Annual Report 2013

Corporate Governance Business Strategy


The bank’s strategy is channeled to increasing efficiency and productivity and to generating sustainable results. To achieve these objectives, BB is investing in a series of management, products and service development, customer relations and employee training initiatives.

The key processes are being reviewed, with the emphasis on expense management. In this sense, worthy of note is the BB Eco-Efficient Program that fosters benefits by both reducing costs and keeping the environmental impact of the operations to a minimum. Within the scope of information technology, the challenges in the years ahead involve improving the customer relations platforms, and it is intended to add solutions for mobility and strong technological integration.

Producing sustainable results is closely tied to proper returns to shareholders, as well as the bank’s role as partner in the sustainable development of Brazil. With its highly-qualified management team, the bank is seeking business alternatives that produce returns and, at the same time, benefits for society. One example of this are the social businesses and the involvement with public programs and policies that generate income for the bank by inducing improvements for society in housing, education and productive investment across a range of economic segments.

One of the priorities of Banco do Brasil for the years ahead is to continually expand its loan portfolio in terms of quality, which increases the customer base and keeps delinquency under control. To that end, financial education, enhanced credit risk management and close relations with customers are seen by the bank as key factors.

Indeed, expanding sustainable relationships is a material aspect in the strategy of BB. The purpose is to establish long-lasting relationships with customers based on transparency and trust. By knowing its customer and being close to them, the bank increases its ability to offer products and services appropriate to their profile, while making room for doing more business. This is a win-win situation for both parties, since the customer’s needs are met and the bank consolidates its relationship with them.

Banco do Brasil will also continue to diversify its business in the quest for consistency of performance in the medium and long term. In this respect, its presence in the cards, insurance pensions, savings bonds, capital market and asset management segments have grown in importance and are leveraging the results.

Owner of the largest overseas service network among Brazilian banks, the bank is also seeking to expand its international operations. The directives for these operations include having a presence in regions where there are Brazilian communities, the internationalization of Brazilian companies and growth in Brazil’s trade relations with the world.

BB is also seeking employee satisfaction in order to enhance their perception of value regarding a range of practices in training, careers, quality of life and health and safety. This purpose is being met, as can be seen by the bank’s listing in the Public Institutions category of the ranking of the Best Companies to Work For, produced by Guia VOCÊ S/A.

To allocate priority to aligning its initiatives with the medium and long-term objectives, the bank draws up its strategic plan with a five year validity period, which is reviewed on an annual basis and approved by the Board of Directors. The targets and actions established in this planning exercise are disclosed internally and continually monitored so that they are achieved in terms of efficiency and quality.


In 2013, BB invested around R$1.5 billion to enhance its physical and technological structure, concentrating on expanding its service network, modernizing its technology park, upgrading its self-service terminals and business solutions supported by IT. The main results of each of these are shown below. For 2014, investments are expected in the region of R$3.1 billion.

Branches | There are 52 new branches in the Estilo segment, 32 branches opened in the retail segment, 275 premises were adapted to the new ambience model, 1 new Corporate branch, changes of address and adaptations to 2 branches and minor refurbishments and improvements at several units across the network.

Self-Service | Some 1,260 ATMs were replaced, and 730 self-service areas modernized.

Premises | Some 3,896 interventions were made to maintain and conserve physical premises, in addition to upgrading/modernizing external signposting at 1,238 branches, and the modernization and expansion of physical security solutions.

Information Technology | Hardware and software were acquired for developing solutions in mainframe environments, technological solutions were rolled out for operational efficiency and know-your-customer, while 1,735 telecommunication rooms (on-line rooms) of retail branches were modernized.


The following topics show the rendering of accounts for the objectives presented in the 2012 Annual Report, indicating the status and attainment of what was established. Later, account is also rendered of the socioenvironmental challenges set out in the Agenda 21 of BB.

Provide adequate returns to shareholders | Banco do Brasil posted net income of R$15.8 billion in 2013, an increase of 29.1% over 2012, representing a Return on Average Shareholders’ Equity (ROAE) of 22.9%. Furthermore, BB maintained its practice of paying out 40% of its net income to its shareholders and allocated R$6.3 billion in remuneration for the year.
Increase the share of services in the result | In line with the strategy of diversifying the business, the bank has increased its presence in capital markets, asset management, insurance business and cards business. In 2013, fee income amounted to R$23.3 billion, an increase of 10.6% compared to 2012.

Increase the share of services in the result | In line with the strategy of diversifying the business, the bank has increased its presence in capital markets, asset management, insurance business and cards business. In 2013, fee income amounted to R$23.3 billion, an increase of 10.6% compared to 2012.

Grow profitable relationships | For BB, establishing profitable relationships is essential for business growth. Thus the bank continued to create partnerships as part of its strategy. In 2013, besides continuing with the partnership with Grupo Mapfre, it centralized its insurance business by creating BB Seguridade.

Expand the loan portfolio | The loan portfolio – broad concept grew by 19.3% in 2013, rising to R$692.9 billion, driven by loans to agribusiness (up by 34.1%), real estate financing (increase of 87.2%) and by lending to businesses in the corporate and large corporate segments.

Maintain delinquency at current levels | The main indicator of the quality of the loan portfolio is the average risk, which shows the ratio of the balance of provisions required to the total classified portfolio. This indicator showed a decline of 25 basis points in relation to 2012 – from 3.81%, to 3.56%. This result is significantly lower than the ratio for the Brazilian Banking Industry (SFN), which in the period declined from 5.50%, to 4.97%. At the same time, the delinquency ratio INAD + 90 (the ratio of transactions past due more than 90 days to the classified loan portfolio) declined in relation to December 2012 – from 2.05%, to 1.98%.

Increase customer satisfaction | The bank’s service channels and products are being constantly improved to provide customers with greater facility and convenience. In that respect, 2013 was noteworthy for the new service packages on offer, the new credit card invoice, the evolution in technology and security for cell phone transactions, the adaptation of the branches where accessibility is concerned and the restructuring of the Customer Help Desk (SAC).


Close profitable business that generates social and environmental value | BB strengthened the alignment of various products and services with the strategy for fostering sustainable development. Worthy of note are the credit facilities within the scope of the following programs: Oriented Productive Micro Credit (MPO), Programa Federal Agricultura de Baixo Carbono (Programa ABC – Low Carbon Agriculture), The Student Financing Fund (Fies) and Minha Casa Minha Vida (Real Estate Lending) Program (PMCMV), in addition to the performance of the Business Strategy for Sustainable Regional Development and the Água Brasil (Water Conservation) Program. The bank’s listing on the Dow Jones Sustainability Index (DJSI) of the New York Stock Exchange and on the Corporate Sustainability Index (ISE) of the BM&FBovespa bear witness to the bank’s commitment to generating social and environmental value for Brazil.

Better operational efficiency and productivity | In 2013, BB recorded growth of 7.2% in administrative expenses, concentrated primarily in personnel expenses (which rose by 8.5%) due to salary increases and a larger structure of commissioned employees. The coverage ratio, which measures the ratio of operating revenues to personnel expenses, rose from 133.6 in 2012, to 136.1 in 2013, showing higher revenue growth.

Increase employee satisfaction | In 2013 Banco do Brasil was elected one of the best companies to work for in Brazil, in the Public Institutions category of the VOCÊ S/A. The Work Satisfaction Survey carried out last year showed a ratio of 76% of employees satisfied, one of the best levels since the survey was first applied. In comparison with 2012, there was an advance of 3.2 percentage points. Another important item was the statistically significant increase in the averages of the 6 dimensions comprising the Survey.

These results could only have been achieved through people management policies and practices that aim for transparency, fairness, equality of opportunity and recognition and the constant development of its employees. Several programs and actions directly influence employee satisfaction, such as the Profit Sharing Program (PLR), the Bonus Performance Program (PDG), the Meeting of Leaders and the higher number of live and distance learning scholarships, among others.