Annual

Report

2018

Self funcionários do Banco do Brasil

About Us

We are Banco do Brasil S.A., the first bank to operate in Brazil. In our 210 years of existence we have made an active contribution to Brazil’s development. Our values are the guiding principles of the organization: Focus on the Customer, Innovation, Ethics, Sense of Ownership, Efficiency, Reliability and Public Spirit.

National presence

Ponto no mapa

Number of
branches:
4,722

Bandeira azul

North: 300

Bandeira amarelo

Northeast: 1,014

Bandeira azul escuro

Midwest: 459

Bandeira cinza

Southeast: 2,015

Bandeira amarelo escuro

South: 934

Funcionários

Number of
employees:
96,889

Bandeira azul

North: 4,259

Bandeira amarelo

Northeast: 16,116

Bandeira azul escuro

Midwest: 16,808

Bandeira cinza

Southeast: 42,586

Bandeira amarelo escuro

South: 17,096

Overseas: 24

Mapa da Presença do Banco do Brasil

International presence since 1941

Mapa da Presença internacional do Banco do Brasil
Ativos: R$ 1,42 trilhão

Assets:
R$1.42 trillion

Ativos: R$ 1,42 trilhão

Adjusted Net Income:
R$13.5 billion

Loan Portfolio: +3.0%

Income from Banking Fees: +5.8%

Market share in agribusiness: 57.4%

Market share in credit: 18.5%

Core Capital Ratio: 10.00%

Net Equity: R$102.25 billion

Business Model

Sustainability is a cross-cutting issue in our strategy. As our business and management practices become increasingly sustainable, we disseminate the importance of incorporating corporate social and environmental responsibility principles into the planning and performance of actions throughout the value chain. To achieve these results we assess sustainability drivers using indicators defined based on the Corporate Strategy.

Capital and purposes

Transformative
Role

Papel transformador

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Through the supply of credit, we play a transformative role in society, activating the economy in all regions of Brazil. Activities range from microcredit operations through to financial solutions for large corporations, capital markets and the government, with an especially prominent position in agribusiness lending.

For customers, Green Economy business models provide sustainable solutions that generate financial returns and bring social benefits, while helping to preserve the environment and reduce carbon emissions. Market requirements are considered in the planning and definition of the sectors for credit offerings, in the fundraising strategies and in the priority areas for action.

All initiatives are in line with the commitments of the Socio-environmental Responsibility Policy (PRSA) and the Sustainability Guidelines for Credit.

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Planta

R$189.6 billion
Balance of green business, with Risk-adjusted return on capital (RAROC) of 17% and Contribution Margin of R$2.4 billion.

Energia

R$512 million funds allocated via the program Agro Energia, in 2017–2018, aims to stimulate the use of renewable energy in rural areas.

Sol

Approximately 1 million family farmers provided in 2018, through Pronaf, and the business goal 96.9% of Brazilian municipalities, indicating the coverage of the program across Brazil.

CCBB

4.36 million visitors in the Banco do Brasil Cultural Center (CCBB), who hosted 315 cultural initiatives, with R$1.2 billion return in spontaneous media.

CCBB

R$53.4 million in funding provided through Fundação Banco do Brasil (FBB).

Our Corporate Governance shows our commitment to the basic principles of transparency, accountability, fairness and corporate responsibility. Trust is vital in relations with all stakeholders, especially shareholders and investors, and is critical for decisions to invest and, therefore, for attracting capital. We seek to positively influence this decision, demonstrating commitment to sustainable management that weighs up and protects the interests of all stakeholders, so that nobody benefits to the detriment of others.

Among the good practices adopted, we have had a collegiate decision-making model in place since 1995, through which all decisions, regardless of the internal level, are taken with the involvement of the representatives of the units and with the support of strategic committees for the definition of strategies and the approval of different businesses proposals.

In addition to having strategic policies in place and investing in compliance programs to try to ensure that all planned and approved actions are carried out properly, all units are responsible for ensuring the implementation of ethical guidelines. The employees are the protagonists and executors of the actions that make up the guidelines. In their day-to-day activities employees apply laws, regulations, standards, policies and procedures, observing principles of integrity, ethical conduct, efficiency and business sustainability.

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Level 1 seal
With maximum score on the Governance Index (IG-SEST) of the Secretariat of Coordination and Governance of State Enterprises (Secretaria de Coordenação e Governança das Empresas Estatais – SEST).

The Integrated Governance and Management Index (Índice Integrado de Governança e Gestão – IGG) of the Brazilian Federal Court of Accounts’ (Tribunal de Contas da União – TCU) – highest score of the 488 participants.

Moeda

We created the Management Remuneration Policy, approved by the Board of Directors.

Anotacão

Banco do Brasil Report on the Brazilian Code of Corporate Governance (Report) prepared in accordance with the instructions of the Brazilian Securities and Exchange Commission (CVM).

Corporate Governance

Governança Corporativa

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Risk
Management

Risk Management

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By incorporating social-environmental factors into investment decisions and asset selection practices, we seek to reduce risks, increase financial returns and meet the expectations of customers and other stakeholders. Furthermore, our socio-environmental risk management also features items from the Credit, Socio-environmental Responsibility (PRSA) and Supplier Relations Policies and from the Sustainability Guidelines for Credit and the Social-environmental Guidelines for Controversial Issues.

Non-financial risks – arising from operating activities and the use of the resources necessary to deliver products and services to customers – can reduce, jeopardize or interrupt operations, as well as having the potential of generating contractual, regulatory and environmental liabilities with a negative impact on reputation. Likewise, emerging risks – arising from changes in the market or from changes in strategy that may trigger new risks – can become significant if their potential impact is increased by the interest in certain strategic objectives.

To manage these risks there are risk policies, standards, procedures, processes and management structures in place and we adopt methodologies to identify, measure, evaluate, monitor, report, control and mitigate them. In 2018, the model for identification and definition of the relevance of risks was reviewed, incorporating improvements in the classification and understanding of the relationship between the risks, the external and internal factors that cause them, and the link to the strategic objectives and the nature of the possible impacts.

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SEST

Implementation, in 2018,
of the socio-environmental rating, with the goal of learning, evaluating and monitoring client’s practices, used as a tool in the management of socio-environmental risk.

SEST

Support initiatives to mitigate climate change, such as the Low Carbon Agriculture Program (Programa de Agricultura de Baixo Carbono – Programa ABC), through which positive financial implications are identified with the contracting of R$1.7 billion in operations in 2018, with contracting costs of R$6 million.

Moeda

73% increase in the number of Internet accesses with BB Code PF (Personal) and 306% with BB Code PJ (Business). In 2018, we surpassed the mark of 32 million customers with registered biometric.

Anotacão

Development of the bases of social and environmental losses of operational and credit risks.

In the context of the financial system, where the digital reality imposes complexities and challenges, the increasing entry of new companies eager to offer services previously only provided by banks and changes in customer behavior guide possible directions and business opportunities and the development of solutions that not only satisfy but also anticipate their needs.

We remain at the forefront of digital solutions with the use of artificial intelligence, allowing customers to interact with us and enjoy services via Whatsapp and social networks. These kinds of practices are in line with one of our values, Innovation, which is integrated into the formulation of Banco do Brasil’s Corporate Strategy (ECBB), organizational culture, vision, and positioning with regards to macro ambitions and goals.

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SEST

18,450 ideas collected in the fifth edition of the Programa de Incentivo à Inovação (Pensa BB).

Moeda

R$125.7 billion in assets were subjected to positive screening, which considers socio-environmental and corporate governance aspects.

SEST

R$1.6 billion of resources are allocated to funds that have socio-environmental characteristics.

Anotacão

57.4% participation in financing for agribusiness.

Social business (balance in portfolio)

Accessibility Credit
(BB Crédito Acessibilidade)

R$162.4 million

Student Finance Fund
(Fundo de Financiamento Estudantil – Fies)

R$41.6 billion

Minha Casa Minha Vida Program
(MCMV)

R$22 billion

Microcredit for Entrepreneurs
(BB Microcrédito Empreendedor)

R$234.8 million

National Program for Strengthening Family Agriculture
(Programa Nacional de Fortalecimento da Agricultura Familiar – Pronaf)

R$44.1 billion

Financial
Value Creation

Criação de valor financeiro

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Social
Value Creation

Criação de valor Social

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Quality of service is fundamental to customer satisfaction, as it contributes to increasing trust, generating business opportunities and increasing profitability. So much so that we were the first financial institution in the country to approve and publish a Policy for Relationships with Customers and Users – a requirement of the National Monetary Council (CMN) – in order to guide the behavior and conduct of activities in compliance with principles of ethics, responsibility, transparency and diligence.

The motivation and dedication of employees is essential for customer satisfaction because their attitude and attention in all of their daily activities directly or indirectly affects the public's perception of services.

This commitment involves the planning and development of employees' careers through management tools and corporate programs for succession and professional growth, as well as continual improvement of salary policies, profit sharing and bonuses.

Actions to promote employee diversity are adopted through general policies, the Code of Ethics and Standards of Conduct and also through the rules of the professional growth programs that contemplate pro gender equality measures. We invest in occupational health, safety and quality of life at work, demonstrating the practical application of socio-environmental responsibility.

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SEST

2.7 million new accounts opened with the expansion of Conta Fácil, leadering in the digital accounts segment. The Conta Fácil MEI 100% digital account benefited 25,756 microentrepreneurs.

SEST

R$6 million users of the Minhas Finanças (My Finance) application, with 937,323 familybudgets created and averageincentivized savings of R$1,000 per customer.

SEST

79.0% of all transactions took place using cell phones and the internet.

SEST

83.6% of satisfied employees.

SEST

R$6 billion in payments to suppliers, R$17.3 million of which was paid to six suppliers based abroad.

SEST

1.5% total water consumption reduced in 2018.

SEST

1.8% total electricity consumption reduced in 2018.

SEST

102,000 printer cartridges refilled (corresponding to 99% of the total used in 2018), providing savings of R$54.4 million.

SEST

1,848 units have deployed a Selective Waste Collection (Recycling) Program.

SEST

259 metric tons of paper reduced with The digital transformation strategy.

For the Ecological Footprint Index (Índice Pegada Ecológica – IPE) in the first half of 2018, 50.1% (2,718) of the BB units assessed met the target. In the second half of the year, 46.1% (2,488 units) reached the target.

Environmental
Value Creation

Criação de valor Ambiental

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