The Organization operates mainly in the banking and insurance segments. Our banking operations include operations in the retail, middle-market and corporate sectors, lease, international bank operations, investment bank operations and as a private bank. The Organization also conducts banking segment operations through its branches located throughout the country, in branches abroad and through subsidiaries as well as by means of shareholding interests in other companies. Additionally we are engaged in insurance, supplemental pension plans and capitalization bonds through our subsidiary, Bradesco Seguros S.A. and its subsidiaries.
The following segment information was prepared based on reports made available to Management to evaluate performance and make decisions regarding the allocation of resources for investments and other purposes. Our Management uses a variety of accounting information, which includes the proportional consolidation of affiliates and joint ventures. Accordingly, the information of the segments shown in the following tables was prepared in accordance with the specific procedures and other provisions of the Financial Institutions Accounting Plan and the total amounts, which correspond to the consolidated information, were prepared in accordance with IFRS, issued by the IASB .
The main assumptions for the segmentation of income and expenses include (i) surplus cash invested by the entities operating in insurance, supplemental pension and capitalization bonds are included in this segment, resulting in an increase in net interest income; (ii) salaries and benefits and administrative costs included in the insurance, supplemental pension and capitalization bonds segment consist only of cost directly related to these operations, and (iii) costs incurred in the banking operations segment related to the infrastructure of the branch network and other general indirect expenses have not been allocated between segments.
Information by operating segment, reviewed by the Organization and corresponding to the years 2017, 2016 and 2015, is shown below:
| R$ thousand | |||||
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| Year ended December 31, 2017 | ||||
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| Banking | ||||
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| Net interest income | 46,997,327 | 1,857,926 | 1,787,660 | 50,642,913 | |
| Net fee and commission income | 24,143,561 | 787,014 | (2,181,747) | 22,748,828 | |
| Net gains/(losses) on financial instruments classified as held for trading | 6,011,351 | 3,641,626 | (29,869) | 9,623,108 | |
| Net gains/(losses) on financial instruments classified as available for sale | (685,560) | 713,425 | 542,493 | 570,358 | |
| Net gain / (loss) on held-to-maturity investments | (54,520) | - | - | (54,520) | |
| Net gains/(losses) on foreign currency transactions | 1,422,957 | - | - | 1,422,957 | |
| Net income from insurance and pension plans | - | 6,239,990 | - | 6,239,990 | |
| Other operating income/(loss) | 6,694,228 | 10,595,041 | 512,624 | 17,801,893 | |
| Impairment of loans and advances | (17,895,929) | - | 1,035,094 | (16,860,835) | |
| Personnel expenses | (19,261,590) | (1,589,077) | 127,402 | (20,723,265) | |
| Other administrative expenses | (17,175,352) | (1,391,439) | 1,684,330 | (16,882,461) | |
| Depreciation and amortization | (5,555,033) | (393,618) | 1,380,083 | (4,568,568) | |
| Other operating income/(expenses) | (9,282,411) | (889,065) | 38,119 | (10,133,357) | |
| Other operating expense | (69,170,315) | (4,263,199) | 4,265,028 | (69,168,486) | |
| Income before income taxes and share of profit of associates and joint ventures | 8,664,801 | 8,976,782 | 4,383,565 | 22,025,148 | |
| Share of profit of associates and joint ventures | 1,497,268 | 217,035 | 4,108 | 1,718,411 | |
| Income before income taxes | 10,162,069 | 9,193,817 | 4,387,673 | 23,743,559 | |
| Income tax and social contribution | (887,289) | (4,156,153) | (1,385,514) | (6,428,956) | |
| Net income for the year | 9,274,780 | 5,037,664 | 3,002,159 | 17,314,603 | |
| Attributable to controlling shareholders | 9,272,962 | 4,812,425 | 3,003,977 | 17,089,364 | |
| Attributable to non-controlling interest | 1,818 | 225,239 | (1,818) | 225,239 | |
| Total assets | 988,063,541 | 295,699,951 | (59,410,052) | 1,224,353,440 | |
| Investments in associates and joint ventures | 6,364,246 | 1,847,099 | 46,039 | 8,257,384 | |
| Total liabilities | 875,887,257 | 257,329,282 | (26,556,803) | 1,106,659,736 | |
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| R$ thousand | |||||
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| Year ended December 31, 2016 | ||||
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| Banking | Insurance, pension and capitalization bonds | Other operations (1), adjustments and eliminations | Total | |
| Net interest income | 49,156,109 | 5,374,229 | 2,132,651 | 56,662,989 | |
| Net fee and commission income | 20,696,785 | 651,482 | (1,007,216) | 20,341,051 | |
| Net gains/(losses) on financial instruments classified as held for trading | 14,918,934 | 1,250,639 | 233,197 | 16,402,770 | |
| Net gains/(losses) on financial instruments classified as available for sale | (1,417,647) | 805,051 | (728,804) | (1,341,400) | |
| Net gains/(losses) on foreign currency transactions | 150,757 | - | - | 150,757 | |
| Net income from insurance and pension plans | - | 4,155,763 | - | 4,155,763 | |
| Other operating income/(loss) | 13,652,044 | 6,211,453 | (495,607) | 19,367,890 | |
| Impairment of loans and advances | (18,829,460) | - | 3,479,182 | (15,350,278) | |
| Personnel expenses | (15,733,611) | (1,387,935) | 117,763 | (17,003,783) | |
| Other administrative expenses | (14,979,689) | (1,331,349) | 161,475 | (16,149,563) | |
| Depreciation and amortization | (3,786,599) | (365,656) | 493,842 | (3,658,413) | |
| Other operating income/(expenses) | (14,421,152) | 243,631 | 173,359 | (14,004,162) | |
| Other operating expense | (67,750,511) | (2,841,309) | 4,425,621 | (66,166,199) | |
| Income before income taxes and Share of profit of associates and joint ventures | 15,754,427 | 9,395,855 | 5,055,449 | 30,205,731 | |
| Share of profit of associates and joint ventures | 1,538,058 | 168,691 | (7,024) | 1,699,725 | |
| Income before income taxes | 17,292,485 | 9,564,546 | 5,048,425 | 31,905,456 | |
| Income tax and social contribution | (7,995,420) | (3,915,822) | (2,001,488) | (13,912,730) | |
| Net income for the year | 9,297,065 | 5,648,724 | 3,046,937 | 17,992,726 | |
| Attributable to controlling shareholders | 9,293,766 | 5,550,662 | 3,049,821 | 17,894,249 | |
| Attributable to non-controlling interest | 3,299 | 98,062 | (2,884) | 98,477 | |
| Total assets | 921,916,290 | 266,642,197 | 3,471,169 | 1,192,029,656 | |
| Investments in associates and joint ventures | 5,512,372 | 1,416,617 | 73,789 | 7,002,778 | |
| Total liabilities | 821,182,152 | 266,143,979 | (775,682) | 1,086,550,449 | |
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| R$ thousand | |||||
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| Year ended December 31, 2015 | ||||
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| Banking | Insurance, pension and capitalization bonds | Other operations (1), adjustments and eliminations | Total | |
| Net interest income | 46,934,849 | 5,973,694 | 2,727,499 | 55,636,042 | |
| Net fee and commission income | 19,195,003 | 1,497,890 | (2,872,223) | 17,820,670 | |
| Net gains/(losses) on financial instruments classified as held for trading | (7,199,397) | (627,343) | (425,315) | (8,252,055) | |
| Net gains/(losses) on financial instruments classified as available for sale | (370,947) | (353,679) | 52,816 | (671,810) | |
| Net gains/(losses) on foreign currency transactions | (3,523,095) | - | - | (3,523,095) | |
| Net income from insurance and pension plans | - | 5,496,147 | 1,358 | 5,497,505 | |
| Other operating income/(loss) | (11,093,439) | 4,515,125 | (371,141) | (6,949,455) | |
| Impairment of loans and advances | (16,479,985) | - | 1,758,833 | (14,721,152) | |
| Personnel expenses | (13,103,515) | (1,217,211) | 262,679 | (14,058,047) | |
| Other administrative expenses | (13,076,913) | (1,137,706) | 492,649 | (13,721,970) | |
| Depreciation and amortization | (2,752,946) | (321,462) | 132,405 | (2,942,003) | |
| Other operating income/(expenses) | (11,726,387) | (963,525) | (298,641) | (12,988,553) | |
| Other operating expense | (57,139,746) | (3,639,904) | 2,347,925 | (58,431,725) | |
| Income before income taxes and Share of profit of associates and joint ventures | (2,103,333) | 8,346,805 | 1,832,060 | 8,075,532 | |
| Share of profit of associates and joint ventures | 1,358,047 | 166,865 | 3,139 | 1,528,051 | |
| Income before income taxes | (745,286) | 8,513,670 | 1,835,199 | 9,603,583 | |
| Income tax and social contribution | 12,621,169 | (3,192,918) | (793,929) | 8,634,322 | |
| Net income for the year | 11,875,883 | 5,320,752 | 1,041,270 | 18,237,905 | |
| Attributable to controlling shareholders | 11,874,609 | 5,215,765 | 1,042,532 | 18,132,906 | |
| Attributable to non-controlling interest | 1,274 | 104,987 | (1,262) | 104,999 | |
| Total assets | 894,579,942 | 209,789,872 | (77,666,292) | 1,026,703,522 | |
| Investments in associates and joint ventures | 4,479,642 | 1,255,326 | 80,357 | 5,815,325 | |
| Total liabilities | 804,576,173 | 188,809,573 | (57,596,986) | 935,788,760 | |
(1) Other operation represents less than 1% of total assets/liabilities and the net income for the year. The main adjustments from the information disclosed in segments columns are related to the difference between the IFRS and the Segment Report Information as impairment for loans and advance and effective interest rate.
Our operations are substantially conducted in Brazil. Additionally, as of December 31, 2017, we have a branch in New York, one branch in Grand Cayman, and one branch in London, mainly to complement our banking services and assist in import and export operations for Brazilian customers. Moreover we also have subsidiaries abroad, namely: Banco Bradesco Argentina S.A. (Buenos Aires), Banco Bradesco Europe S.A. (Luxembourg), Bradesco North America LLC (New York), Bradesco Securities, Inc. (New York), Bradesco Securities UK Limited (London), Cidade Capital Markets Ltd. (Grand Cayman), Bradesco Securities Hong Kong Limited (Hong Kong), Bradesco Trade Services Limited (Hong Kong) and Bradescard Mexico, Sociedad de Responsabilidad Limitada (Mexico).
No income from transactions with a single customer or counterparty abroad represented 10% of the Organization's income in the period of 2017, 2016 and 2015.
All transactions between operating segments are conducted on an arm's length basis, with intra-segment revenue and costs being eliminated in "Other operations, adjustments and eliminations". Income and expenses directly associated with each segment are included in determining business-segment performance.