Banco do Brasil - Financial Statements - 1st half · PDF fileConsolidated Financial Statements...
Transcript of Banco do Brasil - Financial Statements - 1st half · PDF fileConsolidated Financial Statements...
Consolidated Financial Statements
1st half 2017
0
1st half 2017
Financial
Statements
Consolidated Financial Statements
1st half 2017
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INDEX
Index............................................................................................................................................................. 1
Management Report ................................................................................................................................. 14
Financial Statements ................................................................................................................................ 15
BALANCE SHEET .................................................................................................................................. 15
STATEMENT OF INCOME .................................................................................................................... 19
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY .............................................................. 20
STATEMENT OF CASH FLOWS ........................................................................................................... 21
STATEMENT OF VALUE ADDED ......................................................................................................... 22
Notes to the Consolidated Financial Statements .................................................................................. 23
- THE BANK AND ITS OPERATIONS ................................................................................................ 23
- COMPANY RESTRUCTURING ........................................................................................................ 23
- PRESENTATION OF FINANCIAL STATEMENTS ........................................................................... 23
- DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES ......................................................... 27
- INFORMATION BY SEGMENT ........................................................................................................ 33
- CASH AND CASH EQUIVALENTS .................................................................................................. 37
- INTERBANK INVESTMENTS ........................................................................................................... 37
- SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS ...................................................... 38
- INTERBANK ACCOUNTS ................................................................................................................ 45
- LOAN OPERATIONS ...................................................................................................................... 47
11 - FOREIGN EXCHANGE PORTFOLIO ............................................................................................. 54
- OTHER RECEIVABLES .................................................................................................................. 55
- OTHER ASSETS ............................................................................................................................ 56
- INVESTMENTS ............................................................................................................................... 57
15 - PROPERTY AND EQUIPMENT ..................................................................................................... 64
- INTANGIBLE ASSETS .................................................................................................................... 64
Consolidated Financial Statements
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- DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS ......................... 65
- FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES.............................................. 69
- BORROWINGS AND ONLENDINGS ............................................................................................. 70
- OTHER LIABILITIES ....................................................................................................................... 71
- OTHER OPERATING INCOME/EXPENSES ................................................................................. 75
- NON-OPERATING INCOME .......................................................................................................... 77
- SHAREHOLDERS' EQUITY ........................................................................................................... 78
- TAXES ............................................................................................................................................. 85
- RELATED PARTY TRANSACTIONS ............................................................................................. 88
- EMPLOYEE BENEFITS .................................................................................................................. 91
- PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES TAXES AND
SOCIAL SECURITY ............................................................................................................................. 102
- RISK AND CAPITAL MANAGEMENT .......................................................................................... 105
- STATEMENT OF COMPREHENSIVE INCOME .......................................................................... 115
- OTHER INFORMATION ............................................................................................................... 116
Independent Auditors Report ............................................................................................................... 119
Summary of the Audit Commitee Report ............................................................................................. 127
Declaration of the Executive Board Members about the Financial Statements............................... 129
Declaration of the Executive Board Members about the Report of Independent Auditors ............ 130
Members of Management....................................................................................................................... 131
Management Report
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Dear Shareholders,
We present Banco do Brasils (BB) Management Report for 1H17, in accordance with the legal requirements and
regulatory rules in force.
We suggest reading this document along with the MD&A for the first and second quarters of 2017. The MD&A is a
quarterly report for market analysts, shareholders and investors, provides economic and financial indicators, analyzes
our performance. These reports are available on our Investor Relations website at bb.com.br/ir.
1. Macroeconomic Environment
In the first semester, the domestic and international macroeconomic scenario was characterized by uncertainties that
directly and indirectly affected the business environment for financial institutions. Although the domestic uncertainties
level has declined during the first months of the year, non-economic events have again brought volatility to the markets.
In the United States, the economy began the year with growth below expected, but ended the semester show consistent
recovery. The unemployment rate reduction to below full employment and the inflation convergence to the target set by
the Federal Reserve allowed the monetary conditions normalization process continuation.
In Europe, economic activity responded to the monetary stimulus promoted by the European Central Bank, with GDP
growth in its main economies. Add to this context there was uncertainties reduction due to the defeat of presidential
candidates with nationalist profiles and who defended their countries exit from the European block.
In emerging markets, after doubts about US trade protection policy possible negative impacts, economic activity in China
kept accelerating as expected. The result was the slight commodity prices appreciation in the international market.
In Brazil, after two years in recession, the first signs of economic activity recovery were observed. Driven by robust
results in agriculture and livestock GDP increased 1.0% in the first quarter (compared to the last quarter of 2016,
seasonally adjusted). In the semester the industry, commerce and services also presented positive figures.
With the dissipation of inflation shocks observed in 2015 and 2016, retail prices slowed, with IPCA reaching 3.0% in 12
months to June (accumulated), below the target (4.5%), result, partially, of macroeconomic policy reorientation,
implemented throughout 2016.
There has been progress in approved reform agenda, such as establishment of a limit on public expenditure. Other
reforms underway in Congress, such as pension system reform, also focus on structural issues for the country.
As a result, Brazils risk premium, as measured by 5-year CDS, declined by 23% compared to the end of 2016 (May,
2017 average over December/16 average), and the confidence indexes, whether entrepreneurs or consumers,
continued the improvement trend, signaling positive prospects in relation to the possibility of a gradual and sustained
economic growth recovery.
Recently, non-economic events brougth increased uncertainties into the country. As a result, risk and exchange rate
levels responded unfavorably, although there is no evidence on those events repercussion over monetary policy
conduction and