9,500,521
Borrowing and on-lending 1,385,592 (1,295,478) 90,114
Securities issued 2,940,769 3,549,333 6,490,102
Subordinated debt 629,885 1,388,367 2,018,252
Insurance contracts liabilities 1,336,266 17,926,517 19,262,783
Total interest-bearing liabilities 12,299,733 37,264,867 49,564,600
(1)
The amounts set out in the table are calculated as follows:
· Net change is calculated according to the following formula: (interest and similar income interest and similar expenses of current period – interest and similar income or interest and similar expenses of the prior period).
· Average volume represents the change in interest and similar income (interest-earning assets) or interest and similar expenses (interest-bearing liabilities) as a result of fluctuations in volumes and is calculated according to the following formula: (change in the average volume x average rate of the prior period).
· Average yield/rate represents the change in interest income (interest-earning assets) or interest and similar expenses (interest-bearing liabilities) as a result of fluctuations in rates, calculated according to the following formula: (change in the average rate x average volume of the prior period).
· Subsequently, the Average volume and Average yield/rates calculated as set out above are adjusted to reflect the difference between the total net changes and the sum of the two amounts. This adjustment is made in proportion to the absolute values of the Average volume and Average yield/rate, calculated as set out above.
4.B.100.03 Net interest margin
The following
table shows the average balance of our interest-earning assets, interest-bearing liabilities, and net interest and similar income, and
compares net interest income with net interest margin for the periods indicated:
As of and for the year ended December 31, R$ in thousands, except %
2025 2024 2023
Average balance of interest-earning assets (A) 1,849,674,366 1,697,045,950 1,598,145,976
Average balance of interest-bearing liabilities 1,727,834,348 1,606,470,561 1,478,099,351
Net interest margin (B) 73,269,592 67,454,564 55,082,419
Interest rate on the average balance of interest-earning assets (C) 14.4% 12.5% 13.2%
Interest rate on the average balance of interest-bearing liabilities (D) 11.2% 9.1% 10.6%
Net yield on interest-earning assets (C-D) 3.2% 3.5% 2.7%
Net interest margin (B/A) 4.0% 4.0% 3.4%
112 – Form 20-F 2025 | Bradesco
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4.B.100.04 Investments in debt securities
The following table
shows the weighted average income rates and maturities of our investments in debt securities classified as financial assets at fair value
through profit or loss, at fair value through other comprehensive income, and amortized cost. For more information on the treatment of
our assets, see notes 8, 9 and 12 of our consolidated financial statements included in “Item 18. Financial Statements”. As
of December 31, 2025, we did not have relevant tax-exempt portfolios.
The average yield
is calculated as follows: Nominal value * interest rate * outstanding maturity
Nominal value * remaining
maturity
As of December 31, 2025 R$ in thousands, except %
Due in 1 year or less Due after 1 year up to 5 years Due after 5 years up to 10 years Due after 10 years Total
Balance Average yield Balance Average yield Balance Average yield Balance Average yield Balance Average yield
Financial assets at fair value through profit or loss
Brazilian government securities 69,809,627 14.9% 277,446,192 14.8% 39,544,515 13.4% 8,233,829 11.4% 395,034,163 14.2%
Corporate debt and marketable equity securities 4,091,702 10.2% 18,271,819 11.7% 19,198,000 12.2% 4,344,764 14.6% 45,906,285 13.3%
Bank debt securities 21,000,834 12.9% 22,030,069 13.8% 336,315 9.7% - - 43,367,218 13.6%
Foreign government securities 66,555 7.0% - - - - - - 66,555 7.0%
Brazilian sovereign bonds - - - - 91,022 5.5% 97,977 5.7% 188,999 5.6%
Total financial assets at fair value through profit or loss 94,968,718 317,748,080 59,169,852 12,676,570 484,563,220
Financial assets at fair value through other comprehensive income
Brazilian government securities 19,027,498 14.7% 34,976,631 14.3% 30,741,260 13.0% 21,939,805 11.4% 106,685,194 13.7%
Brazilian sovereign bonds 821,425 6.0% 6,164,209 4.8% 861,694 6.2% - - 7,847,328 5.1%
Corporate debt securities 720,236 11.2% 3,661,865 16.0% 3,226,769 15.7% 1,048,034 16.0% 8,656,904 15.7%
Bank debt securities - - 1,638,379 8.0% 148,144 7.0% 2,227 7.0% 1,788,750 8.0%
Foreign government securities 7,858,952 7.0% - - 7,921 7.0% 311,058 7.0% 8,177,931 7.0%
Total financial assets at fair value through other comprehensive income 28,428,111 46,441,084 34,985,788 23,301,124 133,156,107
Financial assets at amortized cost
Brazilian government securities 33,703,386 14.8% 72,569,843 13.1% 9,482,881 13.0% 23,438,936 11.4% 139,195,046 12.5%
Bank debt securities and corporate debt securities 21,187,913 15.1% 66,052,306 17.1% 31,823,721 14.3% 1,287,587 14.7% 120,351,527 15.8%
Total financial assets at amortized cost 54,891,299 138,622,149 41,306,602 24,726,523 259,546,573
Total 178,288,128 502,811,313 135,462,242 60,704,217 877,265,900
113 – Form 20-F 2025 | Bradesco
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4.B.100.05 Loans and advances to customers
The following
tables show the distribution of maturities of our loans and advances to customers by type, as well as the composition of our loans and
advances to customers’ portfolio by interest rate and maturity, as of the dates indicated. The majority of our loans and advances
are denominated in reais and indexed to fixed or floating interest rates. A smaller portion of them is denominated in/or indexed
to the U.S. dollar:
As of December 31, 2025 R$ in thousands
Due in 1 year or less Due after 1 year up to 5 years Due after 5 years up to 15 years Due after 15 years Total of Loans and advances to customers
Companies 114,301,455 201,470,074 23,125,765 11,548,497 350,445,791
Financing and On-lending 37,531,738 73,079,825 15,465,684 11,499,572 137,576,819
Financing and export 16,593,484 16,848,240 1,322,066 - 34,763,790
Housing loans 2,636,594 11,551,672 9,223,318 11,499,572 34,911,156
Onlending BNDES/Finame 3,398,862 17,673,789 3,402,422 - 24,475,073
Vehicle loans 1,811,278 21,022,075 241,095 - 23,074,448
Import 12,797,409 185,493 3,298 - 12,986,200
Leases 294,111 5,798,556 1,273,485 - 7,366,152
Borrowings 60,474,197 127,702,267 7,655,569 48,925 195,880,958
Working capital 28,987,063 107,336,821 7,316,270 270 143,640,424
Rural loans 3,874,004 9,160,081 290,407 - 13,324,492
Other 27,613,130 11,205,365 48,892 48,655 38,916,042
Limit operations (1) 16,295,520 687,982 4,512 - 16,988,014
Individuals 107,184,333 134,151,744 98,882,554 100,803,732 441,022,363
Financing and On-lending 3,213,961 44,407,203 13,853,373 100,074,273 161,548,810
Housing loans 313,592 975,802 11,262,810 100,074,074 112,626,278
Vehicle loans 2,351,553 39,349,420 96,594 199 41,797,766
Onlending BNDES/Finame 493,259 3,695,285 2,428,105 - 6,616,649
Other 55,557 386,696 65,864 - 508,117
Borrowings 21,733,137 82,456,185 84,791,420 729,459 189,710,201
Personal credit 10,279,629 70,288,244 84,156,581 552,686 165,277,140
Rural loans 10,115,028 7,115,536 449,309 1,073 17,680,946
Other 1,338,480 5,052,405 185,530 175,700 6,752,115
Limit operations (1) 82,237,235 7,288,356 237,761 - 89,763,352
Total loans and advances to customers 221,485,788 335,621,818 122,008,319 112,352,229 791,468,154
(1)
It refers to outstanding operations with pre-established limits linked to checking account and credit cards, whose limits are automatically
recomposed as the amounts used are paid.
114 – Form 20-F 2025 | Bradesco
Table of Contents
As of December 31, 2025 Predetermined interest rates Floating interest rates
Companies 96,092,704 140,051,632
Financing and On-lending 61,350,216 38,694,865
Financing and export 11,500,329 6,669,977
Housing loans 32,109,926 164,636
Onlending BNDES/Finame 11,867,234 9,208,977
Vehicle loans 274,865 20,988,305
Import 150,117 38,674
Leases 5,447,745 1,624,296
Borrowings 34,742,323 100,664,438
Working capital 33,021,337 81,632,024
Rural loans - 9,450,488
Other 1,720,986 9,581,926
Limit operations (1) 165 692,329
Individuals 114,841,012 218,997,018
Financing and On-lending 113,541,488 44,793,361
Housing loans 111,770,077 542,609
Vehicle loans - 39,446,213
Onlending BNDES/Finame 1,444,202 4,679,188
Other 327,209 125,351
Borrowings 1,297,972 166,679,092
Personal credit 448,848 155,186,482
Rural loans - 7,565,918
Other 849,124 3,926,692
Limit operations (1) 1,552 7,524,565
Total loans and advances to customers 210,933,716 359,048,650
(1)
It refers to outstanding operations with pre-established limits linked to checking account and credit cards, whose limits are automatically
recomposed as the amounts used are paid.
Ø Outstanding foreign loans
The
majority of our outstanding cross-border commercial loans that are denominated in foreign currencies are denominated in U.S. dollars and
made to subsidiaries of Brazilian companies through our Cayman branch. These loans represented, on average, 2.6% of our total assets over
the last three years (this percentage was calculated as the average balance of cross-border loans and advances to customers as of December
31, 2025, December 31, 2024 and December 31, 2023, divided by the average total assets over the same periods.). We believe that there
are no significant cross-border risks in these transactions, since a substantial part of the related credit risk is guaranteed by the
borrower’s parent company in Brazil. The remainder of our outstanding cross-border transactions mainly includes investments in securities,
which represented, on average, 1.5% of our total assets over the last three years (this percentage was calculated as the average balance
of cross-border investments in securities as of December 31, 2025, December 31, 2024 and December 31, 2023, divided by the average total
assets over the same periods).
Ø Indexation
The
majority of our portfolio of loans and advances is denominated in reais. However, part of our portfolio of loans and advances is
indexed or denominated in foreign currencies, predominantly the U.S. dollar. Our loans and advances indexed to, and denominated in, foreign
currency, consist of onlending of Eurobonds and export and import financing, and represented 9.1% in 2025, 8.4% in 2024 and 5.7% in 2023,
of our portfolio of loans and advances. In many cases, our clients hold derivative instruments to minimize foreign exchange rate variation
risk.
115 – Form 20-F 2025 | Bradesco
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4.B.100.06 Expected credit losses
on loans and advances
The following
table shows the movement of the allocation for expected credit losses of loans and advances for the periods indicated. We did not identify
material changes in the ratios between the years ended December 31, 2025, 2024 and 2023.
As of December 31, R$ in thousands, except %
2025 2024 2023
Write-offs, Net of Recoveries % Net write-offs / average balance of Loans and Advances to Customers Expected credit losses for loans and advances % Expected Credit Loss / Total Loans and Advances to Customers Write-offs, Net of Recoveries % Net write-offs / average balance of Loans and Advances to Customers Expected credit losses for loans and advances % Expected Credit Loss / Total Loans and Advances to Customers Write-offs, Net of Recoveries % Net write-offs / average balance of Loans and Advances to Customers Expected credit losses for loans and advances % Expected Credit Loss / Total Loans and Advances to Customers
Companies (8,278,520) (1.2)% 17,340,053 2.1% (7,249,551) (1,1)% 20,253,698 2.8% (12,859,019) (2.0)% 23,164,097 3.7%
Financing and On-lending (395,627) (0.1)% 3,075,403 0.4% (926,042) (0,1)% 3,912,311 0.5% (866,954) (0.1)% 3,953,301 0.6%
Financing and export (79,828) - 1,556,514 0.2% (50,203) - 1,707,486 0.2% (197,994) - 1,168,050 0.2%
Housing loans (7,655) - 58,202 - (471,584) (0,1)% 391,765 0.1% (584) - 1,015,157 0.2%
Onlending BNDES/Finame (193,829) - 697,137 0.1% 211,443 - 901,191 0.1% (195,405) - 960,220 0.2%
Vehicle loans (164,138) - 610,413 0.1% (624,450) (0,1)% 732,534 0.1% (468,636) (0.1)% 689,494 0.1%
Import 52,103 - 57,664 - 3,908 - 69,483 - (549) - 33,699 -
Leases (2,280) - 95,473 - 4,844 - 109,852 - (3,786) - 86,681 -
Borrowings (6,687,843) (0.9)% 12,315,937 1.6% (4,720,826) (0,7)% 14,773,479 2.1% (10,601,308) (1.7)% 17,235,340 2.7%
Working capital (2,759,470) (0.4)% 4,944,556 0.6% (3,956,002) (0,6)% 4,303,495 0.6% (4,196,421) (0.7)% 7,322,214 1.2%
Rural loans (5,538) - 66,926 - 8,089 - 81,732 - 7,852 - 64,786 -
Other (3,922,835) (0.5)% 7,304,455 0.9% (772,913) (0,1)% 10,388,252 1.4% (6,412,739) (1.0)% 9,848,340 1.6%
Limit operations (1) (1,195,050) (0.2)% 1,948,713 0.2% (1,602,683) (0,2)% 1,567,908 0.2% (1,390,757) (0.2)% 1,975,456 0.3%
Individuals (20,397,134) (2.9)% 32,753,229 4.1% (21,486,118) (3,2)% 31,309,219 4.3% (22,870,157) (3.6)% 30,497,713 4.8%
Financing and On-lending (750,854) (0.1)% 3,572,128 0.5% (953,903) (0,1)% 2,490,271 0.3% (910,419) (0.1)% 2,286,064 0.4%
Housing loans (30,638) - 1,007,838 0.1% (68,358) - 920,569 0.1% 41,932 - 889,074 0.1%
Vehicle loans (472,275) (0.1)% 2,121,306 0.3% (417,675) (0,1)% 1,276,734 0.2% (441,200) (0.1)% 1,198,585 0.2%
Onlending BNDES/Finame (248,649) - 436,137 0.1% (66,053) - 290,571 - (13,807) - 195,659 -
Other 708 - 6,847 - (401,817) (0,1)% 2,397 - (497,344) (0.1)% 2,746 -
Borrowings (11,222,999) (1.6)% 17,903,699 2.3% (9,498,648) (1,4)% 17,886,826 2.5% (12,429,603) (1.9)% 15,246,639 2.4%
Personal credit (7,313,801) (1.0)% 9,874,150 1.2% (6,420,410) (1,0)% 8,019,591 1.1% (8,137,875) (1.3)% 8,234,728 1.3%
Rural loans (241,657) - 1,032,807 0.1% (152,898) - 634,552 0.1% 5,076 - 149,256 -
Other (3,667,541) (0.5)% 6,996,742 0.9% (2,925,340) (0,4)% 9,232,683 1.3% (4,296,804) (0.7)% 6,862,655 1.1%
Limit operations (1) (8,423,281) (1.2)% 11,277,402 1,4% (11,033,567) (1,7)% 10,932,122 1.5% (9,530,135) (1.5)% 12,965,010 2.1%
Total (28,675,654) (4.0)% 50,093,282 6.3% (28,735,669) (4,3)% 51,562,917 7.2% (35,729,176) (5.6)% 53,661,810 8.5%
(1)
It refers to outstanding operations with pre-established limits linked to checking account and credit cards, whose limits are automatically
recomposed as the amounts used are paid.
116 – Form 20-F 2025 | Bradesco
Table of Contents
Ø Write-offs
The whole or part of a financial
asset is written off against the related provision for expected loan losses when there is no reasonable expectation of recovery. Such
loans are written off after all the necessary collection procedures have been completed and the amount of the loss has been determined.
Subsequent recovery of amounts previously written-off is recognized In the statement of income.
For more information
on our categorization of loans, see “4.B.70 Regulation and Supervision – 4.B.70.02 Bank Regulations – 4.B.70.02-11 Treatment
of Loans and Advances”.
4.B.100.07 Deposits
For the average
value and the average rate paid in each category of deposits, see item “4.B.100.01 Average
Statement of Financial Position and Yield Data”. For additional information regarding types of our deposits, see “Item
4.B.30.01-02.01 Deposit accounts.”
Total deposits
from foreign depositors are not material for the years ended December 31, 2025, 2024, and 2023.
Ø Uninsured deposits
For the years
ending December 31, 2025, 2024 and 2023, the amount of uninsured deposits, for the products with FGC guarantee, which are not covered
by the FGC, was R$487.2 billion, R$423.1 billion and R$409.7 billion, respectively.
The FGC is a
deposit insurance system that guarantees a certain maximum amount of deposits and certain other investment products held by the same client
against a financial institution (or against member financial institutions of the same financial group). The liability of the participating
institutions is limited to the amount of their contributions to the FGC, with the exception that in limited circumstances, if FGC payments
are insufficient to cover insured losses, the participating institutions may be asked for extraordinary contributions and advances. The
payment of unsecured credit and client deposits not payable under the FGC is subject to the prior payment of all secured credits and other
credits to which specific laws may grant special privileges.
The CMN has occasionally
increased the maximum insured value provided by the FGC. The last value was R$250 thousand, which has been maintained through to the present
date.
The calculation
of amounts uninsured by the FGC was carried out based on the FGC Census by ownership, which contains information on guaranteed deposits
segregated by ownership and value range. For guaranteed balances, we considered the sum of the amounts within the range of R$0.01 to R$250
thousand and for amounts above the coverage limit, we consider the number of clients multiplied by R$250 thousand (limit coverage), the
uncovered amount being the difference between the total balance and the guaranteed balance.
The following
table shows the values of the time deposits that exceed the FGC insured amount by maturity as of December 31, 2025.
As of December 31, 2025 R$ in thousands
Time deposits exceeding the maximum insured
Maturity in 3 months or less 4,410,270,387
Maturity from 3 months to 6 months 2,327,774,403
Maturity from 6 months to 12 months 5,272,137,615
Maturity after 12 months 422,041,190,101
Total 434,051,372,506
117 – Form 20-F 2025 | Bradesco
Table of Contents
4.C. Organizational Structure
We are a publicly-held
company controlled by Cidade de Deus Participações, a holding company owned by the Aguiar Family, Fundação
Bradesco and another holding company, Nova Cidade de Deus Participações S.A., or “Nova Cidade de Deus”. Nova
Cidade de Deus is owned by Fundação Bradesco and by BBD Participações. For further information about our shareholding
structure, see “Item 7.A. Major Shareholders”. For further information about our significant subsidiaries as of December 31,
2025, see Exhibit 8.1 to this annual report.
The following
is a simplified chart of our principal material subsidiaries in the financial and insurance services businesses, and our voting and ownership
interest in each of them as of December 31, 2025. With the exception of Bradesco Europa, Bradesco Grand Cayman Branch, Bradesco New York
Branch and Bradescard Mexico, the other significant subsidiaries are Brazilian entities. For more information related to the consolidation
of our significant subsidiaries, see Note 2.a) to our consolidated financial statements in “Item 18. Financial Statements”.
118 – Form 20-F 2025 | Bradesco
Table of Contents
4.D. Property, Plant and Equipment
As of December
31, 2025, we owned 736 properties and leased 2,777 properties throughout Brazil and 13 properties abroad, all of which we used in the
operation of our branches and business. We own the buildings where our headquarters are located in Cidade de Deus, Osasco, São
Paulo metropolitan region, State of São Paulo. Rental agreements have an average duration of five years.
ITEM 4.A. UNRESOLVED STAFF COMMENTS
None.