AnnualReport2011
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Board of directors
Antônio Bornia, President
Luiz Carlos Trabuco Cappi, Vice President
Jean Philippe Leroy, Member
Sérgio Alexandre Figueiredo Clemente, Member
ManageMent
Jean Philippe Leroy, Managing Director
Edesio de Paula e Silva, General Manager
Jefferson Marcon Avelino, Senior Manager from February 13th, 2012
external auditor
KPMG Luxembourg S.à.r.l.
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directorsWe submit for the approval of our shareholders the annual accounts for the year
ended December 31, 2011 which resulted in a net profit of USD 23.701.130,78.
These annual accounts were examined by our auditors, KPMG Audit Luxem-
bourg S.à.r.l. whose report is attached herewith.
It is proposed to distribute the total amount of USD 23.701.130,78 as follows:
Free reserves USD 23.701.130,78
Total USD 23.701.130,78
It is proposed as well to transfer the balance of the following account into fiscal
reserves:
Net worth tax referring to 2011 USD 5.100.500,00
Total USD 5.100.500,00
We would like to thank the management and the staff for their contribution to
the satisfactory development of our activities during the fiscal year 2011.
São Paulo, March 19, 2012
report of the Board of
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ANNUAL REPORT - 2011
reportManageMent
Banco Bradesco Europa S.A., BBE, formerly Banco Bradesco
Luxembourg S.A., presents to its stakeholders its annual accounts for
the year ended December 31, 2011.
In terms of the macroeconomic outlook, concerns over the fiscal state
of the advanced economies grew during the second half of the year,
particularly in relation to Europe. The complex nature of the issue
and the political difficulties in finding fast, effective answers to the
problems hit market confidence and resulted in a worsening in the
risk perception of a number of countries, some of which even had
AAA ratings at that time. The economic growth of the emerging
economies started to cool during this same period as a result of the
lagged effects of the economic policy adopted at the beginning of last
year against a backdrop of strong inflationary pressures. However,
since the end of 2011, we have seen some signs of interruption in the
global deterioration which has benefited from the European Central
Bank´s initiative to inject liquidity into the banking system in the Euro
Zone. These actions have been shown to be effective to date and
reduced the risk of the banking rupture that had been foreseen until
then. At the same time, there has also been a discernible improvement
in the recovery of the PMI indicators of the industrial sector and the
American job market, and an interruption in the downward revision
process for China´s economic growth. These signs of improvement
have not eliminated the risks to the global economy but are helping to
reduce risk aversion and maintain international liquidity at high levels
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to support the recovery of commodity prices which have also benefited
from climatic shocks in the case of agricultural commodities.
Although not immune to what happens abroad, Brazil is better
prepared than it was three years ago at the peak of the 2008 crisis, to
address eventual materialization of risks. The country has more degrees
of freedom to embrace countercyclical actions than most nations and
has been highly rated by the international community, explaining why
Brazil is still perceived as a major pole of attraction for global foreign
direct investment.
Despite the undeniable exporting nature of the country, domestic
demand has been and should continue to be the main driver of the
performance of Brazilian economic activity. Household consumption
has been driven by a healthy labor market, while investments have
benefited from the opportunities related to the coming sporting events
of 2014 and 2016 and “pre-salt” oil exploration.
The year of 2011 was an outstanding year for Banco Bradesco Europa.
Total assets increased by 95% on a year-over-year basis, from USD 982
million to USD 1.923 million. Lending activities to credit institutions
grew by approximately 60% and advances to customers have shown a
significant jump of 100% when compared to 2010.
Amounts owed to credit institutions increased by 91% from USD 592
million to USD 1.129 million. Funding from Credit Institutions, other
than the Banco Bradesco Group, increased by 263%, from USD 105.8
million in 2010 to USD 278.3 million in 2011.
Total off balance sheet items comprising fiduciary and agency functions,
assets held in custody for customers, commitments, contingent
liabilities and non-trading derivative instruments showed an increase
of 9% from USD 1.448 million to USD 1.573 million at year end 2011.
As of December 31, 2011 the solvency ratio reached 18,6% (Tier 1),
well above the minimum requirement of 8%, liquidity ratio stood at
47,3% and R.O.A.E at 7,2%. Always focused on improving efficiency,
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ANNUAL REPORT - 2011
the cost to income ratio reached 28,9%.
The reported profit for the year increased from USD 14.4 million to
USD 23.7 million. The recurring profit moved from USD 11 to USD 22.7
million, based on the growth of activities, proving the right strategy
chosen by the Bank. Corporate Banking and Trade Finance contributed
to 80% of the profit and Private Banking to 20%.
In terms of Corporate Banking and Trade Finance, during 2011, Banco
Bradesco Europa participated and/or originated 11 deals totaling more
than USD 650 million.
The general administrative expenses increased by 44% mainly due
to the increase of 65% in staff and I.T. investments. During the year
of 2011, on the Senior Management side, Mr. Jaime Carlito Herbert,
Deputy General Manager, returned to Banco Bradesco in Brazil, to a
new assignment. On top of this movement, Mr. Jean Philippe Leroy
was promoted to Managing Director and Mr. Edésio de Paula e Silva
became General Manager.
BBE is a member of the non-profit association “Association pour la
Garantie des Dépôts, Luxembourg“ (“AGDL“), whose sole object is
the establishment of a mutual guarantee scheme covering deposits
made by customers of member credit institutions (“the Guarantee“).
The customers covered by the Guarantee include all depositors who
are physical persons, whatever their nationality or country of residence.
Also covered by the Guarantee are small companies constituted under
the law of a Member State of the European Union, whose size is
such that they would be permitted to draw up abbreviated accounts
pursuant to Article 35 of the law of December 19, 2002 modified
as per the new statutes adopted by Extraordinary General Meeting
of AGDL as of February 18, 2009 on the register of commerce and
companies and the accounting and annual accounts of undertakings.
The total amount of the Guarantees, as modified by statutes in 2009,
which will in no case exceed per customer EUR 100.000 deposit
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guarantee and EUR 20.000 investor compensation, represents an
absolute figure and cannot be increased by any interest, charges or
any other amount.
As of December 31, 2011, the Bank had a cumulative AGDL provision
for an amount of USD 1.847.718 (2010: USD 1.731.746), in recognition
of its potential liabilities under the guarantee. This provision is deemed
to be sufficient to cover potential obligations of BBE regarding the
AGDL.
In 2012, BBE intends to take advantage of the positive forecasts related
to the Brazilian economy to strengthen its position by further enlarging
its private banking customer base and volume of corporate lending.
Special attention will continue to be dedicated to meet the financial
needs of Brazilian and European corporations already known by the
Bradesco Group. To boost and give more focus to these activities, in
2011, BBE has brought a Corporate Banking Officer from Bradesco
Brazil and hired a local Private Banking Head, to further build up the
activities.
risk ManageMent
Risk management involves a series of controls and processes covering
different areas. BBE’s senior management is directly responsible for
the enforcement of the policies in respect of all activities and for the
quality of the organizational standards. BBE is constantly committed
to enhancing its risk management related activities in the pursuit
of incorporating the recommendations of the banking supervisory
authorities and best international practices. As a matter of principle,
BBE adopts a conservative policy in terms of exposure to risk. The
following areas of risk are monitored and analyzed accordingly.
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ANNUAL REPORT - 2011
credit risk
The lending activities are carried out according to the credit policies
of the Bradesco Group. The credit evaluation process and risk scoring
system are centralized in the shareholder’s office in Brazil observing
the guidelines of the banking supervisory authorities and market
practices. BBE is constantly working to improve procedures to develop
new loss estimation models, prepare rating inventories concerning the
various sectors in which the Group operates, oversee credit analysis,
monitor credit concentration, identify causes of default and prepare
risk mitigation plans. Efforts are focused on the adoption of advanced
models to assess risks inherent to all components of the credit process,
in line with best practices, as well as the Basel II requirements.
The credit scoring system supports the establishment of parameters for
granting credit, managing risk and defining credit policies adequate
to the customer’s specific characteristics and size. Also, it provides a
basis for the adequate pricing of operations and for establishing the
appropriate level of guarantees for each situation. Customer risk ratings
are established on a corporate basis and are permanently reviewed to
monitor the quality of the credit portfolio.
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The ratings are segmented according to the following table:
Rating Bradesco % Provision Concept
AA Excellent 0,0 Premium company/group, with size, tradition and market leadership, with excellent reputation and economic and financial position.
A Very Good 0,5 Company/group, with size, sound economic and financial position, acting in markets with good prospects and/or potential for expansion.
B Good 1,0 Company/group, which, regardless of size, has a good economic and financial position.
C Acceptable 3,0 Company/group with a satisfactory economic and financial situation but with performance subject to economic scenario variations.
D Fair 10,0 Company/group with economic and financial position in decline or unsatisfactory accounting information, under risk management.
E Deficient 30,0
Abnormal course credit operations, classified based on expected loss as per percentage shown.
F Bad 50,0
G Critical 70,0
H Uncollectible 100,0
As at December 31, 2011 there were no loans rated below C in the portfolio.
All credit transactions are subject to the prior approval of the shareholder’s credit committee and
ratification by local management. The regulatory maximum exposure limit to any individual borrower or
economic group is monitored on a permanent basis.
liquidity risk
Liquidity risk management is designed to control the different mismatched liquidation terms
between rights and obligations, as well as the liquidity of the assets. The liquidity ratio is monitored
on a daily basis to ensure the compliance with the requirement of the banking supervisory authority.
In addition, the Treasury department produces on a daily basis the cash flow position for the next
10 business days. The control of the maturity ladder of receivables and payables in each currency
is controlled through reports generated by the accounting system. BBE is working to implement
the recommendations of the Circular CSSF 09/403 on liquidity risk management, including the
revision of a contingency funding plan.
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ANNUAL REPORT - 2011
foreign exchange risk
The foreign exchange operations are predominantly customer-
driven. BBE buys and sells currencies to assist its customers, to fulfill
its obligations in currencies other than the US Dollar and to hedge
against Foreign Exchange fluctuations that can jeopardize its
results. Management monitors the foreign currency position on a
daily basis using system-generated reports that show the exposure
in each of the currencies, and makes sure that adjustments are
made on a timely basis. From time to time BBE enters into foreign
exchange Swap transactions to hedge against the potential
negative effect of the exchange rate USD/EUR on certain loans that
will be repaid in the future.
interest rate risk
Interest rate risk is related to the potential loss of income resulting
from the effect of interest rate fluctuations. This risk is monitored
on a constant basis and is relatively low due to the fact that most
of the floating rate exposures on the asset side of the balance
sheet are funded by floating rate liabilities. The residual interest
rate risk is not hedged, but is not sufficiently high to endanger the
profitability, even in the case of important shifts in the interest rate
curves.
adMinistrative and operational risks
These risks are inherent to activities that give support for the
operations and can impact BBE’s ability to provide quality services
on a continuous basis. They are commonly associated with human
or technological failure.
These risks are mitigated by the close involvement of the local
administration in the daily activities. Segregation of duties and
the application of the four-eye principle are enforced at all levels
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in order to ensure compliance with supervisory regulations and
internal policies. The internal policies and procedures are enhanced
on a regular basis in order to improve controls and management
information systems. Also, BBE’s business continuity plan is tested
annually.
Market risk
This risk is common to an entire class of assets or liabilities. It
relates to the potential for loss resulting from economic changes or
other events that might impact the prices in large portions of the
market. BBE’s policy is not to undertake high-risk or highly geared
operations, nor to undertake speculative dealing operations for its
own account.
BBE’s measurement and control over its market risk is achieved by
requiring all transactions entered into by the dealing room to be
authorized by Luxembourg Senior Management, and ensuring that
all its counterparties are authorized in advance by Management.
Market risk is reduced to an acceptable level by Senior Management
involvement in all areas of activities.
settleMent risk
The risk that the counterparties do not fulfill their obligations
at the occasion of the settlement of transactions related to the
purchase or sale securities. The BBE deals with counterparties of
recognized reputation and financial standing, duly approved by
the shareholder’s credit committee, therefore reducing settlement
risks. In addition, transactions involving third party institutions are
always confirmed in writing and settled through an accredited
clearing system. For the purchase, sale or transfer of securities, BBE
uses secured e-banking access platforms provided by their main
custodians. In the absence of a secured e-banking access platform,
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ANNUAL REPORT - 2011
an authenticated SWIFT message is mandatory for transactions
with all other third party institutions.
profitaBility risk
BBE maintains sufficient control over its margins and costs in order
to ensure continued profitability. Management is directly involved
in the monitoring of the profit. The maturity schedules of assets
and liabilities are also followed up closely to anticipate the need
to reinvest the excess of liquidity or cover temporary gaps without
jeopardizing the result.
coMpliance risk
Compliance risk is defined as the risk of impairment of the
institution’s integrity leading to loss, damage or disadvantage to
which the BBE might be exposed through a failure to conduct its
business in accordance with applicable laws, rules and standards.
In December 2005, the Board of Directors has approved the
Compliance Charter and Policy to implement the guidelines of the
Circular CSSF 04/155. Since 2007 a full time Compliance Officer
has been appointed in order to further enhance the activities of the
compliance function.
The Bank did not undertake any activities in terms of research and
development.
In accordance with Section XVI of the amended CSSF Circular
06/273 and following BBE’s request, the CSSF has granted its
approval to the total exemption of risk limits with its head office
Banco Bradesco S.A. as well as all subsidiaries in Brazil and the
subsidiaries in New York, USA and Georgetown, Grand Cayman as
from December 2010.
Apart the arrival of Mr. Jefferson Marcon Avelino, Senior Manager
of Bradesco Europa, who will be responsible for the back office
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as a whole, as of February 13th 2012, no significant subsequent
events have occurred during the period from December 31, 2011
to date.
Banco Bradesco Europa S.A. remains committed to strengthening
the relationships with its clients and looks forward to continue
offering products and services of high quality and professional
standards.
Finally, we would like to thank our Managers and Employees
for their dedication and commitment towards Banco Bradesco
Europa’s 2011 performance.
Luxembourg, March 19th, 2012. The Management
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ANNUAL REPORT - 2011
Report on the annual accounts
We have audited the accompanying annual accounts of Banco Bradesco
Europa S.A., which comprise the balance sheet as at December 31,
2011 and the profit and loss account for the year then ended, and
a summary of significant accounting policies and other explanatory
information.
Board of Directors’ responsibility for the annual accounts
The Board of Directors is responsible for the preparation and fair
presentation of these annual accounts in accordance with Luxembourg
legal and regulatory requirements relating to the preparation of the
annual accounts, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of annual accounts
that are free from material misstatement, whether due to fraud or
error.
Responsibility of the Réviseur d’Entreprises agréé
Our responsibility is to express an opinion on these annual accounts
based on our audit. We conducted our audit in accordance with
International Standards on Auditing as adopted for Luxembourg by
the Commission de Surveillance du Secteur Financier. Those standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the annual
accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
reportauditor’s
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the amounts and disclosures in the annual accounts. The procedures
selected depend on the judgment of the Réviseur d’Entreprises agréé,
including the assessment of the risks of material misstatement of the
annual accounts, whether due to fraud or error. In making those risk
assessments, the Réviseur d’Entreprises agréé considers internal control
relevant to the entity’s preparation and fair presentation of the annual
accounts in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by the Board of
Directors, as well as evaluating the overall presentation of the annual
accounts.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the annual accounts give a true and fair view of the
financial position of Banco Bradesco Europa S.A. as of December 31,
2011, and of the results of its operations for the year then ended
in accordance with Luxembourg legal and regulatory requirements
relating to the preparation of the annual accounts.
Report on other legal and regulatory requirements
The management report, which is the responsibility of the Board of
Directors, is consistent with the annual accounts.
Luxembourg, March 19, 2012 KPMG Luxembourg S.à r.l.
Cabinet de révision agréé
S. Chambourdon
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ANNUAL REPORT - 2011
as at deceMBer 31,2011Balance sheet
assets Notes 2011USD
2010USD
Cash in hand, balances with central banks and post office banks
3, 4 114.316.772 34.147
Loans and advances to credit institutions: 3, 11 630.027.866 394.708.822
a) repayable on demand 58.111.070 236.314.225
b) other loans and advances 5 571.916.796 158.394.597
Loans and advances to customers 3, 6 1.155.571.019 575.909.385
Debt securities and other fixed-income transferable securities:
3, 7, 8 359.532 351.851
issued by other borrowers 253.641 351.851
Intangible assets 10 415.400 904.228
Tangible assets 10 815.622 891.592
Other assets 3, 9 3.499.059 95.985
Prepayments and accrued income 17.668.651 8.954.512
TOTAL ASSETS 12 1.922.673.921 981.850.522
The accompanying notes form an integral part of these annual accounts.
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liaBilities Notes 2011USD
2010USD
Amounts owed to credit institutions 3, 18 1.129.427.460 592.515.067
a) repayable on demand 72.803.549 97.469.768
b) with agreed maturity dates or periods of notice 13 1.056.623.911 495.045.299
Amounts owed to customers 3, 18 424.717.456 183.899.171
a) repayable on demand 120.533.974 128.182.336
b) with agreed maturity dates or periods of notice 14 304.183.482 55.716.835
Other liabilities 15 312.828 331.746
Accruals and deferred income 10.343.481 3.376.618
Provisions 13.366.382 10.922.735
a) provisions for taxation 28 11.093.986 8.613.209
b) other provisions 30 2.272.396 2.309.526
Subscribed capital 16 268.350.000 68.350.000
Reserves 17 52.455.184 108.052.867
Profit for the financial year 23.701.130 14.402.318
TOTAL LIABILITIES 19 1.922.673.921 981.850.522
off Balance sheet iteMs
Contingent liabilities 20 85.521.163 51.734.093
of which:
guarantees and assets pledged as collateral security
85.521.163 51.734.093
Commitments 21 200.869.075 43.677.585
Fiduciary operations 23 60.000.000 60.000.000
The accompanying notes form an integral part of these annual accounts.
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ANNUAL REPORT - 2011
year ended deceMBer 31,2011profit and loss account
charges Notes 2011USD
2010USD
Interest payable and similar charges 14.985.477 3.945.810
Commissions payable 1.625.342 575.500
General administrative expenses 9.756.580 7.248.012
a) staff costs 24, 25 4.832.277 3.539.185
of which:
– wages and salaries 4.450.329 3.264.297
– social security costs 381.948 274.888
of which:
– social security costs relating to pensions 244.937 163.176
b) other administrative expenses 4.924.303 3.708.827
Value adjustments in respect of intangible and tangible assets 787.414 701.122
Other operating charges 26 584.701 238.734
Value adjustments in respect of loans and advances and provisions for contingent liabilities and for commitments 1.879.771 694.060
Tax on profit on ordinary activities 28 4.577.461 1.624.044
Profit on ordinary activities after tax 22.752.541 11.045.334
Net extraordinary profit after tax 27 948.589 3.356.984
Other taxes not shown under the preceding items 28 – –
PROFIT FOR THE FINANCIAL YEAR 23.701.130 14.402.318
TOTAL CHARGES 57.897.876 29.429.601
The accompanying notes form an integral part of these annual accounts.
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The accompanying notes form an integral part of these annual accounts.
incoMe Notes 2011USD
2010USD
Interest receivable and similar income 29 43.851.434 15.450.930
of which:
that arising from debt securities and other fixed-income transferable securities 24.312 1.157
Commissions receivable 29 7.403.650 4.909.798
Net profit on financial operations 29 4.076.687 4.989.796
Value re-adjustments in respect of loans and advances and provisions for contingent liabilities and for commitments 881.933 335.527
Other operating income 26 735.583 386.390
Extraordinary income 27 948.589 3.357.160
TOTAL INCOME 57.897.876 29.429.601
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ANNUAL REPORT - 2011
to the accountsnotes
note 1 - general
1.1. Corporate matters
Banco Bradesco Luxembourg S.A. was incorporated in Luxembourg as a
“société anonyme” on December 17, 1981.
During an extraordinary general meeting held on October 4, 2010,
Banco Bradesco Luxembourg S.A. changed its corporate name to
Banco Bradesco Europa S.A. (the “Bank”). It was also decided to
transfer the legal domicile of the Bank to 29, Avenue de la Porte Neuve
L-2227 Luxembourg with effect October 18, 2010.
The business policy and valuation principles, unless prescribed by
Luxembourg rules and regulations, are determined and monitored by
the Board of Directors.
1.2. Parent undertaking
The Bank is included in the consolidated accounts of Banco Bradesco
S.A.. The consolidated accounts may be obtained from the registered
office of the parent company at Banco Bradesco S.A., Cidade de
Deus CEP 06029-900, Osasco, São Paulo, Brazil, or alternatively on its
internet site: www.bradesco.com.br.
1.3. Nature of the Bank‘s business
The object of the Bank is to undertake all banking and financial
operations of whatever kind.
The Bank may also undertake directly, by way of participation or by any
other means, all commercial, industrial or other operations, including
real estate transactions, which directly or indirectly relate to this
objective.
The Bank‘s major activities are private banking, trade financing,
corporate lending and interbank operations.
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1.4. Annual accounts
The Bank prepares its annual accounts in United States Dollars (USD),
the currency in which the capital is expressed.
The Bank‘s accounting year coincides with the calendar year.
note 2 - suMMary of significant accounting policies
The Bank prepares its annual accounts in accordance with the laws
and regulations in force in the Grand-Duchy of Luxembourg and the
accounting principles chosen are those commonly referred to as LUX
GAAP, encompassing the principles set forth in the amended law of
June 17, 1992 and the related instructions and circulars of the CSSF.
The Bank has not chosen to fully use the IAS/IFRS accounting standards,
nor any of the IFRS options foreseen in the law of March 16, 2006.
The following significant accounting policies are applied:
2.1. The date of recording of transactions in the balance sheet
Assets and liabilities are recognized in the balance sheet according to
when the amounts concerned become cleared funds, that is, their date
of effective transfer.
2.2. Foreign currencies
The Bank maintains a multi-currency accounting system, which records
all transactions in the currency or currencies of the transaction on the
day on which the contract is concluded.
Revenues and expenses in foreign currencies are translated into USD
daily at the prevailing exchange rates.
Tangible and intangible assets in foreign currencies, not covered in
either the spot or forward markets, are translated into USD at the rate
of exchange prevailing at the date of their acquisition. All other assets
and liabilities are converted into USD at the average of the buy and sell
spot rates applicable at the balance sheet date. Both realized profits
and losses arising on revaluation are accounted for in the profit and
loss account for the year.
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ANNUAL REPORT - 2011
At year-end, all unsettled forward transactions are translated into USD
at the forward rate applicable for the remaining term at the balance
sheet date.
Results on open forward transactions linked to spot transactions and
on swap transactions are accrued at the balance sheet date. The
revaluation of these transactions does not affect the result for the
financial year.
2.3. Loans and advances
Loans and advances are stated at their acquisition price. The policy
of the Bank is to establish specific value adjustments in respect of
doubtful debts, as deemed appropriate.
These value adjustments are deducted from the asset items to which
they relate and shall not be maintained if the reasons for which they
were recorded no longer exist.
Additional details regarding the value adjustments can be found in the
management report.
2.4. Lump sum provision for risk exposures
A general reserve for potential risks on balance sheet and off balance
sheet items is booked. This tax-deductible provision is deducted from
the corresponding assets. The lump-sum provision calculated on off
balance sheet items is booked under the item “Provision for liabilities
and charges: other provisions”.
As at December 31, 2011, the Bank has not recorded an additional
lump sum provision compared to 2010.
2.5. Debt securities and other fixed-income securities
The Bank has divided its portfolio of fixed-income securities into three
categories, whose principal characteristics are the following:
– an investment portfolio of financial fixed assets, which are intended
to be used on a continuing basis in the Bank‘s activities;
– a trading portfolio of securities purchased with the intention of
resale in the short term; and
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– a structural portfolio of securities, which do not fall within either of
the two other categories.
Fixed-income securities are valued as follows:
Investment portfolio
Fixed-income securities included in the Bank‘s investment portfolio
are stated at purchase price. A value adjustment is made when the
market value at the balance sheet date is lower than the purchase
price. This adjustment is made when the Board of Directors considers
the depreciation as durable. As of December 31, 2011 and 2010, the
Bank did not hold such portfolio.
Trading portfolio
Fixed-income securities included in the Bank‘s trading portfolio are
stated at the lower of cost or market value adjusted by the prorata
premium or discount if applicable. The Bank records the value
adjustment, corresponding to the negative difference between the
market value and the acquisition cost.
Structural portfolio
Fixed-income securities included in the Bank’s structural portfolio are
stated at the lower of cost or market value adjusted by the prorata
premium or discount if applicable. The Bank records the value
adjustment, corresponding to the negative difference between the
market value and the acquisition cost. As of December 31, 2011 and
2010, the Bank did not hold such portfolio.
2.6. Tangible and intangible assets
Tangible and intangible assets are recorded at purchase price VAT
excluded since the beginning of the year ended as of December 31,
2011. Formerly those assets were recorded including VAT. The Board
of Directors estimated that this change in accounting policy does not
have a significant impact on the annual accounts of the Bank.
The value of tangible and intangible assets with limited useful economic
lives is reduced by value adjustments calculated to write off the value
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ANNUAL REPORT - 2011
of such assets systematically over their expected useful economic lives.
2.7. Taxes
Taxes are accounted for on an accrual basis, and not in the year they are paid.
2.8. Taxation - exchange difference
Under Luxembourg fiscal regulations, the Bank‘s fiscal balance sheet and results of operations are
required to be expressed in Euro. The earnings of the Bank as determined for fiscal purposes can differ
substantially from earnings reported for accounting purposes as a result of unrealized profits or losses
on the translation of the Bank‘s equity into Euro for fiscal purposes. For the period from incorporation
up to the current year end, the unrealized gains and losses on exchange on the investment of the Bank‘s
equity, due to the overall decline in value of the US Dollar against the Euro, have given rise to a negative
cumulative neutralisation position to be carried forward.
2.9. Derivative Instruments
The Bank’s commitments deriving from derivatives financial instruments are recorded on the transaction
date as off-balance sheet items.
No individual valuation is performed in those cases where a financial instrument specifically covers an
asset or liability and an economic unity is established.
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note 3 - financial instruMent disclosures
Analysis of financial instruments - Primary non-trading instruments - 2011 (expressed in USD)
Primary non-trading instruments (at carrying amount)
Instrument class ≤ 3 months > 3 months > 1 year > 5 years Total
(Assets) ≤ 1 year ≤ 5 years
Cash, balances with
central banks and
post office 114.316.772 – – – 114.316.772
Loans and advances
to credit institutions 444.756.161 47.618.786 137.472.643 180.276 630.027.866
Loans and advances
to customers 330.228.232 329.127.171 483.232.860 12.982.756 1.155.571.019
Debt securities and
other fixed income
transferable securities – – – 359.532 (*) 359.532
Other assets 3.499.059 – – – 3.499.059
Total financial assets 892.800.224 376.745.957 620.705.503 13.522.564 1.903.774.248
Non-financial liabilities (no maturity) 18.899.673
Total assets 1.922.673.921
Instrument class ≤ 3 months > 3 months > 1 year > 5 years Total
(Liabilities) ≤ 1 year ≤ 5 years
Amounts owed
to credit Institutions 678.250.358 184.513.186 252.765.869 13.898.047 1.129.427.460
Amounts owed
to customers 265.406.836 60.034.114 99.276.506 – 424.717.456
Total financial liabilities 943.657.194 244.547.300 352.042.375 13.898.047 1.554.144.916
Non-financial liabilities (no maturity) 368.529.005
Total liabilities 1.922.673.921
* As at December 31, 2011, the fair value of the debt securities and other fixed income transferable securities amounted to USD 382.287.
26
ANNUAL REPORT - 2011
Analysis of financial instruments - Primary non-trading instruments - 2010 (expressed in USD)
Primary non-trading instruments (at carrying amount)
Instrument class ≤ 3 months > 3 months > 1 year > 5 years Total
(Assets) ≤ 1 year ≤ 5 years
Cash, balances with
central banks and
post office 34.147 – – – 34.147
Loans and advances
to credit institutions 354.214.219 24.061.706 16.432.897 – 394.708.822
Loans and advances
to customers 115.110.340 244.120.812 199.513.830 17.164.403 575.909.385
Debt securities and
other fixed income
transferable securities – – – 351.851 (*) 351.851
Other assets 95.985 – – – 95.985
Total financial assets 469.454.691 268.182.518 215.946.727 17.516.254 971.100.190
Non-financial assets (no maturity) 10.750.332
Total assets 981.850.522
Instrument class ≤ 3 months > 3 months > 1 year > 5 years Total
(Liabilities) ≤ 1 year ≤ 5 years
Amounts owed
to credit Institutions 303.552.639 166.892.255 105.866.692 16.203.481 592.515.067
Amounts owed
to customers 159.448.027 24.071.144 380.000 – 183.899.171
Total financial liabilities 463.000.666 190.963.399 106.246.692 16.203.481 776.414.238
Non-financial liabilities (no maturity) 205.436.284
Total liabilities 981.850.522
* As at December 31, 2010, the fair value of the debt securities and other fixed income transferable securities amounted to USD 365.150.
27
Analysis of financial instruments – Derivative non-trading instruments – 2011 and 2010
As at December 31, 2011, the Bank’s OTC derivative non-trading instruments consisted of the following
transactions: Notional Repayment Effective Maturity Fair market value Fair market value
amount date in USD 2011 in USD 2010
Foreign Exchange swap transactions (FX):
FX1 EUR 25.000.000 At maturity 05/12/2011 04/01/2012 (8.052) n.a.
Interest Rate Swap Transactions (IRS):
IRS1 USD 10.000.000 Semi-annual 15/09/2010 08/03/2012 (10.911) (18.325)
IRS2 USD 1.000.000 Semi-annual 27/09/2010 16/03/2012 (590) (2.290)
IRS3 EUR 500.000 Semi-annual 18/06/2008 30/05/2012 (6.794) (24.128)
IRS4 USD 2.000.000 Semi-annual 09/08/2011 24/06/2015 (2.758) n.a.
As at December 31, 2010, the Bank’s OTC derivative non-trading instruments consisted of the following
transactions: Notional Repayment Effective Maturity Fair market value Fair market value
amount date in USD 2010 in USD 2009
Foreign Exchange swap transactions (FX):
FX1 EUR 113.050 At maturity 09/06/2006 16/05/2011 3 875 (7.368)
FX2 EUR 15.000.000 At maturity 30/12/2010 02/02/2011 (1.155) n.a.
FX3 EUR 30.000.000 At maturity 28/12/2010 28/01/2011 (1.860) n.a.
FX4 EUR 22.500.000 At maturity 28/12/2010 20/01/2011 (607) n.a.
Interest Rate Swap Transactions (IRS):
IRS1 EUR 390.150 Semi-annual 10/04/2006 11/03/2011 (2.156) (13.444)
IRS2 EUR 500.000 Semi-annual 18/06/2008 30/05/2012 (24.128) (32.818)
IRS3 EUR 540.000 Semi-annual 13/11/2008 26/08/2011 (16.376) (29.295)
IRS4 USD 15.000.000 Semi-annual 14/07/2010 29/12/2011 (51.119) n.a.
IRS5 USD 10.000.000 Semi-annual 15/09/2010 08/03/2012 (18.325) n.a.
IRS6 USD 2.000.000 Semi-annual 27/09/2010 16/03/2012 (2.290) n.a.
Forward Rate Agreement (FRA):
FRA USD 8.133.946 At maturity 19/11/2010 08/01/2011 (2.508) n.a.
28
ANNUAL REPORT - 2011
Credit risk exposure
Credit risk for financial instruments as at December 31, 2011 can be analyzed as follows: Maturity Notional amount Weighting Risk-equivalent
USD amount USD
(1) (2) (3) = (1) x (2)
Foreign Exchange swap transactions (FX):
FX1 04/01/2012 32.347.510 2.00% 646.950
Interest Rate Swap Transactions (IRS):
IRS1 08/03/2012 10.000.000 1.00% 100.000
IRS2 16/03/2012 1.000.000 0.50% 5.000
IRS3 30/05/2012 646.950 4.00% 25.878
IRS4 24/06/2015 2.000.000 3.00% 60.000
Total 837.828
Credit risk for financial instruments as at December 31, 2010 can be analyzed as follows: Maturity Notional amount Weighting Risk-equivalent
USD amount USD
(1) (2) (3) = (1) x (2)
Foreign Exchange swap transactions (FX):
FX1 16/05/2011 153.951 14.00% 21.553
FX2 02/02/2011 19.950.000 2.00% 399.000
FX3 28/01/2011 39.660.000 2.00% 793.200
FX4 20/01/2011 29.553.750 2.00% 591.075
Interest Rate Swap Transactions (IRS):
IRS1 11/03/2011 521.319 0.50% 2.607
IRS2 30/05/2012 668.100 1.00% 6.681
IRS3 26/08/2011 721.548 0.50% 3.608
IRS4 29/12/2011 15.000.000 0.50% 75.000
IRS5 08/03/2012 10.000.000 1.00% 100.000
IRS6 16/03/2012 2.000.000 1.00% 20.000
Forward Rate Agreement (FRA):
FRA 08/01/2011 8.133.946 0.50% 40.669
Total 2.053.393
29
The credit risk exposure as at December 31, 2011 can be analyzed as follows:
Total replacement cost of which secured Net risk exposure
USD USD USD
Primary non-trading instruments
– Cash in hand balances with central bank
and post office 114.316.772 – 114.316.772
– Loans and advances to credit institutions 630.027.866 – 630.027.866
– Loans and advances to customers 1.155.571.019 (326.421.836) 829.149.183
– Debt securities and other fixed-income
transferable securities 359.532 – 359.532
– Other assets 3.499.059 – 3.499.059
Total 1.903.774.248 (326.421.836) 1.577.352.412
The credit risk exposure as at December 31, 2010 can be analyzed as follows:
Total replacement cost of which secured Net risk exposure
USD USD USD
Primary non-trading instruments
– Cash in hand balances with central bank
and post office 34.147 – 34.147
– Loans and advances to credit institutions 394.708.822 – 394.708.822
– Loans and advances to customers 575.909.385 88.059.065 487.850.320
– Debt securities and other fixed-income
transferable securities 351.851 – 351.851
– Other assets 95.985 – 95.985
Total 971.100.190 88.059.065 883.041.125
30
ANNUAL REPORT - 2011
Total on and off balance sheet economic sector credit risk concentrations are presented in the table
below: 2011 2010
USD % USD %
Other banks 795.227.043 36,37 446.540.592 41,87
Corporate Customers 1.359.105.669 62,15 617.249.695 57,88
Private banking customers 32.332.715 1,48 2.625.528 0,25
Total 2.186.665.427 100,00 1.066.415.884 100,00
The increase of the exposure on private banking customer is mainly due to an increase of Secured Loans
granted to customers for USD 30.810.820 (2010: USD 731.819).
The Corporate customers exposure is recording a large increase reflecting the development of the
volume of activities since the second semester of 2010.
Total geographic sector risk concentrations, both on and off balance sheet, are presented in the table
below: 2011 2010
USD % USD %
Luxembourg 205.772.963 9,41 237.053.883 22,23
Zone A 758.600.904 34,69 139.499.994 13,08
Zone B 1.222.291.560 55,90 689.862.007 64,69
Total 2.186.665.427 100,00 1.066.415.884 100,00
Geographic risk for Zone B included USD 945.609.419 of Brazilian risk (2010: USD 571.665.202).
From that amount, USD 898.429.377 relates to trade finance transactions (2010: USD 550.200.483).
note 4 - cash in hand, Balances with central Banks and post office Banks
In accordance with the requirements of the European Central Bank, the Central Bank of Luxembourg
implemented, effective January 1, 1999, a system of mandatory minimum reserves which applies to
all Luxembourg credit institutions. The Bank has fulfilled its minimum reserve requirement of EUR
499.164.751 with the Central Bank by maintaining a high amount of EUR 89.194.125 during six days
in December 2011. The balance of USD 114.312.329 at year end is made up of the current account and
of an over-night deposit not related to reserve requirements.
31
note 5 - loans and advances to credit institutions
Loans and advances to credit institutions other than those repayable on demand may be analysed
according to their remaining maturity as follows:
2011 2010
USD USD
Not more than three months 386.645.091 117.899.994
More than three months but not
more than one year 47.618.786 24.061.706
More than one year but not
more than five years 137.472.643 16.432.897
More than five years 180.276 –
571.916.796 158.394.597
note 6 - loans and advances to custoMers
Loans and advances to customers may be analysed according to their remaining maturity as follows:
2011 2010
USD USD
Not more than three months 330.228.232 115.110.340
More than three months but not
more than one year 329.127.171 244.120.812
More than one year but not
more than five years 483.232.860 199.513.830
More than five years 12.982.756 17.164.403
1.155.571.019 575.909.385
The increase of the credit activity from 2010 to 2011 is mainly due to an increase in trade finance
transactions to Brazilian customers and trade financing loans with European corporate customers.
32
ANNUAL REPORT - 2011
Loans and advances to customers may be analysed in considering the following deductions:
2011 2010
USD USD
Gross amount granted to Customers 1.158.537.587 578.077.474
Doubtful provision (1.786.140) (1.023.988)
Lump sum provision (1.180.428) (1.144.101)
1.155.571.019 575.909.385
note 7 - transferaBle securities
Transferable securities shown under “Debt securities and other fixed-income transferable securities“
amount to USD 359.532 (2010: USD.351.851). These transferable securities do not include unlisted
securities. They are considered by the Bank as Trading Portfolio and valued at lower of cost or market.
Their market value as at December 31, 2011 amounted to USD 382.287 (2010: USD 365.150).
note 8 - deBt securities and other fixed-incoMe transferaBle securities
Transferable securities shown under “Debt securities and other fixed-income transferable securities”
may be analysed according to their remaining maturity as follows:
2011 2010
USD USD
More than five years 359.532 351.851
359.532 351.851
note 9 - other assets
These items are detailed as follows:
2011 2010
USD USD
Short-term receivables 3.256.387 85.171
Others 242.672 10.814
3.499.059 95.985
Short term receivables account is mainly made up of USD 3.251.806 referring to Invoices paid in the
scope of the project Flexcube and expecting the finalisation of the implementation and agreement of all
counterparties involved into this project.
33
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)(6
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670.
606
34
ANNUAL REPORT - 2011
note 11 - related party Balances - assets
The following balances with affiliated undertakings are included in
Assets:
2011 2010
USD USD
Loans and advances
to credit institutions 527.769.947 199.939.926
Loans and advances to credit institutions consist of current accounts,
deposits and loans held with the Banco Bradesco Group. The figures
as at December 31, 2011 do not include accrued interest amounting
to USD 766.758 (2010: USD 335.039).
note 12 - foreign currency assets
As at December 31, 2011 the aggregate amount of the Bank‘s
assets denominated in foreign currencies, translated into USD, is
USD 632.487.289 (2010: USD 337.633.103).
note 13 - aMounts owed to credit institutions with
agreed Maturity dates or periods of notice
Amounts owed to credit institutions with agreed maturity dates
or periods of notice may be analysed according to their remaining
maturity as follows:
2011 2010
USD USD
Not more than three months 605.446.809 206.082.870
More than three months but
not more than one year 184.513.186 166.892.256
More than one year but
not more than five years 252.765.869 105.866.692
More than five years 13.898.047 16.203.481
1.056.623.911 495.045.299
35
The increase in amounts owed to credit institutions with agreed maturity dates or period of notice
is correlated with the increase generated by the Bank’s trade finance activities. Loans granted by the
Bank in the context of those transactions are mainly funded by Banco Bradesco Cayman with the same
maturity date and same period.
note 14 - aMounts owed to custoMers
Amounts owed to customers with agreed maturity dates or periods of notice may be analysed according
to their remaining maturity as follows:
2011 2010
USD USD
Not more than three months 144.872.862 31.265.691
More than three months but
not more than one year 60.034.114 24.071.144
More than one year
but not more than five years 99.276.506 380.000
304.183.482 55.716.835
note 15 - other liaBilities
These items are detailed as follows:
2011 2010
USD USD
Preferential creditors 278.609 224.441
Sundry creditors 34.219 107.305
312.828 331.746
note 16 - suBscriBed capital
Following the extraordinary meeting of January 17, 2011, it has been decided to increase the share
capital from USD 68.350.000 to USD 138.350.000 by incorporation of USD 70.000.000 from free
reserves. It has also been decided to increase the share capital by USD 130.000.000 from 138.350.000
to USD 268.350.000 by the issuance of 1.785 new shares without nominal value.
As at December 31, 2011, the bank’s authorised, subscribed an paid-up capital amounts to
USD 268.350.000 (2010: USD 68.350.000), which is solely comprised of ordinary share capital,
represented by 3.685 shares without nominal value (share’s par value USD 72.822,25).
36
ANNUAL REPORT - 2011
note 17 - reserves
Reserves include:
17.1. Legal reserve
Under Luxembourg law, the Bank appropriated to a legal reserve an amount equivalent to at least 5%
of the annual net profit until such reserve is equal to 10% of the share capital. Distribution of the legal
reserve is restricted.
Following the extraordinary general meeting held on January 17, 2011, it has been decided to transfer
from free reserve to legal reserve an amount of USD 20.000.000 consequence of the capital increase.
17.2. Free reserves
The free reserve represents profits of prior years that have been appropriated by the Annual General
Meeting of shareholders to a specific reserve referred to as “free reserves”. The Annual General Meeting
may approve the distribution of this reserve.
17.3. Net Wealth Tax reserve
In accordance with the tax law in force since January 1, 2002, the Bank reduces its Net Wealth
Tax (“NWT”) burden by crediting it on the amount of the Corporate Income Tax (“CIT”). In
order to comply with the tax law, the Bank will allocate under non-distributable reserves
(item “Net Wealth Tax reserve”) an amount that corresponds to five times the amount of the
reduction of the Net Wealth Tax for the years 2008, 2009, 2010 and 2011. This reserve will be
non-distributable for a period of five years from the year following the one during which the Net Wealth
Tax was reduced.
2011 2010
USD USD
2005 – 3.285.000
2008 3.827.418 –
2009 5.175.742 –
2010 4.977.285 –
13.980.445 3.285.000
37
17.4. Changes in shareholder’s equity
The movements on shareholder’s equity of the Bank is summarised
below:
Legal
Reserve
USD
Free
Reserves
USD
Net
Wealth
Tax Reserve
USD
Profit
Brought
Forward
USD
Total
USD
Balance at
January 1, 2011 6.835.000 97.932.866 3.285.000 – 108.052.866
Profit for the year ended
December 31, 2010 – – – 14.402.318 14.402.318
Appropriation of profit – 14.402.318 – (14.402.318) –
Transfer from free reserves
to net wealth tax reserve– (13.980.445) 13.980.445 – –
Transfer from net wealth
tax reserve to free reserves– 3.285.000 (3.285.000) –
Transfer from free reserve
to legal reserve20.000.000 (20.000.000) – –
Transfer from free reserve
to Capital– (70.000.000) – – (70.000.000)
Balance at
December 31, 2011 26.835.000 11.639.739 13.980.445 – 52.455.184
38
ANNUAL REPORT - 2011
note 18 - related party Balances - liaBilities
As at December 31, 2011, the following balances with affiliated
undertakings are included in Liabilities:
2011 2010
USD USD
Amounts owed to credit institutions 848.491.736 439.914.258
Amounts owed to customers 228.959.232 24.174
1.077.450.968 439.938.432
Accrued interest amounting to USD 3.248.830 (2010: USD.637.514)
are not included in the above amounts.
note 19 - foreign currency liaBilities
As at December 31, 2011, the aggregate amounts of the Bank‘s
liabilities denominated in foreign currencies, translated into USD, is
USD 633.499.879 (2010: USD 338.267.703).
note 20 - contingent liaBilities
2011 2010
USD USD
Guarantees and other direct
substitutes for credit 85.521.163 51.734.093
note 21 - coMMitMents
2011 2010
USD USD
Confirmed credits, not used 200.869.075 43.677.585
Confirmed credits not used as at December 31, 2011 consist in the
unused balance of facilities the Bank entered giving its commitment to
fund up to USD 405.363.854 (2010 USD 52.814.271).
As at December 31, 2011, the Bank had disbursed USD 204.494.779
(2010: USD 9.136.686) under those committed credit facilities.
39
In 2008, the Bank entered into a 5 year contract with a Luxembourg
PFS in order to structure its data recovery centre. The finance lease
contract amounted to EUR 754.056 encompassing premises, hardware,
software, communication links and all other equipment required to
build the complete infra-structure of the recovery site.
The financing of the contract was done by a leasing company based in
Luxembourg. The reimbursement of the contract will be made through
monthly payments of EUR 14.767 for the duration of 60 months.
Payments made in 2011 amounted to EUR 177.204. Total future lease
payments with regard to this non-cancellable finance lease therefore
amount to EUR 236.274. All amounts mentioned are inclusive of VAT.
The Bank has commitments under operating lease contracts for
buildings used by it in the normal course of business. Since October
31, 2009 the contract became renegotiable tacitly year to year.
Total future lease payments under its current non-cancellable rental
agreement, translated to USD at the year-end exchange rate, can be
analysed as follows:
2011 2010
USD USD
Not more than one year 630.690 597.035
Later than one year and
not more than five years 2.522.760 2.605.246
More than five years 525.575 542.759
3.679.025 3.745.040
note 22 - operations linked to currency exchange rates
In December 2011, the Bank entered into one forward foreign exchange
transaction in the form of EUR/USD swap for a short period of thirty days.
This operation is made in order to swap Euro received from our Cayman
affiliated against U.S. Dollars delivered to our mother company.
In December 2011, the Bank had no Forward Rate Agreement recorded
in its books.
40
ANNUAL REPORT - 2011
note 23 - investMent ManageMent services and
underwriting functions
Management services provided by the Bank consist mainly in custody
and administration of transferable securities, portfolio management
on a non-discretionary basis, advice, fiduciary representation and
agency functions.
note 24 - staff nuMBers
The average number of persons employed during the financial year by
the Bank is as follows: 2011 2010
Number Number
Senior management 2,5 3,0
Middle management 8,5 4,5
Employees 25,5 15,0
36,5 22,5
The total number of employees at year end 2011 and 2010 is as
follows: 31/12/2011 31/12/2010
Number Number
Senior management 2 3
Middle management 9 5
Employees 28 20
39 28
41
note 25 - ManageMent reMuneration
The Bank has paid emoluments for the financial year to members
of senior management in respect of their responsibilities, but it has
not entered into commitments in respect of extra-legal retirement
pensions: Emoluments Emoluments
2011 2010
USD USD
Senior management 1.407.246 1.416.656
No loans or advances to or on behalf of Senior Management or
members of the Board of Directors have been granted by the Bank. As
at December 31, 2011, with the exception of outstanding guarantees
for the rent of residential properties issued on behalf of three members
of the Senior Management and Middle-Management amounting to
EUR 24.085 (2010: EUR 26.137), no other commitments are granted
to Management or members of the Board of Directors.
note 26 – other operating charges and other operating
incoMe
Other operating charge are detailed as follows: 2011 2010
USD USD
Dotation to the AGDL provision 185.544 237.277
Other 399.157 1.457
584.701 238.734
The other operating charges out of AGDL provision are made up
of legal labour contingency expenses for USD 294.785 and sundry
expenses (invoices) paid in 2011 and referring to the previous year for
USD 84.188.
42
ANNUAL REPORT - 2011
Other operating income is detailed as follows: 2011 2010
USD USD
AGDL Reimbursement 41.928 80.178
VAT Reimbursement 425.645 174.885
Other 268.010 131.327
735.583 386.390
note 27 – extraordinary profit
Extraordinary profit in 2011 recorded for USD 948.589, refers mainly
to the value re-adjustment of fiscal provisions notably the NWT 2008
for USD 805.816 and IRC 2008 for USD 142.712.
note 28 – taxes
In 2011, the Bank has recorded provisions for taxation amounting to
USD 4.577.461 (2010: USD 8.613.209).
The Bank is liable for taxes on income, capital and net assets.
In relation with the Fiscal Convention between Brazil and the Grand
Duchy of Luxembourg, the Bank has the opportunity to decrease its
tax to pay in using the fiscal deductions provided by this agreement.
The Bank did not receive in 2011 any assessments from the Luxembourg
tax authorities.
Other taxes refer to the Net Wealth Tax and VAT due by the Bank.
note 29 – geographical analysis of incoMe
The Bank’s income is derived mainly from transactions with Brazilian
counterparties.
The main income comes from the interest received on Loans (+183%)
and Commissions linked to some Loans (+50%).
The net profit on financial operations between 2010 and 2011 shows
a low decrease (-18%), due to a decrease of the fixed income securities
concluded by the Bank in 2011 with its clients and a decrease of the
customers’ portfolio positions. This decrease is also resulting from the
43
calculation of custody commissions on securities revaluated on daily
basis. The prices of the securities (after revaluations) were recorded
lower in 2011 than in 2010.
note 30 - deposit guarantee scheMe
On September 25, 1989, all credit institutions in the Luxembourg
banking sector became members of the non-profit making association
“Association pour la Garantie des Dépôts, Luxembourg“ (“AGDL“).
In accordance with the law of April 5, 1993 as amended by the law
of June 11, 1997, the sole object of the AGDL is the establishment of
a mutual guarantee scheme covering deposits made by customers of
member credit institutions (“the Guarantee“). The customers covered
by the Guarantee include all depositors who are physical persons,
whatever their nationality or country of residence. Also covered by the
Guarantee are small companies constituted under the law of a Member
State of the European Union, which size is such that they would be
permitted to draw up abbreviated accounts pursuant to Article 35
of the law of December 19, 2002 on the register of commerce and
companies and the accounting and annual accounts of undertakings.
Following the art.8 of the Statutes adopted by Extraordinary General
meeting of AGDL on February 8, 2009, with respect to each member,
the Guarantee is limited to a maximum amount per depositor of EUR
100.000 or its foreign currency equivalent. No depositor can receive
more than this sum, regardless of the number of accounts or deposits
held in the sole or joint name of the depositor with the same credit
institution. The law of July 27, 2000 stipulates that banks must also
belong to an investment guarantee scheme. This additional guarantee
covers the reimbursement of claims resulting from investment
transactions up to the amount of EUR 20.000.
The total amount of the Guarantees, which will in no case exceed
EUR 120.000 per customer (EUR 100.000 deposit guarantee and EUR
20.000 investor compensation), represents an absolute figure and
cannot be increased by any interest, charges or any other amount.
44
ANNUAL REPORT - 2011
As at December 31, 2011, the Bank has a cumulative provision for an
amount of USD 1.847.718 (2010: USD 1.731.747), in recognition of
its potential liabilities under the Guarantee within the limits set out in
the Grand Ducal Regulation of December 21, 1991 enacting Article
167§1(5) of the income tax law of December 4, 1967.
In 2011 a total amount of EUR 29.375 was reimbursed to the Bank
in relation with the restructuring of one of the financial institutions
affected by the suspension of payments under consideration. The
amount has been recorded under the caption “Other operating
income”.
The remaining AGDL provision at December 31, 2011 is sufficient to
cover this amount and next potential disbursements.
note 31 – fees of the independent auditors
Following the resolution of the Board of Directors dated April 19,
2010 PricewaterhouseCoopers (“PWC”) has been appointed to act as
external auditors for the purpose of the statutory audit of the annual
accounts of the Bank.
In 2011, KPMG Luxembourg S.à r.l. has been appointed to act as
external auditors for the purpose of the statutory audit of the annual
accounts of the Bank.
The amounts invoiced or accrued for services provided by the
independent auditor of the Bank were as follows:
2011 2010
USD USD
Audit fees (PWC) 72.020 169.183
Audit fees KPMG 144.917 –
Other assurance services (PWC) – 15.898
Other assurance services KPMG 10.351 –
Tax fees (PWC) 62.100 17.289
Other fees (PWC) 18.820 31.297
308.208 233.667
Banco Bradesco Europa S.A.29, Avenue de la Porte-Neuve L-2227 LuxembourgTéléphone: +352 25 41 31 Téléfax: +352 25 41 39S.W.I.F.T. code: BBDE LU LL
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Credit / Photos: Egberto Nogueira · Imprimerie Fr. Faber