BANCO DO ESTADO DO RIO GRANDE DO SUL S/A

Transcription

2015
BANCO DO ESTADO DO RIO GRANDE DO SUL S.A.
ANNUAL SHAREHOLDERS’ MEETING – 4.30.2015
MANAGEMENT PROPOSALS
Corporate Tax Payer’s ID (CNPJ/MF) no 92.702.067/0001-96
NIRE 43300001083
Dear Shareholders:
We present below the necessary information according to CVM Instruction 481, of December 17, 2009,
namely:
1. Proposal for allocation of net income. The retained earnings for the year ended December 31, 2014
totaled R$691,415,413.02. The proposed distribution comprises the legal, statutory and expansion
reserves and the payment of interest on own capital and/or dividends at amount equivalent to 40% of
net income for the year, and proposed total payout of 40% for 2014;
2. Administrators and Fiscal Council. We have attached the list of the nominees to the Board of Directors
and Fiscal Council indicated by the controlling shareholder;
3. Capital increase proposal. The proposed capitalization for the expansion and statutory reserves,
including the balances of R$144,617,942.24 and R$105,382,057.76 related to the respective accounts,
aims at the consolidation of the capital basis necessary to support the Company’s business expansion.
Once the proposal is approved, the capital stock will be increased from R$4.0 billion to R$4.25 billion;
4. Proposed amendment to the Bylaws. The proposal refers to the amendments to articles 4, 5 and 15
of the Company’s Bylaws, which set forth, respectively:
a) the capital stock value, altered by the use of profit reserves;
b) the adequacy of the corporate capital, due to the conversion of 10,626 (ten thousand,
six hundred and twenty-six) Class A preferred shares into Class B preferred shares that took place
between February 28, 2012 and February 28, 2013;
c) the condition for the election of members of the Board of Directors and of the Board of
Executive Officers, as set forth by Article 15, paragraph 1.
Banrisul Annual Shareholders’ Meeting
Management Proposals
April 30, 2015
2
5. Proposed Compensation of the Board of Executive Officers, the Board of Directors and Fiscal Council
for the year 2015.
6. Management comments on the Company’s current condition.
The abovementioned matters will be submitted to the shareholders at the General and Extraordinary
Meetings to be requested by Management, in accordance with the respective terms and other
applicable legal provisions.
Porto Alegre, March 30, 2015.
João Emilio Gazzana
CFO & Investor Relations Officer
April 30, 2015
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NIRE 43300001083
CVM INSTRUCTION No 481/2009
ALLOCATION OF NET INCOME
April 30, 2015
4
PROPOSAL FOR ALLOCATION OF NET INCOME FOR THE YEAR ENDED 2014, IN ACCORDANCE WITH
ATTACHMENT 9-1-II OF CVM INSTRUCTION No. 481, OF DECEMBER 17, 2009
Allocation of net income
The retained earnings for the year ended December 31, 2014 totaled R$691,415,413.02. The allocation
of profits proposed by management, as well as the prior-year information, is presented below:
2014
2013
2012
2011
Legal Reserve
R$
Statutory Reserve
R$ 151,946,853.26
R$ 197,903,621.62
R$ 204,647,592.14
R$ 226,087,235.81
Expansion Reserve
R$ 144,617,942.25
R$ 239,785,711.83
R$ 246,547,982.19
R$ 274,737,698.01
Interest on Own Capital
R$ 268,806,271.57
R$ 244,942,767.49
R$ 253,387,036.03
R$ 231,641,300.25
Dividends
R$
R$
R$
R$ 126,665,262.01
30,389,370.65
12,026,975.29
R$
39,580,724.32
69,401,661.20
R$
40,929,518.43
73,078,239.76
R$
45,217,477.16
Interest on own capital / dividends
In accordance with Law no. 9,249/95, we paid during the year ended 2014 interest on own capital and
dividends in the amount of R$264.4 million, amounting to 40.0% of the net income.
The payment of additional dividends proposed to the General Shareholders’ Meeting, in the amount of
R$12.0 million, accounts for the total 40% of the distribution of the adjusted net income for the year
ended 2014. All shareholders registered with our company as owners or beneficial owners of our shares
on April 30, 2015 will be entitled receive such dividends, and the payment of additional amount should
be completed by May 29, 2015 without any interest or monetary restatement of the declared value.
There will be no distribution of dividends based on profits earned in prior to December 31, 2014. Holders
of our shares do not have the right to receive cumulative dividends.
The payment of interest on own capital resulted in a tax benefit to Banrisul of R$107,522,508.64. The
advanced payment of interest on own capital corresponded to the distribution of 38.87% on retained
earnings in December 2014, which allowed the total tax benefit set forth in Law no. 9,249/95.
For comparison purposes, the tables below set forth the net income for the year ended 2014 and for
the prior years, in addition to the amounts distributed as interest on own capital and dividends, divided
also per type of share:
April 30, 2015
5
Unit and Total Dividends Paid
per Type and Class of Share
ON
PNA
PNB
Total Preferred Shares
Total
Net Income
R$346,647,931.12
R$5,969,706.82
R$338,797,775.09
R$344,767,481.91
R$691,415,413.02
Legal Reserve
R$15,236,010.45
R$262,382.98
R$14,890,977.22
R$15,153,360.19
R$30,389,370.64
Distributed as Interest on
Equity and Dividends
R$132,564,768.29
R$2,282,929.54
R$129,562,719.15
R$131,845,648.69
R$264,410,416.98
Interest on Equity
R$126,534,925.71
R$2,179,088.18
R$123,669,427.80
R$125,848,515.98
R$252,383,441.69
R$-
R$-
R$-
R$-
R$-
R$6,029,842.59
R$103,841.36
R$5,893,291.34
R$5,997,132.70
R$12,026,975.29
R$132,564,768.29
R$2,282,929.54
R$129,562,719.15
R$131,845,648.69
R$264,410,416.98
R$1.690608
R$1.690608
R$1.690608
R$1.690608
R$1.616301
R$1.616301
R$1.616301
R$1.616301
Dividends (Paid)
2014
Dividends (Provisioned)
Total Distribution
Payout
Earnings per Share
Earnings per Share (net of
Legal Reserve)
Interest on Equity - per Share
R$0.657208
R$0.664246
R$0.657209
R$0.659554
Dividends (Paid) - per Share
R$-
R$-
R$-
R$-
Dividends (Provisioned) - per
Share
Total Distribution per Share
R$0.029382
R$0.032321
R$0.029382
R$0.030362
R$0.686591
R$0.696566
R$0.686591
R$0.689916
Net Income
ON
PNA
PNB
Total
R$396,883,703.78
R$6,845,709.47
R$387,885,073.28
R$394,730,782.74
R$791,614,486.52
Legal Reserve
R$19,844,185.19
R$342,285.47
R$19,394,253.66
R$19,736,539.14
R$39,580,724.33
R$150,815,807.43
R$2,601,369.60
R$147,396,327.84
R$149,997,697.44
R$300,813,504.87
R$116,020,602.43
R$2,001,199.16
R$113,390,042.09
R$115,391,241.25
R$231,411,843.68
R$-
R$-
R$-
R$-
R$-
R$34,795,205.01
R$599,326.87
R$34,007,129.32
R$34,606,456.19
R$69,401,661.20
Total Distribution
R$150,815,807.43
R$2,601,369.60
R$147,396,327.84
R$149,997,697.43
R$300,813,504.86
R$1.935609
R$1.935609
R$1.935609
R$1.935609
R$1.838828
R$1.838828
R$1.838828
R$1.838828
R$0.598877
R$0.603749
R$0.598877
R$0.600501
R$-
R$-
R$-
R$-
R$0.169697
R$0.169697
R$0.169697
R$0.169697
R$0.768574
R$0.773446
R$0.768574
R$0.770198
ON
PNA
PNB
Total
R$410,408,312.22
R$818,590,368.62
Interest on Equity
2013
Dividends (Paid)
Payout
Earnings per Share
Legal Reserve)
Share
Net Income
2012
40%
40%
R$7,103,868.54
R$401,078,187.86
R$408,182,056.40
Legal Reserve
Interest on Equity
R$20,520,415.61
R$355,193.43
R$20,053,909.39
R$20,409,102.82
R$40,929,518.43
R$155,955,158.64
R$2,699,470.05
R$152,409,711.39
R$155,109,181.43
R$311,064,340.07
R$119,316,666.19
R$2,065,284.46
R$116,604,149.65
R$118,669,434.12
R$237,986,100.31
Dividends (Paid)
R$20,054,392.43
R$347,126.91
R$19,598,480.67
R$19,945,607.58
R$40,000,000.00
R$16,584,100.02
R$287,058.68
R$16,207,081.06
R$16,494,139.74
R$33,078,239.76
Total Distribution
R$155,955,158.64
R$2,699,470.05
R$152,409,711.39
R$155,109,181.43
R$311,064,340.07
Payout
40%
Earnings per Share
Legal Reserve)
R$2.001568
R$2.001568
R$2.001568
R$2.001568
R$1.901490
R$1.901490
R$1.901490
R$1.901490
R$0.619475
R$0.630075
R$0.619475
R$0.623008
Share
R$0.097721
R$0.107493
R$0.097721
R$0.100978
R$0.080811
R$0.088892
R$0.080811
R$0.083505
R$0.798007
R$0.826460
R$0.798007
R$0.807491
April 30, 2015
6
2011
ON
PNA
PNB
Total
Net Income
R$453.404.231,75
R$7.870.403,41
R$443.074.308,08
R$450.944.711,49
R$904.348.943,24
Legal Reserve
R$22.670.211,59
R$393.520,17
R$22.153.715,40
R$22.547.235,57
R$45.217.447,16
R$430.734.020,16
R$7.476.883,24
R$420.920.592,68
R$428.397.475,92
R$859.131.496,08
Interest on Equity
R$108.788.751,48
R$1.888.406,20
R$106.310.213,74
R$108.198.619,94
R$216.987.371,42
Dividends (Paid)
R$30.081.589,75
R$522.170,35
R$29.396.239,90
R$29.918.410,25
R$60.000.000,00
R$33.423.284,38
R$580.177,05
R$32.661.800,58
R$33.241.977,63
R$66.665.262,01
Total Distribution
R$172.293.625,61
R$2.990.753,60
R$168.368.254,21
R$171.359.007,81
R$343.652.633,42
R$2,211260
R$2,211260
R$2,211260
R$2,211260
R$2,100697
R$2,100697
R$2,100697
R$2,100697
Payout
Earnings per Share
Legal Reserve)
40%
R$0,530565
R$0,519827
R$0,530759
R$0,530565
R$0,146708
R$0,143739
R$0,146762
R$0,146708
Share
R$0,163006
R$0,159707
R$0,163066
R$0,163006
R$0,840279
R$0,823273
R$0,840587
R$0,840279
In accordance with the Bylaws, the annual mandatory dividend is equivalent to 25% of the net income
for the year, adjusted as determined by applicable law.
At the meeting held on March 03, 2015, Minute no. 570 the Board of Directors proposed the distribution
of dividends on net income for the year ended 2015, maintaining the current policy of 40%, of which
15% as extraordinary dividends, as set forth in Law no. 6,404/76, to be presented at the Annual
Shareholders’ Meeting to be held on April 30, 2015.
The Board of Directors, in a meeting held on May 6, 2008, as set forth in article 85 of the Bylaws, which
determines the payment of interest on own capital and establishes that such payment should be
included in the mandatory minimum dividend, approved the adoption of the policy for the payment of
interest on own capital before the conclusion of each quarter. As from such date, the payments were
performed up to the last business day of the respective quarter.
The Bylaws allow the payment of interest on own capital as an alternative for the payment of dividends.
The interest on own capital are subject to the variation of the Long-Term Interest Rate (TJLP) on a
proportional basis, and the amount paid, net of income tax, may be included as a portion of the
mandatory minimum dividend.
In accordance with applicable legislation, we are obligated to pay to the shareholders an amount
sufficient to assure that the net amount received as interest on own capital, less the payment of
withholding income tax, plus the value of the dividends declared, is at least equivalent to the value of
the mandatory minimum dividend.
The payment of interest on own capital to shareholders, resident or not in Brazil, is subject to the
withholding income tax at the following rates:
April 30, 2015
7
i. 15% (fifteen percent) applicable to individuals and legal entities in general;
ii. 25% (twenty-five percent) applicable to shareholders resident in tax heaven, that is, a country
where the income tax is not charged or the percentage of which is below 20% (twenty percent),
or where the local legislation sets forth limitations to the disclosure of the shareholders’
composition or the investment’s holder;
iii. 12.5% (twelve point five percent) applicable to shareholders resident in Japan; and
iv. 0% (zero percent) applicable to shareholders (legal entities) which are able to prove their
respective exemptions.
At the end of the respective financial year, the total dividends proposed is calculated (40% for the year
ended 2014, which is being also proposed for the year 2015), from which value the interest on own
capital, net of income tax already paid, is discounted, being the General Meeting responsible for the
resolution of its respective payment, which payment must be performed within 60 days as from the date
such dividends were declared, except in the event the shareholders determine another payment date;
in any case, such payment must be performed before the end of the fiscal year on which such dividends
were declared.
The payment of the dividends for a specific year ended is based on the audited financial statements for
the immediately previous fiscal year, and must be performed within 60 days as from the date such
dividends were declared, except in the event the shareholders determine another payment date; in any
case, such payment must be performed before the end of the fiscal year on which such dividends were
declared.
Regarding dividends or interest on equity paid based on quarterly net income, we inform that declared
interest on equity amounts to R$252,383,441.66 and supplementary dividends, R$ 12,026,975.29.
The following table contains the payment dates of the amount of R$264,410,416.95, related to quarterly
interest on equity already paid and supplementary dividends to be distributed on May 29, 2015, if
approved in the ASM/ESM of April 30, 2015:
April 30, 2015
8
Quarterly interest on equity and
supplementary dividends’ dates
(*)
May 29, 2015
December 17, 2014
September 29, 2014
June 20, 2014
March 21, 2014
(*)
May 29, 2015
December 17, 2014
September 29, 2014
June 20, 2014
March 21, 2014
(*)
May 29, 2015
December 17, 2014
September 29, 2014
June 20, 2014
March 21, 2014
(*)
Total amount of quarterly interest on
equity and supplementary dividends
ON
Supplementary Dividends
Interest on Equity
Interest on Equity
Interest on Equity
Interest on Equity
PNA
Interest on Equity
Interest on Equity
Interest on Equity
Interest on Equity
PNB
Interest on Equity
Interest on Equity
Interest on Equity
Interest on Equity
264,410,416.95
132,564,771.26
6,029,842.28
32,116,912.95
31,847,756.98
31,396,183.86
31,174,075.20
2,282,745.17
103,860.47
552,991.18
548,356.84
540,581.63
536,955.05
129,562,900.53
5,893,272.54
31,389,694.96
31,126,633.44
30,685,285.21
30,468,014.38
Date submitted to the ASM/ESM of April 30, 2015.
Calculation of Mandatory Minimum Dividend
The shareholders are entitled with the right to receive each year, as mandatory dividend, a percentage
equivalent to 25% of the net income adjusted for the year, less the percentage equivalent to the legal
reserve. The minimum percentage may be supplemented by the extraordinary distribution of dividends,
as approved by the shareholders’ meeting. The mandatory dividend is paid on a full basis.
The net income for the year is decreased or increased (i) 5% to the legal reserve, up to the limit set forth
in the Brazilian Corporate Law, being understood that the company must not create this reserve for the
year when such reserve’s balance, plus the capital reserves, as set forth in paragraph 1, article 182, of
Law no. 6,404/76, exceeds 30% (thirty percent) of the capital stock; and (ii) the amount allocated to the
creation of the reserve for contingencies, as proposed by the Executive Board, and the reversal of this
reserve for the prior years.
The necessary amount for the payment of a fixed dividend of 6% per year to Class A preferred shares
will be deducted from the amount allocated to the payment of the dividends, which must be calculated
upon the result of the division of the capital stock by the number of shares that comprises it.
Upon payment of dividends equivalent to the abovementioned value to all shares issued by us,
regardless of their type or class, the Class A preferred shares will be entitled with the right to participate
in the distribution of any other dividends and bonus in cash distributed by us, considering the addition
of 10% on the value paid to the ordinary shares and Class B preferred shares.
Legal Reserve
April 30, 2015
9
The capital reserves represent the effective additions to the company’s assets originated not from the
income from operations but from shareholders’ or third-parties’ contributions, including governmental
contributions under the form of tax incentives. The legal reserve’s purpose is to assure the company’s
capital stock, which legal reserve must solely be used to offset losses and increase the capital stock.
The proposed allocation of 5% of retained earnings for the year ended 2014 to the legal reserve,
deducted the amount of the valuation adjustments related to post-employment benefits, totaled
R$30,389,370.65, is set forth in Article 193, of Law no. 6,404, of December 15, 1976, which sets forth
the creation of reserves and retained earnings, as well as in accordance with Article 71 of our Bylaws,
which provides for the allocation of said amount to the legal reserve.
Statutory Reserves
The statutory reserves are created as set forth in our Bylaws. In accordance with Article 194, of Law no.
6,404/76, the company may create such type of reserve provided that such company is able to: (i)
describe, accurately and fully, the respective purpose; (ii) set forth the criteria to determine the annual
portion of the net income allocated to create the statutory reserve; and (iii) determine the maximum
limit for such reserve.
Article 86 of the Bylaws sets forth the allocation of up to 25% of the net income for the creation of the
investment reserve, to be invested in IT. The presented proposal suggests an allocation of R$314 million
in IT, equivalent to 45.44% of the net income for the year ended 2014.
The amount of R$151,946,853.26 for the Statutory Reserve represents 25% of net income for the year
ended 2014, which was R$691,415,413.02 deducted the amount of R$83,628,000.00 related to the
valuation adjustments related to post-employment benefits.
Expansion Reserve
Amongst the proposal presented by the management bodies at the Shareholders’ Meeting for retained
earnings, as set forth in Article 196 of Law no. 6,404/76, this reserve is denominated differently, such as
income reserve for expansion, reserve for investment plan, among others.
The proposal for the allocation of R$144,617,942.25 as expansion reserve, equivalent to 20.91% of net
income for the year ended 2014, is referred to in the Technical Study 2015/2024 and Capital Budget
2015/2019, as evaluated and approved, in accordance with the Minute no. 877 of Fiscal Council related
to the meeting held on January 06, 2015, and Minute no. 568 of the Board of Directors related to the
meeting held on January 06, 2015.
April 30, 2015
10
Allocation of capital stock for investments
In accordance with the long-term strategic plan and considering the equity variations estimated for
2015/2019, the portion of the net income withheld for allocation to investments is indicated below. It is
projected for that period equity variations that include credit assets, treasury and fixed assets, in
accordance with the policy described below.
Capital Stock Budget for investments between 2015 and 2019
R$ Million
2015
2016
2017
2018
2019
Total
Origin
Deposits
Other Funding / Escrow Deposits
Retained Earnings from Prior Years
To be used in Investments
To be used as Working Capital
3,029
2,210
634
186
314
(128)
6,519
5,448
801
271
295
(24)
6,597
6,173
164
260
276
(17)
7,409
6,950
176
284
269
15
8,466
7,887
213
366
248
118
32,020
28,667
1,988
1,366
1,402
(36)
Allocation
Credit Operations
Marketable Securities
Expansion / Technologial Update
Refurbishments and Expansions
3,029
2,678
38
238
76
6,519
2,018
4,207
238
57
6,597
3,235
3,086
232
44
7,409
3,678
3,462
229
40
8,466
4,186
4,032
207
40
32,020
15,794
14,824
1,145
257
The policy for allocation of funds comprises the following assumptions:
Credit operations
We adopt strict risk management procedures, in order to preserve the company’s selective and
conservative behavior. The goal is to maintain the continuous expansion of the credit portfolio on a
proper and sustainable manner, as well as assure attractive levels in terms of profitability. It is expected
investments of R$15.8 billion in such assets within five years.
Treasury operations
Due to the estimated credit portfolio expansion, increase of escrow deposits and the Bank’s investments
needs, it is expected that treasury operations increase by R$14.8 billion in the next five years.
Expansion/ Technological modernization
Management intends to maintain and reinforce the investments in the information technology area.
This purpose reflects our pioneer position in the Brazilian market, which position is able to assure a
number of awards and international recognition in the banking technological industry.
April 30, 2015
11
Refurbishment and expansion
The modernization and conservation of our physical facilities, in order to provide better working
conditions through refurbishment and expansion of buildings, CFTVs (internal circuits of television),
doors able to detect metals, alarms, thermal conditioning, automatic and electric infrastructure,
furniture, layout modifications and visual modernization.
April 30, 2015
12
Minute no. 877
1.Date, Time and Place: the ordinary meeting of the Fiscal Council of Banco do Estado do Rio Grande do
Sul S.A. (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held on January
06, 2015, at 09:30 am, at the Company’s head office at Rua Capitão Montanha, 177, 4th floor, Porto
Alegre - RS.
2.Verification of attendance: Cláudio Morais Machado - Chairman; André Luiz Barreto de Paiva Filho Vice Chairman; Eduardo Ludovico da Silva and Djedah de Souza Lisboa - Members. Also present, from
the Accounting Unit: Werner Kohler, Superintendent, and Dione Martins da Silva, Executive Manager.
3.Deliberation: the Board discussed and approved the 2015/2024 Technical Study and the 2015/2019
Capital Budget.
4.Conclusion: Nothing further to discuss, the meeting was closed, this minute was prepared, read,
approved and signed by the members present. Secretary to the meeting, Mrs. Eliane Machado Leal
Guimarães, analist at the General-Secretariat of the Banco do Estado do Rio Grande do Sul S.A.
CERTIFICATE
I certify that this record is a true copy of which appears in the Minute no. 877, dated January 06, 2015,
drawn into the book of Minutes of Audit Committee of Banco do Estado do Rio Grande do Sul S.A., signed
by Mr. Cláudio Morais Machado - Chairman; André Luiz Barreto de Paiva Filho – Vice-Chairman; Eduardo
Ludovico da Silva and Djedah de Souza Lisboa.
Mirian Oliveira Bandeira
General-Secretary
April 30, 2015
13
Minute no. 568
1.Date, Time and Place: the ordinary meeting of the Board of Directors of Banco do Estado do Rio
Grande do Sul S.A. (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held
on January 06, 2015, at 02:00 pm, at the Company’s head office at Rua Capitão Montanha, 177, 4th
floor, Porto Alegre - RS.
2.Verification of attendance: Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo,
Guilherme Cassel, João Acir Verle, Marcelo Tuerlinckx Danéris and Juçara Maria Dutra Vieira - Members;
Luiz Carlos Morlin – Chief Risk Officer; Werner Kohler – Superintendent, and Dione Martins da Silva –
Executive Manager of the Accounting Unit; Denise Eskeff Coelho – Superintendent of the Credit Unit,
and Carlos Augusto Grazziotin – Head of Internal Audit.
3.Agenda: 2015/2024 Technical Study and 2015/2019 Capital Budget.
4.Deliberations: 2015/2024 Technical Study and 2015/2019 Capital Budget: the Board of Directors
approved of: a) the 2015/2024 Technical Study that includes, for the next ten years, projections of the
main items of Banrisul’s Income Statement, Balance Sheet and Cash Flow (unconsolidated statements),
in compliance with the regulations set forth by the Central Bank of Brazil. The projected results are based
on assumptions related to internal and external environments, and on business strategies that result in
the projection of tax credits; b) the 2015/2019 Capital Budget, whose investments projections cover
fixed assets. Banrisul’s capital allocation covers credit assets, treasury and other assets.
approved and signed by the members present. Secretary to the meeting, Mrs. Mirian Oliveira Bandeira
– General-Secretary of the Banco do Estado do Rio Grande do Sul S.A..
CERTIFICATE
I certify that this record is a true copy of which appears in the Minute no.568, dated January 06, 2014,
drawn in the book of Minutes of Board of Directors of Banco do Estado do Rio Grande do Sul SA, signed
by Mr. Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo; Guilherme Cassel, João
Acir Verle, Marcelo Tuerlinckx Danéris e Juçara Maria Dutra Vieira - Members of the Board of Directors.
Túlio Luiz Zamin
CEO
April 30, 2015
14
Minute No. 571
1.Date, Time and Place: : the ordinary meeting of the Board of Directors of Banco do Estado do Rio
Grande do Sul S.A. (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held
on March 25, 2015, at 02:00 pm, at the Company’s head office at Rua Capitão Montanha, 177, 4th floor,
Porto Alegre - RS.
2. Verification of attendance: Odir Alberto Pinheiro Tonollier – Chairman; Túlio Luiz Zamin – ViceChairman; Aldo Pinto da Silva; Dilio Sérgio Penedo, Guilherme Cassel, João Acir Verle and Marcelo
Tuerlinckx Danéris – Members.
3. Agenda: 3.1) resignations of the Chairman of the Board of Directors, Mr. Odir Alberto Pinheiro
Tonollier and of the Member Marcelo Tuerlinckx Danéris, and 3.2) designation of Mr. Luiz Gonzaga Veras
Mota and Mr. Irany de Oliveira Sant’Anna Junior as Members of Board of Directors.
4. Deliberations: 4.1) Resignation of Mr. Odir Alberto Pinheiro Tonollier and Mr. Marcelo Tuerlinckx
Danéris of Board of Directors: the Board of Directors received , on March 25, 2015 resignation lettes
from Mr. Odir Alberto Pinheiro Tonollier and Marcelo Tuerlinckx Danéris, in which they resigns the to
the positions of Chairman and member ofthe Board of Directors, respectively, and 4.2) Designations of
Mr. Luiz Gonzaga Mota Veras and Mr. Irany de Oliveira Sant'Anna Junior: The members of the Board,
as provided in Article 22 of the Bank's Bylaws, and pursuant to the correspondence CC/SL 036, dated
January 29, 2015, designated Mr. Luiz Gonzaga Mota Veras, Brazilian, married, economist, Identity Card
No. 3010736019 SJS/RS, issued on 02/19/1999, Individual Tax Payer’s No. 287319640-87, with address
at Caldas Junior Street, 108, 4th floor, Downtown, Porto Alegre, RS, and Mr. Irany de Oliveira Sant'Anna
Junior, Brazilian, single, public servant from the Federal Government, Identity Card No. 4027264292
SJS/RS, issued on 18/11/2005, Individual Tax Payer’s No. 339511440-68, with address in Caldas Junior
Street, 108, 4th floor, Historical District, Porto Alegre, RS, for the position of members of the Board of
Directors. The mandate of the newly appointed members shall extend until the investiture of their
deputies, to be selected at the Annual General Meeting of 2015. On the same meeting of the Board, the
members informed the elected the requirements set by the Central Bank of Brazil and that their
investidures will be conditioned to the ratification of their names by that Supervisory Authority.
approved and signed by the members present. Secretary to the meeting, Mrs. Mirian Oliveira Bandeira,
General-Secretary of the Banco do Estado do Rio Grande do Sul S.A..
CERTIFICATE
I certify that this record is a true copy of which appears in the Minute no.571, dated March 25, 2015,
drawn in the book of Minutes of Board of Directors of Banco do Estado do Rio Grande do Sul SA, signed
by Mr. Odir Alberto Pinheiro Tonollier – Chairman; Mr.; Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da
Silva; Dilio Sérgio Penedo; Guilherme Cassel; João Acir Verle; Marcelo Tuerlinck Danéris - Members of
the Board of Directors.
Porto Alegre, March25, 2015.
Túlio Luiz Zamin
CEO
April 30, 2015
15
NIRE 43300001083
ADMINISTRATORS AND FISCAL COUNCIL ELECTION
April 30, 2015
16
INFORMATION ON THE PERSONS INDICATED AS MEMBERS OF THE BOARD OF DIRECTORS AND OF THE
FISCAL COUNCIL, AS SET FORTH IN ARTICLE 10 OF CVM INSTRUCTION 481, OF DECEMBER 17, 2009
12.6 Administrators and members of the Fiscal Council
12.6.1 Board of Directors
The tables below set forth the Board of Directors’ members indicated by the controlling shareholder at
the Annual Shareholders’ Meeting of the Institution held on April 30, 2015:
Name
Age
Occupation
Individual Taxpayer’s ID or Passport No.
Title
Election Date
Initial Office Term
Mandate period
Other duties or functions exercised in the Company
Elected by the controller
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Giovani Batista Feltes
57 years old
Businessman
265.865.680-72
Chairman
April 30,2015
After approval from the Central Bank of Brazil
Up to the innauguration of the members elected at the AGSM to be
held in 2017
No
Yes
Luiz Gonzaga Veras Mota
56 years old
Economist
287.319.640-87
Vice-Chairman
April 30,2015
held in 2017
Yes (CEO)
Yes
Irany de Oliveira Sant’ Anna Junior
55 years old
Economist
339.511.440-68
Member
April 30,2015
held in 2017
Yes (Vice-President)
Yes
April 30, 2015
17
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Joao Gabbardo Dos Reis
59 years old
Medic
223.127.490-68
Member
April 30,2015
held in 2017
No
Yes
Joao Carlos Brum Torres
71 years old
Lawyer – Master’s Degree in Philosophy
142.916.650-91
Member
April 30,2015
held in 2017
No
Yes
Joao Verner Juenemann
75 years old
Accountant - Professor
000.952.490-87
Member
April 30,2015
held in 2017
No
Independent, as set forth by Article 20, paragraph 3, of of the
Bylaws
Carlos Antonio Burigo
50 years old
Accountant
400.828.570-91
Member
April 30,2015
held in 2017
No
Yes
The inauguration of the Board of Directors’ members elected at the Annual Shareholders’ Meeting of
the Institution held on April 30, 2015 is subject to the approval of the Central Bank of Brazil.
12.6.2 Board of Executive Officers
The election of the Board of Executive Officers’ members is under the responsibility of the Company’s
Board of Directors.
April 30, 2015
18
12.6.3 Fiscal Council
The tables below set forth the Board of Directors’ members indicated by the controlling shareholder at
the Annual Shareholders’ Meeting of the Institution to be held on April 30, 2015 (effective and alternates
members):
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Fernando Ferrari Filho
57 years old
Economist
627.544.917-91
Member
April 30,2015
held in 2016
No
Yes
Cláudio Morais Machado
71 years old
Accountant
070.068.530.-87
Member
April 30,2015
held in 2016
Yes
Yes
Urbano Schmitt
59 years old
Accountant
255.350.130-72
Member
April 30,2015
held in 2016
No
Yes
Enory Luiz Spinelli
71 years old
Accountant
002.140.430-53
Member (alternate).
April 30,2015
held in 2016
No
Yes
April 30, 2015
19
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Fernando Antonio Viana Imenes
63 years old
Accountant
201.365.956-34
Member (alternate)
April 30,2015
held in 2016
No
Yes
Vicente Jorge Soares Rodrigues
61 years old
Accountant
172.994.110-91
Member (alternate)
April 30,2015
held in 2016
No
Yes
The term of the Fiscal Council members elected at the Annual and Extraordinary Shareholders’ Meeting
of the Institution to be held on April 30, 2015 will commence their mandate after approval from the
Central Bank of Brazil.
12.7 Provide information referred to in item “12.6” as regards to the members comprising the
statutory committees, as well as the members comprising the audit, risk, financial and compensation
committees, although these committees are not statutory bodies
The election of the Audit Committee’s members is under the responsibility of the Company’s Board of
Directors.
12.8 Summary of the Administrators and Members of the Fiscal Council
a. Summary of the Administrators and Members of the Fiscal Council
Board of Directors
Giovani Batista Feltes – Member
Entrepreneur, also held the following positions: City Councillor in Campo Bom/RS, 1977-1988; Mayor of
Campo Bom/RS, 1989-1992; Rio Grande do Sul State Representative, 1995-2000; Mayor of Campo
April 30, 2015
20
Bom/RS, 2001-2008; Rio Grande do Sul State Representative, 2011-2014; Finance Secretary of the State
of Rio Grande do Sul, from February 12, 2015.
Luiz Gonzaga Veras Mota – Member
Degree in Economics from São Gabriel Educational Foundation and Teacher Qualification from São Judas
Tadeu Educational Institution; Postgraduate degree in Business Administration and Finance from UFRGS;
Specialization in Accounting Sciences at PUCRS, Specialization in Banking Management at the
Association of State Commercial Banks (Asbace); Specialization in Marketing at ADVB. Also, he has held
the following positions: Director of General Insurance Company Union, April/1998 to January/1999;
admitted into Banrisul in 1979, served as head of Real Estate Credit Department, 1994 to 1995; head of
the Department of Risk Management, 1996 to 1997; Head of the Finance Department, 1997 to 1998;
effective member of the Credit Committee, 1994 to 1998; President of the Funding and Resource
Allocation Committee, 1997 to 1998; head of the Department of Organization and Methods, January to
September/1999; Regional Superintendent, 1999 to 2003; Executive Superintendent of Retail Business
Unit, 2003 to 2006; effective member of the Credit Committee of Banrisul, 2003 to 2006; coordinator of
the Technology and Business Committee, 2003 to 2006; member of the Funding and Resource Allocation
Committee, 2003 to 2006; Director of Asset Management, 2006 to 2010; Chief Financial Officer, 2010 to
April/2011; Executive Superintendent of Financial Unit, 2011 to 2015. Also served as coordinator of the
Economic Management Committee, member of the Corporate Risk Committee and the Business
Management Committee.
Irany Sant'anna Júnior – Member
Degree in Economics from the Federal University of Rio Grande do Sul in 1981, has also held the
following positions: Director advisor to the Formac Administradora, 1982 to 1983; An independent
consultant in the financial economics area serving FININVEST CFI and Bozano SISMONSEN DTVM, 1983
to 1994; Analyst of the Department of Supervision of the Central Bank of Brazil (BACEN), 1994 to 1995;
Supervisory Inspector in the Central Bank of Brazil, 1995 to 1998; Surveillance Supervisor in the Central
Bank of Brazil, September/1998 to April/2009; Vice President of Finance of Grêmio Foot-Ball Porto
Alegrense, 2009 to 2010; Banking Supervision Technical Manager for the Southern Region of Brazil in
the Central Bank of Brazil, may/2009 to May/2013; Deputy Head of the Banking Supervision Department
(SP), June/2013 to 2015.
April 30, 2015
21
João Verner Juenemann - Member
Mr. Juenemann holds an Accounting degree from PUCRS (concluded in 1962); an English degree from
PUCRS (concluded in 1962) and a bachelor’s degree in Business Administration from UFRGS (concluded
in 1971), with a graduate degree in Auditing from UFRGS (concluded in 1965). He also completed the
following extracurricular courses: Proficiency in German at the Goethe Institute, Germany in 1956;
Proficiency in English at Michigan State University, USA in 1957; Financial Administration, General
Electric S.A. in Rio de Janeiro state from 1963 to 1964; Auditing Course from the Central Bank of Brazil/
Brazilian Capital Markets Institute - IBMEC in 1974. Juenemann & Associados - Perícias e Investigações
Contábeis S/S Ltda., since 1999; Juenemann & Associados - Consultoria Empresarial Ltda., since 1999;
Juenemann & Associados - Auditores e Consultores since 1977; expert and forensic accountant since
1985; assistant to the Financial Department at Hércules S.A. - Fábrica de Talheres from 1964 to 1965;
assistant to the officers at Metalúrgica Gerdau S.A. in 1967; head of the branch office of Parada, Vidigal
Pontes & Associados - Distribuidora Nacional de Títulos e Valores Mobiliários S.A. from 1971 to 1979;
sales supervisor at Investbanco - Banco de Investimento Industrial S.A. from 1971 to 1972; sales manager
at Banco Crefisul de Investimentos S.A. from 1972 to 1974; assistant to the CEO of Companhia
Riograndense de Telecomunicações from 1995 to 1998. He also served as an alternate member on the
Fiscal Councils of Hospital Nossa Senhora da Conceição S.A. in 1991; Hospital Cristo Redentor S.A. in
1991; Hospital Fêmina S.A. in 1991; a member, vice-president and president of the Conselho Regional
de Contabilidade (Regional Accounting Council) of Rio Grande do Sul from 1968 to 1981 and a life
member of the Advisory Board since 2001; member, vice-president and president of the Conselho
Federal de Contabilidade from 1974 to 1985 and a life member of the Advisory Board since 2001; a
member of the Management Board of the Instituto Brasileiro de Contadores (IBRACON) - 6th Regional
Branch; and has been a member of the National Association of Accountants, based in New York, since
1981 until nowadays; head of the Governmental Relations with Auditors Subcommittee of the
International Federation of Accountants - IFAC from 1983 to 1986; member of the Fiscal Council of Banco
Meridional do Brasil from 1985 to 1987;member of the Board of Directors of DHB S.A. Ind. E Comércio
from 2008 to 2011; member of the Board of Directors of DHB S.A. Ind. E Comércio from 2008 to 2011;
head of the Audit Committee of Tupy S.A., from 2009 to 2011; member of the Fiscal Council of Dimed
S.A. from 2009 to 2011; member of the Fiscal Council of Karsten S.A. from 2007 to 2010; member of the
Fiscal Council of Cia. Providência Ind. E Comércio in 2010;
member of the Fiscal Council of Ind. De Electro Aços Altona S.A. in 2010; member of the Audit Committee
of Banrisul, from 2004 to 2009; member of the Board of Directors of Banrisul, from 2003 to 2011. Current
Director of Juenemann & Associados, member of the Board of Directors of DHB, head of the Audit
Committee of Tupy, member of the Fiscal Council of Indusval, Dimed, INDG and Plascar. He is the
April 30, 2015
22
Brazilian representative to the ISAR/UN and member of the College of the Accounting Pronouncements
Committee - CPC.
Joao Carlos Brum Torres– Member
Degree in Philosophy Course at the Federal University of Rio Grande do Sul (1967), Degree in Law School
at the Federal University of Rio Grande do Sul (1968), Master in Departement de Philosophie - Université
de Paris XIII (Paris-Nord) (1974) and a PhD in Human Sciences from the University of São Paulo (1985);
(2014) Post-Doctorate - University of California Berkeley. It is for the fourth time research scholarship
fellow of CNPQ (2010-2013; formerly: 08/85 to 07/87, 08/88 to 07/90 and 04/92 / to 03/94). He has held
the posts of Director for Social and Urban Operations of BADESUL (1990 - 1991); Municipal Secretary of
Funding and resources of the city of Porto Alegre (1993-1994); Secretary of State for Coordination and
Planning in the Government of Rio Grande do Sul State for two administrative periods (1995-1998 and
2003-2006). Currently he is professor in the Department of Philosophy of University of Caxias do Sul UCS, is also retired Professor of the Federal University of Rio Grande do Sul, exercising the functions of
Associate Professor at the same institution.
João Gabbardo dos Reis – Member
Degree in Medicine from the Federal University of Rio Grande do Sul (1980), specialization in pediatrics
at the Clinical Hospital of Porto Alegre by UFRGS (1982). Public Health Doctor, gazetted officer the State
Department of the Rio Grande do Sul Health (1981), began serving in Health Unit reaching State Health
Secretary. He was coordinator of SUDS-RS Implementation in 1988, representative of the SES-RS in the
State Council Health and Member of the National Implementation Committee on SICAPS (Information
System of Social Security Ambulatory Control in 1988). Pediatrician, gazetted in the Ministry of Social
Security in 1982, where he held the National Secretary function of Healthcare of the Ministry of Health.
He was chairman of the executive committee responsible for developing the Information System for
Medium and High Complexity procedure of SUS (2001), member of the Advisory Board of the National
Cancer Institute, National Coordinator of Pharmaceutical Office of the Ministry of Health, Manager of
Monitoring ambulatory, Hospitalar and Emergency Programme of Brazil's Advance of Ministry of
Planning, Budget and Management, Working Group Coordinator for instrument and methodology
development for re-registration of SUS Hospital Network. From 1996 to 1999 he was Executive
Coordinator of the Education Service/PIES-MEC-MS Integration Program. Teacher at the University of
Contestado, Campus of Concordia, Santa Catarina, in the course of Postgraduate degree in Health
Services Management in the discipline of Health Policy and SUS. Since 2010 is Superintendent of the
Cardiology Institute of the Federal District.
April 30, 2015
23
Carlos Antonio Búrigo – Member
General Secretary of the State Government; Secretary of Administration and Finance of Caxias do Sul
from 2009 to 2012; Secretary of Finance of Caxias do Sul from 2005 to 2008; Mayor of São José dos
Ausentes from 1997 to 2000 and 2001 to 2004; President of the Tourism Consortium of Campos de Cima
da Serra in 2003 and 2004; President of the Association of Mayors of the Hydrangeas Region in 1998;
Vice-President of the COREDE Sierra in 2001; Administration Secretary and Chief of Staff of São José dos
Ausentes from 1993 to 1996; Degree in Accounting Sciences from University of Vale do Rio dos Sinos Unisinos.
Fiscal Council
Cláudio Morais Machado – Member (effective)
Degree in Accounting from the Federal University of Rio Grande do Sul, 1968; Postgraduate in Audit by
the Federal University of São Paulo, 1978; Postgraduate degree in Finance from the Federal University
of Rio Grande do Sul, in 1987; Postgraduate degree in Accounting and Auditing from the University
Fernando Pessoa, Porto - Portugal, 2001; and Master in Business Administration from the University
Fernando Pessoa, Porto - Portugal, 2002; also, he has held the following positions: Tax Advisor Certified
by IBGC - Brazilian Institute of Corporate Governance; External Control Inspector of the State Accounting
Court of Rio Grande do Sul, 1971 to 1976; Auditor's Central Bank of Brazil, 1976 to 1997; Director of the
6th Regional IBRACON, 2002 to 2008; Majority partner, Auditor, Consultant and Accounting Expert from
Machado & Nedwed Consultores Associados, 2003 to 2008; Advisor to the Regional Accounting Council,
2006 to 2009; Member of the Fiscal Council of Banrisul, 2003 to 2011; Teacher of graduate and
postgraduate of the School Don Bosco, present; Partner and Consultant at Quantum Consulting, present.
Enory Luiz Spinelli – Member (alternate)
Degree in Accounting, by UNISINOS, post-degree in Accounting with a minor in Teaching Methodology
and Human Resources UNISINOS, 1997, also, he has held the following positions: Member of the Board
in the following entities class: Union of Accountants of Porto Alegre; Federation of Accountants of the
RS State; Founding member of the Association, today Union of Accounting Services, Consulting,
Expertise, Information and Research of the State RGS - SESCON/RS; Board Member and Vice Fiscal
President of the Rio Grande do Sul Regional Council of Accounting - CRCRS, from 1998 to 2001, President
of CRCRS entity, 2002 to 2005; Board Member and Vice President of Ethics and Discipline Inspection, at
the Federal Accounting Council (CFC), 2006 to 2009; Board Member and Vice President of Operational
April 30, 2015
24
Development, of the Federal Accounting Council (CFC), 2010 to 2013; Currently, Managing Director of
Accounting Spinelli Ltda.
Fernando Ferrari Filho – Member (effective)
Degree in Economics by the State University of Rio de Janeiro - UERJ; Master in Economics by the Federal
University of Rio Grande do Sul - UFRGS; PhD in Economics by the University of São Paulo - USP; Post
doctorate at the University of Tennessee System, 1996; Post doctorate at the University of Cambridge;
also, he has held following positions: Economic Advisor in Supermarkets State Association of Rio Grande
do Sul (AGAS), February/2003 to December/2004; Teacher of Macroeconomics and International
Economics at the Pontifical Catholic University of Rio Grande do Sul (PUCRS), 1987 to 1989; Economic
Advisor to the Federation of Rio Grande do Sul Commercial Associations (FEDERASUL) September/1984
to February/1988; Teacher of Economics at UNISINOS, august/1984 to December/1987 Teacher of
Economics at the Federal University of Rio Grande do Sul - UFRGS, 1987 to present; Director and
graduate Engineer in Economics at the State Federal University of Rio Grande do Sul.
Fernando Antonio Viana Imenes – Member (alternate)
Degree in Administration from PUCMG, 1979; Degree in Accounting by PUCMG, 1979; Degree in
Economics from PUCMG 1979, also, he has held the following positions: Consultant/Instructor in the
PhD Consulting and Business Training; lecturer in the fields of ethics, financial, negotiation,
organizational and planning; Member of the Board of Trade of the State of Rio Grande do Sul.
Urbano Schmitt – Member (effective)
Degree in Accounting from the University of Caxias do Sul-UCS and graduated in Law from the UNISINOS,
also, he has held the following positions: Director of the Division of Research and Accounting Guidance
and General Auditor of the State of RS; Chief Secretary of the Treasury's Office of RS; Deputy Secretary
of the Finance Secretary of the RS; Secretary of the Finance Secretary of RS; Chief of the Staff of Rio
Grande do Sul State Legislature Presidency; President and Vice-President of the Union of Auditors of
Public Finances of RS - SINDAF; Vice President of Banrisul, 2003 to 2007, Chief Credit Officer of Banrisul,
2007 to 2010; Financial Administrative Superintendent of the State of Rio Grande do Sul Legislature. He
is currently Secretary of Municipal Management in the city of Porto Alegre.
Vicente Jorge Soares Rodrigues – Member (alternate)
Degree in Accounting and Actuarial Sciences at the Faculty Porto Alegrense/RS and technical Accounting
at the ACM School; also, he has held the following positions: Career Officer at Banrisul, since 1972;
April 30, 2015
25
Executive Manager in the Financial Services Department, 2000 to 2015; Chairman of the Fiscal Council
of Fundação Banrisul, December/1999 to august/2001; Chairman of the Fiscal Council of CABERGS,
December/1999 to august/2001; Member of the Fiscal Council of the Fundação Banrisul, January/2005
to march/2007; Member of the Board of Directors of Banricoop, march/2003 to march/2006; Banrisul's
representative in the Brazilian Federation of Banks (Febraban).
b. Legal and administrative plea (including criminal claims) against the administrators and Fiscal
Council’s members
Board of Directors
None of the members of the Company’s Board of Directors appointed by the controlling shareholder at
ASM of April 30, 2015 has been subject to any legal or administrative plea to this date.
Board of Executive Officers
None of the members of the Company’s Board of Executive Officers has been subject to any legal or
administrative plea to this date.
Fiscal Council
None of the members of the Company’s Fiscal Council appointed by the controlling shareholder at ASM
of April 30, 2015 has been subject to any legal or administrative plea.
12.9 Marital relationship, stable relationship or relationship up to the second degree amongst:
a. Company’s administrators
None of the members of the Board of Directors appointed by the controlling shareholder has marital
relationship, stable engagement or second-degree relatives with any of the administrators of the
Company.
April 30, 2015
26
b. (i) Company’s administrators and (ii) administrators of the Company’s subsidiaries, directly or
indirectly controlled
None of the of the Board of Directors appointed by the controlling shareholder has marital relationship,
stable engagement or second degree relatives with any of the administrators of the Company’s directly
or indirectly controlled subsidiaries.
c. (i) Administrators of the Company or its subsidiaries, directly or indirectly controlled and (ii)
Company’s direct or indirect controllers
Company’s directly or indirectly controlled subsidiaries.
d. (i) Administrators of the Company and (ii) Administrators of the Company’s direct and indirect
subsidiaries
Company’s directly or indirectly controlled subsidiaries.
Additionally, we inform that none of the members of the Fiscal Council appointed by the controlling
shareholder has marital relationship, stable engagement or second-degree relatives with any of the
persons mentioned in Item 12.9, sub items (a), (b), (c) and (d).
12.10 Relationship of subordination, rendering of services or control over the last three years amongst
the Company’s administrators and:
a. Subsidiary controlled directly or indirectly by the Company
None of the appointed members the Board of Directors has had any subordination, rendering of services
or control relationship over the last three fiscal years with subsidiaries directly or indirectly controlled
by the Company.
b. Company’s direct and indirect controller
- Finance Secretary of the State of Rio Grande do Sul
Carlos Antonio Búrigo
- General Secretary of the State of Rio Grande do Sul
April 30, 2015
27
João Gabbardo dos Reis
- Health Secretary of the State of Rio Grande do Sul
c. If relevant, the Company’s supplier, client, debtor or creditor, including the subsidiary or parent
companies or subsidiaries of these persons
Additionally, please note that none of the appointed effective or alternate member has a relationship
of subordination, service or control, in the last 3 fiscal years, with any of the persons mentioned in
paragraphs (a), (b) and (c) this Item 12.10.
12.12 Other information the Company deems relevant
Statutory committees are composed by the occupants of certain positions, if applicable, as provided in Chapter XII
of the Bylaws (Articles 77-80), with no election of members by the Board. See item 12.1 (a) for more information
on the composition of committees.
The investiture of the members of the Board of Directors and the Audit Committee elected at the Annual and
Extraordinary Shareholders’ Meeting of April 30, 2015 will take place after the approval from the Central Bank of
Brazil.
Positions held by members of the Board of Directors in other companies or entities.
Members of the Board of
Directors
Position held in the Board of Directors
Positions held in other companies or entities
Member
nihil
Luiz Gonzaga Veras Mota
Member
CEO of Banrisul Cartões *
Irany Sant'anna Júnior
Member
CEO of Banrisul Consórcios, member of the Board of
Directors of Banrisul Cartões *
Board Member of Forjas Taurus S.A.; Fiscal Advisor to the
Instituto de Desenvolvimento Gerencial S.A., Paludo
Participações
João Verner Juenemann
Member
S.A.
(Vipal
Grupo),
Unetral
Empreendimentos S.A., Moinhos de Trigo Indígena S.A.,
Saraiva S.A. Livreiros Editores, Forjas Taurus S.A.; Member
of the Audit Committee of Tupy S.A., and Forjas Taurus
S.A.
Joao Carlos Brum Torres
Member
nihil
Carlos Antonio Búrigo
Member
nihil
João Gabbardo dos Reis
Member
nihil
* nominees for positions in the shareholders’ meetings of these companies, which will take place on dates prior to
the Banrisul S.A. Shareholders’ meeting.
April 30, 2015
28
NIRE 43300001083
CAPITAL INCREASE
April 30, 2015
29
CAPITAL INCREASE PROPOSAL, IN ACCORDANCE WITH ATTACHMENT 14 OF CVM INSTRUCTION 481,
OF DECEMBER 17, 2009
Management submits to the shareholders a capital increase proposal in the amount of
R$250,000,000.00, through the use of retained earnings and reserves, including the balance of
R$144,617,942.24 related to the Expansion Reserves and R$105,382,057.76 related to the Statutory
Reserves. The table below sets forth the main information on the proposed capitalization:
CAPITALIZATION EFFECTS
Capital Stock
Capital Reserves
Revenue Reserves
Legal Reserve
Reserva Legal
Statutory Reserve
Reserva
Estatutária
Expansion
Reserve
Equity
Adjustments
Reserva para Expansão
Equity
BEFORE
4,000,000,000.00
4,511,476.21
1,698,568,585.91
348,548,339.02
1,205,402,304.64
144,617,942.25
(33,832,215.93)
5,669,247,846.19
AFTER
4,250,000,000.00
4,511,476.21
1,448,568,585.91
348,548,339.02
1,100,020,246.89
(33,832,215.93)
5,419,247,846.19
The purpose of the proposed capitalization is to consolidate the capital basis necessary to support our
business expansion. Should the capitalization be approved, the balance of the expansion reserve will be
zero and the statutory reserves will amount to R$1,100,020,246.89.
The Technical Study 2015/2024 and the Capital Budget 2015/2019, approved by the Board of Directors
at the meeting held on January 06, 2015, were structured based on the assumptions of our business
expansion, supported, inclusive, by the shareholders’ equity increase, which, in turn, is affected by the
incorporation of the results generated.
Our business plan for the next years foresees the maintenance of the leadership conquered in the State
of Rio Grande do Sul and the expansion in other markets, which goal requires the extension of the branch
network, specifically in the South region, sharing of the self-service network with other Banks; expansion
of customers’ base, adoption of innovative technologies and improvement of the management model,
planning which require the preservation of our own capital.
In the event the capitalization is approved, there will be no change in the number of shares in our capital
stock.
The proposed capital increase was discussed by Fiscal Council and the Board of Directors at their
meetings on March 03, 2015, as stated in Minutes no. 880 and no. 570, reproduced below.
April 30, 2015
30
Minute No. 880
1. Date, Time and Place: the ordinary meeting of the Fiscal Council of Banco do Estado do Rio Grande do Sul S.A.
(Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held on March 03, 2015, at 09:30
am, at the Company’s head office at Rua Capitão Montanha, 177, 4th floor, Porto Alegre - RS.
2. Verification of attendance: Cláudio Morais Machado - Chairman; André Luiz Barreto de Paiva Filho - ViceChairman; Eduardo Ludovico da Silva, Djedah de Souza Lisboa and Nilvo Luiz Alves da Silva - Members. Also present,
Werner Kohler - Executive Superintendent of the Accounting Unit; Noeli Perinetto Pontel – Executive Manager in
the Accounting Unit; Maria Aparecida Vidal – Controller, and Dario Cunha and Leonardo Dantas, representatives
of Ernst Young S/S Independent Auditors.
3. Deliberation: 3.1) after Mr. Werner Kohler’s explanations, the Fiscal Council examined and approved of the
Financial Statements of December 31, 2014 under IFRS, which presented a net profit of R$621.0 million. The
external auditors pointed out that the rules of their duties have been fulfilled and that the audit evidence obtained
was adequate to support their unmodified opinion upon those statements; 3.2) the Fiscal Council approved of the
following documents, to be submitted to the next General Meeting of Shareholders: a) Allocation of Net Income:
allocation of net income for the year ended December 31, 2014, in the amount of R$691,415,413.02 (six hundred
ninety-one million, four hundred and fifteen thousand, four hundred and thirteen reais and two cents) which, after
the completion of Asset Valuation Adjustments related to post-employment benefits, resulted in the total net
income of R$607,787,413.02 (six hundred and seven million, seven hundred and eighty-seven thousand, four
hundred and thirteen reais and two cents). The distribution proposal includes the following items: Legal Reserve
Constitution: R$30,389,370.66; Statutory Reserve Constitution: R$151,946,853.26; Expansion Reserve
Constitution: R$144,617,942.24; Interest on Capital: R$268,806,271.57; Proposed Dividend: R$12,026,975.29; b)
Capital Increase: increase in the amount of R$250,000,000.00 (two hundred and fifty million reais), with Capital
increasing from R$4,000,000,000.00 (four billion reais) to R$4,250,000,000.00 (four billion, two hundred and fifty
million reais) with the use of R$144,617,942.24 (one hundred forty-four million, six hundred and seventeen
thousand, nine hundred and forty-two reais and twenty-four cents) from the Expansion Reserve and
R$105,382,057.76 (one hundred and five million, three hundred eighty-two thousand, fifty-seven reais and
seventy-six cents) from Statutory Reserve, without the issuance of new shares; c) Dividend Distribution Proposal:
to be maintained the current pay-out policy at the percentage of 40% (forty percent),for the year 2015, with 15%
(fifteen percent) as extraordinary dividends, as permitted by Law 6404/76, as proposed by the Board of Executive
Officers.
4. General Matters: the Fiscal Council examined the Executive Board's proposal for the payment of interest on
capital for the 1st Quarter of 2015 based on the Pay-out Policy, which is in accordance with current legislation.
5. Conclusion: Nothing further to discuss, the meeting was closed; this minute was registered, read, approved of
and signed by the present members. Acted as secretary to the meeting Mrs. Eliane Machado Leal Guimarães,
Analyst at the General-Secretary of the State Bank of Rio Grande do Sul SA.
CERTIFICATE
I certify that this record is a true copy of which appears in the Minute no. 880, dated March 03, 2015, drawn into
the book of Minutes of the Fiscal Council of Banco do Estado do Rio Grande do Sul, signed by Mr. Cláudio Morais
Machado - Chairman; André Luiz Barreto de Paiva Filho – Vice-Chairman; Eduardo Ludovico da Silva, Djedah de
Souza Lisboa and Nilvo Luiz Alves da Silva.
Mirian Oliveira Bandeira
General-Secretary
April 30, 2015
31
Minute No. 570
1. Date, time and place: the ordinary meeting of the Board of Directors of Banco do Estado do Rio Grande do Sul
S.A. (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held on March 03, 2015, at
02:00 pm, at the Company’s head office at Rua Capitão Montanha, 177, 4th floor, Porto Alegre - RS.
2. Verification of attendance: Odir Alberto Pinheiro Tonollier – Chairman; Túlio Luiz Zamin – Vice-Chairman; Aldo
Pinto da Silva; Dilio Sérgio Penedo, Guilherme Cassel, João Acir Verle, Juçara Maria Dutra Vieira and Marcelo
Tuerlinckx Danéris - Members; João Acir Verle – Member of the Audit Committee; Guilherme Cassel – Chief Credit
Officer; Werner Kohler - Executive Superintendent of the Accounting Unit; Noeli Perineto Pontel – Executive
Manager in the Accounting Unit; José Luís Campani Lourenzi – Executive Superintendent of the Corporate Risk
Management Unit; Luis Carlos Demartini – Executive Manager in the Corporate Risk Management Unit; Maria
Aparecida Vidal – Controller, and Sheila Lisandra Nunes – Banrisul’s Ombudsman.
3. Agenda: 3.1) Consolidated Financial Statements in IFRS - December/2014, and 3.2) Allocation of Net Income,
Capital Increase and Dividend Distribution Proposal.
4. Deliberations: 4.1) Consolidated Financial Statements in IFRS - December/2014: after the explanations of Mr.
Werner Köhler, the Board examined and approved of the Financial Statements of December 31, 2014 in IFRS, ,
which presented net profit of R$621.0 million; 5.2) the Board of Directors approved of the following documents,
to be submitted to the next General Meeting of Shareholders: a) Allocation of Net Income: allocation of net
income for the year ended December 31, 2014, in the amount of R$691,415,413.02 (six hundred ninety-one
million, four hundred and fifteen thousand, four hundred and thirteen reais and two cents) which, after the
completion of Asset Valuation Adjustments related to post-employment benefits, resulted in the total net income
of R$607,787,413.02 (six hundred and seven million, seven hundred and eighty-seven thousand, four hundred and
thirteen reais and two cents). The distribution proposal includes the following items: Legal Reserve Constitution:
R$30,389,370.66; Statutory Reserve Constitution: R$151,946,853.26; Expansion Reserve Constitution:
R$144,617,942.24; Interest on Capital: R$268,806,271.57; Proposed Dividend: R$12,026,975.29; b) Capital
Increase: increase in the amount of R$250,000,000.00 (two hundred and fifty million reais), with Capital increasing
from R$4,000,000,000.00 (four billion reais) to R$4,250,000,000.00 (four billion, two hundred and fifty million
reais) with the use of R$144,617,942.24 (one hundred forty-four million, six hundred and seventeen thousand,
nine hundred and forty-two reais and twenty-four cents) from the Expansion Reserve and R$105,382,057.76 (one
hundred and five million, three hundred eighty-two thousand, fifty-seven reais and seventy-six cents) from
Statutory Reserve, without the issuance of new shares; c) Dividend Distribution Proposal: to be maintained the
current pay-out policy at the percentage of 40% (forty percent) for the year 2015, with 15% (fifteen percent) as
extraordinary dividends, as permitted by Law 6404/76, as proposed by the Board of Executive Officers.
CERTIFICATE
I certify that this record is a true copy of which appears in the Minute no. 570, dated March 03, 2015, entered into
the book of Minutes of Board of Directors of Banco do Estado do Rio Grande do Sul SA, signed by Odir Alberto
Pinheiro Tonolllier – Chairman; Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo;
Guilherme Cassel; João Acir Verle, Juçara Maria Dutra Vieira and Marcelo Tuerlinckx Danéris – Members of the
Board of Directors.
Porto Alegre, March 05, 2015
Túlio Luiz Zamin
Vice Chairman
April 30, 2015
32
Minute No. 572
1. Date, Time and Place: the extraordinary meeting of the Board of Directors of Banco do Estado do Rio Grande
do Sul S.A. (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held on March 25,
2015, at 02:30 pm, at the Company’s head office at Rua Capitão Montanha, 177, 4th floor, Porto Alegre - RS.
2. Verification of attendance: Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo, Guilherme
Cassel and João Acir Verle – Members.
3. Agenda: 3.1) Management Compensation and 3.2) Proposal for Statutory Reform.
4. Deliberations: 4.1) Management Compensation: The Board of Directors has submitted to the General
Shareholders' Meeting the proposal of remuneration for the members of the Board of Executive Officers and the
members of the Board of Directors, to the members of Banrisul’s Audit and Fiscal Committee and to the
management of Banrisul’s subsidiaries companies for the fiscal year of 2015, as suggested by the Compensation
Committee at the meeting of 03/16/2015, transcribed below:
"the Compensation Committee decided to submit to the Board of Directors, for examination and deliberation, the compensation
proposal for of the Management and the Members of the Board of Directors and Executive Officers, Banrisul’s Audit and Fiscal
Committees and also its subsidiaries companies, for the year 2015, as follows:
a) set the annual overall amount of up to R$11,000,000.00 (eleven million reais) for management compensation (fixed
remuneration and, eventually, variable compensation and charges);
b) set, the compensation limit of R$30,471.11 (thirty thousand, four hundred and seventy-one reais and eleven cents) to the
Board of Executive Officers, commencing on 01/01/2015, and.
c) increase, from 01/01/2015, in 8.5% (eight point five percent), the same rate expressed in the Collective Bargaining Agreement
for the period 2014/2015, the individual compensation (salary and representation allowance) for the officers of the Bank and
its subsidiaries directors, , accordingly:
Banrisul’s Officers:
i. CEO: Salary: R$18,698.93, and Representation Allowance: R$18.698,93; Vice-President: Salary: R$ 17,764.01, and
Representation Allowance: R$17,764.01; Other Officers: Salary: R$ 16,828.31, and Representation Allowance: R$ 16,828.31;
ii. Board of Directors: R$ 8,243.92 (gross amount) per member, monthly;
iii. Fiscal Council: R$ 6,595.13 (gross amount) per member, monthly; and
iv. Audit Committee: R$ 13,190.29 (gross amount) per member, monthly.
Subsidiaries Officers:
i. CEO: Salary: R$ 7,749.18, and Representation Allowance: R$ 7,749.18; Other Officers: Salary: R$ 6,974.27, and Representation
Allowance: R$ 6,974.27;
ii. Board of Directors: R$ 2,893.03 (gross amount) per month;
iii. Fiscal Council: R$ 2,169.77 (gross amount), per month.
For further understanding, the Compensation Committee states that:
The currently proposed amounts, regarding to the compensation of Banrisul’s Management, were established considering the
provisions of State Law No. 13,670/2011, which limits the management compensation of publicly-held companies, in which the
State of Rio Grande do Sul State have a stake at their capital, to the same monthly compensation paid in kind to the Judges of
the Court of Justice of the State of Rio Grande do Sul, which has been established by the State Law No. 12,910/2008, as amended
by Law No. 14,676/2015.
To observe the before mentioned ceiling, it is not added one another neither with the remuneration of the month in which
payment is carried out, nor with the advance of holiday pay, nor with the 13th salary, the additional holiday pay and profit
sharing.
The Management of Banrisul and its subsidiaries will receive annual compensation equivalent to thirteen monthly compensation
and are also entitled to receiving profit sharing, this calculated according to the criteria defined by the Collective Bargaining
Agreement set by the Banking industry.
Executive Officers who are Banrisul’s employees or who have being transferred from other gubernatorial bureaus may opt to
continue receiving their original pay plus the amount corresponding to the representation allowance , and
4.2) Proposal for Statutory Reform: it has also been submitted to the General Meeting of Shareholders the
following proposal for Statutory Reform: 1. Amend the caput of Article 4, to adjust it the new amount of the Social
Capital, altered on account of the use of profit reserves; 2. amend Article 5 to contemplate the conversion of shares
April 30, 2015
33
that took place between March 1, 2014 and February 28, 2015, and 3. to amend Article 15, paragraph 1, in
compliance to the requirements for the exercise of member of the Board of Directors or Executive Board, in
accordance to the Controlling Shareholder letter CC/SL 486, dated 03.25.2015.
5. Conclusion: Nothing further to discuss, the meeting was closed, this minute was prepared, read, approved and
signed by the members present. Secretary to the meeting, Mrs. Mirian Oliveira Bandeira, General-Secretary of the
Banco do Estado do Rio Grande do Sul S.A..
CERTIFICATE
I certify that this record is a true copy of which appears in the Minute No. 572, of March 25, 2015, drawn into the
book of Minutes of Board of Directors of Banco do Estado do Rio Grande do Sul SA, signed by Mr.; Túlio Luiz Zamin
– Vice-Chairman; Aldo Pinto da Silva, Dilio Sérgio Penedo, Guilherme Cassel and João Acir Verle – Members.
Túlio Luiz Zamin
CEO
April 30, 2015
34
NIRE 43300001083
AMENDMENT TO THE BYLAWS
April 30, 2015
35
PROPOSED AMENDMENTS TO THE BYLAWS, IN ACCORDANCE WITH ARTICLE 11, OF CVM INSTRUCTION
481, OF DECEMBER 17, 2009
Pursuant Article 11 of Comissão de Valores Mobiliários (CVM – Securities and Exchange Commission of
Brazil) Instruction No. 481 of December 17, 2009, we present the proposed amendment to the Company's
Bylaws to be submitted to the Shareholders in general meeting to be held in April 30, 2015.
Ref.: Proposed Statutory Reform
Presented here is the consolidation of the proposed Statutory Reform to be submitted the Board of
Directors and subsequently the General Meeting of Shareholders, towards the update and adaptation of
the Bylaws.
a) Article 4, to reflect the proposed capital increase of R$250,000,000.00 submitted to the
shareholders at the Shareholders’ Meeting.
Present Wording
Proposed Wording
Article 4 - The capital stock is R$4,000,000,000.00 (four
billion Reais).
billion, two hundred and fifty million Reais).
b) Article 5, to adequate the Corporate Capital, due to the conversion of 2,200 (two thousand and two
hundred) Class A preferred shares into Class B preferred shares and common shares requested by
shareholders that took place between March 01, 2014 and February 28, 2015, in observance to
paragraph 4, Article 5 of Banrisul’s Bylaws.
Present Wording
Proposed Wording
Article 5 - The capital stock is divided into 408,974,477
(four hundred eight million, nine hundred seventy four
thousand, four hundred seventy seven) shares without
par value, of which 205,043,374 (two hundred five
million, forty three thousand, three hundred seventy
four) are common shares, 3,531,751 (three million, five
hundred thirty one thousand, seven hundred fifty one)
are class A preferred shares and 200,399,352 (two
hundred million, three hundred ninety nine thousand,
three hundred fifty two) are class B preferred shares,
being class A preferred shares convertible into common
shares or class B preferred shares.
million, forty three thousand, three hundred ninety
five) are common shares, 3,529,551 (three million, five
hundred twenty nine thousand, five hundred fifty one)
hundred million, four hundred one thousand, five
hundred thirty one) are class B preferred shares, being
class A preferred shares convertible into common
shares or class B preferred shares.
April 30, 2015
36
c) Amendment to the condition for the election of members of the Board of Directors and Executive
Officers, as set forth by Article 15, paragraph 1:
Present Wording
Article 15 - The management of the Company, in the
manner envisaged in these Bylaws, rests with the Board
of Directors and the Executive Board.
Paragraph 1 - Members to be elected to the
management bodies must be natural persons resident
in Brazil, who have university level education and
senior management experience in financial institutions
of the National Financial System or other companies or,
if employees of the Bank, have served as the
Superintendent of the Unit or the Region or in other
equivalent function.
Proposed Wording
Paragraph 1 – It is a condition to the election to a
position in the of Board of Directors or Board of
Executive Officers the compliance with the
requirements established by legislation and
regulations, and that the member, resident in Brazil,
has the technical qualification required for the duties of
the position, which must be demonstrated upon
academic or professional experience or other deemed
relevant, by means of documents.
Paragraph 2 - Names of the nominees for the Executive
Board should first be approved by the Legislative
Assembly of the state of Rio Grande do Sul.
Paragraph 3 - Members of the Board of Directors and
the Executive Board shall take office after signing the
terms of consent in the Company´s records, with the
waiver of guarantee of management, and only after
signing the Statement of Consent From Senior
Managers according to the regulations governing Level
1 corporate governance practices of the São Paulo
stock exchange, and the regulation relating to the
Market Arbitration Panel.
In compliance with Item I of Article 11 of Comissão de Valores Mobiliários (CVM – Securities and Exchange
Commission of Brazil) Instruction no. 481, of December 17, 2009, it is reproduced below the compared
version containing the Bylaws changes that will be submitted to the shareholders of Banrisul in the Annual
Shareholders’ Meeting to be held on April 30, 2015.
April 30, 2015
37
NIRE 43300001083
Bylaws
PRESENT WORDING
PROPOSED WORDING
CHAPTER I
Nature, Duration and Head Office
CHAPTER I
Nature, Duration and Head Office
Section I
Nature
Article 1 - The BANCO DO ESTADO DO RIO GRANDE DO
SUL S.A., in short ‘BANRISUL’, is a mixed-capital
company constituted as a Corporation (Sociedade
Anônima) on September 12, 1928, according to State
Law 459 of June 18, 1928, regulated by State Decrees
4079, 4100, 4102 and 4139 of June 22, July 21, July 26,
and September 6, 1928, respectively.
Paragraph 1 - As per State Law 6223 of June 22, 1971,
the interest held by the state of Rio Grande do Sul in
the Bank´s capital should in no case be lower than 51%
(fifty-one percent), of the total voting shares.
Paragraph 2 - The Company has undergone
restructuring according to these Bylaws, by which it has
adopted the provisions of Federal Law 6404 of
December 15, 1976.
Paragraph 3 - With the admission of the Company in
the special listing segment named Level 1 of
Differentiated Corporate Governance of the Brazilian
Securities and Derivatives Stock Exchange BM&FBOVESPA, the Company, its Shareholders,
Administrators and members of the Fiscal Council are
subject to the provisions of the Listing Rules of the
Level 1 of Differentiated Corporate Governance.
Section I
Nature
Not Altered
Section II
Duration
Article 2 - The duration of the company is indefinite,
only depending on the validity of the operating license.
Section II
Duration
Not Altered
Section III
Head Office and Jurisdiction
Section III
Head Office and Jurisdiction
Not Altered
Not Altered
Not Altered
April 30, 2015
38
Article 3 - The capital of the state of Rio Grande do Sul
is the domicile of the Company for all legal purposes,
and the place of the Company´s head office.
Sole paragraph - The Company may, based on the
Executive Board´s initiatives, open or close branches or
representative offices in any place in Brazil or abroad,
after obtaining authorization from financial
authorities.
Not Altered
CHAPTER II
Capital and Shares
CHAPTER II
Capital and Shares
Section I
Capital
billion Reais).
Paragraph 1 - The Annual General Meeting that
decides on capital increase through payment will fix
the respective price and payment terms.
Paragraph 2 - The subscriber in arrears with regard to
payment of capital will be subject to an adjustment of
his debt based on the IGP-DI (General Price Index Internal Availability) or any other index in its place, for
the period in arrears, plus interest at 12% (twelve
percent) per annum and a fine of 10% (ten percent).
The adjustment will be made within the legal limits
applicable to the case.
Paragraph 3 - The capital stock may be increased, as
laid down by Article 168 of Law 6404/76, up to the limit
of 600 (six hundred) million shares, within the limit for
each class of shares established by legislation and
regulations, through a decision of the Board of
Directors and independent of any amendment to the
Bylaws. The Board of Directors will fix the price and the
number of shares to be issued, the period and the
conditions for payment.
Paragraph 4 - The issue of shares to increase the
capital, through sale in the stock exchange or through
public subscription, may exclude the preemptive
rights, or reduce the period for exercising them, under
Article 171 of Law 6404/76.
Section I
Capital
Article 4 - The capital stock is R$4,250,000,000.00
(four billion, two hundred and fifty million Reais).
Not Altered
Section II
Shares
Section II
Shares
Article 5 - The capital stock is divided into
408,974,477 (four hundred eight million, nine
Not Altered
Not Altered
Not Altered
Not Altered
April 30, 2015
39
million, forty three thousand, three hundred seventy
four) are common shares, 3,531,751 (three million, five
hundred thirty one thousand, seven hundred fifty one)
hundred million, three hundred ninety nine thousand,
three hundred fifty two) are class B preferred shares,
being class A preferred shares convertible into
common shares or class B preferred shares.
Paragraph 1 - Both the common shares and the
preferred shares will always be registered shares.
Paragraph 2 - Each common share, without restriction,
will correspond to one vote at the general meetings of
the shareholders.
Paragraph 3 - The registered common shares and
registered preferred shares will be maintained as book
entry shares without issue of certificates, in depository
accounts in the name of their holders in the Company
itself, which shall bear the legal depository charges.
Paragraph 4 - The class A preferred shares will be
convertible into common or class B preferred shares as
established by Article 8 (eight) below. The common
shares and class B preferred shares are not convertible.
Paragraph 5 - The state of Rio Grande do Sul, the
controlling shareholder is prohibited from selling the
class A preferred shares owned by it. However, it can
convert them according to Paragraph 4 of this article.
Article 6 - Upon authorization from the Board of
Directors, the Bank may buy back its shares for
cancellation or to hold them in treasury in order to sell
them at a future date.
Paragraph 1 - The acquisitions mentioned in this article
will not reduce the capital and will be made using funds
that shall not exceed the available profit balances or
reserves in the last balance sheet.
Paragraph 2 - The acquisitions cannot be of the shares
owned by the controlling shareholder or shares not yet
paid up.
Paragraph 3 - The Bank cannot hold in treasury more
than 5% (five percent) of each class of outstanding
shares issued by it.
Paragraph 4 - Acquisitions authorized by this article
shall strictly comply with the norms laid down by the
Brazilian Securities and Exchange Commission in this
regard.
hundred seventy four thousand, four hundred
seventy seven) shares without par value, of which
205,043,395 (two hundred five million, forty three
thousand, three hundred ninety five) are common
shares, 3,529,551 (three million, five hundred
twenty nine thousand, five hundred fifty one) are
class A preferred shares and 200,401,531 (two
hundred million, four hundred one thousand, five
hundred thirty one) are class B preferred shares,
being class A preferred shares convertible into
common shares or class B preferred shares.
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
April 30, 2015
40
Article 7 - Preferred shares, except under the
provisions of Paragraph 2 of Article 20 (twenty) and
Article 39 (thirty-nine) of these Bylaws, shall not have
voting rights.
Article 8 - The class A preferred shares shall confer on
their holders the following rights: (i) priority in the
receipt of fixed non-cumulative preferential dividend
at 6% (six percent) per year, calculated on the result of
dividing the capital amount by the number of shares
comprised in it; (ii) the right to a share, after the
common and class B preferred shares are paid, in the
dividend equal to that paid to such shares, in any other
dividends or bonuses in cash distributed by the
Company, under the same conditions as the common
and class B preferred shares, with an increment of 10%
(ten percent) on the amount paid to such shares; (iii)
share in the capital increases resulting from
capitalization of reserves under the same conditions as
common and class B preferred shares; (iv) priority in
the repayment of capital, without premium; (v) the
right guaranteed by Article 89 of these Bylaws; (vi)
convertibility into common or class B shares at any
time, at the discretion of the shareholder, through a
notification to the Company.
Article 9 - the class B preferred shares confer upon
their holders the following rights: (i) share in the capital
increases resulting from capitalization of reserves
under the same conditions as common and class A
preferred shares; (ii) priority in the repayment of
capital, without premium; and (iii) the right guaranteed
by Article 89 of these Bylaws. Class B preferred shares
are not convertible.
Not Altered
CHAPTER III
Corporate Purpose, Operations and Organization
CHAPTER III
Corporate Purpose, Operations and Organization
Section I
Corporate Purpose
Article 10 - The purpose of the Company is to carry out
borrowing, lending and other ancillary operations
inherent to the respective authorized portfolios
(commercial, real estate lending - 2nd to 8th Regions,
and credit, financing and investment, leasing and
development and investment portfolios), including
exchange operations, in accordance with legal
provisions and regulations.
Section I
Corporate Purpose
Not Altered
Not Altered
Not Altered
April 30, 2015
41
Sole paragraph - Within the norms established by the
Brazilian Central Bank and these Bylaws, the Bank may
own interest in other companies.
Not Altered
Section II
Operations
Article 11 - The Company´s operations will cover all the
banking activities compatible with the nature of a
multiple-service bank, which are or will be granted to
it by the monetary authorities and may be or should be
implicit or understood within the corporate objectives.
Article 12 - The Company may acquire the property
necessary for its installations or those for its expansion,
within the appropriate technical limits and,
exceptionally, those that are suitable to safeguard its
interests.
Sole paragraph - Assets acquired from those
responsible for loans with difficult or doubtful
settlement, when not of use to the Company, shall be
sold at the moment and manner established by the
Executive Board in compliance with the pertinent legal
and normative provisions.
Section II
Operations
Not Altered
Section III
Organization
Article 13 - To carry out its operations, the Bank shall
have as many Advisory Services and Units necessary for
carrying out its corporate objectives.
Paragraph 1 - The Company shall have a Department
dedicated to rural lending, which will centralize all
types of rural lending operations.
Paragraph 2 - Rural lending operations with funds
allocated or granted by the shareholder, the state of
Rio Grande do Sul, are restricted to persons domiciled
in the same state.
Article 14 - Long-term operations use funds from
BNDES (the Brazilian development bank) on lendings
and are limited to 80% (eighty percent) of the
Company´s net equity.
Section III
Organization
Not Altered
CHAPTER IV
Management of the Company
Article 15 - The management of the Company, in the
manner envisaged in these Bylaws, rests with the
Board of Directors and the Executive Board.
Paragraph 1 - Members to be elected to the
management bodies must be natural persons resident
CHAPTER IV
Management of the Company
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Paragraph 1 – It is a condition to the election to a
position in the of Board of Directors or Board of
April 30, 2015
42
in Brazil, who have university level education and
senior management experience in financial institutions
of the National Financial System or other companies
or, if employees of the Bank, have served as the
Superintendent of the Unit or the Region or in other
equivalent function.
Paragraph 2 - Names of the nominees for the Executive
Board should first be approved by the Legislative
Assembly of the state of Rio Grande do Sul.
Paragraph 3 - Members of the Board of Directors and
the Executive Board shall take office after signing the
terms of consent in the Company´s records, with the
waiver of guarantee of management, and only after
signing the Statement of Consent From Senior
Managers according to the regulations governing Level
1 corporate governance practices of the São Paulo
stock exchange, and the regulation relating to the
Market Arbitration Panel.
Article 16 - Members of the Board of Directors or the
Executive Board cannot exercise any identical function
in financial institutions in which the Bank or the state
do not own direct or indirect shareholding control.
Article 17 - The following cannot jointly exercise the
functions of the member of the Board of Directors or
the Executive Board: a) parents or children, adoptee or
adopted, collateral relatives and others up to the
second degree by civil law; b) persons belonging to the
same Company, except if it is a Sociedade Anônima; c)
two or more executive officers, managers or
equivalent positions of the same Company.
Paragraph 1 - In case of impediments and
incompatibilities above, those with the highest number
of votes will assume office.
Paragraph 2 - If voting is tied, the oldest nominee will
be considered elected and, if the age is the same,
decision will be by draw of lots.
Article 18 - For each session they take part, members
of the Board of Directors shall receive remuneration
approved for them, in each fiscal year, by the Annual
General Meeting convened for the purpose of Article
132 (one hundred thirty-two) of Law 6404 of December
15, 1976.
Article 19 - The Annual General Meeting convened for
the purpose of Article 132 (one hundred thirty-two) of
Law 6404 of December 15, 1976 will set the total
Executive Officers the compliance with the
requirements established by legislation and
regulations, and that the member, resident in
Brazil, has the technical qualification required for
the duties of the position, which must be
demonstrated upon academic or professional
experience or other deemed relevant, by means of
documents.
Not Altered
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April 30, 2015
43
monthly or annual remuneration of the Executive
Board members.
Paragraph 1 - The General Shareholders’ Meeting, in
the fiscal years during which mandatory dividend and
employees’ profit sharing are paid, may grant bonuses
to members of the Bank‘s Board of Executive Officers,
provided that the sum does not exceed 50% (fifty
percent) of the Board members’ annual salary, nor five
thousandths of the profits (Article 190 of Law No.
6404/76), whichever limit is lower.
Paragraph 2 - Members of the Board of Executive
Officers who are also members of the Board of
Directors shall not accumulate the remuneration of
each of the functions and shall be entitled only to the
remuneration of the Executive Officer.
Not Altered
Not Altered
CHAPTER V
Board of Directors
CHAPTER V
Board of Directors
Section I
Composition
Article 20 - The Board of Directors, composed of at
least five and at most nine members, shall be elected
for a unified term of two years, with the possibility of
reelection, by the Annual General Meeting which may
at any time remove them.
Paragraph 1 - Members of the Board of Directors shall
be elected without specific designation and the
controlling shareholder, the state of Rio Grande do Sul,
shall name, among others, the Chairman who must
compulsorily be the State Finance Secretary, and the
Vice Chairman.
Paragraph 2 - In the election of members of the Board
of Directors, excluding the controlling shareholder, the
majority of shareholders, in a separate voting session
at the Annual General Meeting, shall have the right to
vote in the following manner: (i) owners of common
shares, provided they represent at least 15% (fifteen
percent) of the Company´s voting capital, and (ii)
owners of preferred shares, provided they represent at
least 10% (ten percent) of the Company´s voting
capital. If neither the holders of voting shares nor the
owners of preferred shares make up the quorum
required above, they can choose to add up their shares
to jointly elect one member of the Board of Directors,
Section I
Composition
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April 30, 2015
44
provided they jointly represent at least 10% (ten
percent) of the Company´s capital stock.
Paragraph 3 - The Regional Economic, Accounting and
Administration Councils are assured of the right to
indicate a representative on the Board of Directors, in
compliance with the conditions of Paragraph 1 of
Article15 (fifteen) of these Bylaws. The indication shall
be done through a list in triplicate presented to the
controlling shareholder, with each Council having the
option to indicate a name. The controlling shareholder
may select one among the nominees.
Paragraph 4 - The term of office of the members of the
Board of Directors will extend until the inauguration of
their substitutes.
Article 21 - At least 20% (twenty percent) of the Board
of Directors should be Independent Members, as laid
down by Paragraph 2 below.
Paragraph 1 - If, applying the percentage referred to in
the first paragraph of this article results in a fraction,
the number should be rounded off: (i) to the
immediately higher number if the fraction is equal to
or greater than 0.5, or (ii) immediately lower number if
the fraction is lower than 0.5.
Paragraph 2 - For the purpose of these Bylaws, an
“Independent Director” is one who: (i) has no relation
with the Company, except interest in the capital; (ii) is
not the controlling shareholder, spouse or related up
to the second degree, or is not or has not been, in the
past 3 (three) years, related to the Company or any
entity related to the controlling shareholders (persons
related to public educational and/or research
institutions are excluded from this restriction); (iii) has
not been in the past 3 (three) years, employed or was
an Executive Officer of the company, the controlling
shareholders or the holding company of the company;
(iv) is not the supplier or buyer, directly or indirectly, of
the Company´s products and/or services at a volume
that implies loss of autonomy; (v) is not the employee
or manager of the company or entity offering or
requiring the Company´s services and/or products; (vi)
is not the spouse or relative up to the second degree of
any manager of the Company; and (vii) does not
receive any other remuneration from Company than as
the board member (cash earnings from interest in the
capital are excluded from this restriction).
Paragraph 3 - Also will be considered Independent
Members those elected according to Paragraphs 4 and
5 of Article 141 of Law 6404/76 and Paragraph 2 of
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April 30, 2015
45
Article 20 of these Bylaws, provided they meet, in the
latter case, the provision of Paragraph 2 of this Article.
Section II
Replacement
Article 22 - In case of vacancy on the Board of
Directors, the Board, after consulting the controlling
shareholder, the state of Rio Grande do Sul, shall
designate the replacement to exercise the function till
the next Annual General Meeting. The vacancy shall be
filled with voting of the minority shareholders at the
first annual general meeting.
Sole paragraph - Resignation with the permission of
the Board of Directors will not result in a vacancy.
Article 23 - The Chairman of the Board of Directors, in
case of vacancy, absence or temporary impediments,
shall be replaced by the Vice Chairman.
Sole paragraph - The vacancy, absence or temporary
impediment referred to by this article do not depend
on notice or notification to third parties and can be
done merely by the replacement signing the actions
that the officer being replaced is authorized to carry
out.
Section II
Replacement
Not Altered
Section III
Meetings
Article 24 - The Board of Directors shall meet ordinarily
at least once per month and extraordinarily, when
required. Decisions shall be valid when at least five of
its members, one of them the Chairman or his/her
statutory replacement, are present.
Article 25 - The decisions of the Board of Directors shall
be taken by majority vote of those present at the
meeting. Sole paragraph - If a decision is tied, the
Chairman of the Board of Directors or his/her statutory
replacement, besides the personal vote, shall have the
casting vote.
Article 26 - The work and decisions of the Board of
Directors shall be recorded in the Company´s books by
means of minutes, which may be summarized,
registering the events, matters discussed, decisions
taken, disagreement, protests, declaration of vote and
other necessary items, signed by the Chairman and
other board members present.
Paragraph 1 - For the minutes to be valid, it is enough
if the number of members of the Board of Directors
Section III
Meetings
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April 30, 2015
46
present needed to constitute the majority required for
decision making, sign them.
Paragraph 2 - The documents or proposals submitted
at the meeting and the declarations of vote, protest
and other papers recorded in the minutes shall be
numbered and filed at the Company within six months
after the term of office of the Board of Directors.
Paragraph 3 - The Board of Directors, through two or
more of its members present at the meeting, may, at
the request of the member interested, authenticate a
specimen or copy of the proposals, declarations of
vote, disagreement or protest made.
Paragraph 4 - From the minutes of the Board of
Directors’ meetings, which contain decisions affecting
third parties, certificates are extracted with a summary
of the facts and the transcription of the decisions
taken, which will be filed with the Board of Trade and
published according to legislation. These certificates
can be validated merely by the signature of the
Chairman of the Board of Directors or his/her statutory
replacement.
Section IV
Powers
Article 27 - The Board of Directors is empowered to:
1. appoint the Company´s executive officers and confer
on them their respective duties in accordance with the
provisions of these Bylaws;
2. remove the Company´s executive officers in
consultation with the controlling shareholder, the
state of Rio Grande do Sul;
3. lay down the general business guidelines of the
Company, in compliance with the governmental
strategy of the controlling shareholder;
4. monitor the activities of the Executive Officers,
examine at any time the Company’s books and
documents, request information about contracts
signed or are about to be signed, and any other acts;
5. decide on convening the general meeting of the
shareholders when they deem appropriate or in the
case of Article 132 of the Lei de Sociedades por Ações;
6. opine on the management´s report and accounts,
approving the allocation of net income;
7. opine on the provision of guarantee by the
Company, when the amount is more than five percent
(5%) of the Company´s net equity in the last half-yearly
balance sheet;
Not Altered
Not Altered
Not Altered
Section IV
Powers
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April 30, 2015
47
8. fix, annually, the sum of subsidies and grants to be
distributed by the Executive Board, in compliance with
the provisions of these Bylaws;
9. approve the plans and promotional budgets of the
Company and its subsidiaries;
10. appoint and remove the independent auditors, in
compliance with these Bylaws;
11. organize and amend the Bylaws of the Board of
Directors;
12. set the maximum debt limit per client, including
business group, as a percentage of the Bank´s net
equity, while the Executive Board may approve credit
and risk limit operations up to the limit of three percent
(3%) of aforementioned net equity;
13. authorize the Company to buy back its shares under
the terms of Article 6 of these Bylaws, for cancellation
or to be held in treasury for sale at a future date.
14. establish annually the marketing budget based on
technical criteria for market monitoring and control,
and focused on marketing and institutional strategy,
on building and in strengthening customers and
community relationship.
Article 28 - The Chairman of the Board of Directors is
empowered to:
1. convene and chair the meetings of the Board of
Directors and coordinating their activities;
2. convene the Bank´s Annual General meetings and
establish their respective agenda;
3. comply with and ensure that the provisions of these
Bylaws, the decisions of the Board of Directors and the
General Meetings are complied with;
4. use the casting vote in case of tied votes at the Board
of Directors’ meetings;
5. authenticate copies or certificates of minutes and
other documents of the Board of Directors;
6. name relaters, where applicable, to study and
forward the matters under the power of the Board of
Directors for voting.
Sole paragraph - In the hypotheses mentioned by
Article 23 of these Bylaws, the Vice Chairman of the
Board of Directors is empowered to replace the
Chairman and validly exercise the actions mentioned in
the first paragraph of this article.
Not Altered
Not Altered
Not Altered
CHAPTER VI
Executive Board
CHAPTER VI
Executive Board
Section I
Section I
April 30, 2015
48
Composition
Composition
Article 29 - The Company shall have an Executive
Board, with executive functions, composed of a Chief
Executive Officer, a Deputy Chief Executive Officer and
up to seven executive officers, whether shareholders
or not, resident in Brazil, who meet the requirements
of Article 15 of these Bylaws.
Paragraph 1 - One of the Executive Officers shall
exclusively be in charge of the Asset Management
Department under the regulations of the National
Monetary Council and the Brazilian Securities and
Exchange Commission, and will not be accountable for
other activities affecting the Department.
mandatorily be appointed as Investor Relations Officer,
position that can be combined with other functions of
the Board, pursuant to regulations issued by the
Comissão de Valores Mobiliários (CVM - Securities and
Exchange Commission of Brazil).
exclusively act as the Information Technology Officer.
Article 30 - The Chief Executive Officer, Deputy Chief
Executive Officer and other members of the Executive
Board shall be elected or reelected for a term of three
years, by the Board of Directors, subject to the
following conditions:
a) The Chief Executive Officer and the Deputy Chief
Executive Officer will necessarily be chosen from the
Board of Directors;
b) One of the members of the Executive Board must
compulsorily be selected from among employees with
more than ten years of service provided directly to the
Bank and who meet the requirements of Article 15
(fifteen) of these Bylaws;
c) The positions of Chairman of the Board and Chief
Executive Officer or CEO of the Company must not be
exercised by the same person.
d) The positions of Deputy Chief Executive Officer and
member of the Board of Directors may be accumulated
with the functions of the Executive Board.
e) The mandate of the Board of Executive Officers will
extend until the inauguration of their substitutes.
Article 31 - The Board of Directors shall assign special
designations to the Executive officers, according to the
functions it assigns them.
Not Altered
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April 30, 2015
49
Section II
Replacement
Article 32 - In case of any vacancy on the Executive
Board, the Board of Directors shall name the
replacement to exercise the function till the end of the
term subject to item “b” of Article 30 mentioned
above, where applicable.
Sole paragraph - Any absence/termination with the
permission of the Executive Board shall not constitute
a vacancy.
Section II
Replacement
Not Altered
Section III
Meetings
Article 33 - The Executive Board shall ordinarily meet
at least once a week and, extraordinarily, when
required. Decisions are valid if at least four of its
members are present.
Article 34 - Provisions of Section III of Chapter V of
these Bylaws, with the adaptations specific to this
organ, are applicable to the Executive Board meetings.
Section III
Meetings
Not Altered
Section IV
Powers
Article 35 - The powers and duties of the Executive
Board are:
1. to comply with and ensure that the basic laws of the
Bank, the decisions of the Annual General Meeting and
the Board of Directors´ meetings are complied with;
2. to propose to the Board of Directors the general
direction of the business and operations of the Bank;
3. to organize the internal service regulations of the
Bank and amend them when required;
4. to authorize the provision of guarantees, sale of
assets and the transfer or renunciation of rights,
subject to the pertinent provisions in these Bylaws;
5. to establish general and uniform norms for
appointment, promotion, punishment, dismissal,
leave, absence, salaries, bonuses and other benefits for
employees not in positions of trust, delegating
authority for execution of these norms;
6. to create, modify and remove positions or functions
of trust, setting for them the respective commissions
and benefit amounts, appoint, punish, dismiss, grant
leave to the holders of such positions or functions;
7. to distribute and invest the profits while respecting,
within the limits of the earnings of each half-year, the
compulsory requirement of distribution of fixed and
Section IV
Powers
Not Altered
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April 30, 2015
50
minimum dividends laid down by these Bylaws and
other legal norms and regulations about dividends in
kind;
8. To set up and close down branches and
representative offices in any place in Brazil or abroad;
9. to prepare and review the strategic plan annually,
indicating the principal guidelines about management
policy, human resources, investments and technology,
products and services.
Article 36 - The Chief Executive Officer is empowered:
1. to coordinate the Executive Board meetings,
exercising, in addition to his vote, the casting vote in
case of a tie in decisions;
2. to ensure that the decisions taken at the Meeting of
the Shareholders, the Board of Directors and the
Executive Board are carried out, and ensure that the
Bank´s basic principles are complied with;
3. to represent the Bank, actively and passively, in
court or in its relations with third parties, to contract
loans, sell assets and properties, waive and renounce
rights;
4. to constitute the Bank´s attorneys-in-fact, specifying
in the instrument the actions or operations they can
practice and the duration of such power of attorney
which, in case of judicial power of attorney, may be for
an indefinite period;
5. to designate the Bank´s representatives in court;
6. to present the annual report on the Bank´s
operations and those of the Executive Board,
illustrated with the respective financial statements, to
the Annual General Meeting, after consulting the
Board of Directors on such documents;
7. to exercise other functions conferred on him by the
Board of Directors;
8. appoint and remove the Ombudsman.
Article 37 - In case of vacancy, absence or temporary
impediment of the Chief Executive Officer, the Deputy
Chief Executive Officer is empowered to replace him
and validly exercise, under the following hypotheses,
the actions laid down in the previous article.
Paragraph 1 - When the Deputy Chief Executive
Officer, under the hypotheses envisaged by this article,
is unable to replace the Chief Executive Officer, any of
the Executive Officers, who have or do not have any
specific designation assigned, temporarily or
permanently, can replace the Chief Executive Officer,
validly carrying out the actions authorized for the Chief
Executive Officer, on such occasions.
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April 30, 2015
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Paragraph 2 - The vacancy, absence or temporary
impediment referred to by this article do not depend
on notice or notification to third parties and can be
done merely by the replacement signing the actions
that the officer being replaced is authorized to carry
out.
Not Altered
CHAPTER VII
Fiscal Council
CHAPTER VII
Fiscal Council
Section I
Composition
Article 38 - The Company shall have a permanent Fiscal
Council composed of five members and an equal
number of alternate members elected annually by the
Annual General Meeting. Members to be elected to the
Fiscal Council must be natural persons resident in
Brazil, who have university level education and senior
management experience in financial institutions of the
National Financial System or other companies.
Article 39 - Owners of preferred shares without voting
rights may, in separate voting, elect one member and
his alternate to the Fiscal Council; minority
shareholders shall have equal rights. The Regional
Economic, Accounting and Administration Councils are
assured of the right to indicate a representative,
through a list provided in triplicate, for one of the
vacancies in the Fiscal Council reserved for the majority
shareholder. The controlling shareholder may select
one among the nominees.
Paragraph 1 - The members of the Fiscal Council
elected by the minority shareholders and by holders of
preferred shares, in case of absence or impediment,
may be replaced only by their respective alternate
members.
Paragraph 2 - Other members of the Fiscal Council, in
case of absence or impediment, shall be replaced by
any alternate member.
Paragraph 3 - Members of the Fiscal Council should
sign the Statement of Consent laid down by the
Regulations of the Market Arbitration Panel.
Article 40 - In addition to the persons referred to in
Paragraph 2 of Article 162 of Law 6404 of December
15, 1976, those, by themselves or in relation to the
Executive Officers or the members of the Board of
Directors, meeting the conditions laid down by Article
Section I
Composition
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April 30, 2015
52
17 of these Bylaws, cannot be elected to the Fiscal
Council.
Section II
Functioning
Section II
Functioning
Not Altered
Article 41 - The Fiscal Council shall ordinarily meet once
a month and extraordinarily when required. Decisions
are valid if taken by at least three of its members
present.
Not Altered
Article 42 - With the specific adaptations to its
functioning, the meetings of the Fiscal Council are also
governed by Section III Chapter V of these Bylaws.
Section III
Powers
Article 43 - The Fiscal Council, in addition to the duties
and powers given by it by the Lei de Sociedades por
Ações, must meet when convened by the Board of
Directors or the Executive Board and submit a report
on the matters assigned to it.
Section III
Powers
Not Altered
Section IV
Remuneration
Article 44 - The monthly remuneration of members of
the Fiscal Council shall be fixed by the Annual General
Meeting and cannot be lower, for each member, than
one tenth of the average remuneration of each
Executive Officer.
Sole Paragraph - The alternate member of the Fiscal
Council is entitled to the remuneration of the sitting
member replaced, in proportion to the number of
meetings he participated in the month.
Section IV
Remuneration
Not Altered
CHAPTER VIII
Audit Committee
CHAPTER VIII
Audit Committee
Section I
Composition
Article 45 - The Company shall have a permanent Audit
Committee, as required by the Brazilian Central Bank,
composed of 3 (three) members named by the Board
of Directors in the first meeting following the Annual
Shareholders’ Meeting, for a term of 1 (one) year,
removable at any time and may be reappointed up to
the maximum legally allowed.
Section I
Composition
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April 30, 2015
53
Sole paragraph - The functions of the Audit Committee
members cannot be delegated.
Article 46 - The Audit Committee should directly report
to the Board of Directors.
Article 47 - Members to be named to the Audit
Committee must be natural persons resident in Brazil,
who have university level education and the technical
qualification required for the positions, besides
meeting the conditions for exercising the function in
statutory organs of financial institutions and other
institutions authorized to function by the Brazilian
Central Bank.
Sole paragraph - At least one member of the Audit
Committee should possess proven knowledge in the
accounting and audit areas that qualify him for the
function.
Article 48 - In addition to the previous Article, the
following are the basic conditions for a member of the
Audit Committee:
I - is not or should not have been, in the twelve months
before being nominated: a) an executive officer of the
institution or its associated companies; b) employee of
the institution or its associated companies; c) technical
person responsible, executive officer, manager,
supervisor or any other member with managerial
function, of the unit involved in audit work for the
institution; d) member of the Fiscal Council of the
institution or its associated companies.
II - should not be the spouse, or direct relatives or
collateral relatives or affinity relatives, up to second
degree of persons mentioned in items “a” and “c” of
clause I;
III - not receive any other type of remuneration from
the institution or its associated companies, not related
to his function as a member of the Audit Committee;
IV - should not hold any licensed position at the state
government level;
V - should not or should not have been, in the five
months before appointment, in any office or function
at the state government level.
Article 49 - The Audit Committee member can return
to such organ in the company only at least three years
after the end of his earlier term.
Not Altered
Section II
Replacement
Section II
Replacement
Not Altered
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April 30, 2015
54
Article 50 - In case of any vacancy in the Audit
Committee, the Board of Directors shall designate the
replacement to exercise the function till the end of the
term of the person replaced.
Sole paragraph - Resignation with the permission of
the Board of Directors shall not result in a vacancy.
Not Altered
Section III
Functioning
Article 51 - The Audit Committee shall ordinarily meet
according to the rules governing its functioning, and
extraordinarily when required. Decisions are valid if
taken by all the members present.
Article 52 - Audit Committee meetings shall be
recorded in minutes, which record the main facts,
matters discussed and decisions taken, and are signed
by all and filed at the Company.
Article 53 - The Audit Committee shall meet at least
once a quarter with the Executive Board, the
Independent Audit firm and the Internal Audit to check
compliance with its recommendations or inquiries,
including those relating to the planning of the
respective audit work, formalizing the proceedings of
such meetings in minutes.
Article 54 - The Audit Committee may, within the scope
of its powers, use the services of specialists.
Sole paragraph - Usage of specialist services does not
exempt the Audit Committee from its responsibilities.
Article 55 - At the end of the semesters ended June 30
and December 31, the Audit Committee should
prepare a document called the Audit Committee
Report containing the following information:
a) activities exercised in the period within the scope of
its powers;
b) evaluation of the effectiveness of the institution´s
internal control systems, with the focus being on
compliance with norms laid down by the Brazilian
Central Bank, and pointing out the shortcomings
detected;
c) description of the recommendations submitted to
the Executive Board, with those not followed and the
respective justification;
d) evaluation of the effectiveness of the independent
audit and internal audit, including with regard to
checking of compliance with legal and normative
provisions applicable to the institution, besides the
Section III
Functioning
Not Altered
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April 30, 2015
55
internal regulations and codes, with evidence of
shortcomings detected;
e) evaluation of the quality of the financial statements
relating to the respective periods, with the focus on the
application of accounting practices adopted in Brazil
and compliance with the norms of the Brazilian Central
Bank, evidencing any shortcoming detected.
Paragraph 1 - The Audit Committee should maintain
the Audit Committee Report at the disposal of the
Brazilian Central Bank and the Board of Directors for at
least five years after it is prepared.
Paragraph 2 - The Audit Committee should publish,
together with the half-yearly financial statements, the
summary of the Audit Committee Report, providing the
main information contained in the document.
Section IV
Powers
Article 56 - The functions of the Audit Committee are:
1. to establish the operating rules for its own
functioning, which must be approved by the Board of
Directors in writing and placed at the disposal of the
shareholders;
2. to submit the technical report to the Bank
management about the firm to be hired to provide
independent audit services, as well as recommend the
replacement of the firm providing such services, if it
deems necessary, subject to the legal norms governing
the Company´s rules for contracting;
3. to review, before publication, the half-yearly
financial
statements,
including
the
notes,
management´s report and report of the independent
auditor;
4. to evaluate the effectiveness of the independent and
internal audits, including with regard to compliance
with the legal and normative provisions applicable to
the institution, in addition to the internal regulations
and codes;
5. to evaluate the Bank management´s compliance
with the recommendations made by the independent
and internal auditors;
6. to establish and report the procedures for receipt
and treatment of information about noncompliance
with the legal and normative provisions applicable to
the Bank, in addition to the internal regulations and
codes, including the estimate of specific procedures for
protecting the provider and the confidentiality of the
information;
Not Altered
Not Altered
Section IV
Powers
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April 30, 2015
56
7. to recommend to the Bank´s Executive Board,
rectification or improvement in policies, practices and
procedures identified within the scope of its duties;
8. to check, on the occasion of the meetings envisaged
in Article 53, the compliance of the institution´s
Executive Board with its recommendations;
9. to meet the Fiscal Council and the Board of Directors
based on their request, to discuss the policies,
practices and procedures identified within the scope of
their respective powers;
10. other functions established by the Brazilian Central
Bank.
Section V
Remuneration
Article 57 - The monthly remuneration of the Audit
Committee members shall be set by the Board of
Directors that nominates them, based on their
professional qualifications, after consulting the
controlling shareholder.
Section V
Remuneration
Not Altered
CHAPTER IX
Ombudsman’s Office
Article 58 - The Ombudsman’s Office, which shall be
permanent, will be entrusted with ensuring that the
Company and its subsidiaries strictly comply with the
legal and regulatory norms relating to consumer rights,
and serving as the communication channel between
the Company and the clients and users of its products
and services, including for resolving disputes.
Article 59 - The Ombudsman’s Office shall have the
following duties:
a) receive, record, instruct, analyze and formally and
appropriately deal with complaints from the
Company´s clients and users of the products and
services that are not resolved by traditional customer
service through the branches and other customer
service points;
b) provide the necessary clarifications and inform the
complainants about the progress of their complaints
and the measures taken;
c) inform the complainants the estimated time for the
final response, which cannot exceed fifteen days from
the date of the filling of the complaint;
d) forward the final response to the complaint within
the deadline informed in item “c”;
CHAPTER IX
Ombudsman’s Office
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April 30, 2015
57
e) propose to the Board of Directors corrective
measures and other measures to improve the
procedures and routines based on analysis of the
complaints received;
f) prepare and forward to internal audit, the Audit
Committee and the Board of Directors, at the end of
every six months, a report showing the numbers and
the quality of the Ombudsman´s activities, containing
the proposals mentioned in item “e”.
Article 60 - The Ombudsman’s Office will be
administered by the Ombudsman, selected from the
Bank’s employees for a term of 1 (one) year, and may
be extended, who shall be appointed and removed by
the Chief Executive Officer.
Article 61 - The Ombudsman’s Office shall be provided
with adequate working conditions and its functioning
will be guided by transparency, autonomy, impartiality
and independence.
Article 62 - The Ombudsman’s Office shall have access
to the information necessary for preparing the
appropriate response to the complaints received, and
shall have total administrative support. It can request
information and documents for exercising its activities.
CHAPTER X
Compensation Committee
Section I
Composition
Article 63 - The Compensation Committee, nominated
by the Board of Directors, will be made up of three (3)
members, resident in the country, with a university
degree and the technical skills demanded by the
position, as well as the requirements for holding
positions in statutory bodies of financial institutions
and other organizations authorized to operate by the
Brazilian Central Bank, with a term of office of three (3)
years, removable at any time, and renewable until the
maximum period permitted by Law.
Paragraph 1 - The Board of Directors is responsible for
the
Administrators’
compensation
policy,
compensation incentives and all other related matters,
and for supervising, planning, operating, controlling
and reviewing said policy.
Paragraph 2 – One of the persons chosen to form
the Compensation Committee must not be an
Administrator, with no direct links to any of the
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CHAPTER X
Compensation Committee
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April 30, 2015
58
Banrisul Group companies, and the others will be
chosen from among the Board of Directors, excluding
the Chairman and Vice-Chairman.
Paragraph 3 One of the members chosen to form
the Compensation Committee will be nominated by
the Board of Directors, to hold the position of
Coordinator.
Paragraph 4 The members of the Compensation
Committee will officially take up office on the occasion
of its first meeting, to be held after the Brazilian Central
Bank approves the chosen members
Paragraph 5 The functions of a member of the
Compensation Committee are non-transferable.
Article 64 - The Compensation Committee is a
collective advisory and instructive body, which reports
directly to the Board of Directors and whose decisions
constitute recommendations to the Board of Directors.
Article 65 - The members of the Compensation
Committee will not be compensated.
Article 66 - In the event that a position on the
Compensation Committee becomes vacant due to
replacement, removal, resignation, death, proven
impediment, invalidity, loss of mandate or any other
hypothesis set forth in law, the Board of Directors will
appoint a substitute to the vacant position until the
end of the replaced member’s term of office
Sole Paragraph - The temporary absence of any
member with the permission of the Board of Directors
shall not constitute a vacancy.
Section II
Powers
Article 67 – The duties of the Compensation
Committee are:
a) To prepare the compensation policy for the
Administrators of the Bank and its subsidiaries,
proposing the various forms of fixed and variable
compensation to the Board of Directors of the Bank
and its subsidiaries, as well as the benefits and specific
recruitment and severance packages;
b) To supervise the implementation and operation of
the compensation policy for the Administrators of the
Bank and its subsidiaries;
c) To review the compensation policy of the
Administrators of the Bank and its subsidiaries on an
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Section II
Powers
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April 30, 2015
59
annual basis, recommending any relevant corrections
or improvements to the respective Boards of Directors;
d) To propose to the Board of Directors of the Bank and
its subsidiaries the total compensation of the
Administrators to be submitted to the respective
Annual Shareholders’ Meetings, pursuant to Article
152 of Brazilian Corporation Law 6404 of 1976;
e) To evaluate future scenarios, both internal and
external, and their possible impacts on the
compensation policy of the Administrators of the Bank
and its subsidiaries;
f) To analyze the compensation policy of the
Administrators of the Bank and its subsidiaries in
relation to market practices, with a view to identifying
any significant discrepancies and proposing any
necessary adjustments;
g) To ensure that compensation policy of the
Administrators of the Bank and its subsidiaries is
permanently compatible with the institutions’ risk
management policy, targets and current and expected
financial situation;
h) To request clarification from the Boards of Executive
Officers of the Bank and its subsidiaries or any of their
members;
i) To invite employees with proven knowledge of their
field to provide additional clarifications; and
j) To obey any other attributions determined by the
Brazilian Central Bank.
Article 68 – The Compensation Committee shall
prepare, on an annual basis, the Compensation
Committee Report within ninety days as from
December 31, containing, at least, the following
information:
a) description of the composition and attributions of
the Compensation Committee;
b) activities exercised within its powers during the
period;
c) a description of the decision making process adopted
to establish the compensation policy;
d) the main characteristics of the compensation policy,
including the criteria used to measure performance
and adjust for risk, the relation between compensation
and performance, the policy for suspending
compensation and the parameters used to determine
the cash compensation percentage and other forms of
compensation;
e) a description of the modifications to the
compensation policy realized during the period and the
April 30, 2015
60
resulting implications to the Institution’s risk profile
and to the conduct of the Administrators when
assuming risk;
f) consolidated quantitative information of the
structure of the Administrators’ compensation,
including:
1.
the amount of annual compensation,
separated into fixed and variable compensation and
the numbers of beneficiaries;
2.
the amount of benefits granted and the
number of beneficiaries;
3.
the amount and form of variable
compensation, separated by type, i.e. cash, shares,
share-based instruments and others;
4.
the amount of compensation that was
deferred for payment in the year, separated into
compensation paid and compensation reduced due to
adjustments to the Institution’s performance;
5.
the amounts paid in relation to the
recruitment of new Administrators and the number of
beneficiaries;
6.
the amount paid in severance during the year,
the number of beneficiaries and the highest payment
to a single person; and
7.
the percentages of fixed and variable
compensation and benefits granted in relation to
period net income and shareholders’ equity.
Paragraph 1 – The Compensation Committee shall
maintain the report at the disposal of the Brazilian
Central Bank and the Board of Directors for at least five
years as of its preparation.
Paragraph 2 - The Compensation Committee shall
present the information for each Banrisul Group
subsidiary.
Paragraph 3 - The Compensation Committee shall
present said report to the Board of Directors at its first
meeting after the Annual Shareholders’ Meeting.
Section III
Functions
Article 69 - The Compensation Committee will meet on
a quarterly basis and extraordinarily, whenever
necessary, in accordance with its operational
regulations.
Section III
Functions
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April 30, 2015
61
Article 70 – The Bank's Secretary-General will be
responsible for:
a)
offering all the necessary technical and
administrative support to the Compensation
Committee by providing a Bank employee responsible
for secretarial duties and preparing, organizing and
distributing the agendas and subjects to be discussed
at the meetings;
b)
receiving, dispatching and maintaining
custody of all correspondence, processes and other
documents that are of interest to the Compensation
Committee;
c)
keeping the administrative assets of the
Compensation Committee up-to-date; and
d)
drawing up the minutes of the Compensation
Committee's meetings, which will include the date,
time, place, list of those present, tasks, resolutions
taken (recording the main facts and subjects which
were dealt with), other matters (if applicable) and
closure; said minutes shall be signed by all members of
the Committee and filed.
Not Altered
Section IV
General Provisions
Section IV
General Provisions
Article 71 -The members of the Compensation
Committee shall remain loyal to the Bank and its
subsidiaries and may not disclose documents or
information related to their business to third parties,
and shall maintain the confidentiality of all privileged
or strategic information of the Bank and its subsidiaries
obtained due to its duties that has not yet been
officially disclosed to the market, doing everything
possible to prevent third party access to said
information. It is prohibited to benefit from such
information, either personally or through another
party, in any form whatsoever. Members are also
required to foster the Bank’s good corporate
governance practices.
Not Altered
CHAPTER XI
General Meeting
CHAPTER XI
General Meeting
Section I
General Provisions
Article 72 - The General Meeting shall be convened and
held and its decisions shall be according to the legal
provisions and, subordinately, to these Bylaws.
Section I
General Provisions
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April 30, 2015
62
Article 73 - Before starting a meeting, shareholders
shall sign the "Attendance Record", indicating their
name, nationality, residence, and the number and type
of shares held by them.
Article 74 - The business of the General Meeting shall
be opened by the Chairman of the Board of Directors
or his statutory replacement, who will immediately
request the shareholders to elect the presiding board,
composed of the Chairman and Secretary.
Not Altered
Section II
Annual General Meeting
Article 75 - Every year, in the four months following the
end of the fiscal year, there will be an Annual General
Meeting to examine the material referred to in Article
132 of the Lei de Sociedades por Ações.
Section II
Annual General Meeting
Not Altered
Section III
Extraordinary General Meeting
Article 76 - The Extraordinary General Meeting shall be
convened whenever the Company´s business demands
it.
Section III
Extraordinary General Meeting
Not Altered
CHAPTER XII
Committees
CHAPTER XII
Committees
Section I
Composition
Article 77 - Company shall have 15 (fifteen) organs to
assist the Executive Board. They are:
a) Banking Management Committee;
b) Economic Management Committee;
c) Business Management Committee;
d) Administrative Management Committee;
e) Internal Controls Management Committee;
f) Information Technology Management Committee;
g) Credit Committee;
h) Personnel Management Committee;
i) Marketing Management Committee;
j) Cards and Acquiring Business Committee;
k) Environmental Management Committee;
l) Investment Committee;
m) Asset Pricing Committee:
n) Corporate Risk Committee;
o) Treasury Committee.
Sole paragraph - Each Committee shall have at least 4
(four) and at most 12 (twelve) members.
Section I
Composition
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April 30, 2015
63
Article 78 - Members of the Committees will be the
Unit Superintendents, Superintendent of Advisory
Boards and the Controller, named by the Executive
Board, and, by appointment of the Executive Board,
administrators of companies in which Banrisul
participates with 50% (fifty percent) or more of the
capital stock.
Sole Paragraph - The Banking Management Committee
will consist of Directors and Coordinators of other
Committees.
Article 79 - The Committees may be subdivided into
groups based on the service needs and interests of the
Executive Board.
Not Altered
Section I
Organization, duties and powers
Article 80 - Subject to the regulations of the Executive
Board, each Committee envisaged in these Bylaws shall
opine on matters pertaining to its respective area, after
being submitting them to the Executive Board for
discussion.
Section I
Organization, duties and powers
Not Altered
CHAPTER XIII
Fiscal Year, Financial Statements, Profits and their
allocations
CHAPTER XIII
Fiscal Year, Financial Statements, Profits and
their allocations
Section I
Fiscal Year
Article 81- The Fiscal Year shall have duration of one
year, ending on December 31.
Section I
Fiscal Year
Not Altered
Section II
Financial Statements
Section II
Financial Statements
Not Altered
Article 82 - At the end of each half-year, in compliance
with legal provisions, the Financial Statements shall be
prepared, clearly explaining the Company´s financial
standing, the changes in the period and the respective
cash flow statements.
Article 83 - Before any profit sharing is made,
accumulated losses and provision for income tax shall
be deducted from the earnings, in compliance with
Article 189 of Law 6404 of December 15, 1976.
Article 84 - In compliance with the previous Article, at
the discretion of the Executive Board, the employees’
profit sharing shall be earmarked for distribution as
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April 30, 2015
64
performance award, up to 10% (ten percent) of the
operating results of the half-year.
Section II
Profit and its Allocation
Article 85 - Shareholders shall have the right to receive
as mandatory dividend, every year, a percentage
equivalent to 25% (twenty percent) of the year´s net
income, adjusted according to the following norms: I.
The year´s net income shall be reduced or increased
with the following amounts: (a) 5% (five percent) for
constitution of the Legal Reserve up to the limit
established by the Lei das Sociedades Anônimas. The
Company is exempted from constituting this Reserve in
the year in which its balance, after adding the amount
of Capital Reserve mentioned by Paragraph 1 of Article
182 of Law 6404/76, exceeds 30% (thirty percent) of
the capital; and (b) the amount allocated to
constituting the contingency reserve, as proposed by
the Executive Board, and the reversal of this reserve
formed in previous years; II. From the amount
allocated for payment of dividend mentioned by this
Article, subject to the deductions envisaged in item I
above, the following shall be excluded: first, the
amount necessary for payment of a fixed dividend of
6% (six percent) per annum to class A preferred shares,
calculated by dividing the capital by the number of
shares making it (Article 8); III. Subject to the previous
items, if there is any balance, dividend shall be paid to
common shares and class B preferred shares, not
greater than that allocated to class A preferred shares;
IV. After payment of the dividend mentioned in
previous items, any balance in the amount allocated
for dividend shall be distributed among all the
shareholders. In such a hypothesis, common shares
and preferred shares shall enjoy the same conditions,
in compliance with item “ii” of Article 8 (eight) of these
Bylaws.
Article 86 - The Company shall maintain an Investment
Reserve for investments in information technology. To
constitute such reserve, the Board of Directors may
propose up to 25% (twenty-five percent) of the
adjusted net income of each fiscal year, up to 70%
(seventy percent) of the paid-up capital.
Section II
Profit and its Allocation
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April 30, 2015
65
Article 87 - Without prejudice to Articles 82 to 86 of
these Bylaws, the Board of Directors may determine
preparation of the balance sheet and payment of
dividend in periods shorter than 6 (six) months,
provided the total of dividend paid in each half-year
does not exceed the capital reserve amount.
Sole Paragraph - In addition, the Board of Executive
Officers, with the concurrence of the Board of
Directors and Fiscal Council may, at its discretion, and
whenever corporate interests so recommend, declare
interim dividends for less than six months from
retained profits or profit reserves existing in the last
quarterly statement, subject to other statutory and
legal provisions on the payment of dividends.
Article 88 - The amount of interest, paid or credited, as
remuneration on equity, under the terms of Article 9
(nine) Paragraph 7 of Law 9249, of 12/26/95 and
pertinent legislation and regulations, may be imputed
to the mandatory dividend, with that amount being
added to the dividend amount distributed by the
Company, for all legal purposes.
Not Altered
CHAPTER XIV
Sole Section - Preservation of the Control of the
Company by the State of Rio Grande do Sul and
Rights of Minority Shareholders
Article 89 - The fundamental and basic rule of the
Company is that it shall necessarily be controlled by the
state of Rio Grande do Sul. Under Article 22 of the Rio
Grande do Sul State Constitution, any amendment to
this rule is the prerogative of the state population.
Thus, only through a plebiscite can there be a transfer
of shareholding control in the Company, subject to
public interest. If such sale is approved following this
procedure required by the State Constitution, either
through a single operation or through successive
operations, it should be based on a suspensive or
resolutory condition that the party acquiring the
control undertakes to place, within 90 (ninety) days, a
public tender offer for acquiring the shares owned by
other shareholders, guaranteeing them a price of at
least 100% (one hundred percent) of the amount paid
per share with voting rights in the controlling block, in
order to assure them equal treatment on par with the
seller.
Article 90 - The public tender offer referred to in the
previous Article should also be held, subject to the
constitutional norms and the plebiscite requirement
CHAPTER XIV
Sole Section - Preservation of the Control of the
Company by the State of Rio Grande do Sul and
Rights of Minority Shareholders
Not Altered
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April 30, 2015
66
mentioned in Article above: (a) in cases of encumbered
assignment of subscription rights of shares and other
bonds or rights related to securities convertible into
shares that may result in the disposal of the Company
Control; and (b) in the case of indirect sale, that is sale
of the control in the company by the Company´s
controlling shareholder(s), in which case the selling
controlling shareholder(s) shall be obliged to inform
the São Paulo Stock Exchange (BOVESPA) the amount
to be attributed to the Company in such sale and attach
documentary evidence.
Article 91 - Those already holding the Company´s
shares and, subject to the constitutional norms and the
plebiscite requirement mentioned in Article 80 above,
acquiring the shareholding control through a private
instrument of share purchase agreement entered into
with the controlling shareholder(s) involving any
amount of shares, shall be bound to: (a) make the
public offer referred to in Article 42 hereof; and (b)
refund the shareholders from whom they purchased
shares in the stock exchange in the (6) six-month
period before date of transfer of the shares
representing control in the Company, and shall pay
them any difference in the price paid to such
controlling shareholder(s) and also the amount paid in
the stock exchange for shares of the Company in this
same period, duly adjusted according to the Extended
Consumer Price Index - IPCA (“IPCA”) up to the actual
payment.
Article 92 - In the public tender offer for the shares to
be made by the controlling shareholder for
cancellation of the Bank´s registration as an open
capital Company, the minimum price to be offered
should correspond to the economic value calculated in
the valuation report.
Article 93 - If the shareholders at the Extraordinary
General Meeting decide to discontinue the Level 1
Corporate Governance Practices, the controlling
shareholder or group of shareholders (as defined in
Article 116 of Law 6404/76) should make a public
tender offer for acquisition of shares owned by other
shareholders, for the economic value of the shares
according to the valuation report: (i) within 90 (ninety)
days, if the discontinuance of Level 1 Corporate
Governance Practices is for the shares to be traded
outside the Level 1 of Corporate Governance Practices,
or (ii) within 120 (one hundred twenty) days from the
date of the Annual General Meeting that approved the
Not Altered
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April 30, 2015
67
corporate restructuring in which the Bank´s shares
resulting from such reorganization are not admitted for
trading in Level 1.
Article 94 - The valuation report referred to in Articles
83 and 84 should be prepared by a specialist company
with proven experience, which is independent of the
Bank, its managers or controllers. The report should
also satisfy the requirements of Paragraph 1 of Article
8 of Law 6404/76 and contain the responsibility
envisaged in Paragraph 6 of the same Article of said
Law.
Article 95 - In compliance with the hypotheses of
Article 80 and subsequent articles, the Company shall
not carry out any transfer of shares to shareholder(s)
acquiring control if such shareholder(s) do not sign the
Statement of Consent to the Regulations of
Differentiated Practices of Level 1 Corporate
Governance and the Statement of Consent to the
Regulations of the Market Arbitration Panel.
Not Altered
Not Altered
CHAPTER XV
Sole Section - Arbitration
Article 96 - Disputes related to Regulations of Level 1
Corporate Governance Practices, these Bylaws, any
shareholders´ agreements filed at the Company´s head
office, provisions of Law 6404/76, norms of the
National Monetary Council, Brazilian Central Bank, the
CVM, regulations of the BOVESPA and other norms
relating to the functioning of the capital markets in
general, or arising from such norms, shall be resolved
by means of arbitration held according to the
Regulation of the Market Arbitration Panel instituted
by the BOVESPA.
CHAPTER XV
Sole Section - Arbitration
Not Altered
CHAPTER XVI
Sole Section - General Provisions
Article 97 - The Bank, in compliance with its corporate
objectives, business nature and operational
characteristics, following the methods used by the
private sector, shall: a) adopt the principle of tenders
for purchase of assets, works and services contracted;
b) observe the principles instituted by the controlling
shareholder for granting subsidies and grants; c)
without prejudice to other norms governing the
inspection of its activities as a financial institution,
provide conditions essential for efficient internal
control, the position of Controller and Auditor General
of the controlling shareholder and external control, as
CHAPTER XVI
Sole Section - General Provisions
Not Altered
April 30, 2015
68
laid down by the State Constitution of Rio Grande do
Sul and pertinent legislation; d) implement the code of
ethics governing the relations with external clients and
among the employees; e) guarantee to its past and
present managers and board members, in cases when
there is no incompatibility of interests with those of the
Company and in the manner defined by the Board of
Directors and proposed by the Executive Board, their
defense in legal and administrative proceedings
against them for actions in the exercise of their
position or function, subject to provisions of Law 8906
of 07/04/1994.
Article 98 - Except for the funds needed to meet the
objectives of the Fundação Banrisul de Seguridade
Social (Banrisul Social Security Foundation), the
amount of subsidies and grants to be distributed
annually by the Executive Board shall be fixed by the
Board of Directors, subject to tax restrictions and the
criteria laid down by the State for concession of these.
Article 99 - The Executive Board shall pass the
resolutions establishing the procedures to be adopted
in cases of tender bids and grant of subsidies and
grants.
Article 100 - The Executive Board shall send to the
Controller and Auditor General of the state of Rio
Grande do Sul the balance sheets and the trial balances
of the Bank and provide them with all the information
required for the internal and external control by the
Article 101 - The Company shall be dissolved and
liquidated according to prevailing legislation.
Article 102 - Recruitment of personnel for the Bank, in
Brazil, shall be according to Brazilian Labor Laws
(Consolidação das Leis do Trabalho) through a common
entrance exam or entrance exams weighted for
qualifications, depending on the nature of the position.
Article 103 - Members of the Executive Board may,
once a year, enjoy vacation of up to thirty days,
consecutive or otherwise, without loss of any benefits
or prerogatives guaranteed to these in these Bylaws.
Article 104 - The Banco do Estado do Rio Grande do Sul
S.A. shall, through at least one of the members of its
Executive Board, have a presence on the Board of
Directors of the companies in which it owns 50% (fifty
percent) or more of the capital. Sole paragraph - The
Bylaws of each of the companies referred to in this
Article should envisage the participation of the Bank´s
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
April 30, 2015
69
representatives on their Boards of Directors, subject to
legal provisions.
Article 105 - The acquisition or subscription to the
Bank´s shares implies in the approval of these Bylaws
and acceptance of the responsibilities arising from
them and the laws in force.
Article 106 - Cases omitted by these Bylaws shall be
regulated by applicable legislation.
CHAPTER XVII
Sole Section - Temporary Provisions
Article 107 - The rights of current holders of preferred
shares shall be given to the holders of such shares on
the date of the Extraordinary General Meeting held on
March 28, 1988, without prejudice to their right to
convert them into registered preferred shares anytime
with no pecuniary liability.
Not Altered
Not Altered
CHAPTER XVII
Sole Section - Temporary Provisions
Not Altered
April 30, 2015
70
NIRE 43300001083
REFERENCE FORM
CVM INSTRUCTION No. 480/2009
ITEM 10. MANAGEMENT COMMENTS
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71
INDEX
10.1 MANAGEMENT COMMENTS
a. General financial conditions
Overview
Financial and Operational Overview
b. Capital structure and possibility of redemption of shares or quotas:
(i) Events of redemption
(ii) Formula for calculation of the redemption amount
c. Payment capacity with respect to financial obligations assumed
d. Sources of working capital loans and investments in non-current assets used
Own Funds – Shareholders’ Equity
Assets Under Management
e. Sources of Working Capital Loans and Investments in Non-Current Assets to be Used to Cover Liquidity
Deficiencies
f. Indebtedness levels and debt characteristics, also describing:
(i) Material loan and financing agreements
(ii) Other long-term relationships with financial institutions
(iii) Subordination level between debts
(iv) Potential restrictions on the Company, in particular with respect to indebtedness levels and taking
out of
net debts, distribution of dividends, disposal of assets, issuance of new securities and transfer of
shareholding control
g. Limits of use of financing already taken
h. Material changes in each line item of the financial statements
Year ended December 31, 2014 compared to the year ended December 31, 2013
10.2 MANAGEMENT COMMENTS
a. Company’s operating results, in particular:
(i) Description of any material revenue item
(ii) Factors materially affecting operating income (expenses)
Requirements on Compulsory Deposits
Changes in Tax Legislation
Regulation and Risks of Chance in the Rules Relating to the Credit
Delinquency in Loan Operations
b. Variations in revenues attributable to changes in prices. exchange and inflation rates, modification of
volumes
and introduction of new products and services
c. Impact of inflation. changes in prices of main inputs and products, exchange and interest rates on the
Company’s operating and financial results
10.3 MANAGEMENT COMMENTS ON THE MATERIAL EFFECTS CAUSED OR EXPECTED TO BE CAUSED BY THE EVENTS BELOW ON
THE COMPANY’S FINANCIAL STATEMENTS AND RESULTS
a. Introduction or disposal of operating segment
b. Establishment, acquisition or sale of ownership interest
April 30, 2015
72
c. Unusual events or transactions
Strategic Agreement with Icatu Seguros
Restructuring of the Post-Employment Benefit Plans
Retirement Incentive Plan
Banrisul Cartões S.A.
Issuance of Financial Bills
Subordinated Debt
Real Estate Investment Fund
10.4 MANAGEMENT COMMENTS ON
a. Significant changes in accounting practices
b. Material effects of the changes in accounting practices
c. Exceptions and emphasis in the auditor’s report
10.5 CRITICAL ACCOUNTING POLICIES ADOPTED BY THE COMPANY
Marketable Securities and Derivative Financial Instruments
Loan and lease operations and other receivables
Other receivables – Credit card transactions
Allowance for loan, lease and other loan losses
Permanent assets
Foreign-currency denominated assets and liabilities
Deposits, Open Market Operations, Resources from Financial Bills, Borrowings and Subordinated Debt
Provisions for Tax, social security, Labor and Civil Contingencies
Other Current and Noncurrent Assets and Liabilities
Income and social contribution taxes
Post-Employment Long-Term Benefit To Employees Obligations
Cash and cash equivalents
Earnings per Share
10.6 INTERNAL CONTROLS ADOPTED TO ENSURE THE PREPARATION OF ACCURATE FINANCIAL STATEMENTS:
a. Efficiency level of such controls, indicating potential errors and measures adopted to correct such errors
b. Deficiências e recomendações sobre os controles internos presentes no relatório do auditor
independente
10.7 MANAGEMENT COMMENTS IF THE COMPANY HAS ALREADY CONDUCTED A PUBLIC OFFERING
a. How the proceeds deriving from the offering have been allocated
b. If there were any material discrepancies between the actual allocation of proceeds and the allocation
proposals disclosed in the offering memoranda of the respective distribution
c. In the event of discrepancies, the reasons for such discrepancies
10.8 MANAGEMENT’S DESCRIPTION OF THE MATERIAL ITEMS NOT DISCLOSED IN THE COMPANY’S FINANCIAL STATEMENTS
a. The assets and liabilities held by the Company, whether directly or indirectly, which are not recorded in the
Company’s balance sheet (off-balance sheet items)
b. Other items not recorded in the financial statements
10.9 MANAGEMENT COMMENTS WITH RESPECT TO EACH OF THE ITEMS NOT RECORDED IN THE FINANCIAL STATEMENTS
INDICATED IN ITEM 10.8
a. How these items change or may change revenues, expenses, operating results, financial expenses or other
items in the financial statements of the issuer)
April 30, 2015
73
b. Operation nature and purpose
c. Nature and amount of the obligations and rights generated in favor of the issuer as a result of the operation
10.10 MAIN COMPONENTS OF THE COMPANY’S BUSINESS PLAN:
a. Investments
b. Acquisitions already disclosed of plants. equipment. patents or other assets which could materially affect
the Company’s production capacity
c. New products and services. indicating: (i) description of surveys in progress already disclosed; (ii) total
amounts disbursed by the Company in connection with surveys for development of new products or services;
(iii) projects in progress already disclosed; and (iv) total amounts disbursed by the Company in connection with
the development of new products or services
10.11 COMMENTS ON OTHER FACTORS MATERIALLY AFFECTING THE OPERATING PERFORMANCE AND WHICH HAVE NOT BEEN
IDENTIFIED OR COMMENTED IN THE OTHER ITEMS OF THIS SECTION
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We, members of Banrisul’s Board of Executive Officers, pursuant to CVM Rule 480/09, make comments in item
10 of the Reference Form about main information referring to the Bank, analyzing 2012, 2013 and 2014 figures.
We declare that this information is accurate and consistent based on the usual accompanied financial statements
and Management reports.
Firstly, in item 10.1, we point out the Bank’s operational and financial overview, our capital structure, our funding
sources and indebtedness levels. We also show the variations between 2012/2013 and 2013/2014 of the Balance
Sheet and Statement of Income.
In item 10.2, we describe main revenue components, the performance of the commercial loan portfolio, ranked
by products and divided into individuals and corporates and also the breakdown of other operating revenues.
In relation to item 10.3, we comment on the events incurred that are part of the business strategy: strategic
partnership with Icatu Seguros, restructuring of the post-employment benefit plans, retirement incentive plan,
restructuring of Banrisul Cartôes S.A. and first issue of financial bills, both in 2013, subordinated debt and real
estate fund, both in 2012.
In item 10.4, we outline the relevant changes in the accounting practices adopted by the Bank and its effects on
the Financial Statements and also we comment on the independent auditor’s report on the financial statements
for the fiscal years of 2012, 2013 and 2014.
Referring to the critical accounting policies adopted by Banrisul, in item 10.5, we point out the securities
classification methodologies and credit risk evaluation, as well as the classifications adopted in loan operations,
in lease and other receivables. In addition, we outline the characteristics of the provision for losses, permanent
assets, measurements and justifications for provisions for tax, labor and civil contingencies and the breakdown
of income tax, social contribution, private pension, health insurance and retirement plans.
Concerning item 10.6, we refer to internal controls sustained by policies ensuring effectiveness and clearness in
the financial statements, structured by the best market practices and corporate governance, meticulously
complying with laws and regulators’ guidelines.
In item 10.7, we inform the characteristics of two foreign funding operations carried out by Institution in 2012.
In reply to item 10.8, we list the assets and liabilities held by the Bank, not mentioned in the Balance Sheet, such
as judicial deposits, sureties and guarantees, the custody of securities and import credit co-obligation, export and
credit transfer, the asset management, the management of consortia and property rental.
In item 10.9, additional comments on the assets and liabilities listed in item 10.8.
Lastly, in item 10.10, referring to business plan, we detail Banrisul’s Capex policy, structured into expansion and
technological modernization, revitalization of the service network, and expansion of client relationship channels.
As we believe that all factors influencing Banrisul operating performance were commented in items 10.1 to 10.10,
we do not include additional comments in Item 10.11.
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10.1 Management comments
a. General financial conditions
Overview
Founded in 1928, Banrisul is a multiple bank controlled by the state of Rio Grande do Sul. It is an official bank and
main state government’s financial agent. In 1934, the Bank started an expansion process by opening branches in
several municipalities of the state, which was followed by the merger of government financial institutions, such
as Banco Real de Pernambuco (1969), Banco Sul do Brasil (1970), Development Bank of the State of Rio Grande
do Sul, BADESUL (1992) and DIVERGS – Securities Broker of the State of Rio Grande do Sul (1992).
In 1998, in view of adhesion to the PROES – Incentive program to reduce state public sector participation in
banking activity, Banrisul went through a restructuring process, which resulted in a capital contribution of R$1
billion, of which (i) R$700 million from bonds issued by the federal government and Brazilian Central Bank and
the remainder (ii) R$700 million referring to the actuarial liability with Fundação Banrisul and amounts due to
BNDES (Brazilian Development Bank). R$700 million capitalized in bonds were earmarked to set up provisions for
(i) operation losses, especially credit and provision for labor risks, (ii) partial write-off of tax credits and deferred
assets and (iii) investments.
In 2007, Banrisul held a primary and secondary offer, totaling nearly R$2 billion and adhered to the BM&FBovespa
Level 1 Special Corporate Governance Practices. The period also concurred with the consolidation of an incompany restructuring program, initiated in 2005, which became effective with the implementation of a resultoriented management model, by reviewing internal processes, developing a new credit model, restructuring
business target modeling and employees variable compensation, besides revamping the technological complex.
In 2011, Banrisul went through a smooth transition by changing executives and replacing members of the Fiscal
Council and Management, thanks to its consolidated corporate governance standards. The result of efforts
endeavored in 2011 was awarded with the rating assigned by Moody’s Investors Service, classifying the Bank as
Investment Grade in the global scale and as maximum rating in national scale in early January 2012 and BBBcredit rating in the global scale, brAAA in Brazil National Scale and stand-alone credit profile SACP) bbb+ by
Standard & Poor’s Rating Services in March 2012, which have been maintained up to this date.
In 2012, the Bank carried out several actions, highlighting: the consolidation of the acquisition of 49.9% of
Credimatone Promoter Sales and Service S.A., two foreign funding in the amount of US$775 million; issue for the
first time, quotas of investment funds in the approximate amount of R$70 million, called Banrisul Novas Fronteiras
Fundo de Investimento Imobiliário – FII (Banrisul New Frontier Real Estate Investment Fund). The ratings
Investment Grade awarded by Moody's Investors Service and by Standard & Poor's Rating Service in early 2012
were fundamental to the implementation of the diversification strategy of funding sources and strengthening
capital.
In 2013, the Bank focused the marketing strategy in expanding the matrix of revenue, the maintenance of credit
quality in new business opportunities, the restructuring of the post-employment benefit plan and operational
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efficiency. The operation cards was strengthened with the integration of vouchers, acquiring and Banricompras
card activities in the company Banrisul Cartões S.A.. In August 2013, was completed the first issue of financial
bills, totaling R$1,600 million. Moreover, in the period was approved by Previc the new retirement plans in place
to Defined Benefit Plan, the PB1, creating favorable conditions for retirement planning, and allowing the Bank to
resize internal structures and greater stability in the projection of marked to market results.
The year of 2014 was marked by events that impacted the results of the Bank and will influence the future
indicators, among which include: the restructuring of post-employment benefit plans of Banrisul Social Security
Foundation, completed in the first half of 2014, a process of migration which resulted in about 60% adherence
and generated expenses of R$288 million relating to incentives for migration to the new plans, minimized, in part,
by the actuarial gain of R$84 million, resulting from the effects of calculation of settlement rights of PBI migrants
on the portion of sponsor obligations; Retirement Incentive Plan, with 510 dismissals effected until 30 June 2014
and incentives paid in the amount of R$64 million; and distribution agreement for life insurance and pension plan
products of Icatu Seguros in Banrisul channels, approved by the Central Bank of Brazil and by the Administrative
Council for Economic Defense in 2014, and in February 2015 by the Superintendent of Insurance private, resulting
in the creation of a joint venture in which Banrisul will be holding 49% of capital, and will enable the Bank to
diversify and increase the sources of revenue in the coming years.
At the end of 2014, Banrisul totaled R$59,562 million in assets. Loan operations totaled R$30,487 million, deposits
totaled R$34,135 million and shareholder’s equity, R$5,671 million in December 2014.
Banrisul is focused on meeting individuals’ demands and corporate working capital financing. Referring to the
individuals segment, several agreements with public and private authorities were signed, in addition to the loan
origination out of the branch network, which enables the Bank to expand payroll credit out of the state. In the
corporate segment, the lines of working capital were favored by the expansion of activity in the acquiring market.
Additionally customers are offered real estate credit lines, rural, long-term, exchange rates and specific resources
for the public sector.
The commercial loan maintained an outstanding position in the total loan portfolio, comprising 66.2% of loan
assets. In the commercial portfolio, the individual segment advanced 8.0% in 12 months. Corporate commercial
loan grew by 10.0% in 12 months. It is also worth mentioning the annual growth of long-term financing at 26.7%,
the increase of 24.4% in rural and 21.0% increase in mortgage, segments that received several stimuli in the
period.
The Bank’s performance geographic focus is the South region of Brazil, especially the state of Rio Grande do Sul,
which is ranked in the 4th position among the economies composing Brazil’s Gross Domestic Product (GDP) in
2012 and where the Financial Institution is headquartered.
Banrisul conglomerate is composed of the Banco do Estado do Rio Grande do Sul S.A., Banrisul S.A.
Administradora de Consórcios, a Banrisul S.A. Corretora de Valores Mobiliários e Câmbio, Banrisul Armazéns
Gerais S.A., Banrisul Cartões S.A. and Bem Promotora de Vendas e Serviços S.A..
In a competitive market, in September 2014, Banrisul was ranked in the 11 th position among medium and largesized banks of the Brazilian National Financial System in total assets, 11th position in shareholder’s equity, 7th
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position in total deposits and 7th position in number of branches, according to the ranking released by the Brazilian
Central Bank, excluding BNDES.
The Bank presented in the last twelve months, market share gains of 0.7357 pp. in time deposits’ domestic share,
reflecting the growth of such deposits by 13.2%, compared to a year-on-year decline of 7.0% in the national
banking industry. Regarding demand deposits, Banrisul’s share in the domestic market reached 1.9105% in
December 2014, compared to 1.8894% in December 2013; and savings deposits, as Banrisul’s share in the national
financial system increased by 0.0058 percentage points against that of December 2013, reaching a
representativeness of 1.1713% in December 2014. As for total credit, the Bank increased its balance by 14.4% in
the last twelve months as its competitors in the national financial system grew by 11.3% in the same period. The
representativeness of the institution in the balance of credit operations reached 1.0089% in December 2014
(compared to the participation of 0.9815% in December 2013).
In the regional market Banrisul recorded an increase in time deposits of 2.2694 pp., reaching 38.8399% in
September 2014, growth in demand deposits by 1.6994 pp., and savings deposits by 0.2641 pp. The
representativeness of the balance of loans reached, in September 2014, a participation of 17.2433% on the credit
balance of Rio Grande do Sul, decreasing 0.3655 pp. in comparison to September 2013.
Financial and Operational Overview
The tables 1 and 2 show the data related to the main operational and financial indicators:
Table 1: Main Balance Sheet Accounts
R$Million
Total Assets
Total Credit Operations (1)
Deposits
Money Market Funding
Resources from Bills
Assets under Management (2)
Shareholders' Equity
Consolidated Basel Ratio (3)
(1)
(2)
(3)
(4)
2014
59,562
30,487
34,135
4,318
2,838
8,869
5,671
17.8%
2013
53,211
26,652
30,645
4,221
2,506
7,408
5,150
18.3%
2012(4)
46,744
24,327
26,746
1,628
315
7,138
4,636
20.2%
Includes all types of credit operation.
Management of third party funds made through investment funds and managed portfolios.
Basel ratio represents the relation between base capital (Referential Equity) and risk weighted assets.
Restated.
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Table 2: Main Income Statement Accounts
R$Million
Recurring Net Income
Gross Profit from Financial Operations (1)
Other Operating Income (Expenses) (2)
Recurring Efficiency Ratio (3)
Recurring ROAE (p.a.) (4) (5)
Number of Service Points (6)
(1)
(2)
(3)
(4)
(5)
(6)
2014
753
3,006
(1,888)
55.3%
13.9%
1,328
2013
792
3,006
(1,799)
52.9%
16.2%
1,323
2012
819
2,878
(1,675)
47.5%
18.1%
1,301
Corresponds to the total Income from Financial Intermediation less total Costs of Financial Intermediation.
Considers the (i) revenues from services and fees, (ii) administrative expenses, (iii) tax expense, (iv) other operating income and
expenses.
Efficiency Ratio, based on 12-month accumulated period and consists of (i) personnel costs summed to (ii) other administrative
expenses, then divided by (iii) net interest income added of (iv) income of services and (v) the net result of other income/expenses.
Net income as a percentage of the average balance of shareholders' equity.
Return on equity restated for 2012.
It includes branches, bank service points and ATMs.
Fiscal year ended December 31, 2014
The main factors that affected the 2014 performance are briefly highlighted below, as well as relevant events that
occurred in the period:
The operation approved by the Central Bank of Brazil and the Administrative Council for Economic Defense at the
end of 2014, by which Banrisul and Icatu Seguros S.A. entered into a distribution agreement, on an exclusive basis,
for life insurance and pension plans. This operation was authorized by the Superintendence of Private Insurance SUSEP in February 2015, and will result in the creation of a joint venture, in which Banrisul will be holding 49% of
capital. This corporate association represents an evolution in the business model; and beyond receiving a
commission for the sale of life insurance and pension plans, Banrisul will share the profits of the transaction. Icatu
paid R$115 million for the exclusive use of Banrisul sales channels. Discounting the tax effects, the event generated
a positive effect in the income at R$71 million.
The restructuring of the post-employment benefit plans was another important 2014 event. The process was
concluded in June, and generated expenses of R$288 million with the creation of new plans, of which R$32 million
were paid to the participants of the Defined Benefit Plan - PBI who have chosen voluntarily to migrate their
mathematical reserves and R$256 million directly to the Settled Plan and FBPrev II Plan. The new plans have
undergone actuarial reassessment. Discounting the tax benefits of R$111 million, the event had a negative effect
of R$93 million on the bottom line, represented by the difference between the above costs and the actuarial gain
of R$83.6 million regarding the portion of sponsor's obligations arising from the effect of settlement calculations
of the rights of migrant participants of PBI. For the application of accounting rules in CPC 33 (R1), the promoted
restructuring brought increased balance plans for post-employment benefits, having remained at R$118 million
liability recognized on the sponsor's equity.
Another 2014 highlight event was the Retirement Incentive Plan - PAI. Implemented earlier this year in order to
stimulate your employees on favorable terms, PAI was directed to employees suitable for official and
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supplementary retirement until December 2014. The deadline for membership was extended to March and
dismissals were done by June 2014. The adherence to the PAI was of 554 people. The dismissals totaled 510
employees. The incentives paid under the PAI totaled R$64 million. Net of tax effects, the event affected the result
in R$39 million.
The consolidation of the acquiring segment favored the performance achieved in 2014. The launch of the brand of
acquiring network - Vero, Vero Mobile strengthened the business model, based on multiflag transactions Banricompras, VISA, MasterCard, VerdeCard - in one device, favoring merchants and consumers. Revenues from
acquiring and vouchers amounted to R$355 million in 2014, 45.5% above the amount recorded in 2013.
The Bank net income was of R$691 million in 2014. Recurring income reached R$753 million, 4.9% lower than
2013. The return calculated based on recurring income, was 13.9% on average equity. The extraordinary events
(PAI, Foundation and partnership with Icatu Insurance), net of tax benefit of R$92 million, generated a negative
net impact of R$62 million in income for the year. Recurring income in 2014 was affected by the increase in the
basic interest rate, with direct impact on the cost of funding, in a context of falling spreads and stabilization of NPL;
and was favored by the expansion of the revenue from fees and services, to a lesser volume than the increase in
administrative expenses.
Net interest income calculated for 2014, R$3,790 million, increased by R$123 million or 3.4% compared to that
recorded in 2013. The evolution of the annual flow of net interest income is explained by the gradual recovery of
financial intermediation revenues, especially in the second half of the year, compared to the increase in expenses,
in a context of rising basic interest rates, with direct effect on the costs of post-fixed funding and indirect on credit
revenues.
Allowance for loan losses on amounted to R$784 million in 2014, an increase of R$123 million compared to cash
flow calculated in 2013. In the last twelve months, the loan portfolio classified by rating improved by 1.8
percentage points the normal risk. The 3.83% 60-day delinquency rate increased 0.03 percentage points in twelve
months. The 3.39% 90-day delinquency rate increased 0.16 percentage points in twelve months. The increase in
provision expenses in the periods under review reflected the rollover of the portfolio by rating, due to specific
transactions that have requested adjustments to the provision stream.
Revenues from services and banking fees continue influenced by the performance of Banrisul Cards and the
insurance, pension plan and capitalization business. The revenue recorded in 2014 exceeded R$213 million,
increasing by 21.6% the amount recorded in 2013, of which R$148 million were from acquiring and vouchers,
insurance, pension plan and capitalization businesses.
The recurring administrative expenses, R$2,742 million in the year 2014, increased by R$328 million or 13.6%
compared to the amount recorded in 2013, mainly reflecting the higher costs associated with new business and
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the collective labor agreement. The efficiency ratio calculated on recurring expenses reached 55.3% considering
the accumulated flow in the twelve months before December 2014.
Total assets reached a balance of R$59,562 million in December 2014, an increase of 11.9% compared to December
2013. The loan assets reached R$31,816 million in the expanded concept, an increase of 14.6% in twelve months.
Discounting recourse operations in guarantees, credit growth was 14.4% in twelve months. The credit performance
in twelve months was driven by the expansion of the commercial portfolio and specialized credits.
Shareholders' equity reached R$5,671 million in December 2014, 10.1% above the December 2013. In twelve
months, the balance of shareholders' equity was affected by the incorporation of the results generated by the
payment of dividends and interest on capital and the reassessment of the actuarial liability of the plans for postemployment benefits. The funds raised and managed totaled R$48,065 million, 13.3% above the December 2013
balance.
The 4.4% increase in gross profit from financial intermediation and stability of operating income in 2013 compared
to the determined values recorded in 2012 reflect, in terms of revenue and expenses, a context of effective Selic
rate reduction and lower flow of provision expenses for credit as a result of improvements in the compliance of
client rating system process, as well as high rates of revenue, compared to the effort to expand other services
(acquiring, insurance, pension plan, capitalization), the relationships narrowing through the introduction of new
tools for customer management, and actions to improve the service by increasing points and alternative channels,
allowing motion minimize the effect of the increase in administrative expenses and personnel.
The funding structure of the Bank is mainly represented by time deposits, bank deposit certificates (TD), savings
deposits, demand deposits and the issuing of letters resources and subordinated debt abroad. In August 2013, the
first issue of treasury bills, totaling R$1,600.0 million was held by the institution.
The capture and management of third party funds of Banrisul, consisting of deposits, appeal letters, subordinated
debt and investment funds, totaled R$42,420 million in December 2013, an increase of 20.0% or R$7,062 million
on the balance recorded in December 2012. The funds raised and managed are composed of 72.2% of deposits,
17.5% of investment funds, 5.9% of resources in letters and 4.4% of subordinated debt.
Deposits totaled R$30,645 million in December 2013, with an increase of 14.6% or R$3,898 million over the amount
recorded in the same period of 2012. The resources of letters totaled R$2,506 million in December 2013. The
subordinated debt, with issuance abroad, totaled R$1,861 million in December 2013, an increase of R$703 million
over the balance of December 2012. The portfolio of managed funds totaled, in December 2013 R$7,408 million,
an increase of 3.8%, or R$270.0 million compared to the previous year.
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Total assets reached R$53,211 million in December 2013, 13.8% or R$6,467 million higher than recorded the same
month last year. The assets comprise loans, 50.1% of total, bonds and securities and liquid interbank investments,
35.5%, interbank and interbranch, 9.1%, and other assets, 5.3%.
The balance invested in credit assets reached R$26,652 million in December 2013, with an increase of 9.6% or
R$2,325 million in the twelve months. The loan portfolio is comprised of contracted operations primarily along to
individuals and large companies. The balance of the expanded portfolio reached R$27,763 million in December
2013 and increased 10.2% or R$2,564 million compared to December 2012. Among the credit lines, the most
significant were individual payroll loans, representing 27.6% of total loans and working capital to companies, which
absorbed 24.5% of total loans at end-December 2013. The portfolios of real estate loans, rural and long-term
financing increased their participation in the Bank's credit amount in the last quarter, 10.2%, 8.3% and 7.0% of the
loan portfolio the total respectively in December 2013.
Regarding credit granting, compared with 12M12, the commercial portfolio showed more significant growth, in
particular the individual payroll loans, guaranteed account and working capital, and long-term financing.
The commercial portfolio totaled R$18,532 million in December 2013, an increase of 4.7% or R$834 million in
twelve months. In twelve months both segments - consumption financing and business credit - contributed to the
expansion of the commercial portfolio, the increase of credit to individuals totaled R$664 million and the expansion
of trade credit to companies totaled R$170 million.
The NPL over 60 days reached 3.8% of total loans in December 2013, same indicator in the previous year. Defaults
over 90 days reached 3.2% in December 2013, above that of December 2012, 2.9%. The coverage ratio of credit
overdue loans over 60 days reached 156.4% and the indicator of 90 days, 184.5%, keeping in line with those
charged by the banking market. Indicators of default and delays cover with provisions were also impacted by the
delay in the transfer of credits received by Banco Cruzeiro do Sul - under extrajudicial liquidation, in addition to
implementation of the new system for rating customer.
Regarding liquidity Banrisul, we highlight the liquid availabilities invested in government securities indexed to the
Selic Rate, in Treasury Bills or repurchase operations, always backed by federal bonds. In December 2013 the
balance in bonds and securities and liquid interbank investments, discounted repurchase operations, totaled
R$14,687 million, a decrease of 4.3% or R$656 million compared to December 2012. The variation was due to the
profile change in funding lines.
The Bank has conditions to support the growth of its operations, capacity certified by the Basel ratio, 18.3% in
December 2013. The indices that demonstrate the effectiveness of the administrative structure, given by the
proportion of administrative costs in relation to the volume of assets or in respect of revenue generated,
represented by indicators of operational cost and efficiency, reached 4.5% and 52.9% in December 2013
respectively.
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The Bank recorded net income of R$792 million in 2013 compared to the result of R$819 million in the year of
2012. The performance in the period was impacted by lower net interest income, 1.7% or R$64 million, and the
expansion of administrative expenses, at 15.3% or R$320 million, flow partly offset by the decrease in expenditure
on provisions for loans, 22.5% or R$191 million, and the increase in revenue from provision of services and fees by
23.2% or R$185 million.
Gross income from financial operations reached R$3,006 million in 2013, an increase of 4.4% or R$127 million over
the amount recorded for the same period last year. The variation reflects the slowdown in interest income and
interest expense increased in line with the trajectory of the basic interest rate and reduction of bank spreads, as
well as the effect of reduction of provision expenses for credit and the result of market marking subordinated debt
and hedging instruments.
The results generated in 2013 equals a return of 16.2% calculated on the average shareholders' equity. In
December 2013, shareholders' equity totaled R$5,150 million, an increase of 11.1% or R$513 million over the
balance of December 2012. The return on equity reflects lower revenue generation and higher interest expenses,
and the favorable effect of the increase in revenues from other services and consequent increase in administrative
expenses associated with business expansion strategy.
The Bank collected and provisioned in the 12M13, R$802 million in taxes and contributions. The withheld and
passed on taxes levied directly on financial intermediation and other payments, totaled R$684 million.
Banrisul’s economic performance in 2012 was affected by the slowdown of the growth in interest income, in line
with an environment of lower business activity and the reduction of interest rates to end-customers. The growth
strategy designed two years ago was put into practice with the acquisition of 49.9% of the capital of the payrollloan specializing company Credimatone Promotora de Vendas e Serviços S.A., a company with points of service
dispersed through five regions of Brazil. In the southern region, the expansion project has continued with the
opening of 9 new branches and the transformation of 18 banking service posts into full branches. The Bank also
concluded two foreign funding subordinate capital injections in February and December 2012, in the total amount
of USD775 million, foreign and corporate events that exemplify a year marked by various movements.
Banrisul’s funding structure, mainly represented by savings and time deposits, includes financial and investment
funds and counts on the issuance of foreign subordinated bonds. Throughout 2012, the Bank also raised funds by
issuing real estate bonds.
In 2012, Banrisul accessed the international debt capital market in two opportunities, reaching the amount of
USD775 million in foreign subordinated notes issued with a term of 10 years, maturing in 2022 and interest coupon
of 7.375% p.a., with the purpose of increasing Tier II capital. The first issue, in the amount of USD500 million, took
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place in late January 2012, with a yield of 7.50% p.a. The second, in the amount of USD275 million, was concluded
in late November 2012, with a yield of 5.95% p.a. The authorization from the Central Bank of Brazil for the use of
the external funding as Tier II capital was received in December 2012.
Banrisul’s funding and AUM structure, consisting of deposits, financial and development funds, external funding
and investment funds, reached R$40,985.3 million in December 2012, an increase of 20.2% (R$6,887 million) over
the amount recorded in December 2011. Funding consists of 65.3% of deposits, 14.5% of financial and investment
funds, 2.8% of subordinate debt (related to the first issue, as the second will only be used as Tier II Capital from
January 2013) and 17.4% of investment funds.
The balance of deposits totaled R$26,746 million in December 2012, an expansion of 19.6% over the amount
recorded in December 2011. Financial and investment funds reached R$5,942 million, with a growth of 16.5% over
December 2011. The foreign subordinated debt totaled R$1,158 million in December 2012. Funding from real
estate bonds totaled R$315 million at the end of 2012. Assets under management totaled R$7,138 million at the
end of December 2012, an increase of 7.5% over the previous year.
Total assets reached R$46,744 million in December 2012, 24.4% up year-on-year. The assets are composed of loan
operations, 52.0% of total, marketable securities and liquidity interbank investments, 36.3%, interbank and
interdepartmental accounts, 7.9%, and other assets, 3.8%.
Loan book reached R$24,327 million, with an increase of 19.3% (R$3,934 million) in twelve months. Loan portfolio
consists mainly of borrowings to individuals and medium-sized companies. Among the credit lines, payroll loans to
individuals stand out by their representativeness, with 27.8% of total loans at the end of December 2012, seconded
by working capital loans to companies, which absorbed 26.7% of the total credit portfolio. Real estate and
agricultural loans also presented favorable growth in the last twelve months since December 2012, representing
9.2% and 7.4% of the loan book, respectively. Payroll loans originated from branches, working capital and real
estate loans are the main lending highlights of 2012.
The commercial (non-earmarked) credit portfolio totaled R$17,698 million, with a growth of 15.9% (R$2,427
million) in twelve months. In 2012, both credit to companies and consumer credit contributed to the increasing
trend of the commercial credit portfolio; the expansion of credit to companies totaled R$1,254 million and the
contribution of the commercial credit to individuals reached R$1,173 million.
Delinquency rate over 60 days reached 3.80% of total loans in December 2012, an increase of 1.04 pp. over last
year’s. NPLs over 90 days reached 2.93% in December 2012, higher than the 2.38% of December 2011. The
coverage ratio reached 172.2% and 223.5% for loans 60- and 90-day overdue, respectively, in line with market
trends. In the last quarter, default and cover ratios were impacted by the delay in the remittance of payments
received by Banco Cruzeiro do Sul (currently in extrajudicial liquidation) upon loans that were sold to Banrisul. This
delay was due to the fact that the company Banco Cruzeiro do Sul hired to collect and process all installments
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credited by the consignors entities (mostly public companies, from the payments of payroll loans taken by their
employees), as agreed by all the banks that acquired credit portfolios from Cruzeiro do Sul, has not yet concluded
the operational process that will expedite the identification of payments and their transferences to the
corresponding creditor banks. Of the amount more than 60 days overdue, 11.9% was referred to contracts with
overdue installments not yet transferred by Banco Cruzeiro do Sul, the equivalent to 0.45 pp. out of the 60 days
default rate presented by Banrisul, i.e., if excluded, delinquency would have reached 3.35% in 4Q12, in comparison
to the 3.39% of September 2012. Of the amount more than 90 days overdue, 7.4% arose from installments of
contracts not yet transferred by Banco Cruzeiro do Sul and represented 0.22 pp. of Banrisul’s 90-day default rate,
i.e., the rate would have been 2.71% in 4Q12, reducing from the 2.76% in September 2012.
As to Banrisul’s treasury management, cash and cash equivalents are invested into to federal bonds indexed to the
Selic Rate, in Treasury Bills or in matched transactions, always backed by federal securities. In December 2012, the
balance in securities, interbank transactions, net of matched transactions, totaled R$15,343 million, an increase of
38.5% from December 2011.
The Bank has room to support credit growth, capacity attested by the 20.2% Basel ratio in December 2012.
Operating performance indicators, the administrative costs to total assets and the administrative costs to total
revenue ratios, representing the operational cost and efficiency indicators, reached 4.5% and 47.5% in December
2012, respectively.
Banrisul’s net income of R$819 million in 2012 is 9.5% below that recorded in 2011, largely reflecting the business
slowdown in the economic environment and the rise of delinquency. Although the effect of situational constraints,
2012 performance produced increases in credit and treasury revenues (derivatives included) and in service fees,
although offset by the increases in financial, operating and administrative expenses, the latter related to events
associated with the Bank’s growth strategy that comes from the prospection of new business opportunities and
from the issuance of foreign subordinated debt.
Gross financial income reached R$2,878 million in 2012, with growth of 5.1% (R$140 million) over that of 2011.
The result generated in 2012 corresponds to a profitability of 18.1% calculated over average shareholder’s equity.
In December 2012, shareholder’s equity totaled R$4,636 million, 5.3% up on balance of December 2011. ROE
reflects the net interest margin and lower credit average interest rates, the increase of default rates and of
administrative expenses, grandly linked of Banrisul’s expansion strategies.
Banrisul collected and provisioned R$752 million in taxes and contributions in 2012. Taxes withheld and paid, which
are levied directly on financial intermediation and other payments, amounted to R$685 million.
b. Capital structure and possibility of redemption of shares or quotas:
April 30, 2015
85
The capital of Banrisul on December 31, 2014 was R$4,000,000 thousand, subscribed and paid, represented by
408,974,000 shares with no par value. From January to December 2014, there was the conversion of shares,
between preferred share class A (PNA) and preferred share class B (PNB) in the amount of 1,879 shares. The
Extraordinary General Shareholders Meeting held on April 30, 2014, approved a capital increase through utilization
of profit reserve in the amount of R$250 million, without the issuance of new shares, approved by the Central Bank
of Brazil in May 26, 2014.
PNB(*
ON(*)
Amount
Rio Grande do Sul State
%
PNA(*)
Amount
)
%
Amount
%
Total
Amount
%
204,199,859
99.6
2,721,484
77.1
26,086,957
13.0
233,008,300
57.0
449,054
0.2
158,983
4.5
0
0.0
608,037
0.2
44,934
0.0
168,612
4.8
0
0.0
213,546
0.1
Market
349,548
0.2
480,772
13.6
174,314,274
87.0
175,144,594
42.8
Total
205,043,395
100.00
3,529,851
100.00
200,401,231
100.00
408,974,477
100.00
Fundação Banrisul de
Seguridade
Social
(pension plan)
Social Security Institute
of Rio Grande do Sul
State
(*) Classes of shares – ON (Ordinary), PNA and PNB (Preferred shares defined as follow).
The capital of Banrisul on December 31, 2013 was R$3.75 billion, subscribed and paid, represented by 408,974
thousand shares with no par value. In the period January to December 2013, there was the conversion of the
shares between preferred share class A (PNA) and preferred share class B (PNB) in the amount of 11,026 shares.
The Extraordinary General Shareholders Meeting held on April 30, 2013, approved a capital increase through
utilization of profit reserve in the amount of R$250 million, without issuing new shares, approved by the Bank in
June 2013.
ON(*)
PNB(*)
Total
Amount
%
Amount
%
Amount
%
Amount
%
204,199,859
99.6
2,721,484
77.1
26,086,957
13.0
233,008,300
57.0
449,054
0.2
158,983
4.5
0
0.0
608,037
0.1
44,934
0.0
168,612
4.8
0
0.0
213,546
0.1
Market
349,527
0.2
482,672
13.6
174,312,395
87.0
175,144,594
42.9
Total
205,043,374
100.00
3,531,751
100.00
200,399,352
100.00
408,974,477
100.00
Fundação Banrisul de Seguridade
Social (pension plan)
Social Security Institute of Rio Grande
do Sul State
(*)
PNA(*)
Classes of shares – ON (Ordinary), PNA and PNB (Preferred shares defined as follow).
Banrisul subscribed and paid-up share capital on December 31, 2012 totaled R$3,500,000 thousand, represented
by 408,974 thousand non-par shares. Between January and December 2012, share conversion occurred between
April 30, 2015
86
preferred share class A (PNA) and preferred share class B (PNB) amounting to 34,410 shares. The Extraordinary
Shareholders’ Meeting held on April 30, 2012, approved capital increase through the utilization of Profit Reserves,
totaling R$300,000 thousand, without issuing new shares, already ratified by Brazilian Central Bank (Bacen).
ON(*)
PNB(*)
Total
Amount
%
Amount
%
Amount
%
Amount
%
204,199,859
99.6
2,721,484
76.8
26,086,957
13.0
233,008,300
57.0
449,054
0.2
158,983
4.5
0
0.0
608,037
0.1
44,934
0.0
168,612
4.8
0
0.0
213,546
0.1
Market
349,527
0.2
493,698
13.9
174,301,369
87.0
175,144,594
42.8
Total
205,043,374
100.00
3,542,777
100.00
200,388,326
100.00
408,974,477
100.00
Fundação Banrisul de Seguridade
Social (pension plan)
Social Security Institute of Rio Grande
do Sul State
(*)
PNA(*)
Classes of shares – ON (Ordinary), PNA and PNB (Preferred shares defined as follow).
Banrisul increased the percentage of operations financed by third party capital in 2014, reaching 90.5%, compared
to 90.3% in 2013 and 90.1% in 2012.
Operations Financing Pattern
Own Capital
Third Party Capital
Total Capital
2014
5,671
53,891
59,562
2012 (1)
2013
9.5%
90.5%
100%
5,150
48,061
53,211
9.7%
90.3%
100.0%
4,636
42,108
46,744
9.9%
90.1%
100.0%
(1) Restated
(i) Events of redemption
(ii) Formula for calculation of the redemption amount
There are no events of redemption of shares issued by the Company, other than those set forth by legislation.
c. Payment capacity with respect to financial obligations assumed
Banrisul’s liquidity position benefits from our funding characteristics, through an extensive network, in particular
in the State of Rio Grande do Sul, in other locations in the Southern Region and in other Brazilian states. We also
prioritize widespread transactions in credit operations, the main type of asset, and primarily operate with
individuals and micro, small and medium-sized companies. Deposits are our main funding source.
The treasury policy was not modified in 2014, although the allocation in treasury assets had shown a higher growth
over credit assets allocation, position that differs to that recorded in 2011, due to the foreign funding bond
issuances held in December 2012 in the amount of USD275 million, whose proceeds will be directed to credit assets
throughout 2013. Total net available funds continue to be invested in government bonds indexed to the SELIC rate,
April 30, 2015
87
in Financial Treasury Bill (“LFTs”), or in repurchase transactions, always backed by government bonds, with no
exposure to foreign exchange rates, swap or derivative transactions.
The Bank participates in transactions involving derivative financial instruments in the form of swaps and forward
currency contracts, recorded in balance sheet and memorandum accounts, which are intended to meet own needs
to manage its global exposure. The use of derivative financial instruments is predominantly aimed to mitigating
risks arising from currency swings of the external funding operation conducted by Banrisul and cited in Note 14 of
the Financial Statements, which results in the conversion of these rates to the variation of the CDI rate. With this
purpose, swap operations with derivative financial instruments are long term, accordingly to the flow and tenor
of the external funding, while forward currency transactions are short-term, maturing as portions of the external
funding are protected by natural hedge. Such operations are based on OTC contracts registered in the Custody and
Settlement Chamber (CETIP) and have as counterparties top-tier financial institutions. The Bank uses hedge
accounting practices laid down by the Central Bank of Brazil, and the effectiveness expected from the designation
of hedging instruments and in the course of the operation is in accordance with the provisions of the Central Bank
of Brazil.
Banrisul has financial capacity, confirmed through technical studies developed internally, and intents to hold to
maturity securities classified as "held to maturity", as provided in Article 8 of Circular no. 3,068 of the Central Bank
of Brazil, dated November 08, 2001.
The table below sets forth our average asset and liability terms for 2014, showing our payment capacity with
respect to financial obligations assumed:
April 30, 2015
88
Table 3: Assets and Liabilities by Maturity
R$Million
Without
Up to 3
3 to 12
Over 12
maturity
months
months
months
Total
ASSETS
Current and Long-term
Cash
798
798
Interbank Investments
29
29
Securities and Derivatives
259
1,678
757
16,194
18,889
5,473
9,393
15,622
30,487
194
9,092
Lending, Lease and Other Receivables
Operations
Other Assets
Permanent Assets
Total Assets
8,898
267
267
10,251
7,151
10,150
32,010
59,562
11,049
1,616
3,020
18,451
34,135
LIABILITIES AND SHAREHOLDERS´ EQUITY
Current and long-term
Deposits
Borrowings and Onlendings
4,318
4,318
0
554
1,671
1,955
4,180
Other Payables
5,034
86
75
2,954
8,149
Other Liabilities
1,516
1,593
3,109
Shareholders’ Equity
5,671
Total Liabilities and Shareholders’ Equity
23,269
5,671
6,574
4,766
24,953
59,562
d. Sources of working capital loans and investments in non-current assets used
We make use of own and third-party funds to conduct our activities.
Own Funds – Shareholders’ Equity
Banrisul’s shareholder’s equity stood at R$5,671 million at the end of December 2014, 10.1% up on the previous
year.
The allocation of own funds into different alternatives of active investments is however subject to strict risk and
return assessments. We present level close to the average for large banks of national network and, as any other
Brazilian financial institution, we are required to adjust our capital adequacy based on risk weight, a methodology
developed in July 1988 by the Basel Committee on Banking Supervision, and implemented including the
modifications defined by the Central Bank.
In March 2013, the Conselho Monetário Nacional (CMN, the National Monetary Council) released a set of
guidelines for the implementation of Basel III rules in Brazil, effective from October 2013. The Resolution no. 4,192
April 30, 2015
89
sets forth the new composition of regulatory capital, which will be the result of Tier I Capital, composed of Core
Capital and Additional Capital, plus Tier II, calculated in relation to total Risk Weighted Assets (RWA) and based on
information related to the economic financial group. New minimum capital requirements were defined, which
ought to be observed when calculating capital in accordance with the schedule established by Resolution No.
4,193. Limits will be required to Core Capital, Tier I Capital and Reference Equity (RE), besides the introduction of
the Additional Capital concept.
Also regarding capital requirements, in 2014, through Circular No. 3,711, the Central Bank of Brazil established the
principles for calculating the share of risk-weighted assets (RWA) for exposures to credit risk subject to the
calculation of the capital through standardized approach (RWA CPAD). In the same year, the Circular No. 3,714, of
August 08, 2014, from the Central Bank amended criteria on the minimum capital requirements for credit risk.
Starting January 1st, 2015, the Analytical Balance Sheet - Prudential Conglomerate should be used as a basis for
calculation of RE and minimum capital requirements as set forth by Resolution No. 4,281 of October 31, 2013. In
addition, with Circular No. 3,701 the Central Bank disciplines procedures for preparation, publication or delivery
of the consolidated financial statements of consolidated prudential.
It is also worthy pointing out that, on December 03, 2012, the Central Bank of Brazil permitted Banrisul to record
its USD275,000,000.00 foreign bond as eligible to Tier II in relation to the Reference Assets in the category of
subordinated debt, allowing said issue to integrate the balance subject to Article 29, paragraphs I and II of
Resolution no. 4,192 as of December 31, 2012, even without being recorded in the proper Cosif account.
Banrisul’s Reference Equity increased 4.7% due to the increase of 9.6% in Tier I Capital from the incorporation of
the net income of the period. Tier II Capital decreased 11.1% on account of the 20% reduction in the amount of
the subordinated debt in comparison to the 10% reduction in 2013, both having the amount of December 2012 as
basis. On the other hand, Risk Weighted Assets (RWA) grew 8.0% in the period, due to the increase in exposures.
Based on the observed variations, Basel ratio decreased 0.5 pp. year-on-year, reaching 17.8% in December 2014.
Core and Tier I Capitals reached 14.2%, comfortable levels above the minimum requirement.
Our widespread funding policy benefits small and medium-sized investors, instead of corporate investors, such as
pension funds and investment funds, which ensure the reduction of financial costs and diversified funding sources,
or non-concentrated funding sources, which policy is adequate to the funding requirements for extension of new
loans.
In December 2014, the main sources of funding were: deposits, which totaled R$34,135 million, accounting for
63.3% of sources from asset management; open market operations, totaling R$4,318 million, representing 8.0%
of third party capital; borrowings and onlendings, totaling R$4,180 million, accounting for 7.8%; followed by
sources from financial bills, totaling R$2,838 million, or 5.3%; and subordinated debt, which totaled R$2,223
million, or 4.1% of total asset management.
Table 4 shows the main sources of asset management for the years ended December 31 2012, 2013 and 2014:
April 30, 2015
90
Table 4: Main Funding Sources
R$Million
Deposits
2014
2013
Chg.
R$
%
2012*
Chg.
R$
%
34,135
30,645
3,491
11.4%
26,746
3,898
14.6%
Demand Deposits
3,281
3,398
(117)
-3.4%
3,400
(3)
-0.1%
Saving Account
7,762
6,991
771
11.0%
5,836
1,155
19.8%
Time Deposits
22,523
19,904
2,619
13.2%
17,090
2,814
16.5%
Other Deposits
570
352
218
62.0%
420
(68)
-16.2%
4,318
4,221
98
2.3%
1,628
2,593
159.3%
2,838
2,506
332
13.2%
315
2,191
694.6%
4,180
3,488
692
19.8%
3,255
232
7.1%
Subordinated Debt
2,223
1,861
361
19.4%
1,158
703
60.7%
Other (3)
6,197
5,341
856
16.0%
9,004
(3,664)
-40.7%
Third Party Resources
53,891
48,061
5,830
12.1%
42,108
5,954
14.1%
Resources from Bills
(1)
(2)
*Restated
(1) Includes Financial and Real Estate Bills.
(2) Includes borrowings and onlendings Country - Official Institutions and Onlendings - Foreign (short and long term), including foreign funding
effected in December/2012 recognized as subordinated debt, as authorized by the Central Bank in January/2013.
(3) Includes Interbank and Interdepartmental Relations, Derivatives, Financial and Development Funds and Other Liabilities.
Total deposits
Deposits are the main funding instrument. Time deposits, which are stimulated by commercial policy, are
contracted with clients of the entire branch network, under fixed or floating interest rates.
Repo operations with other financial institutions are used to manage the liquidity position. This is a one-day trade
through the purchase or sale of federal government bonds, whose profitability is defined upon trade, based on the
repurchase or resale commitment, where applicable. Their spreads usually decrease, in order to increase the
sources of funds and improve Banrisul’s cash management liquidity.
Funding through repo operations mostly complement financial intermediation transactions. Open market
operations are transactions contracted at an average rate corresponding to 100% of CDI variation.
Financial Bills
In August 2013, Banrisul concluded the first offering of financial bills, in the amount of R$1,600.0 million. The issue
was made in three series: the first one in the amount of R$700.0 million for a two-year term; the second, R$870.00
million for a term of three years; and the third series of R$30.0 million with a term of four years. The issue better
positioned the Bank in the fixed income debt market, while creating opportunities for future long term
transactions.
April 30, 2015
91
Onlendings funds are obtained from BNDES (Brazilian Development Bank), FINAME (government agency for
machinery and equipment financing) and Federal Savings Bank, in accordance with programs established by these
financial institutions. The funds are transferred to clients under same term and interest rate conditions, plus
intermediation commission.
Based on this strategy, foreign funding only occurs in case of borrower already identified in Brazil, without
arbitration between foreign exchange rates and foreign exchange risk.
Banrisul also trades its funds raised abroad to conduct commercial and foreign exchange operations. These
operations incur in foreign exchange variation with interest rates lower than those practiced in the domestic
market.
Subordinated Debt
In 2012, Banrisul conducted its first debt issue in the international market. The first tranche took place the end of
January 2012 in the amount of US$500 million, and the second tranche, worth US$275 million at the end of
November 2012. Both recognized by the Central Bank to compose the Bank Tier II capital. The funds raised in 2012
through the issuance of debt represent possibility of granting extended credit and strengthen the tier II capital,
favoring sustained business growth.
e. Sources of Working Capital Loans and Investments in Non-Current Assets to be Used to Cover Liquidity
Deficiencies
Banrisul adopts a Liquidity Contingency Plan aiming at identifying, in advance, and adjusting the Company’s
capacity of dealing with domestic and/or international liquidity crises, minimizing their potential effects on going
concern, its capacity of generating income and its image.
The Liquidity Contingency Plan and this policy systematize parameters that identify adverse situations, units’
responsibilities and the departments involved in its execution, as well as the procedures to be observed in order
to recover a proper liquidity level.
In order to recover liquidity levels, the Treasury Committee must immediately propose to the Chief Financial
Officer the following measures, severally or cumulatively:
a)
Realignment of interest rates levied on loan operations, so that to consider the new risk level;
b) Interest rates increase in funding instruments, so that to block and reverse volume reductions seen in
funding products;
c)
Implementation of sales, marketing initiatives, including new products, strengthening Banrisul brand
aiming at mitigating risks to reputation and image;
d) Tightening of loan operations for a better cash control;
e)
Improvement of relationship with other financial institutions aiming interbank deposit certificates;
f)
Total or partial sale of tradable assets;
April 30, 2015
92
g)
Total or partial sale of loan portfolio classified as trading book, pursuant to the Market and Liquidity Risk
Management Policy and;
h) Ultimately have access to the discount window with the Brazilian Monetary Authority.
f. Indebtedness levels and debt characteristics, also describing:
(i) Material loan and financing agreements
Banrisul operated several credit lines with onlendings from BNDES, FINAME, FINEP and Federal Savings Bank, with
the purpose of them to pass on such funds to the final beneficiaries, by means of a pre-defined remuneration. In
special shared operations, the Bank has negotiated with other financial institutions for such purpose, and each one
is liable for onlendings an amount of the credit.
In accordance with Disposições Aplicáveis aos Contratos do BNDES (Provisions Applicable to BNDES Agreements),
included in BNDES Resolution No. 665/87, Banrisul is jointly liable before BNDES, for the payment of the
installments of the credits granted, even if not settled by the final beneficiaries, as well as for the mandatory
assignment of credit to BNDES, if it so determines, and requesting that final beneficiaries pledge security interest
on behalf of the Bank, in the minimum amount of 130% of principal, except in cases when BNDES waives such
security interest.
Banrisul also has a private pension plan managed by Fundação Banrisul de Seguridade Social, or Banrisul Social
Security Foundation. Under this plan, Banrisul has a remaining debt of R$67 million on December 31, 2014 (R$67
million in 2013). This debt is paid plus interest rate of 6% p.a. and adjusted by the General Price Index - Domestic
Availability (IGP-DI), through monthly adjustments, with final maturity in 2028.
(ii) Other long-term relationships with financial institutions.
There were no other relevant long-term relationships with financial institutions.
However, in early 2012, Banrisul debuted in the foreign market of subordinated debt, raising US$500 million with
10-year maturity. At the end of 2012, through the resumption of issue of subordinated notes in January of the
same year, Banrisul conducted the second funding operation totaling US$275 million, with 10-year maturity.
(iii) Subordination level between debts
There is no subordination level of debts. However, the obligations recorded in current liabilities are organized
according to origin, in the event of composition with creditors, pursuant to the Law No. 11,101, Article 83, which
classifies credits, prioritizing those deriving from labor laws, followed by credits with security interest and tax
credits. Thereafter, other credits are considered, pursuant to the aforementioned law.
The table below shows Banrisul’s list of creditors in the order as per the abovementioned law:
April 30, 2015
93
Table 5: Liabilities of Agreement with Precedence
R$Thousand
Banrisul Consolidated
Tax, Labor and Social Security Liabilities
Labor
Tax and Social Security
Collected Taxes and Other
2014
%
2013
%
2012*
%
1,139,483
458,636
2.1%
0.9%
1,166,084
466,261
2.4%
1.0%
1,155,387
431,810
2.7%
1.0%
680,847
1.3%
699,823
1.5%
723,577
1.7%
44,446
0.1%
45,121
0.1%
44,953
0.1%
50,435,360
93.6%
44,906,031
93.4%
39,700,743
94.3%
Other Payables
2,271,062
4.2%
1,943,769
4.0%
1,206,389
2.9%
Subordinated Debt
2,222,523
4.1%
1,861,494
3.9%
1,158,335
2.8%
48,539
0.1%
82,275
0.2%
48,054
0.1%
53,890,351
100.0%
48,061,005
100.0%
42,107,472
100.0%
Other
Social and Statutory
Liabilities
*Restated
Furthermore, as for the subordinated debt, we inform that the Central Bank of Brazil has considered the previously
mentioned foreign funding, in the total amount of USD775 million, eligible as Tier II capital of the Reference Equity,
in the category of Subordinated Debt, according to approvals granted in April 2012 and December 2012.
(iv) Potential restrictions on the Company, in particular with respect to indebtedness levels and taking out of
net debts, distribution of dividends, disposal of assets, issuance of new securities and transfer of shareholding
control
The long-term operations are subject to statutory limits of contracting. As art. 14 of the Statute of Banrisul, "the
long-term operations carried out with funds accruing from BNDES on-lending, are limited to 80% (eighty percent)
of the Equity of the company”.
Banrisul is subject to the limits imposed by BNDES for the utilization of funds based on reference shareholders’
equity and rating analysis made by an external institution. In case of onlendings, funds are fully transferred to
clients, under same terms and rates, plus financial intermediation commission. BNDES does not impose specific
restrictions in relation to Banrisul, besides the usual limit required. However, BNDES has covenants relating to
financial agents in general, which can be seen in “Provisions Applicable to BNDES Agreements” (BNDES Resolution
No. 665/87), Chapters I – Cooperation Conditions, II – Onlendings Agreements and III – Loan Agreements to
Shareholders, and further ruling updates issued by BNDES referring to suspensive conditions of the Financial
Cooperation and each amount of the credit.
April 30, 2015
94
Below, the average rates of BNDES liabilities by line of credit:
Indexing Factor
Line of Credit
Fixed Interest Rates
BNDES EXIM
CARTÃO BNDES
BNDES FINEM INDIRETO
BNDES/PERGIRO
BNDES/CEREALISTA
FINAME INDUSTRIAL RURAL
FINAME MODERMAQ
FINAME CAMINHOS DA ESCOLA
FINAME CAMINHÕES
FINAME COMPONENTES
FINAME PACA
FINAME/PSI
BNDES/POC 01
BNDES/FINEM/INDIRET DIR 522/2002
BNDES/HOSPITAIS/SUS
BNDES PROGEREN
BNDES SANEAMENTO HOSPITAIS
FINAME CAMINHOS DA ESCOLA
FINAME PACA
FINAME PROVIAS
BNDES/POC MOE RES 635/87
BNDES/FINEM/INDIRET DIR 522/2002
FINAME/PACA/635
BNDES/POC DOLAR
BNDES
CEF SANEAMENTO PARA TODOS
INOVACRED FINEP
Long-Term
Rate
with
deduction Reductor
UM BNDES-Res 635/87
DOLAR
SELIC/UR 143
UPRD
UR/354 – TJLP FINRP
Annual Interest Rate
6,08%
7,52%
1,50%
2,50%
1,49%
2,50%
1,91%
1,50%
1,29%
1,38%
3,81%
1,26%
1,97%
1,97%
2,13%
1,23%
1,75%
1,00%
3,55%
1,00%
1,80%
1,80%
1,80%
2,13%
0,89%
6,19%
2,00%
For onlendings operations of Programa Saneamento para Todos (sanitation for all program), we follow the rules
set forth in the Development Manual (FGTS’ Oversight Council which establishes these rules) issued by Federal
Savings Bank (CEF) ruling this financing in line with the guidelines of the Ministry of Cities. We established an
agreement so that CEF is the Operational Technical Agent (ATO), draft approved by our legal department and to
be signed by our Credit Officer, for supervision and procedures to release funds for the works financed in this
Program. Periodically, it is done a study to assess Banrisul’s risk re-rating with CEF, from which the limits for new
agreements may be reviewed.
April 30, 2015
95
Indebtedness Levels
Table 6: Funds Raised by Maturity 2014 and 2013
R$Million
Without
Up to 3
3 to 12
Above 12
maturity
months
months
months
Demand (a)
3,281
-
-
Savings (a)
7,762
-
Interbank
-
2014
2013
-
3,281
3,398
-
-
7,762
6,991
50
196
323
570
352
6
1,566
2,823
18,127
22,523
19,904
11,049
1,616
3,020
18,451
34,135
30,645
4,318
4,318
4,221
4,318
4,318
4,221
Short Term
20,003
19,845
Long Term
18,451
15,020
Deposits
Term
(*)
Total Deposits
Market Money Funding
Own Portfolio
Total Market Money Funding
(a) Classified as without maturity, because there is no contractual maturity date.
(*) Considered the maturities set for each investment.
Table 7: Funds Raised by Maturity 2013 and 2012
R$Million
Without
Up to 3
3 to 12
Above 12
maturity
months
months
months
3,398
-
-
2013
2012
-
3,398
3,400
Deposits
Demand (a)
Savings
(a)
6,991
-
-
-
6,991
5,836
Interbank
-
25
32
295
352
420
Term (*)
3
1,678
3,497
14,726
19,904
17,090
Other Deposits
-
-
-
-
-
10,392
1,703
3,530
30,645
26,746
4,221
4,221
1,628
4,221
4,221
1,628
Short Term
19,845
17,642
Long Term
15,020
10,732
Total Deposits
15,020
Market Money Funding
Own Portfolio
Total Market Money Funding
(a) Classified as without maturity, because there is no contractual maturity date.
(*) Considered the maturities set for each investment.
April 30, 2015
96
Deposits and Money Market Funding
Time deposits are raised with individuals or companies, under fixed or floating interest rates corresponding to
94.08% and 5.92% of total portfolio, respectively. The average funding rate for floating rate deposits corresponds
to 79.46% (2013 – 70.56%) of CDI variation and fixed rate deposits is 8.64% (2013 – 7.21%) p.a.. Repo operations
in own portfolio – open market, carried out with financial institutions have an average funding rate of 100% of CDI
variation.
Borrowings
Borrowings abroad are represented by funds raised from foreign banks for investment in foreign exchange
operations with foreign exchange variation of related currencies, plus interest rates between 0.62% and 3.82%
(2013 – 1.00% and 3.37%) p.a., with maximum maturity up to 1,591 days (2013 – 356 days) and a balance of
R$1,507 million (2013 – R$1,275 million).
Onlendings
Domestic onlendings are basically represented by funding from official institutions (BNDES, FINAME, FINEP and
Federal Savings Bank). These liabilities have monthly maturities up to November 2029, with financial charges levied
on floating rate operations of 0.40% to 8.00% (2013 – 0.50% to 8,61%) p.a., besides index variations (TJLP, URTJ01, U.S. dollar, Currency Basket, UPRD and Selic) and fixed rate liabilities up to 11.00% (2013 – 11.00%) p.a.. The
funds are transferred to clients, under same terms and funding rates, plus financial intermediation commission. As
guarantee of these funds, guarantees received in related loan operations were transferred.
Tables 8 and 9 breakdown onlendings operations in Brazil and abroad:
Table 8: Onlendings - 2014 and 2013
R$Million
Domestic Onlendings
Official Institutions
Up to 3 months
3 to 12 months
Above 12 months
Total
Short Term
Long Term
2014
206
510
1,936
2,652
716
1,936
2013
167
403
1,642
2,211
569
1,642
Foreign Onlendings
2014
6
11
17
6
11
2013
-
Total
2014
206
516
1,947
2,669
722
1,947
2013
167
403
1,642
2,211
569
1,642
April 30, 2015
97
Table 9: Onlendings 2013 and 2012
R$Million
Domestic Onlendings
Official Institutions
Up to 3 months
Foreign Onlendings
Total
2013
2012
2013
2012
2013
2012
167
128
-
1
167
129
3 to 12 months
403
311
-
25
403
336
Above 12 months
1,642
1,205
-
-
1,642
1,205
Total
2,211
1,643
-
26
2,211
1,669
Short Term
569
439
-
26
569
465
Long Term
1,642
1,205
-
-
1,642
1,205
g. Limits of use of financing already taken
Amongst Banrisul’s indebtedness characteristics, long-term operations are subject to statutory contracting limits.
As per Article 14 of Banrisul’s Bylaws, “long-term operations carried out with funds deriving from BNDES
onlendings are restricted to eighty percent (80%) of the company’s Shareholders’ Equity”. In case of onlendings
operations, amounts may be gradually released up to the limit of the contracted amount. In 2014, the amount of
R$1,043 million was contracted via BNDES onlendings, of which 82.4% has already been made available. Referring
to the Federal Savings Bank onlendings, no operation was contracted in the period, however, R$2 million were
released referring to operations contracted in previous years. In relation to funds from FINEP, R$203 thousand
were contracted and released .
h. Material changes in each line item of the financial statements
Tables 10 and 11 state the simplified versions of the consolidated statements of income and consolidated balance
sheet for the fiscal years ended December 31, 2014 and 2013.
April 30, 2015
98
Table 10: Income Statement for Fiscal Years 2013 and 2012
R$Million
2014
Revenues from financial intermediation
Credit Revenues
Lease Revenues
Securities Revenues
Derivatives Revenues
Foreign Exchange
Compulsory Investments Revenues
Revenues from sales or transfers of financial assets
Expenses of Financial Operations
Funding Operations
Borrowings, Assignments and Onlendings
Allowance for Loan Losses
Gross Profit from Financial Operations
Other Operating Income/Expenses
Income from Services Rendered
Bank Fees Income
Personnel Expenses
Other Administratives Expenses
Tax Expenses
Equity in Subsidiaries
Other Operating Income
Other Operating Expenses
Operating Income
Income Before Taxes on Income and Employee Profit
Income Tax and Social Contribution
Employee Profit Sharing
Minority Interest
Net Income
Extraordinary Events
Adjusted Net Income
8,197
5,229
13
1,829
251
200
630
45
(5,191)
(3,880)
(527)
(784)
3,006
(1,888)
221
975
(1,471)
(1,271)
(319)
3
321
(347)
1,117
1,117
(273)
(91)
(0)
753
(62)
691
2013
6,573
4,591
13
1,439
3
155
324
49
(3,567)
(2,453)
(453)
(661)
3,006
(1,799)
211
773
(1,360)
(1,055)
(279)
2
255
(345)
1,207
1,207
(323)
(91)
(0)
792
792
Chg.
R$
1,624
638
0
390
248
45
306
(4)
1,624
1,427
74
123
0.0
89
10
202
111
216
40
1
67
2
(90)
(90)
(50)
0
0
(39)
(62)
(101)
Chg.
%
24.7%
13.9%
-4.2%
27.1%
29.1%
94.8%
-7.4%
45.5%
58.2%
16.2%
18.7%
0.0%
5.0%
5.0%
26.2%
8.2%
20.6%
14.4%
111.2%
26.2%
0.8%
-7.4%
-7.4%
-15.6%
-0.4%
-4.9%
-12.7%
Net Income
Net income totaled R$691 million in 2014. Recurring net income reached R$753 million, with a reduction of 4.9%
(R$39 million) from 2013. The following extraordinary events impacted the net income: (i) revenue of R$115 million
coming from the celebration of the commitment of exclusive distribution agreement for life and pension insurance
products through Banrisul network; (ii) expenses of R$205 million from restructuring Banrisul Foundation’s postemployment benefits plans, deposited into the mathematical reserves of the plans related to the payment of
migration incentives, offset by the actuarial gain resulting from effect of the settlement of PBI plan migrants'
participants rights upon the portion of Sponsor obligations; (iii) expenses of R$64 million due to the
implementation of the Retirement Incentive Plan; (iv) tax effects of R$92 million upon these non-recurring events.
These non-recurring events resulted in a negative net effect of R$62 million into 2014 income.
From 2013 to 2014, adjusted net income was affected by (i) the increase of R$123 million in the net interest income
due to the growth of the interest income, particularly from credit and treasury, partly offset mainly by the
April 30, 2015
99
expansion of funding expenses; (ii) the increase of R$123 million in expenses with loan losses provision; (iii) the
expansion of R$213 million in banking and services fees; (iv) the increase of R$328 million in administrative
expenses, including personnel expenses, and (v) the growth of R$67 million in other operating income.
We present below the comparison between the main income accounts for the fiscal years ended December 31,
2014 and 2013.
Revenues from Financial Intermediation
Financial income totaled R$8,197 million in 2014, 24.7% (R$1,624 million) higher than in 2013. The upward trend
in revenues from financial intermediation from 2013 to 2014 was influenced by the growth of R$638 million in
securities revenues and by the increase of R$634 million in revenues from lending, leasing and sale or transfer of
financial assets, and the growth of compulsory deposits result at R$307 million. The increase in the basic interest
rate and the increase in the average balance of assets led to the increase in revenues in the period.
Revenues from Credit and Leasing Operations
Revenues from credit, leasing operations and sale or transfer of financial assets totaled R$5,287 million in 2014,
13.6% (R$634 million) above 2013. The growth in credit revenues, leasing and sale or transfer of financial assets
from 2013 to 2014 came mainly from the expansion of R$443 million in revenues from commercial credit,
particularly the individual segment, the R$94 million increase in revenues from long-term loans, at, mainly those
linked to foreign currency loans, and the growth of R$60 million in revenues from mortgage. The increase in credit
revenues was influenced by the growth in the balance of credit assets, the growth in the average floating interest
rates, which are Selic rate benchmarked, and by the variation of the exchange rate.
Revenues from Securities and Derivatives
Revenues from securities and derivatives totaled R$2,080 million in 2014, 44.3% (R$638 million) above 2013. From
2013 to 2014, the revenues from securities and derivatives came from the increase in the revenues from the
securities portfolio on account of the trend of the effective Selic rate, which increased from 8.22% in 2013 to
10.90% in 2014, and of the increase in income from financial instruments derivatives impacted by swap contracts
mark-to-market.
Revenues from Foreign Exchange
Revenues from foreign exchange transactions totaled R$200 million at the end of 2014, 29.1% (R$45 million) above
the amount reported in 2013, and reflects foreign currency devaluation observed in the period. Foreign exchange
operations in Banrisul are matched to their funding in foreign currencies; hence, any variation in revenues is
proportionally offset by the variation of costs with foreign currency loans and onlendings.
Revenues from Restricted Deposits
Revenues from compulsory deposits reached R$630.2 million in 2014, R$306.7 million above the amount recorded
April 30, 2015
100
in 2013. The increase in revenues from compulsory deposits from 2013 to 2014 was mainly driven by the revenues
growth linked to the compliance with additional reserve requirements and to time deposits, influenced by the
growth in such compulsory assets, given the recent change in the rules for the assessment of compulsory reserves,
impacted by the current level of the Bank’s reference equity, besides the growth of the benchmark index (Selic
rate).
Financial Expenses
Financial expenses totaled R$5,191 million in 2014, increasing 45.5% (R$1,624 million) from 2013. The growth of
financial expenses from 2013 to 2014 came mainly from the increase of R$1,428 million in market funding and
from the increase R$123 million in expenses with loan losses provisions.
Expenses with Market Funding Operations
Market funding expenses totaled R$3,880 million in 2014, 58.2% (R$1,428 million) above 2013. The year-on-year
growth in market funding expenses was mainly driven by the increase of R$598 million in time deposits expenses,
the growth of R$302 million in expenses related to mark-to-market and the variation of exchange rate over the
subordinated debt, the increase of R$200 million in matched transactions, and the increase of R$184 million in
expenses with the local senior bond (the financial bills) and mortgage-backed bills. The hikes of the Selic rate,
funding natural benchmark, and the growth of funding balances contributed to increasing expenses from 2013 to
2014.
Expenses with Borrowings and Onlendings
Expenses with borrowings and onlendings totaled R$527 million in 2014, 16.2% (R$73 million) above the amount
recorded in the same period of last year. The level of expenses with borrowings and onlendings from 2013 to 2014
was mainly influenced by the increase of R$114 million in expenses with hard currency onlendings, impacted by
the exchange rate variations observed in those periods, while partially offset by the reduction of R$53 million in
expenses from financial and development funds.
Financial Margin
Net interest income totaled R$3,790 million in 2014, 3.4% (R$123 million) higher than 2013. From 2013 to 2014,
net interest income was impacted by the increase of the Selic rate, directly affecting expenses on floating rates
funding sources, and indirectly impacting interest income, given the mix of the portfolio and the competitive
environment, and also the higher increase of interest-earning assets vis-à-vis that of interest-bearing liabilities.
Expenses with allowance for loan losses totaled R$784 million at the end of 2014, 18.7% (R$123 million) higher
than what was recorded in 2013. The upward trajectory of the allowance for loan losses in the last six months was
due to the carrying effect of timely downgrading the rating of the loan portfolio in relation to specific credit
April 30, 2015
101
operations that demanded additional amounts of provision expenses, which occurred in an environment of better
asset quality and of increasing credit assets.
Revenue from Services Rendered
Revenues from services and banking fees totaled R$1,196 million in 2014, 21.6% (R$213 million) above 2013 and
was impacted by the increase of R$111 million in revenues from MDR fees related to the card acquiring network
and the use of vouchers cards, the increase of R$37 million in fees from insurance, pension plan and capitalization
products and the growth of R$31 million in checking account fees.
Administrative Expenses
In 2014, recurring administrative expenses totaled R$2,742, 13.6% (R$328 million) higher than 2013. Personnel
expenses totaled R$1,471 million in 2014, including the R$64 million related to the expenses with the Retirement
Incentive Plan, increasing 8.2% (R$111 million) from 2013,and was impacted by the collective bargaining
agreement. Other administrative expenses reached R$1,271 million, having grown 20.6% (R$217 million) year-onyear, especially impacted by the increase of R$201 million in outsourced services, influenced mainly by the increase
of expenses linked to the banking correspondents for the origination of payroll loans and the interchange fees
related to the card business and the acquiring network, and also by the increase of 11.6% (R$22 million) of the
costs of data processing and telecommunications, flow party offset by the reduction of 25.0% (R$23 million) in
marketing expenses.
Other operating income, adjusted by actuarial gains originated from the effects of the settlement and curtailment
assessment of the existing PBI defined benefit plan and by the celebration of the agreement for the distribution of
life insurance and pension plans products on an exclusive basis through Banrisul’s network totaled R$321 million
in 2014, 26.2% (R$67 million) above 2013. The increase in other recurring operating income from 2013 to 2014
was especially due to the growth of R$27 million in revenues from the discount of receivables from performed
transactions captured by Banrisul’s acquiring network, and to the increase of R$22 million revenues from the
reversal of operating provisions and the growth of R$16 million in the income from escrow deposits.
Other operating expenses, adjusted by the costs related to the change of pension plans, reached R$347 million in
2014, increasing 0.8% (R$3 million) from 2013. From 2013 to 2014, the increase in other recurring operating
expenses was particularly due to the growth in provisions for operations without credit characteristics, and also to
the increase in expenses with property (assets not in use) and tax provisions, which together increased R$28
million, and to the increase of R$7 million in expenses with discount on renegotiations, flow that was mitigated by
the reduction of R$ 35 million in expenses with provisions for civil and labor claims.
April 30, 2015
102
Table 11: Balance Sheet 2014 and 2013
R$Million
ASSETS
Current
Cash
Interbank Accounts
Interbranch Accounts
Lending Operations
Leasing Operations
Other Credits
Other Assets
Long-Term
Interbank Accounts
Lending Operations
Leasing Operations
Other Credits
Other Assets
Permanent
Investments
Property in Use
Intangible
TOTAL ASSETS
LIABILITIES
Current
Deposits
Funds from Acceptances Issue of Securities
Intebank Accounts
Borrowings
Onlendings in the Country
Onlendings Abroad
Derivative Financial Instruments
Other Payables
Long-Term
Deposits
Intebank Accounts
Borrowings
Onlendings Abroad
Other Payables
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
2014
2013
Chg.
R$
Chg.
%
27,285
798
29
4,884
5,701
99
12,039
33
3,593
109
32,010
14,004
755
15,030
37
1,984
199
267
59
186
22
59,562
23,687
738
528
4,311
3,995
109
11,043
33
2,833
96
29,255
14,069
735
12,875
37
1,404
136
269
58
177
33
53,211
3,598
60
(499)
573
1,706
(10)
996
(0)
760
13
2,755
(65)
20
2,155
0
580
63
(2)
1
9
(11)
6,351
15.2%
8.1%
-94.6%
13.3%
42.7%
-9.2%
9.0%
-1.9%
26.8%
13.5%
9.4%
-0.5%
2.8%
16.7%
0.2%
41.3%
46.6%
-0.7%
1.6%
5.1%
-35.5%
11.9%
28,938
15,685
4,318
1,245
15
214
1,503
716
6
42
5,195
24,953
18,451
1,593
0
8
1,936
11
2,954
5,671
59,562
26,545
15,624
4,221
377
9
225
1,275
569
40
4,204
21,516
15,020
2,129
6
1
1,642
72
2,646
5,150
53,211
2,393
61
97
868
6
(11)
228
147
6
2
991
3,437
3,431
(536)
(-6)
7
294
11
(72)
308
522
6,351
9.0%
0.4%
2.3%
230.6%
66.6%
-5.1%
17.9%
25.8%
100.0%
3.9%
23.6%
16.0%
22.8%
-25.2%
-100.0%
17.9%
100.0%
-100.0%
11.7%
10.1%
11.9%
Total Assets
Total assets reached R$59,562 million in December 2014, and are divided into (i) loans (51.2% of total assets); (ii)
securities and interbank deposits (31.8%); (iii) interbank and interbranch accounts (11.0%) and (iv) other assets
April 30, 2015
103
(6.0%). Assets are mostly long term, according to their durations. Assets maturing up to 360 days are composed
by loans and leases, interbank and interbranch accounts; securities and derivatives and interbank deposits, and
account for 44.2%, 21.3% and 18.0% of the balance of short term investments, respectively. Among assets with
maturities over 360 days, loans, leases and securities and derivatives stand out, making up, respectively, for 47.1%
and 43.7% of long term assets. The 11.9% (R$6,351 million) increase in the balance of assets from December 2013
to December 2014 originated mostly from the increase in deposits (R$3,491 million), from the financial and
development funds growth (R$714 million), and the increase in borrowings and onlendings (R$692 million). Funds
raised were allocated into loans, which increased by R$3,835 million, and into interbank accounts, which increased
by R$1,726 million, face to the increase in reserve requirements deposited at the Central Bank of Brazil.
Securities, derivatives and interbank investments, net of repo transactions, totaled R$14,599 million in December
2014, relatively stable year-on-year. As to the composition of the securities portfolio, 80.7% (R$15,261 million) are
classified as “held to maturity”, 12.8% (R$2,426 million) as “trading”, 3.3% (R$615 million) “available for sale”,
3.1% (R$586 million) in derivatives financial instruments, and 0.2% (R$29 million) in interbank investments, totaling
R$18,917 million in treasury assets.
Interbank and Interbranch Transactions
Interbank and interbranch transactions reached R$6,556 million in December 2014, 35.5% (R$1,716 million) higher
than in December 2013. The increase in the balance of interbank and interbranch transactions was driven by the
growth of credit linked to compulsory deposits placed at the Central Bank of Brazil, which increased R$1,714 million
year-on-year, in line with Banrisul’s reference equity, having as a consequence the loss of the reducer used in the
calculation of the reserve requirements upon time deposits.
Credit Operations
Banrisul’s credit portfolio totaled R$30,487 million in December 2014, increasing 14.4% (R$3,835 million) over
December 2013. In twelve months, the expansion of the loan portfolio originated mainly from the increase in the
commercial portfolio (non-earmarked or non-direct lending), real estate financing and loans linked to acquired
portfolios, the latter motivated by the acquisition of credit with recourse from banks eligible according to Circular
no. 3,712 of the Central Bank of Brazil, a strategy adopted to minimize the effect of the reduction of income on
reserve requirements.
Breakdown of Credit by Company Size
Credit operations to corporations totaled R$14,589 million in December 2014, equivalent to 47.9% of the total
loan portfolio. 57.2% of the total corporate credit is allocated into micro-, small- and medium-sized companies.
The balance of credit to micro-, small- and medium-sized companies presented a growth of R$894 million in
comparison to December 2013, influenced mainly by the growth in the balance of medium-sized companies and
the increase of R$826 million in to the balance of large-sized companies.
April 30, 2015
104
Breakdown of Credit by Sector
Presented by industry sectors, loans to the private sector represented 99.7% of the total credit assets in December
2014. Credit by sector is composed, mainly, by individuals (with 38.4%) and industry (with 17.8%). From December
2013 to December 2014, the expansion of consumer credit, agricultural loans, industrial and real estate finance
stood out.
Breakdown of Credit by Portfolio
The breakdown of credit by portfolio presents both unmarked and directed allocation into loan assets. The
commercial (non-earmarked) portfolio, leasing, credits linked to acquired portfolio with recourse and public sector
are freely funded from time deposits and equity and, in December 2014, composed 70.0% of the total credit
portfolio. Development (long-term finance), agricultural, real estate finance and foreign exchange portfolios, which
are mostly supported by specific funding sources and are used for mandatory credit allocation, represented 30.0%
of total credit allocation in the same period.
Comprising 66.2% of Banrisul's total loan book, the commercial (non-earmarked) credit portfolio ended December
2014 with the balance of R$20,189 million, accounting for 43.2% of the increase of total assets in the last twelve
months.
Within the commercial (non-earmarked) credit portfolio, credit to individuals corresponded, in December 2014, to
53.1% of the balance of the commercial portfolio and to 35.1% of the total loan book. Credit to companies
represented, in the same period, 46.9% of the balance of commercial credit and 31.1% of the total stock of credit.
Real estate finance totaled R$3,280 million in December 2014, an increase of 21.0% (R$569 million) in twelve
months. Real estate loans represented 10.8% of loan assets in December 2014. Within the balance of the real
estate portfolio, it is included the amount of R$67 million related to the issuance of Real Estate Receivables Bonds
(with recourse).
Agricultural loans totaled R$2,750 million in December 2014, an expansion of 24.4% (R$540 million) since
December 2013. Agricultural loans represented 9.0% of the loan portfolio in December 2014. The performance of
rural credit was favored by the Bank's participation in various fairs during the year 2014.
The foreign exchange portfolio totaled R$739 million in December 2014, 3.6% (R$25 million) higher than the
balance recorded in December 2013.
Breakdown of Credit by Rating
Credit operations rated between AA and C, normal risk according to Resolution no. 2,682/99 of the National
Monetary Council, accounted for 91.3% of the credit portfolio in December 2014, increasing 1.8 pp. from
December 2013.
Allowance for loan losses totaled R$1,694 million in December 2014, representing 5.6% of the loan portfolio, with
April 30, 2015
105
a decrease of 0.4 pp. over December 2013. The changes in the allowance for loan losses in those periods reflect
the expansion of the loans classified as normal risk of the loan portfolio.
The breakdown of the allowance for loan losses in December 2014, according to Resolution no. 2,682 of the
National Monetary Council, was as follows:
(i) R$830 million for operations with installments 60 days overdue;
(ii) R$772 million for contracts due or less than 60 days overdue;
(iii) R$93 million relating to the excess allowance to the minimum required by Resolution no. 2,682 of the National
Monetary Council, established based on periodic review carried out by the administration of the quality of the
customer, in order to cover possible events not identified by internal customer rating model.
Funds Raised and Under Management
Total asset management totaled R$48,065 million at the end of December 2014, a balance 13.3% or R$5,645
million up year-on-year, which can be explained by increased deposits and funds under management.
Demand Deposits
In December 2014, demand deposits reached R$3,281 million, decreasing 3.4% (R$117 million) in twelve months.
Savings Accounts
Savings deposits totaled R$7,762 million at the end of December 2014, a year-on-year growth of 11.0% (R$771
million), reflecting the customer’s choice for the product.
Time Deposits
Banrisul’s main funding vehicle, time deposits totaled R$22,523 million in December 2014, an increase of 13.2%
(R$2,619 million) over the previous year.
Resources from Financial Bills
The balance of financial and real estate bills reached R$2,838 million in December 2014, with a growth of 13.2%
(R$332 million) year-on-year.
Subordinated Debt
The subordinate debt amounted to R$2,223 million at the end of December 2014, increasing 19.4% (R$361 million)
since December 2013.
Assets under Management
Assets under management totaled R$8,869 million at the end of December 2014, 19.7% (R$1,461 million) above
the amount of December 2013.
Shareholders' Equity
Banrisul’s shareholders' equity reached R$5,671 million at the end of December 2014, expanding 10.1% (R$522
million) December 2013. The variations in shareholders' equity are related to the incorporation of the produced
net income, net of the payments of dividends and interest on equity and of the reassessment of the actuarial
liabilities of the post-employment benefit plans, adjusted for tax effect.
April 30, 2015
106
Tables 12 and 13 state the simplified versions of the consolidated statements of income and consolidated balance
sheet for the fiscal years ended December 31, 2013 and 2012.
Table 12: Income Statement for Fiscal Years 2013 and 2012
R$Million
Revenues from financial intermediation
Credit Revenues
Lease Revenues
Securities Revenues
Derivatives Revenues
Foreign Exchange
Compulsory Investments Revenues
Revenues from sales or transfers of financial assets
Expenses of Financial Operations
Funding Operations
Borrowings, Assignments and Onlendings
Derivatives
Gross Profit from Financial Operations
Other Operating Income/Expenses
Income from Services Rendered
Bank Fees Income
Personnel Expenses
Other Administratives Expenses
Tax Expenses
Equity in Subsidiaries
Operating Income
Income Before Taxes on Income and Employee Profit
Income Tax and Social Contribution
Employee Profit Sharing
Minority Interest
Net Income
2013
2012
6,573
4,591
13
1,439
3
155
324
49
(3,567)
(2,453)
(453)
(661)
3,006
(1,799)
211
773
(1,360)
(1,055)
(279)
2
255
(345)
1,207
1,207
(323)
(91)
(0)
792
6,346
4,611
13
1,081
207
107
298
29
(3,468)
(1,986)
(630)
(852)
2,878
(1,675)
196
603
(1,234)
(861)
(258)
1
250
(371)
1,204
1,204
(309)
(76)
(0)
819
Chg.
R$
226
(20)
0
358
(205)
48
25
20
(99)
(466)
176
191
127
(124)
15
170
(127)
(193)
(21)
0
5
26
3
3
(14)
(16)
(0)
(27)
Chg.
%
3.6%
-0.4%
1.4%
33.1%
-98.7%
45.3%
8.5%
67.4%
2.8%
23.5%
-28.0%
-22.5%
4.4%
7.4%
7.8%
28.1%
10.3%
22.4%
8.1%
24.5%
2.0%
-7.1%
0.2%
0.2%
4.7%
20.5%
36.9%
-3.3%
Net Income
Banrisul’s net income in 2013 reached R$792 million, 3.3% or R$27 million below the results for the same period
in 2012. The results earned for the twelve months of 2013 compared to the twelve months of 2012 show a
slowdown in revenues and an increase in interest costs, higher administrative costs, the increase in revenues from
services and banking fees, and the favorable performance of other income and other operating expenses reflected
in (i) reduction in net interest income by 1.7% or R$64 million, impacted by credit revenues stability, leasing and
sale or transfer of assets, given the loans rates reduction, by increasing the costs of market funding, flow partially
offset by loans and repasses lower expenditure, both affected by the FRDJ expenses, due to withdrawal of the
Government in April 2013, and by the increase in income from operations with bonds and securities and derivative
financial instruments; (ii) increase in administrative expenses by 15.3% or R$320 million, mainly explained by the
April 30, 2015
107
number of employees increase, by the effect of collective agreements, by expenditure with the loan origination
channel, service network expansion and the institutional advertising, (iii) reduction of expenses with provisions for
loan losses, 22.5% or R$191 million, (iv) an increase in revenues from services and fees, 23.2% or R$185 million.
Revenues from Financial Intermediation
In 12M13, revenues from financial intermediation totaled R$6,573 million in 2012, 3.6% up or R$226 million above
12M12. The increase in financial intermediation revenues in the twelve months of 2013 against the accumulated
value until December 2012 was mainly influenced by the increase of income from operations with bonds and
securities and derivative financial instruments, at 11.9% or R$153 million, impacted by the balance of these assets
increase by R$1,937 million, and the foreign exchange operations increase in income, 45.3% or R$48 million,
favored by the exchange rate of the period.
Revenues from Credit and Leasing Operations
Revenues from credit, leasing and sale or transfer of financial assets totaled R$4,653 million in 12M13, R$733
thousand below the amount recorded in the same period of 2012. Credit revenues, leasing and sale or transfer of
financial assets stability in the twelve months of 2013 was impacted by the interest rates decline, which offset the
9.6% growth of the loans balance. The variation of this revenue in the period came, especially, from the commercial
credit corporation reduction in revenue, at 6.9% or R$103 million, partially offset by mortgage loans higher
revenues, 19.5% or R$38 million, by long-term debt revenue growth, by 23.9% or R$25 million, and the increase in
revenues from the sale or transfer of financial assets at 67.4% or R $20 million.
Revenues from Securities and Derivatives
Result from operations with bonds and securities and derivative financial instruments amounted R$1,441 million
in 12M13, 11.9% or R$153 million below the amount recorded in 12M12. The result of treasury trajectory in the
twelve months of 2013 compared to the same period last year was influenced by the income of securities increase,
33.1% or R$358 million, driven by the increase of R$1,937 million in the balance of these assets, and the derivatives
financial instruments reduction in 98.7% or R$205 million, due to impact of swap contracts marking-to-market.
The setting on the swap marking-to-market generated corresponding reflection in the cost of subordinated debt.
Revenues from Foreign Exchange
The result of exchange transactions totaled R$155 million in the twelve months of 2013, 45.3% or R$48 million
above the amount recorded in 2012. The exchange rates growth of income during the period was impacted by the
devaluation of 14.64% in the twelve months of 2013 against the devaluation of 8.94% in the twelve months of
2012.
April 30, 2015
108
Revenues from Restricted Deposits
The income from compulsory deposits reached in the twelve months of 2013 R$324 million, 8.5% or R$25 million
above the amount recorded in the same period last year. The income from compulsory deposits expansion
accumulated in 2013 compared to 2012 was due, especially, to the increase in rents linked to deposits, in 18.0%
or R$10 million, and in savings deposits, 15, 4% or R$10 million, influenced by the amount of credits related to the
compulsory savings deposits and term deposits increase by R$543 million.
Financial Expenses
Financial intermediation expenses totaled R$3,567 million in 12M13, an increase of 2.8% or R$99 million over the
flow in 2012. The expansion of the financial intermediation expenses from the period, resulted from the increase
in funding expenses in the market, at 23.5% or R$466 million, partly offset by lower allowance for loan losses
expenses, or 22.5% R$191 million, and expenses on loans, assignments and transfers by 28.0% or R$176 million.
The balances of time deposits and savings expansion justify, in part, the growth in fundraising expenses, minimized
by subordinated debt costs decline. The reduction in provisions for loan losses expenses reflects improved
compliance in the client rating system, through the deployment of new centralized process. The variation of
expenses with loans and repasses was affected especially by the balance of the Financial and Development Funds
fall, due to the withdrawal made by the State in April/13, which also influenced the upward trajectory of committed
operations expenses.
Expenses with Market Funding Operations
Market funding expenses totaled R$2,453 million in 12M13, 23.5% or R$466 million above the amount of 2012.
During the period, the greater flow of funding expenses stemmed from the increased committed operations
expenses, 163.5% or R$260 million, from the increase in expenses on term deposits, savings and interfinancial,
16.2% or R$233 million, and financial bills and mortgage loans expenditure growth at R$94 million, compensated,
in part, by lower cost, exchange rate variation and subordinated debt marking-to-market by 37.6% or R$128
million. The balance expansion of these features and the effective Selic rate trajectory influence the variation of
these costs.
Expenses with Borrowings and Onlendings
Expenses of loans, assignments and transfers totaled R$453 million in the twelve months of 2013, 28.0% or R$176
million below the amount accumulated in 2012. Within twelve months of 2013, the loans, assignments and
transfers lowest expenses flow, compared to the same period of the previous year, came from the decrease of
54.1% or R$244 million in expenses from the reserve fund judicial deposits – FRDJ, motivated by withdrawal carried
out by the State, in April 2013, and the decrease of 0.27 pp. of the effective Selic rate during the period, partially
offset by transfer expenses in foreign currency increased in 54.7% or R$55 million, influenced by the exchange rate
of the period.
April 30, 2015
109
Financial Margin
Net interest income totaled R$3,667 million in 12M13, a decrease of 1.7% or R$64 million year-on-year. In 12M13,
net interest income was affected by lower revenue generation forward with interest to the acceleration of interest
expense, both impacted by the path of the Selic rate, by marking to market and corresponding subordinated debt
swap contracts and the expansion of sales.
Expenses related to provision for loan operations in 12M13 totaled R$661 million, 22.5% up or an increase of
R$191 million year-on-year. Provision for loan operations expenses in 12M13 decreased year-on-year mainly due
to the implementation of the new customer rating system, reflected in improvements in compliance.
Revenue from Services Rendered
Fee income and commissions totaled R$983 million in 12M13, an increase of 23.2% or R$185 million year-on-year.
In the accumulated of twelve months, the trajectory of revenue from services and fees was influenced especially
by the growth in revenues from the acquiring network (R$85 million) of bank account fees (R$42 million) and from
insurance, pension plan and capitalization (R$35 million).
Administrative Expenses
In 12M13, administrative expenses totaled R$2,415 million, an increase of 15.3% or R$320 million year-on-year.
Personnel expenses, which account for 56.3% of total administrative expenses in 12M2013, were 10.3% or R$127
million up year-on-year.
In the year-on-year comparison, higher personnel expenses derive from salary adjustment and increase in
headcount, 728 employees. Other administrative expenses items increased by 22.4% (R$193 million) offset by: (i)
higher expenses related to outsourced services (R$152 million), influenced by the costs of services with the
origination of payroll loans through banking correspondents. (ii) increased costs of surveillance, security and
transportation of values and services of the financial system, R$36 million, resulting from the opening of new
service points, (iii) the increase in expenses of advertising, promotions and publicity, R$18 million, justified by the
advertising campaigns presented over the period, and (iv) the increase of the cost of data processing and
telecommunications, R$17 million, monetary updating of current contracts and the renewal of leases and
equipment maintenance; movement partly offset, (v) by the decrease in depreciation and amortization expense
of R $ 44 million.
Other operating revenue totaled R$255 million in 12M13, 2.0% or R$5 million up year-on-year. The increase in
revenues recorded in 2013 compared to the same period last year came mainly from the growth in revenues from
reversal of provisions for payment of administrative expenses, R$27 million in revenue from cards, R$16 million,
and revenue from foreign exchange rate adjustment, for R$10 million, partially offset by the decrease in revenues
April 30, 2015
110
from reversal of provisions in R$47 million, due to the recovery of income tax (R$41 million) due to court decision
in relation to the fiscal incentive Worker Food Program in 2012.
In 12M13, other operating expenses totaled R$345 million, a decrease of 7.1% or R$26 million year-on-year. In
2013, the decrease in other operating expenses was due, in particular, reducing labor expenses and provisions for
civil lawsuits, 22.5% or R$43 million, partially offset by increased costs of monetary updating of the debt of Banrisul
Foundation R$24 million.
April 30, 2015
111
Table 13: Balance Sheet 2013 and 2012
R$Million
ASSETS
Current
Cash
Interbank Accounts
Lending Operations
Leasing Operations
Other Credits
Other Assets
Long-Term
Interbank Accounts
Lending Operations
Leasing Operations
Other Credits
Other Assets
Permanent
Investments
Property in Use
Intangible
TOTAL ASSETS
LIABILITIES
Current
Deposits
Intebank Accounts
Borrowings
Onlendings Abroad
Other Payables
Long-Term
Deposits
Intebank Accounts
Borrowings
Instrumentos Financeiros Derivativos
Outras Obrigações
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
2013
2012*
Chg.
R$
Chg.
%
23,687
738
528
4,311
3,995
109
11,043
33
2,833
96
29,255
14,069
735
12,875
37
1,404
136
269
58
177
33
53,211
25,997
809
4,609
5,780
2,921
85
9,819
36
1,870
68
20,484
6,581
680
11,860
38
1,313
12
262
48
167
47
46,744
(2,311)
(71)
(4,082)
(1,470)
1,075
24
1,224
(2)
964
28
8,771
7,488
55
1,015
(1)
91
124
6
10
10
(13)
6,467
-8.9%
-8.8%
-88.6%
-25.4%
36.8%
28.1%
12.5%
-6.9%
51.5%
41.3%
42.8%
113.8%
8.1%
8.6%
-3.0%
7.0%
1017.7%
2.3%
20.1%
5.7%
-28.3%
13.8%
26,545
15,624
4,221
377
9
225
1,275
569
40
4,204
21,516
15,020
2,129
6
1
1,642
72
2,646
5,150
53,211
27,047
16,014
1,628
28
5
248
966
439
26
23
7,669
15,061
10,732
287
9
620
1,205
2,208
4,636
46,744
(502)
(390)
2,593
349
4
(23)
309
130
(26)
17
(3,464)
6,456
4,288
1,842
(3)
(618)
437
72
438
513
6,467
-1.9%
-2.4%
159.3%
1247.4%
69.0%
-9.4%
31.9%
29.7%
-100.0%
74.5%
-45.2%
42.9%
40.0%
640.8%
-32.9%
-99.8%
36.3%
100.0%
19.8%
11.1%
13.8%
*Restated
Total Assets
By the end of 2013, total assets totaled R$53,211 million, being composed of (i) 50.1 % of loans , (ii) 35.5 % of
securities and interbank investments , (ii) 9.1% of interbank and interbranch operations, and (ii) 5.3% of other
April 30, 2015
112
assets. The increase in the balance of assets by 13.8 % or R$6,467 million compared to December 2012 were due,
especially, to the increase in deposits, R$3,898 million, the expansion of liabilities from operations, R$2,593 million
(albeit offset by the reduction in the financial and development funds balance to R$4,575 million due to the
decrease effected by the state, recorded in April 2013, pursuant to Law 12,069, enabling the use of escrow deposits
made by third parties to the limit of 85% of the balance amount that was transferred to the Integrated
Management of Unique Cash ( SIAC ) of Rio Grande do Sul), the expansion of resources from bills, R$2,190 million,
the increase in subordinated debt R$703 million, and the evolution of borrowings and lending in R$232 million .
The proceeds were partly applied in the loan portfolio, which grew by 9.6% or R$2,325 million in securities added
to liquidity interbank investments, which recorded an increase of 11.4 % or R$1,937 million, and in interbank and
interbranch, which increased 31.3 % or R$1,154 million.
Securities
Securities investments, including derivatives, and added to the interbank, totaled R$14,687 million in December
2013, 4.3% or R$656 million up year-on-year. This amount excludes repo operations. The increase resulted in
twelve months, from the profile change in funding lines.
Interbank and Interbranch Transactions
Interbank and interdepartmental accounts totaled R$4,839 million in December 2013, an increase of 31.3% or
R$1,154 million year-on-year. Compared to December 2012, the balance of interbank and interbranch increased,
influenced mainly by the growth of credits related to the compulsory deposits with the Brazilian Central Bank in
37.2% or R$1,070 million.
Credit Operations
Banrisul’s loan inventory totaled R$26,652 million in December 2013, the balance 9.6% or R$2,325 million higher
than achieved in December 2012. Considering the balance of the loan portfolio expanded, including risks and
recourse guarantees, the variation increased by 10.2% or R$2,564 million.
Breakdown of Credit by Company Size
Corporate loan operations totaled R$12,870 million in December 2013, accounting for 48.3% of total loan portfolio.
The balance of operations in the corporate segment grew by 10.4% year-on-year. In twelve months, the highlight
was micro, small and medium corporates, an increase of 9.3% or R$634 million, reaching 57.9% of the total loan
from the corporate segment and 28.0% of the Bank's credit.
Breakdown of Credit by Sector
In loan portfolio breakdown by activity, the private sector increased by 9.7% or R$2,339 million increase in 12M11,
recording 99.4% of loan assets in December 2013. The sectors with the largest representation, in December 2013,
were individuals, 38.9% of the total portfolio, industry 18.3%, services and other 13.2% of the total loan portfolio.
April 30, 2015
113
Compared to December 2012, we highlight the trajectory of individual credit transactions, which increased by 7.1%
(R$684 million), housing with an increase of 20.7% (R$465 million), to services and others, an increase of 15.0%
(R$457 million), rural with growth of 21.2% (R$384 million), industry with growth of 5.5% (R$252 million), and
trade with increase of 3.5% (R$97 million).
Breakdown of Credit by Portfolio
The portfolio breakdown shows free funds and invested in loan assets. The commercial portfolio, leasing, credits
linked to operations acquired in assignment and public sector derive from free resources from deposits and equity
capital and in December 2013, accounted for 71.8% of total loan portfolio. Long-term, rural, real estate and foreign
exchange loan portfolios mostly derive from specific sources of funds, composing earmarked loans and they
recorded in December 2013, 28.2% of the invested amount.
Commercial portfolio, which comprises 69.5% of the Bank's total loan portfolio, totaled R$18,532 million in
December 2013. Compared to December 2012, commercial loan increased by 4.7% (R$834 million). Regarding the
composition of credit to individuals recording, in December 2013, 53.5% of the commercial portfolio and 37.2% of
the total loans of the Bank. The business segment accounted for, in the same period, 46.5% of the balance of
commercial credit and 32.3% of the total amount of credit.
The real estate portfolio reached R$2,711 million in December 2013, an increase of 20.7% (R$465 million) in twelve
months. The performance of the institution in the real estate portfolio in 2013 was influenced by the maintenance
of several covenants, programs for loan to state officials, participation in events, as well as the extension of the
deadline of real estate financing for 35 years, with the possibility of financing up to 90% of property value. In the
amount of mortgage loans is included the value of R$84 million relating to the assignment of real estate loans with
recourse.
Rural loan balance totaled R$2,209 million in December 2013, 21.9% (R$398 million) year-on-year.
Long-term loan totaled R$1,872 million in December 2013, an increase of 42.7% (R$560 million) in 12 months.
The foreign exchange portfolio recorded R$713 million in December 2013, an increase of 10.1% or R$65 million
year-on-year.
Breakdown of Credit by Rating
Credit risk operations rated from AA to C, according to the rules set forth by the Brazilian National Monetary
Council Resolution no. 2,682/99, accounted for 89.5% of loan portfolio in December 2013.
The provision for loan losses totaled R$1,586 million in December 2013 or 6.0% of consolidated loan portfolio, in
line with December 2012. The indicator decreased 0.5 p.p. year-on-year. The provision balance revealed an
downward trend directly related to the compliance improvement through the new client rating system, by
deploying new centralized system process, minimizing the need for the provision due to the growth of the loan
portfolio and increasing the amount of operations arrears.
April 30, 2015
114
In December 2013, the provision for loan losses had the following composition, pursuant to the criteria set forth
by the Brazilian National Monetary Council Resolution no. 2,682/99 and amendments:
R$635 million for operations with installments overdue by more than 60 days;
R$824 million for agreements falling due or those with overdue installments less than 60 days;
R$128 million referring to provision exceeding the minimum amount required by the Brazilian National
Monetary Council Resolution no 2,682/99, set up in view of client quality periodical analysis carried out by
the Management, aiming at covering any events not captured by client rating model.
Funds Raised and Under Management
Total asset management totaled R$42,420 million at the end of December 2013, a balance 20.0% or R$7,062
million up year-on-year, which can be explained by increased deposits.
Demand Deposits
Demand deposits totaled R$3,398 million, 0.1% (R$3 million) down year-on-year, with a relative stability.
Savings Accounts
Savings deposits totaled R$6,991 million at the end of December 2013. Savings balance was 19.8% or R$1,155
million up year-on-year. In line with record net funding in the market for the year 2013, the growth in the period
reflects the preference of savers by product, despite the change in the compensation rule and the oscillations of
the Selic rate.
Time Deposits
Time deposits are the Bank’s main funding instrument. In December 2013, the amount raised in time deposits
reached R$19,904 million, an increase of 16.5% or R$2,814 million up year-on-year. The launching of specific
modes, Automatic TDs (bank deposit certificate) with different rate and term, intended to applicators that have
significant volumes of cash and reduction of the minimum values for automatic application influenced the
expansion of this resource in the period.
Resources from Financial Bills
In August 2013, Banrisul concluded the first offering of financial bills, in the amount of R$1,600 million. The issue
was made in three series: the first one in the amount of R$700 million for a two-year term; the second, R$870
million for a term of three years; and the third series of R$30 million with a term of four years. The issue better
positioned the Bank in the fixed income debt market, while creating opportunities for future long term
transactions. Reflecting this movement, the balance grew R$2,191 million over December 2012.
April 30, 2015
115
Subordinated Debt
The subordinate debt amounted to R$1,861 million at the end of December 2013, increasing R$703 million since
December 2012. In comparison to December 2012, the changes were influenced by the approval from the Central
Bank of Brazil, in December 2012, to the use as Tier II Capital of the proceeds from the second tranche of the
foreign issue in November 2012.
Assets under Management
Assets under management totaled R$7,408 million at the end of December 2013, 3.8% (R$270 million) above the
amount of December 2012.
SHAREHOLDERS' EQUITY
Banrisul’s shareholders’ equity reached R$5,150 million at the end of December 2013, an expansion of 11.1%
(R$513 million) in comparison to December 2012. The variations in shareholders’ equity are related to the addition
of net income proceeds over the past twelve months, after the payments of dividends and interest on equity,
besides the accounting recognition of R$433 million originating from the actuarial deficit of the main pension plan
offered to its employees administered by Fundação Banrisul, as set forth by CPC 33-R1 (and approved by Resolution
no. 695 of the National Monetary Council), which resulted in the constitution of tax credits in the amount of R$173
million, and the impact on equity in the net amount of R$260 million.
10.2 Management Comments
a. Company’s operating results, in particular:
(i) Description of any material revenue item
The mainly revenues derived from:
Revenues from financial intermediation: it includes revenues from loan, leasing operations and sale or
transfer of financial assets, income from securities and derivatives operations, income from reserve
requirements funds at the Brazilian Central Bank and income from foreign exchange operations;
Fee income and commissions: they comprise revenues from bank fees and services, such as business
acquiring and voucher income and insurance, pension plan and capitalization, current account bank fees,
fund management revenues, income related to the collection of bonds and consortia management income
fees, among others;
Other operating revenue: it is composed of several revenues from cards, recovery of charges and expenses,
revenues of performed operations anticipation related to acquiring and incomes of the judicial deposit
reserve fund, among others.
April 30, 2015
116
Composition of Total Revenue
Table 14 shows total revenue breakdown for the years ended December 31, 2014, 2013 and 2012.
Table 14: Total Revenue Breakdown
R$Million
2014
2013
2012
% Chg.
R$
%
R$
%
R$
%
2014/2013
2013/2012
Revenues from Financial
Intermediation
8,197
84.4%
6,573
84.1%
6,346
85.8%
24.7%
3.6%
Revenues from Loan and
Lease Operations
5,242
53.9%
4,604
58.9%
4,624
62.5%
13.8%
-0.4%
1,829
18.8%
1,439
18.4%
1,081
14.6%
27.1%
33.1%
1,126
11.6%
530
6.8%
641
8.7%
112.5%
-17.4%
1,196
12.3%
983
12.6%
799
10.8%
21.6%
23.2%
324
3.3%
256
3.3%
251
3.4%
104.3%
2.1%
7,812
100.0%
7,396
100.0%
26.9%
5.6%
Total Revenue
Revenues from Securities
Other (1)
Revenue from Services and
Fees
Other Operating Income (2)
Total Revenues
9,717
100.0%
(1)
Considers Foreign Exchange Revenues, Compulsory Investments Revenues, Derivatives Revenues and Sale or Transfer of Financial Assets
Operations.
(2) Considers Other Operating Income and Subsidiaries Income.
Composition by Product in Commercial Credit - Balance, Revenue and Rate
Table 15 shows the breakdown of commercial loan portfolio, the main revenue item, on December 31, 2012, 2013
and 2014 divided by product type.
April 30, 2015
117
Table 15: Composition of Commercial Credit by Product in 2014 and 2013
R$Million
2014
Individuals
Payroll-deductible Loan
Payroll-deductible Purchase of
Consumer Goods
Purchase Goods – Other
2013
(4)
Change
Income Variation
Balance
(1)
10,711
Revenue
(2)
2,848
Fee
(3)
2.38%
Balance
(1)
9,916
Revenue
(2)
2,617
Fee
(3)
2.40%
795
8.0%
231
8.8%
7,861
1,568
1.86%
7,269
1,405
1.89%
592
8.2%
163
11.6%
75
13
1.46%
93
23
1.46%
(18)
18.9%
(10)
-42.0%
R$
%
R$
%
5
1
2.06%
3
1
1.71%
2
55.6%
0
19.7%
73
14
1.67%
79
18
1.60%
(6)
-7.2%
(4)
-22.7%
Overdraft
536
631
7.95%
546
610
7.71%
(10)
-1.8%
21
3.4%
One Minute Loan
399
154
3.52%
359
133
3.21%
40
11.2%
21
15.8%
Automatic Individual Loan
255
117
4.00%
274
110
3.68%
(19)
-7.0%
7
6.5%
Non Payroll-deductible Loan
578
182
2.56%
499
170
2.56%
79
15.8%
12
7.3%
Credit Card
100
70
8.63%
81
56
8.51%
19
23.1%
14
26.7%
Other – Individuals
827
96
1.09%
712
91
1.16%
115
16.2%
5
6.0%
Vehicle Loan – Individuals
Companies
9,478
1,564
1.50%
8,616
1,352
1.37%
862
10.0%
212
15.7%
32
6
1.64%
31
8
1.59%
1
3.4%
(2)
-18.5%
Vehicle Loan – Companies
50
9
1.69%
44
9
1.76%
6
14.3%
(0)
-4.0%
Working Capital - Guarantee
5,567
778
1.31%
4,992
644
1.15%
575
11.5%
134
20.9%
Working Capital - Receivable
Financing to Customers –
Companies
Compror
1,501
259
1.50%
1,540
241
1.26%
(39)
-2.5%
18
7.6%
16
6
3.25%
18
7
2.76%
(2)
10.7%
(1)
-9.2%
161
19
1.24%
113
14
1.04%
48
42.6%
5
33.3%
46.5%
Indebted Security Account
306
53
1.69%
242
36
1.45%
64
26.4%
17
Guaranted Account
734
286
3.29%
570
264
3.40%
164
28.6%
22
8.2%
Debt Instruments Discount
368
90
1.79%
316
81
1.68%
52
16.5%
9
10.7%
1.21%
83
12
1.08%
170
6
Vendor
89
13
Foreign Credit
199
9
Other – Companies
455
37
0.64%
497
32
Total
20,189
(1)
Balance in the last day of the year
(2) Revenue accumulated in the year
(3)
Average price of average debit balance
(4) Restated
4,412
1.98%
18,532
3,969
6
6.8%
1
8.7%
29
16.7%
3
51.4%
0.89%
(42)
-8.4%
5
17.7%
1.93%
1,657
8.9%
443
11.2%
Composition of Commercial Credit by Product for 2014 and 2013 – Balance, Revenue and Rate
Balance of Commercial Credit
Personal commercial loan totaled R$10,711 million in December 2014, a R$795 million increase or 8.0% up on
December 2013.
The expansion of personal commercial loans compared to December 2013 came especially from the increase in
the balance of payroll loans, which represented 72.4% of the growth of this portfolio in the period.
Payroll loans totaled R$7,937 million in December 2014, making up for 74.1% of the personal commercial loan
portfolio, and 39.3% of commercial credit portfolio, showing an increase of 7.8% (R$575 million) in twelve months.
Among the payroll loans lines, R$4,694 million represents the balance generated in Banrisul network, which
increased by 7.7% (R$337 million) in twelve months. The balance of credit originated by extra branch platform,
representing 38.3% of Bank’s payroll loans reached R$3,042 million in December 2014, an increase of 24.2% (R$593
April 30, 2015
118
million) in twelve months. The remaining R$200 million correspond to portfolios acquired with recourse.
Payroll loans added to transfer of assets (R$993 million), accounted as Circular Letter No. 3543 of 26/03/12 of the
Central Bank of Brazil in credits linked to acquired operations in transfer, reached R$8,930 million in December
2014. Of this amount, loans acquired with recourse reached R$1,193 million in December 2014, an increase of
R$198 million in twelve months compared to the acquisition of payroll loans motivated by changes in compulsory
reserve rules.
The corporate commercial loan reached R$9,478 million in December 2014, an increase of 10.0% (R$862 million)
compared to December 2013. The commercial portfolio of corporate segment is composed mainly of working
capital lines, which represents 74.6% of corporate commercial loan and 35.0% of total commercial credit portfolio.
The trajectory of corporate commercial credit was influenced especially by the increase in working capital lines
and overdraft accounts, respectively responsible by 62.3% and 19.0% growth in the corporate commercial credit
portfolio for the twelve months.
Commercial Credit Revenues
In 2014, revenues from commercial credit totaled R$4,412 million, 11.2% (R$443 million) above the amount
recorded in 2013. Revenues were favored by the growth on individual and corporate balance and the increase of
the basic interest rate, with direct impact on the business segment revenue, largely characterized by post-fixed
operations.
The expansion of revenue from personal commercial loans, comparing 2014 and 2013, came especially from
revenues from payroll loans, accounting for 66.4% of revenue increase in personal commercial portfolio in the
period. With regards to revenue from corporate commercial loan segment, comparing the years 2014 and 2013,
the increase came especially from revenue growth of working capital lines, accounting for 72.2% of the increase in
this portfolio in the period.
Commercial Loan Rates
Average monthly commercial credit rates increased by 0.05 pp. in 2014 compared to 2013. The products of
corporate commercial loan increased by 0.13 pp. in the average monthly rates in twelve months, while the average
monthly rates of the personal commercial loans products decreased by 0.02 pp. in the same period. The average
monthly rates of corporate commercial loan segment are influenced in particular by the trajectory of the basic
interest rate and the conditions of market competition, while the individual's average monthly rates carry the
effect of prefixed rate transactions stock.
Commercial Credit by Product Composition - Balance, Income and Rate
Table 16 presents the composition of the commercial loan portfolio, main item of revenue, in December 31, 2012
and 2013 divided by product type.
April 30, 2015
119
Table 16: Composition of Commercial Credit by Product in 2013 and 2012
R$Million
Individuals
9,916
2013
Revenu
e (2) (5)
2,617
2.40%
9,252
2012
Revenu
e (2)
2,680
2.49%
664
7.2%
(63)
-2.4%
Payroll-deductible Loan
Payroll-deductible Purchase of
Consumer Goods
7,269
1,405
1.89%
6,610
1,390
1.83%
659
10.0%
15
1.1%
93
23
1.46%
164
33
1.47%
(71)
-43.3%
(10)
-31.3%
3
1
1.71%
5
1
1.10%
(1)
-29.0%
0
16.2%
-1.8%
Balance
(1)
Vehicle Loan – Individuals
Fee (3) (5)
Balance
(1)
Balance Variation
Fee
(4)
R$
Income Variation
%
R$
%
79
18
1.60%
102
18
1.66%
(23)
-22.7%
0
Overdraft
546
610
7.71%
577
606
7.74%
(31)
-5.4%
4
0.7%
One Minute Loan
359
133
3.21%
342
172
4.50%
17
5.1%
(39)
-22.3%
Automatic Individual Loan
274
110
3.68%
225
135
5.06%
49
21.9%
(25)
-18.3%
Non Payroll-deductible Loan
499
170
2.56%
520
191
2.84%
(21)
-4.0%
(21)
-11.1%
81
56
8.51%
63
58
7.33%
18
28.1%
(2)
-4.4%
712
91
1.16%
644
76
1.18%
68
10.5%
15
19.4%
-9.2%
Credit Card
Other – Individuals
Companies
8,616
1,352
1.37%
8,446
1,490
1.60%
170
2.0%
(138)
31
8
1.59%
39
7
1.61%
(8)
-19.5%
1
8.3%
Vehicle Loan – Companies
44
9
1.76%
52
11
1.90%
(8)
-15.5%
(1)
-14.1%
Working Capital - Guarantee
4,992
644
1.15%
4,714
658
1.27%
278
5.9%
(14)
-2.2%
Working Capital - Receivable
Financing to Customers –
Companies
Compror
1,540
241
1.26%
1,779
246
1.30%
(240)
-13.5%
(5)
-2.3%
18
7
2.76%
35
10
2.56%
(17)
-48.6%
(3)
-28.0%
113
14
1.04%
141
15
1.11%
(29)
-20.2%
(1)
-6.9%
Indebted Security Account
242
36
1.45%
195
30
1.39%
47
24.0%
6
19.3%
Guaranted Account
570
264
3.40%
602
372
4.91%
(32)
-5.3%
(108)
-29.1%
Debt Instruments Discount
316
81
1.68%
367
79
1.83%
(51)
-13.9%
2
2.8%
1.08%
112
15
1.15%
(28)
-25.5%
(3)
-22.8%
61
4
0.49%
109
179.4%
2
39.5%
0.89%
348
42
1.14%
149
42.7%
(10)
-24.3%
18,532
3,969
1.93%
Balance in the last day of the year.
(2) Revenue accumulated in the year.
(3) Average price of the average debt balance.
(4) Monthly Average Revenue / Monthly Average Balance.
(4) Restated.
17,698
4,170
2.08%
834
4.7%
(201)
-4.8%
Vendor
83
12
Foreign Credit
170
6
Other – Companies
497
32
Total
(1)
Composition of Commercial Credit by Product for 2013 and 2012 – Balance, Revenue and Rate
Balance of Commercial Credit
Personal commercial loan totaled R$9,916 million in December 2013, a R$664 million increase or 7.2% up on
December 2012.
Payroll-deductible loan totaled R$7,362 million in December 2013, accounting for 74.2% of personal commercial
portfolio, a R$588 million increase or 8.7% up in 12M12, influenced by a positive variation of owned line of payrolldeductible loan, totaling R$419 million, especially the credits originated through the platform of banking
correspondents, movement minimized by decreasing the acquired line of payroll-deductible loan by R$1,125
million. The amount of credit originated reached R$2,449 million in December 2013, representing 33.3% of payroll
loans of Banrisul. Payroll-deductible loan added to the transfer of assets, R$440 million, accounted for pursuant to
Circular Letter No. 3,543 of 26/03/12 of the Central Bank of Brazil in credits linked to acquired operations reached
April 30, 2015
120
R$7,802 million. Among the lines of payroll-deductible loans, owned payroll-deductible loans totaled R$6,073
million in December 2013, accounting for 82.5% of payroll-deductible loans portfolio and 61.2% of personal
commercial portfolio. Owned payroll-deductible loan went up 39.3% or R$1,713 million in 12 months. Acquired
loan, excluding the loans acquired from assignment with recourse, pursuant to Circular Letter 3.543/12, reached
R$1,288 million in December 2013, accounting for 17.5% of payroll-deductible loans portfolio and 13.0% of
personal commercial loan. The balance of acquired payroll-deductible loan went down 46.6% or R$1,125 million
when compared to December 2012.
Corporate commercial loan reached a balance of R$8,616 million in December 2013, an increase of 2.0% (R$170
million) year-on-year. Corporate segment commercial portfolio is mainly composed of working capital lines,
totaling R$6,532 million, and current account overdrafts, which totaled R$570 million. In December 2013, the
working capital balance accounted for 75.8% of legal entity commercial portfolio, and 35.27% of total commercial
loan. In 12 months, working capital lines grew by 0.6% or R$38 million.
Revenues from Commercial Credit
In 12M13, revenues generated by commercial loan totaled R$3,969 million, 4.8% or R$201 million below the
amount recorded in 12 months. The reduction in interest rates influences the trajectory of revenues from
commercial credit period.
Commercial Credit Rates
Commercial loan monthly average fees in 2013, compared to 2012, were 0.15 p.p. down, reaching 1.93% in 12M13.
The pace of drop in monthly average fees was directly influenced by floated operations of credit to individuals,
especially Crédito 1 Minuto and Automatic Individual Credit. With regard to credit to entities, overdraft and
discounting of receivables showed a significant decline of average rates during the period.
Other operating revenue breakdown
The table below shows the breakdown of other operating revenue for the years ended December 31, 2012, 2013
and 2014.
April 30, 2015
121
Table 17: Other operating revenues breakdown
R$Million
Chg. %
2014
2013
2012
48,527
55,724
2014/2013
2013/2012
50,017
-12.9%
11.4%
Other operating revenue
Recovery of charges and expenses
Reversal of operational provisions:
Civil
-
37
44
-100.0%
-15.9%
Labor
1,196
179
768
-
-76.7%
Tax
10,912
-
-
-
-
Other values and goods
12,288
2,211
49,267
-
-95.5%
1,255
1,536
4,335
-18.3%
-64.6%
-
-
1,166
-
-100.0%
Interbank fees
24,810
22,974
21,757
8.0%
5.6%
Forex adjustments – premises abroad
34,300
21,623
11,672
58.6%
85.3%
-2.7%
Securitization losses
Savings bonds commissions
Credit instruments receivable
6,243
6,020
6,187
3.7%
30,862
14,859
14,077
107.7%
5.6%
8,700
8,286
9,944
5.0%
-16.7%
Diverse income from Cards
55,812
41,791
26,235
33.6%
59.3%
Gain on sale of goods
13,787
5,986
10,047
130.3%
-40.4%
6,140
47,115
20,449
-87.0%
130.4%
Acquiring revenue - performed operations anticipation
34,243
7,397
-
-
-
Banrisul Foundation - actuarial result of migration
83,628
-
-
-
-
Reserve fund – Judicial deposits - Law 12,069
Commission and management fee on insurance
Provisions reversal of payments to perform
Insurance distribution agreement revenue
Other operating revenue
Total other operating revenue
115,000
-
-
-
-
32,220
18,853
23,615
70.9%
-20.2%
519,923
254,591
249,580
104.2%
2.0%
(ii) Factors materially affecting operating income
Requirements on Compulsory Deposits
The Brazilian Central Bank imposes to financial institutions several requirements related to compulsory deposits,
as a mechanism to control Brazilian financial system liquidity. When Brazilian Central Bank changes the compulsory
deposit requirements, it can influence the volume of assets bearing interest rates and liabilities paying interest
rates, accordingly, influencing the financial intermediation revenues and expenses.
The compulsory deposits enforceability incurs on the volume of deposits, at rates established by applicable rules,
and proceeds deriving therefrom are deposited at the Central Bank, earning interest rates (except for demand
deposits). The volume of compulsory deposits placed at the Central Bank of Brasil also impacted the level 1
reference equity presented by Banrisul, from the loss of the deductor applied to the compulsory deposits
calculation based on time deposits. On December 31, 2014, Banrisul had R$5,659 million compulsorily deposits, in
cash or through federal government bonds to the Brazilian Central Bank.
April 30, 2015
122
Changes in Tax Legislation
Results are influenced by amendments to tax laws and tax regimes affecting the operations and clients operations.
These amendments include changes in tax rates and levy of temporary taxes, the proceeds of which are earmarked
for specific purposes.
Regulation and Risks of Chance in the Rules Relating to the Credit
As a way to soften the inflationary dynamics and their impacts on consumption and investment decisions, the
Central Bank Monetary Policy Committee went ahead with the Selic rate adjustment cycle, which reached 11.75%
p.a. after the last Committee’s meeting held in December 2014, compared to the 10.00% in December 2013 and
the 7.25% in December 2012. Interest rates and loans spreads, which in 2012 decreased, maintained a downward
trend in 2013 and 2014.
From the point of view of regulation, several measures that influence the volume of credit of financial institutions
were taken over the three years which is subject of this form, as described below.
Whit effect up to 2012, banking portability, ruled by the Brazilian National Monetary Council Resolutions 3,402
and 3,424 allows the public servants entitled to choose the bank to receive their salary. This change results in
improved customer service systems, among other strategies, to gain customer loyalty. In addition, Resolution No.
4292/13, of the Central Bank of Brazil, provides for the portability of Individual credit operations, standardizing the
procedures and deadlines for the exchange of information and for the transfers between financial institutions.
However, CMN Resolution No. 4294/13 modifies the standards and the percentage of compensation of the
correspondents and other requirements related to the control of transactions made by these channels, with entry
into force in January 2015.
In addition, even in 2013, other measures were published that affected the volume of credit through rules
regarding the capital of institutions, among which it can be mentioned CMN Resolution No. 4192, which defines
the new capital structure, in which the requirements are segregated into three capital requirements,
complemented by CMN Resolution No. 4193/13, both amended by Resolution No. 4278 and 4,281.
In 2014, there were also edited measures related to the credit market: Circular No. 3712 of Central Bank of Brazil
disciplined rules relating to reserve requirements on forward and cash resources. This standard was amended by
Circular No. 3715 of Central Bank of Brazil, which raised the size of reserve requirements on time deposits that can
be fulfilled with loans, while restricted the deduction of on auto finance and allowed to be considered, for the
purposes of compliance with reserve requirements, the acquisition of new financial bills of eligible banks. New
credit stimuli was produced through Circular No. 3723 of the Central Bank of Brazil, allowing banks to use working
capital loans to meet the compulsory rule on time deposits.
With reference to payroll loans, by decision of the National Council of Social Providence, it was published a
Measure benefiting retirees and pensioners of the INSS, as they now have longer-term loans. The federal civil
servants, through Decree No. 8321, of 10/03/2014, were also benefited as regard to the deadline to settle the
transactions.
Among the regulatory measures with regards to capital, it can be mentioned the Circular No. 3711, of 07/22/2014,
April 30, 2015
123
of the Central Bank of Brazil, which sets the principles for calculating the share of risk-weighted assets (RWA)
referring to the exposures to credit risk subject to the calculation of capital requirements under the standardized
approach (RWACPAD); and Circular No. 3714, of 08/20/2014, of the Central Bank, amending criteria for minimum
capital requirement for credit risk.
Delinquency in Loan Operations
Certain factors beyond the Company’s control may impact delinquency level to which the Brazilian Financial
System is subject, such as, economy recession that affects the country or higher unemployment rates. Any increase
in loan portfolio delinquency level can result in higher losses from loan operations, adversely affecting the
Company’s operating results and its financial condition.
Banrisul observes the practices imposed by Brazilian Central Bank as to the write-off of overdue loans, to the extent
it considers appropriate to the operations and it decides that loans are written-off as loss 360 days after maturity.
Thus, a provision for loan loss over defaulting operations remained accounted for a 360-day period, until loan is
written-off as loss.
b. Variations in revenues attributable to changes in prices. exchange and inflation rates, MODIFICATIONS of
volumes and introduction of new products and services
c. Impact of inflation. changes in prices of main inputs and products, exchange and interest rates on the
Company’s operating and financial results
The analytical margin presented herein was determined based on average balances of assets and liabilities,
calculated from 12-month closing balances comprising periods analyzed.
Table 18 shows assets generating revenue and interest-bearing liabilities, related financial intermediation revenue
amounts over assets and financial intermediation expenses over liabilities, as well as effective average rates.
April 30, 2015
124
Table 18: Analytical Margin
R$Million
2014
2013
2012
Average
balance
sheet
Revenue/
Expense
Average
Rate
Average
balance
sheet
Revenue/
Expense
Average
Rate
Average
balance
sheet
Revenue/
Expense
Average
Rate
Profitable assets
52,315
8,197
15.7%
47,137
6,573
13.9%
39,857
6,346
15.9%
Loan operations
27,312
5,487
20.1%
24,374
4,808
19.7%
22,229
4,760
21.4%
226
33
14.7%
2,401
202
8.4%
3,834
312
8.1%
2,984
300
10.1%
3,326
256
7.7%
2,221
172
7.7%
Available-for-sale securities
842
85
10.1%
1,299
100
7.7%
1,187
92
7.7%
Held-to-maturity securities
13,915
1,651
11.9%
11,411
876
7.7%
6,582
704
10.7%
134
10
7.4%
92
7
7.9%
106
8
7.6%
6,903
630
9.1%
4,234
324
7.7%
3,696
298
8.1%
6,153
571
9.3%
3,526
266
7.5%
3,040
243
8.0%
750
59
7.9%
709
58
8.2%
656
56
8.5%
Resale commitments
Held-for-trading securities
Interbank deposits
Other profitable assets
Reserve requirements
Other
5,370
-
-
4,037
-
-
2,693
-
-
Total assets
57,685
8,197
14.2%
51,174
6,573
12.8%
42,549
6,346
14.9%
Interest-bearing liabilities
44,904
(4,407)
9.8%
39,475
(2,906)
7.4%
32,357
(2,616)
8.1%
434
(39)
8.9%
373
(24)
6.3%
196
(11)
5.6%
7,412
(494)
6.7%
6,415
(374)
5.8%
5,468
(328)
6.0%
21,161
(1,924)
9.1%
18,823
(1,320)
7.0%
15,720
(1,139)
7.2%
Open market operations
5,857
(619)
10.6%
4,976
(420)
8.4%
1,887
(172)
9.1%
Subordinated debt
1,948
(514)
26.4%
1,790
(212)
11.8%
1,056
(340)
32.2%
Borrowings and onlendings
3,710
(371)
10.0%
3,044
(242)
7.9%
2,422
(174)
7.2%
In the country
2,430
(103)
4.2%
1,932
(87)
4.5%
1,430
(74)
5.2%
Abroad
1,281
(269)
21.0%
1,113
(155)
13.9%
991
(99)
10.0%
Other
4,382
(446)
10.2%
4,055
(315)
7.8%
5,610
(452)
8.1%
Non-interest bearing liabilities
7,433
-
-
6,761
-
-
5,476
-
-
5,348
-
-
4,938
-
-
4,716
-
-
57,685
(4,407)
7.6%
51,174
(2,906)
5.7%
42,549
(2,616)
6.1%
Unprofitable assets
Interbank deposits
Savings account
Time deposits
Liabilities and Shareholders’ Equity
6.6%
Spread
Analytical Margin
3,790
7.2%
7.2%
3,667
8.8%
7.8%
3,731
Loan operations include advances from foreign exchange contracts and leasing operations, which are stated at
present value, net of leasing agreements. Income from loan operations overdue by more than 60 days, regardless
of their risk level, are only recognized as revenue when effectively received.
Average balances of liquidity interbank investments, funds applied or raised in the interbank market, correspond
to the redemption amount, less unearned revenues or unexpired expenses corresponding to future periods.
Average deposit balances, open market operations, borrowings and onlendings include charges payable until the
closing date of financial statements, recognized on a pro rata die basis. Referring to expenses related these items,
those referring to deposits include expenses for contributions to Credit Guarantee Fund – FGC.
April 30, 2015
125
9.4%
It was noticed a downward trend in the margin over profitable assets in from 2013 to 2014. Profitable average
assets increased 11.0% year-on-year and interest-bearing liabilities, 13.8%. Absolute margin increased by 3.4% and
relative margin decreased by 0.6 p.p. compared to 2013.
The trajectory of effective Selic Rate that was upward in 2014, affected the prices of profitable assets and onerous
liabilities. In addition to base interest rates referencing the operations in the financial sector, the structure of assets
and liabilities and also contractual terms are decisive factors composing the margin earned in each period.
Credit assets percentage in relation to the total average profitable assets increased 0.5 p.p. from December 2013
to 2014, reaching 52.2%. Treasury operations decreased from 39.1%, in December 2013, to 34.3% in 2014.
Compulsory increased representation in total profitable assets by 4.3 p.p., reaching 11.8% in 2014.
Referring to interest-bearing liabilities, the average balance of time deposits accounted for 47.1% of expensegenerating liabilities in 2014, 47.7%. above the percentage seen in the previous year. Savings deposits increased
their percentage over interest-bearing liabilities in 0.3 p.p. in twelve months, reaching 16.5% in December 2014.
Money market funding share reached 13.0% in interest-bearing liabilities in 2014, an increase of 0.4 p.p. from
2013. Among other interest-bearing liabilities, resources for acceptance and issuance of securities grew 3.0 p.p.,
reaching 6.2% in 2014.
Together, these variations resulted in a 0.6 p.p. spread reduction, which reached 6.6% in 2014.
Interest rates
Fluctuations in Brazil’s interest rates materially affect the company’s operating results. Higher interest rates may
positively influence revenue, since interest rates related to bearing-interest assets and the remuneration of loan
operations also increase. On the other hand, interest expenses may be equally affected, if interest rates related to
interest-bearing liabilities, including funding operations, also increase.
Overall, higher interest rates result in higher revenues from loan operations due to higher spreads. Nevertheless,
higher interest rates may negatively affect results and loan portfolio by reducing demand for credit and increasing
client delinquency risk.
On the other hand, lower interest rates reduce revenues from loan operations due to lower spreads. Thus, lower
interest rates may result in a reduction in revenues and, accordingly, worsen results. This revenue decline may
eventually be offset by a loan volume growth, due to a higher demand for credit, provided that we have conditions
to grant loans in order to meet said demand without significantly increasing the delinquency levels of operations.
According to data from the Brazilian Central Bank, in December 2012, 2013 and 2014, average spread of loans
presented by Brazilian banks stood at 14.50 p.p., 13.80 p.p. and 15.10 p.p., respectively, while in the years ended
2012, 2013 and 2014, the effective SELIC rate stood at 8.49%, 8.22% and 10.90%, respectively.
Inflation
Net income can be adversely affected by higher inflation rate in Brazil, which can result in higher costs and reduce
operating margins, if inflation is not followed by an increase in interest rates. Moreover, inflation may contribute
to increase market volatility, due to economic uncertainties, lower expenditures by population, lower growth of
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real income and reduced consumer’s confidence, factors that may have a negative impact over operating results.
Inflation rates in Brazil revealed high volatility in the past in recent years. Lower inflation rates, to a large extent,
were due to the federal government monetary policy, which includes periodic changes in interest rates and the
Real appreciation against U.S. dollar in the period.
The inflation calculated by IGP-M (General Market Price Index) was 7.81% in 2012, 5.53% in 2013 and 3.67% in
2014. Prices, on the other hand, when calculated by IPCA, went up 5.84% in 2012, 5.91% in 2013 and 6.41% in
2014.
Spread
The operating result can be affected by changes in spread, as seen in Table 18, where revenues from interestbearing assets in relation to interest-bearing liabilities expenses, which represent the funding, are stated. In 2014,
the spread of 6.6% was 0.6 p.p. below the 7.2% recorded in 2013.
Factors that may influence spread are increase/decrease in borrowing costs due to variation in the benchmark
interest rate, stiff competition among financial institutions and delinquency arising from periods of crisis or
economic growth.
Considering Banrisul’s relevant market share in the State of Rio Grande do Sul, the Company was directly affected
by this state's economic performance. There is a difficulty to mitigating this risk deriving from concentration of
activity, a factor Banrisul have tried to reverse with the acquisition, in 2012, of a share of 49.9% of the capital in
Bem Promotora de Vendas e Serviços S.A., formerly called Credimatone Promotora de Vendas e Serviços S.A..
Exchange Rates
The foreign exchange operations solely aim at meeting clients’ needs in products, services and credit for import
and export operations. For these operations, we raised funds with international financial institutions. Therefore,
assets and liabilities denominated in foreign currency are similar, providing us with a natural hedge. Except for
capital of branches abroad, totaling US$76 million, foreign exchange rate exposure was not maintained with own
funds and no leveraged operations were carried out in foreign currency, reason that result was not impacted by
foreign exchange rate variations.
10.3 Management comments on the material effects caused or expected to be caused by the events below on
the Company’s financial statements and results
a. Introduction or disposal of operating segment
Historically, the insurance segment has been object of commercial approach for Banrisul. The insurance industry
has become subject of studies since 2011, in order to expand revenues. After four years of choosing and selecting
a partner company, the Bank signed, at the end of 2014, an agreement with Icatu Seguros for the distribution for
20 years of life insurance and pension plans through Banrisul channels, on an exclusive basis. This partnership will
take the form of an insurance company in 2015, of which Banrisul will be holding 49% of the capital. The insurance
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business growth should bring stability to the generation of income, increasing the representativeness of services
fees in revenue.
b. Establishment, acquisition or sale of ownership interest
As part of the strategic move to leverage client relationship channels, increase loan portfolio and expand the
distribution potential of financial products and services nationwide, on March 13, 2012, Banrisul acquired, through
the Stock Purchase Agreement and Other Covenants entered into with MatoneInvest Holding, Banrisul, forty-nine
percent and nine tenths (49.9%) of the shares issued by Bem Promotora de Vendas e Serviços S.A., a closely-held
company headquartered in the city of Porto Alegre, representing 673,500 common shares.
Banrisul’s investment on the acquisition amounted to R$45 million. In 2013, there was an increase in capital of
Bem Promotora de Vendas e Serviços SA. Banrisul invested in the capital increase the amount of R$5 million.
At the end of 2014, the balance of loan operations originated through this channel reached R$3,042 million,
compared to the R$2,449 million at the end of 2013 and to the R$1,675 million at the end of 2012. Banrisul paid,
for the period ended December 31, 2014, R$115 million to Bem as commissions and performance fees for the
origination of payroll loans by means of agreements (compared to the R$101 million paid for the period ended
December 31, 2013 and to the R$24 million paid for the period ended December 31, 2012).
c. Unusual events or transactions
Strategic Partnership with Insurance Icatu
In 2015, Banrisul will complete important negotiation of equity interest. After four years of study and selection of
a business partner, at the end of 2014 an agreement for the distribution of life insurance and pension bonds with
Icatu Insurance within Banrisul’s channels was realized. In 2015, the agreement will provide the basis for the
creation of a joint venture, in which Banrisul will be holding 49% of capital. The successful changes that have
occurred in the insurance market in Brazil, the permanence of banks as strong distributors and the potential
absorption of insurances by Banrisul’s customers were the reasons that led to the establishment of this negotiation
already approved by the Central Bank of Brazil, the Administrative Council Economic Defense and the
Superintendence of Private Insurance - SUSEP.
Plans Restructuring - Fundação Banrisul de Seguridade Social
Banrisul is the main sponsor of Fundação Banrisul de Seguridade Social (FBSS) and Caixa de Assistência dos
Empregados do Banco do Estado do Rio Grande do Sul (Cabergs), which respectively provide complementation of
retirement benefits and health care to employees. The accounting of commitments related to post-employment
benefits, at Banrisul, follows rules laid down by CVM Resolution 695/12, whose effects were observed from January
1, 2013.
The Bank is the main sponsor of plans of the types "defined benefit", called Benefit Plan I - PBI, and "variable
contribution", called FBPREV. The PBI has presented historical imbalances produced by factors inherent to this
type of plan, such as changes in longevity profile, economic factors, future wage growth, as well as lawsuits. For
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dealing with the deficit, an adjustment term was signed in May 2013, which included the creation of new plans.
With the approval by PREVIC of new benefit plans at the end of 2013, Banrisul Foundation began, in February 3,
2014, the voluntary and incentivized migration process of participants and beneficiaries from PBI to: (i) Settled
Benefit, which is constituted in defined Benefit model, in which the aggregate amount of all participants is placed
in a collective account, and (ii) Plan FBPREV II, which consists in variable contribution model, being the contribution
specified in reserve accumulation phase and benefit set over payment of lifetime benefit.
In 2014, about 90% of active employees and 25% of assisted participants transferred their mathematical reserves
for the newly created plans. Costs associated with the incentive to migrate for the Settled Benefit Plan and Benefit
Plan II FBPREV offered by the Bank totaled R$288 million. At the same time, giving effect to the existing deficit in
PBI Benefit Plan in the sponsor’ risk sharing responsibility towards migrants to the Settled Benefit Plan and Benefit
Plan II FBPREV, according to CPC 33 and CVM Resolution 695/12, a revenue of R$84 million was produced revenue.
For the application of accounting rules set out in CPC 33 (R1), the promoted restructuring brought increased
balance to post-employment benefits plans, having remained liabilities of R$118 million, recognized against equity.
After the Plan restructuring, the remaining portion of the contracted debt, in the amount of R$67 million, on
December 31, 2014 (2013 - R$ 67 million), was distributed as follows: to Benefit Plan I, the amount of R$38 million;
to Settled Benefit Plan, the amount of R$17 million; and, to Benefit Plan II FBPREV, the amount of R$12 million, all
recorded in Other liabilities account. This debt is accrued with interest of 6% p.a. and restated by the General Price
Index - Internal Availability - (IGP-DI), through updates and monthly payments, with final maturity in 2028.
Bank’s benefit plans are based on the respective Plans Regulations, which contains all rights and obligations of
participants and sponsors, the actuarial costing plan, the statutory terms, the payment of monthly contributions
and benefits, the minimum contribution time and other parameters necessary for actuarial sizing. Regulations are
approved by the internal legal management bodies, by the sponsor and federal oversight and regulation agencies,
under the applicable laws.
Regarding the actuarial risks, Banrisul and FBSS together may conduct studies of active/liabilities confrontation
with the objective of seeking operations in the financial capital and insurance markets aimed at reducing or
eliminating the actuarial risks of the plans. Through its defined benefit plan, the Bank is exposed to a number of
risks, the most significant being: volatility of assets, change in bond yields, inflation risk and life expectancy.
The recently implemented changes, with the creation of two new plans, represents structural changes that follow
on a constant evaluation process, whether from a financial point of view, whether through governance
mechanisms, which are the natural forums of following up with economic impact of the created alternatives.
Encouraged Retirement Plan
In the wake of the post-employment benefits plans restructuring, Banrisul released in January 2014 the Retirement
Incentive Plan, providing better conditions to employees suitable for official and supplementary retirement plans
to leave the Bank in 2014. The plan was open until March 2014, and employees could leave until June 2014. Set
up in order to preserve the ownership structure of the Bank and meet the employees’ expectations on postemployment benefits, 554 employees joined the plan and 510 dismissals were effected. The accrued and paid
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incentives under the plan totaled R$64 million.
Banrisul Cartões S.A.
Banrisul Cartões S.A. ("Banrisul Cartões"), a subsidiary of Banrisul, formerly known as Banrisul Serviços Ltda., was
established in July 2, 1969 and in 2013 underwent a major reorganization. On October 3, 2013, occurred the
transformation of the corporate form of limited company to a publicly-held company and the modification in the
corporate name.
In November 2013, Banrisul Cartões SA, through onerous assignment of rights and obligations, acquired from
Banrisul the operations of the acquiring network, called Banricompras Network. In this transaction R$908 million
in assets were ceded, of which R$117 million were Advances of Receivables transactions recorded at book value,
having no reflexes in equity, and R$810 million in liabilities, whereas the difference amounting to R$98 million was
settled financially on November 1st, 2013. Thus, Banrisul cards began to centralize and include in its business
purpose, beyond the management of products that serve as means of payment related to benefits and services
(Food, Meal, Benefit, Gift, Fuel, Maintenance and Salary System cards Fleet), the management of the acquiring
network operations, affiliation of merchants and the capture and processing of data relating to transactions arising
from the use of credit and debit cards.
Due to the restructuring, the Company signed an Operational Agreement with Banrisul, effective for thirty (30)
years, which establishes the rules by which the management of the activities of the Banricompras Network was
transferred to Banrisul Cartões, covering, among other matters, the split of the liability of costs, the transfer of
employees to exercise the activities, the right to use the trademarks, the use of the distribution network of the
bank as sales channel for Banrisul Cartões and rewards between the parties for the services channel license.
Issuance of Financial Bills
In August 2013, Banrisul completed its first issuance of financial bills, totaling R$1,600 million. The issuance was
made in three series: the 1st in the amount of R$700 million and a term of two years, the 2nd at R$870 million and
a term of three years, and 3rd at R$30 million and a term of four years. The remuneration interests of financial
bills are paid semiannually. The operation represented a better positioning in the fixed income market, and creates
opportunities for future operations over longer terms. In December 2014, the balance of financial bills reached
R$1,679 million.
Subordinated Debt
On 2012, Banrisul conducted two external funding issuances, in the total amount of USD775 million.
The first one took place on January 26, 2012, when a transaction for the issuance of subordinated debt abroad
with the total amount of USD500 Million (five hundred million U.S. Dollars) was concluded. The operation was
settled on February 02, 2012 for a 10-year term, with maturity on February 02, 2022.
Coupon was set at 7.375% p.a. payable semiannually from the settlement date. Offering price corresponded to
99.131% of the total principal amount, equivalent to an effective yield to maturity of 7.50% p.a.
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The second operation took place on November 26, 2012, by the reopening of the issue of subordinated debt in the
amount of USD275 million. The financial settlement was made on December 3, 2012, maturing on February 02,
2022. The agreed interest coupon is 7.375% per annum, payable semi-annually from the date of execution. The
issue price was 109.943% of the face value of the securities sold, resulting in an effective interest rate of 5.95% pa.
The Central Bank of Brazil considered the amounts related to these fundings eligible as Tier II capital under the
category of subordinated debt.
Real Estate Investment Fund
In the year 2012, the first issuance of shares of Banrisul New Frontier Real Estate Investment Fund - FII took place,
coordinated by Banrisul. The Fund's objective is to achieve long-term real estate investments, through the
acquisition and eventual construction and/or development of real estate assets to be rented to the Banrisul Group.
The fundraising reached more than R$70 million.
10.4 Management comments on
a. Significant changes in accounting practices
b. Material effects of the changes in accounting practices
As to post-employment benefits, including those from FBSS - Banrisul Social Security Foundation, pursuant to CVM
Resolution No. 695/2012, as of January 1st, 2013, actuarial gains and losses arising from experience adjustments
and from changes in actuarial assumptions are now recognized directly in equity as other comprehensive income
when they occur. The effect of the application of this standard in Banrisul negatively impacted equity in December
2013 in the amount of R$323 million, adjusted for the tax credit in the amount of R$129 million.
The balances of 2012 were restated by the same criteria, for comparison purposes.
c. Exceptions and emphasis in the auditor’s report
There are no exceptions or emphasis in the auditor's report of 2014.
The auditor's report of 2013 on the financial statements of Banrisul, signed by Ernst & Young, contained an emphasis,
as follows:
"Emphasis:
Restatement of corresponding values - As mentioned in Note 3, due to the change in accounting policy for the
recognition of Employee Benefits, as amended by CPC 33 (R1), effective from January 1, 2013, the corresponding
individual and consolidated amounts for the balance sheets on January 1 and December 31, 2012 and the
corresponding financial information relating to the statement of changes in equity for the year ended December 31,
2012, presented for comparative purposes, were adjusted and are being restated as required by CPC 23 - Accounting
Policies, Changes in Accounting Estimates and Errors and CPC 26 (R1) - Presentation of Financial Statements . Our
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opinion does not contain any changes related to this subject.”
There are no exceptions or emphasis in the auditor's report of 2012.
10.5 Critical accounting policies adopted by the Company, particularly discussing accounting estimates made by
management on inaccurate and material matters with respect to the description of the financial condition and
results, which require subjective or complex judgments, such as: allowances. contingences, revenue recognition,
tax credits, long-term assets, useful life of noncurrent assets, pension plans, foreign currency translation
adjustments, environmental recovery costs, asset impairment test criteria and financial instruments
The individual and consolidated financial statements have been prepared in accordance with Brazilian accounting
practices applicable to financial institutions, and with standards and instructions from the Central Bank of Brazil
and from the Brazilian Securities and Exchange Commission (CVM), which include accounting practices and
estimates concerning the recognition of allowances and determination of the value of the assets that comprise its
securities portfolio, Derivatives and Deferred Taxes. Actual results could differ from those estimated.
Within the critical accounting policies are those classified as critical, requiring subjective or complex judgments by
management, usually the result of the need to develop estimates of the effects of matters that inherently involve
uncertainty. As the number of variables and assumptions affecting the future resolution of the uncertainties
increases, those judgments become more subjective and complex.
Banrisul's individual financial statements include operations conducted in Brazil as well as the consolidation of its
foreign branches (Miami and Grand Cayman). The effects of the foreign exchange variation on the operations in
foreign branches are distributed in the statement of income according to the nature of the corresponding assets
and liabilities. In the preparation of the consolidated financial statements, interests held among consolidated
companies were eliminated, as well as intercompany balance sheet and profit and loss accounts. The portions of
income for the period and net equity referring to noncontrolling interests are shown separately in the financial
statements.
The preparation of such financial statements necessarily involves assumptions and estimates deriving from our
past results and reasonable and material facts and events. The factors affecting the estimates made by our
management with respect to our financial statements are intrinsically uncertain. Note 3 to our consolidated
financial statements for the year ended December 31, 2014 includes a summary of the main accounting practices
and critical accounting policies used in the preparation of our consolidated financial statements.
Marketable Securities and Derivative Financial Instruments
Pursuant to Circular No 3068/01, and supplementary regulation, marketable securities are classified and asses into
three specific categories, in conformity with the following accounting criteria:
Trading securities – include marketable securities purchased in order to be freely traded on regular and
active basis, stated at market value, and any gains and losses on such securities are recognized in the income
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statement.
Securities available for sale - include marketable securities used as part of our strategy to manage interest
rate fluctuation risks and can be traded as a result of such fluctuations, changes in payment terms and
conditions or any other factors. These securities are marked to market, and the earnings deriving therefrom
are recognized in net income for the year and gains and losses arising out of mark-to-market variations, not
yet realized, are recognized in a specific account in shareholders’ equity, net of the respective tax effects,
when applicable, called as “Equity Adjustments” until realization upon sale. Gains and losses, when realized,
will be recognized on the trading date in the income statement, as a contra-entry to the same specific
account in shareholders’ equity, net of the respective tax effects, when applicable.
Securities held to maturity – include marketable securities with respect to which management has the
intention and financial capacity to hold until maturity, stated at acquisition cost, provided there are no
permanent losses, restated on pro rata basis in counterpart the statement of income. The financial capacity
is defined in cash flow estimates, without taking into account the possibility to sell such securities.
Derivative Financial Instruments – These are classified, on their acquisition date, according to the
Management’s intention of using them as a hedge instrument or not, pursuant to the Circular Letter
3082/02 of the Brazilian Central Bank. Derivative operations carried out as requested by clients, on their
own account, or not complying with the hedge criteria (mainly derivatives applied to manage the global risk
exposure), are recorded at the market value, with realized and unrealized gains and losses, directly
recognized in the statement of income. Firstly, derivatives are recognized by fair value on the date a
derivative agreement is executed and, subsequently, re-measured at their fair value. The method to
recognize the resulting gain or loss depends if the derivative is designated or not a hedge instrument, in
cases of adopting the hedge accounting. If this is the case, the method depends on the nature of item that
has been hedged. Banrisul adopts the hedge accounting and designates derivatives to hedge against
subordinated debt as fair value hedge of recognized assets or liabilities or firm commitment (market risk
hedge). When the operation starts, Banrisul documents the relation between hedge instruments and
hedged items, as well as the risk management goals and strategy for several hedge operations. Banrisul
also documents its evaluation, both in the beginning of hedge and continuously that derivatives used in
hedge operations are highly effective to offset variations at fair value or at cash flows of hedged items.
The fair values of the various derivative instruments used for hedging purposes are disclosed in Note 05.
The total fair value of a hedge derivative is classified as non-current asset or liability, when the remaining
maturity of hedged item exceeds 12 months, and as current asset or liability when the remaining maturity
of hedged item is lower than 12 months.
Market Risk Hedge – Derivative financial instruments destined to offset risks arising from the exposure to
market value variation of hedged item are classified into this category.
Banrisul considered in this derivatives category contracted aiming at hedging the foreign currency variation
deriving from the issue of debt at US$775 million, maturing on February 2, 2022. On December 31, 2012,
the sole outstanding derivatives refer to swaps.
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The variations in derivatives fair value designated and qualified as market risk hedge are recorded in the
statement of income, with any variations in the fair value of hedged assets or liabilities, attributable to the
hedged risk. Gain or loss related to this operation is recognized in the statement of income as “Gross Profit
from Financial Brokerage”.
Loan and lease operations and other receivables
All loan and leasing operations have their risks classified according to the Management’s judgment, taking into
account the market conditions, past experience and specific risks in relation to operations, debtors and guarantors,
observing the parameters set forth by Resolution 2,682/99 of Brazilian National Monetary Council - CMN, which
requires a periodic portfolio analysis and their classification into nine risk levels, from AA to H.
Loan and leasing operations are recorded at present value, calculated pro rata die based on the index and interest
rates, adjusted until the 60th day in arrears. After this term, revenue is recognized in profit or loss when the
operations are effectively received.
The risks of renegotiated asset operations are defined according to criterion of Resolution 2,682/99, i.e., remain
in the same rating they were before renegotiation and loan operations renegotiations which were previously
written-off against provisions, which were recorded in memorandum accounts, are classified level H. Eventual
gains deriving from renegotiation only will be recognized as revenue when effectively received.
Other receivables – Credit card transactions
Amounts to be invoiced are represented by amounts receivable from credit card holders in connection with the
use of credit cards in member establishments affiliated to Banricompras, Visa and MasterCard. Such amounts are
recorded in Trade accounts receivable, without loan characteristic, and transactions in installments, where we are
the issuers, and the outstanding balance of transactions, which payment was made based on the minimum
invoiced amount (revolving credit), are reclassified into Loan operations.
Allowance for loan, lease and other loan losses
Recorded in an amount deemed as sufficient to cover any losses, supported by client’s risk rating, in view of the
periodic analysis of client’s quality and not only based on minimum accrual percentages required by Resolution
2,682/99 of the Brazilian National Monetary Council - CMN, in the event of delinquency.
On December 31, 2014, the total amount of provision for loan operations losses, leasing and other receivables,
exceeds the minimum amount that would be required only considering the rating of operations based on the
number of days in arrears, as provided for in Resolution 2,682/99. This procedure has been adopted by
Management since the edition of said rule in order to deal with possible events not mentioned in clients’ rating
model based on their respective delays.
Permanent assets
Permanent assets are stated at acquisition cost, considering the following aspects:
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Investments in subsidiaries and affiliates are accounted for under the equity method, based on the financial
statements prepared in conformity with the accounting practices adopted by the parent company, i.e. the
Brazilian accounting practices applicable to financial institutions authorized to operate by the Central Bank
of Brazil. Other investments are stated at cost and adjusted for allowances for losses, when applicable;
Goodwill - corresponds to the excess amount paid on acquisition of investments arising from expected
future profitability. It has no term defined of useful life and are submitted annually to test for impairment
of assets;
Depreciation of property and equipment in use is calculated under the straight-line method based on the
expected economic useful lives of assets considering the minimum rates disclosed in Notes to the Financial
Statements number 10;
Intangible Assets consist primarily of investments whose benefits will occur in the future. This group of
accounts is represented by bank services contracts and software acquisition. Amortization is calculated
under the straight line method at the rates stated in Notes to the Financial Statements number 10; and
Annually, Banrisul reviews intangible assets for impairment losses. When identified, losses are charged to income
of the period. During the year ended December 31, 2014, the Bank did not found any indication that certain assets
could be above the permanent impairment and therefore was not recognized any provision for impairment loss of
these assets.
Foreign-currency denominated assets and liabilities
The balances of assets and liabilities of foreign branches, as well as any other foreign-currency denominated assets
and liabilities, were translated based on the exchange rate on the closing date of the financial statements.
Deposits, Open Market Operations, Borrowings and Financial and Development Fund
These are stated at the amounts of obligations and take into consideration the charges accrued up to the financial
statements date, recognized on pro rata basis.
As set forth in Law no 12,069/04 and Law no 12,585/06 from the State Government of Rio Grande do Sul, up to
85% of the balance of the amounts deposited in the courts with us by third parties are made available to the State
Government and the outstanding balance is help with us for establishment of a reserve. The balances deposited
and transferred are controlled in a memorandum account and the portion withheld is recorded in Other Liabilities,
as described in Note 23. Expenses with charges on the outstanding balance are recorded in Borrowings,
Assignments and Onlendings Expenses.
Contingent Assets and Liabilities and Legal Obligations, Tax and Social Security
Contingent assets, contingent liabilities, and legal obligations are recognized, measured and disclosed in
accordance with the criteria set forth by Resolution no. 3823/09 and Technical Pronouncement CPC 25, issued by
the Brazilian FASB (CPC). They are recorded based on the legal counsel's opinion, using models and criteria which
permit obtaining the most reasonable measurement, despite the uncertainty about their period and the final
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outcome amount. The criteria used according to the nature of the contingency are as follows:
Contingent Assets - they are not recognized in the financial statements, except when there is evidence of
certain realization, and to which no further appeal can be made.
Contingent Liabilities - they are recognized in the financial statements when the risk of losing a lawsuit or
administrative claim is probable, based on the opinion of management and of legal advisors, with a
probable outflow of funds for the settlement of liabilities and when the amounts involved are measurable
reliably, as follows:
(i)
Reserve for Labor Contingencies - they are recognized upon court notification of judicial discussion involving
Banrisul, the risk of loss of which is deemed as probable. Amounts are determined according to
disbursement estimates by Management, timely revised based on information received from the legal
counsels, adjusted based on the amount of the related escrow deposits, when escrow deposits are required.
These refer to lawsuits filed by, mainly, unions and former employees claiming labor rights, in particular the
payment of overtime and other labor rights.
Out of referred provision, the amount of R$75 million (2013 - R$103 million) is deposited in escrow accounts.
Additionally, the amount of R$29 million (2013 - R$27 million) was requested as procedural resources.
There are labor contingencies that are deemed as possible losses, amounting to R$753 million (2013 – R$497
million), that according to the nature of these processes refers mainly to claims of overtime, reintegration and
wage parity. According to the accounting practices was not recorded provision for contingencies.
(ii)
Provisions for Civil Contingencies - they are recognized upon court notices, and monthly adjusted based on
the amount of compensation sought, on the evidence presented, and on the legal counsel's evaluation which considers previous court decisions, factual support, evidence produced in the records and legal
decisions that might be rendered for the lawsuit, for the risk of loss on the lawsuit.
Lawsuits for damages refer to compensation for property damage and/or pain and suffering, referring to consumer
relations, in particular, matters relating to credit cards, consumer credit, checking accounts, banking collection and
loans.
Of the previously mentioned allowance, it is deposited in escrow accounts the amount of R$92 million (2013 –
R$72 million).
The amount of R$1,384 million (2013 – R$1,634 million) refers to lawsuits filed by third parties against Banrisul,
whose natures mainly relate to savings accounts, moral damages, repetition of the overpayment and real estate
financing. The company’s legal counsel classifies them as possible losses, therefore, they were not accrued.
(iii)
Provisions for Tax and Social Security Contingencies - Basically refer to obligations relating to taxes which
validity or constitutionality is subject to challenge through administrative or legal proceeding, which
probability of loss is, or in previous stages of the proceedings was, considered as probable, and established
based on the full amount of the claim. For claims with the respective escrow deposits, the amounts involved
are not restated, except upon the issuance of a calculation order due to the favorable outcome of the claim.
Contingent liabilities assessed as possible losses are disclosed, and those not reliably measured, as well as remote
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losses, are not provisioned and/or disclosed.
The main tax claim refers to Income Tax and Social Contribution on the deduction of expense arising from the
payment of actuarial deficit with Fundação Banrisul de Seguridade Social (Banrisul Social Security Foundation),
challenged by the Internal Revenue Service for the period between 1998 and 2005, in the amount of R$462 million
(2013 – R$443 million). Banrisul, through its legal counsels, has been discussing this issue in court and recorded
provision for contingencies in the estimated loss amount.
Tax debt notification on INSS related to social security collection of amounts that do not have salary and educationsalary nature classified as probable by our legal counsel and with provision amounting to R$7 million (2013 – R$16
million).
There are also tax contingencies which, according to their nature, are deemed as possible loss, totaling R$97 million
(2013 – R$81 million). According to the accounting practices, no provision for contingencies has been recorded.
Legal, Tax and Social Security Responsibilities - Are recorded as payable regardless of the evaluation about
the probability of loss.
Other Current and Noncurrent Assets and Liabilities
These are stated at realizable or settlement values, including earnings and charges incurred to the balance sheet
date, calculated on a daily "pro rata" basis, and, where applicable, the effect of adjustments to bring the asset cost
to realizable or fair value. Amounts receivable and payable within twelve months are classified as current assets
and liabilities, respectively.
Income and social contribution taxes
Social contribution tax (CSLL) is calculated at a rate of 15% (9% for non-financial companies) and corporate income
tax (IRPJ) is calculated at 15% (plus a 10% surtax pursuant to legislation) on taxable profit for the period, adjusted
for permanent differences. Deferred income and social contribution taxes were calculated based on the rates in
force on balance sheet date for the temporary differences and recorded under Other Receivables, with offsetting
entry in with the income statement for the period. The attainment of these tax credits will occur simultaneously
when the attainment of the temporary differences and of the related provisions recorded accordingly.
Post-Employment Long-Term Benefit To Employees Obligations
Retirement Obligations - Banrisul sponsors the FBSS - Fundação Banrisul de Seguridade Social (Banrisul Social
Security Foundation) and Cabergs – Caixa de Assistência dos Empregados do Banco do Estado do Rio Grande do
Sul (Employee Assistance Fund of the Bank of the State of Rio Grande do Sul) which, respectively, ensure the
supplementary retirement and health insurance benefits to its employees.
(i) Pension Plans - Banrisul is the sponsor of plans of the types "defined benefit" and "variable contribution". A
defined benefit plan is different from a defined contribution plan. In general, defined benefit plans provide a
value of pension benefit that an employee will receive upon retirement, usually dependent on one or more
factors such as age, length of service and salary.
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The liability recognized in the balance sheet with regard to defined benefit plans pension is the present value of
the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent actuaries using the method of the projected credit unit. The
present value of the defined benefit obligation. The value is determined by discounting the estimated future
cash outflows using rates consistent with market yields interest, which are denominated in the currency in which
the benefits will be paid and that have maturities close to those of the respective obligation of pension plan.
The actuarial evaluation is prepared based on assumptions and interest rates, inflation projections, benefits
increase, life expectancy, effect of any limitation on the portion of the employer in the cost of future benefits,
contributions from employees or third parties that reduce the ultimate cost of those benefits to the entity, etc.
The actuarial evaluation and its assumptions and projections are updated yearly, at the end of each fiscal year.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognized directly in equity as other comprehensive income when they occur.
The cost of benefits granted by defined benefit plans is established separately for each plan, through the
Projected Credit Unit Method. The past service costs, when they occur, are immediately recognized in revenues.
The variable contribution plans cover benefits with defined contribution characteristics, which are the normal
retirement, early retirement and funeral assistance. In this case, Banrisul has no further payment obligations
once the contributions have been paid. The contributions are recognized as employee benefit expense when
owed. Contributions made in advance are recognized as an asset to the extent in which cash refund or a
reduction in future payments is available. In addition, there are benefits with defined benefit characteristics
which are retirement for disability, proportionate benefit, sickness allowance, annual bonus, minimum benefit
and survivorship.
(ii) Health Plan – These are benefits provided by Cabergs – Caixa de Assistência dos Empregados do Banco do
Estado do Rio Grande do Sul (Employee Assistance Fund of the Bank of the State of Rio Grande do Sul) that offer
health care benefits in general and whose funding is established through an agreement of accession.
Banrisul also offers the benefit of post-retirement health care to their employees. The expected costs of these
benefits are accrued over the period of employment using the same accounting methodology used for the
defined benefit pension plans. Actuarial gains and losses arising from adjustments based on experience and
changes in actuarial assumptions are charged or credited to equity, in other comprehensive income. These
obligations are valued annually by independent qualified actuaries.
The plan assets are not available to Banrisul’s creditors and cannot be directly paid to Banrisul. The fair value is
based on information about market price and, in the case of quoted securities, in the market quotes. The value
of any defined benefit asset recognized is restricted to the sum of any past cost of service not yet recognized
and at present value of any economic benefit available as reduction in future employer contributions to the
plan.
(iii) Retirement Bonus - employees who retire are granted a retirement bonus, proportional to the monthly salary
of the employee, effective at the time of retirement.
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Additionally, the results of the actuarial valuation can generate an asset to be recognized. This asset is recorded
only when the Institution:
(1) controls a resource, which is the ability to use the surplus to generate future benefits;
(2) that control is a result of past events (contributions paid by the institution and service rendered by the
employee), and
(3) future economic benefits are available to the institution in the form of reductions in future contributions
or a cash refund, either directly to the institution or indirectly to compensate for the failure of another
plan post-employment benefit (obeying the law).
Commitments to these three types of post-employment benefits are assessed and reviewed annually by
independent qualified actuaries
Cash and cash equivalents
For purposes of the statements of cash flows (as defined in Resolution - CMN 3604/08), cash and cash equivalents
correspond to the balances of cash and readily convertible, highly liquid interbank investments, or with original
maturity not exceeding ninety days and with insignificant risk of change in fair value.
Earnings per Share
The Institution performs the calculations of earnings per lot of one thousand shares, basic and diluted - using the
weighted average number of common shares and preferred total outstanding during the period corresponding to
the result.
The disclosure of earnings per share is conducted in accordance with the criteria defined in CVM Resolution no.
636/2010.
10.6 Internal controls adopted to ensure the preparation of accurate financial statements:
Banrisul Compliance Program, aligned with the objectives set by the Internal Control Policy, aims to ensure that its
activities are conducted in an environment of adequate control with current legislation and in accordance with
good banking practices.
Compliance procedures adopted include policies and rules that are widely publicized, contributing to the
dissemination of the culture of control, tracking, analysis of efficacy and effectiveness of internal controls in
different processes of the Bank, helping to mitigate legal and image risks and strengthening the institution's control
environment.
Activities aimed to the controls together with the various units of the Bank, such as monitoring of external laws
and compliance with regulatory agencies, seek to ensure that business strategies are in compliance with the
required items and regulations issued by the supervisory entities, obeying respective deadlines.
The Bank, based on its institutional policy to prevent money laundering, adopts specific processes and systems for
identification and monitoring of their customers' activities, keeping dedicated staff devoted to the implementation
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of activities focused on money laundering prevention, in reviewing the legislation and in the development of
training programs for the entire workforce. All of these actions are intended to ensure that activities are conducted
in an environment suited to the prevention of risks related to the offense of money laundering, laws and
regulations in effect.
Aligned to Money Laundering prevention policy was established the "Know Your Customer and Their Activities"
policy, which sets rules and procedures to assist in identifying and better knowledge on customer profiles and the
origin of their funding, thus aiming to reduce risks for the institution to be used to legitimize funds from illicit
activities. Likewise, the policy "Know Your Employee" establishes, without distinction, to all levels of the
organization, responsibility for compliance and guidelines enforcement against corruption and money laundering,
as well as the duty to promote ethical values, thus preserving the image and reputation of the organization. Finally,
the Corruption Prevention Policy establishes a series of procedures, controls, and preventive measures to avoid
Banrisul of acting under the illegal practices as corruption and misconduct laid down in the Penal Code, Law No.
8666/93, in Law No. 12846/13 and other regulations from of the Brazilian anti-corruption system for its employees
and third parties acting on their behalf or interest.
In addition to internal controls related to transactions transiting within its operating systems, Banrisul has an
automated accounting integrity system that checks the events related to the Bank business. The Company
maintains regular routines of balances conciliation among its operating systems and accounting. This internal audit
routine foresees analytical auxiliary overlaps between the funding and credit operating systems and the accounting
systems, and periodical checking for the other income and expenditure accounts. In the Accounting area,
generating balance sheets, statements and consolidated financial statements are conducted through a specific tool
(financial application ), a systemic procedure that allows the generation of structured views, IFRS included, as
required by regulatory agencies, with traceability trails and decomposition from synthetic accounts for analytical
ones, favoring the return of required information in the external audit checks.
a. Efficiency level of such controls, indicating potential errors and measures adopted to correct such errors
The internal controls adopted by us, in our management’s opinion, ensure the preparation of accurate financial
statements and are in line with similar practices adopted in the Brazilian banking market.
b. Weaknesses and recommendations on internal controls included in the independent auditor’s report
In the last year, there was no exceptions or emphasis in the Independent Auditor's Report on the Financial
Statements.
Banrisul has a system of internal controls that ensures the preparation of financial statements in conformity with
accounting practices applicable to financial institutions, free of material inconsistencies or errors. External Auditors
have not found misstatements in the individual and consolidated financial statements for the last year.
The deficiencies or recommendations for the improvement of the Institution’s internal control system, presented
by the Independent Auditors, are systematically checked. These appointments go through a treatment process,
becoming object of analysis and opinion of the respective managers of the related activities and are accompanied
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by Internal Audit and the Controller of the Bank. Periodically, the objects of recommendations, both notes and the
solutions identified by managers, if applicable, are brought before the Internal Controls Management Committee
and the Audit Committee, which are in charge of monitoring and deliberating the implementation of control
improvements, when relevant.
10.7 Management comments if the Company has already conducted a public offering
a. How the proceeds deriving from the offering have been allocated
In early 2012, Banrisul debuted in the international market of subordinated debt securities, obtaining funding of
USD500 million with a 10-year term and coupon of 7.375% pa. (effective yield of 7.50% pa.). At the end of 2012,
by reopening the issue of the subordinated debt held in January of the same year, the Bank accessed for the second
time the international capital market, obtaining the amount of USD275 million with a term of 10 years, interest
coupon of 7.375% pa. and an effective yield of 5.95% pa. Both transactions were considered by the Central Bank
of Brazil as eligible to Tier II capital, in the category of subordinated debt according to Resolution no. 3444, of 2007.
The funds captured represent the possibility of extending credit and strengthening Tier II capital, promoting the
sustainable growth of the business.
b. If there were any material discrepancies between the actual allocation of proceeds and the allocation
proposals disclosed in the offering memoranda of the respective distribution
There were no differences between the application of resources and implementation of the proposals described
in the prospectus.
c. In the event of discrepancies, the reasons for such discrepancies
There were no discrepancies between the actual allocation of proceeds and the allocation proposals described in
the offering memoranda.
10.8 Management’s description of the material items not disclosed in the Company’s financial statements
a. The assets and liabilities held by the Company, whether directly or indirectly, which are not recorded in the
Company’s balance sheet (off-balance sheet items)
Escrow deposits
On April 22, 2004, State Law no 12,069, amended by Law no 12,585, of August 29, 2006, was enacted, whereby
we are required to make available, if requested, to the State Government of Rio Grande do Sul up to 85% of the
escrow deposits made by third parties with us (except for those which litigant is the Municipal Government). The
unavailable portion should be allocated to a reserve fund established to guarantee the refund of such escrow
deposits.
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As of December 31, 2014, the amount of escrow deposits made by third parties at Banrisul, adjusted through the
balance sheet date by the TR (managed prime rate) variation plus interest of 6.17% p.a., totaled R$9,687 million
(2013 - R$8,324 million), of which, R$7,708 million (2013 – R$7,058 million) was transferred to the State upon its
request and written off from the respective balance sheet accounts. The remaining balance, which makes up the
aforementioned fund managed by Banrisul, is recorded in Other Payables - Financial and Development Funds.
Sureties and Guarantees
Sureties and guarantees granted to customers amount to R$1,249 million (2013 - R$1,043 million), and are subject
to financial charges and backed by the beneficiaries' sureties.
Custody of Securities and Co-obligation in Import, Export and Credit Assignment
Banrisul is liable for the custody of 662,961 thousand securities of its clients (2013 – 479,411 thousand).
Banrisul has import and confirmed export credits, totaling R$70 million (2013 - R$56 million), and coobligation in
credit assignment amounting to R$10 million (2013 – R$12 million).
Third-party Asset Management
Banrisul manages various Funds and Portfolios, which have the following net assets:
R$Million
Investment Funds (1)
2014
2013
2012
7,987
5,624
5,307
Investment Funds in Investment Fund Quotas
173
129
103
Equity Funds
57
78
89
Individual Retirement Funds Program
18
18
19
Fund to Guarantee the Liquidity of Rio Grande do Sul State Debt Securities
360
2,128
66
Managed Portfolios
632
1,557
1,618
Investment Clubs
Total
1
1
2
9,229
9,536
7,204
(1) The investments
fund portfolios consist primarily of fixed-rate and variable rate securities. and their carrying amounts already reflect markto-market adjustments at the balance sheet date.
Banrisul is trustee of several Funds and Managed Portfolios, which are composed mainly of fixed income and
variable income securities.
In the quality of trustee, it was responsible for conducting, as counterparty, repo operations of Funds that had
government bonds as collateral. These operations presented an average daily volume of R$60 million in the period,
which represented 32.3% of the average equity of the Funds. Those operations were carried out under market
conditions as it relates to term and rates charged.
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Banrisul S.A. Corretora de Valores Mobiliários e Câmbio, as counterparty, was liable for the buy and sell operations
of Equity Funds managed by Banrisul in the period. These operations represent a volume of R$61 million or 86.3%
over average shareholder’s equity of the Equity Fund in the same period and were conducted at the market price
through the electronic trading session of BM&FBovespa. There operations incurred a brokerage fee of R$55
thousand.
Pool Group Management
Banrisul Consórcios is responsible for the administration of 173 pool groups, such as real estate, motorcycles,
vehicles and tractors. The Company had a customer base of 39,929 active customers at the end of 2014, and a
total of R$1.6 billion in outstanding letters of credit. About 7,300 customers were granted the right to make
purchases, with the amount equivalent to R$249 million being released for the purchase of consumer goods. Net
income reached R$26 million at the end of 2014, 45.7% above 2013.
Property Lease
Banrisul leases properties mainly destined to install new branches, based on standard contract, which may be
cancelled at will and includes the right to renew and adjustment clauses. The total amount of minimum future
payments of contracted but not cancelable lease operations totaled R$271 million on December 31, 2014, of which
R$67 million with one-year maturity, R$171 million with one to five-year maturity and R$33 million with maturity
above five years. Lease payments recognized as expenses in the fiscal year totaled R$77 million.
b. Other items not recorded in the financial statements
There are no other material items not recorded in the Company’s financial statements.
10.9 Management comments with respect to each of the items not recorded in the financial statements
indicated in item 10.8
A. Items such as modify or could come to change revenues, costs, operating income, financial costs or other
items of financial statements of the issuer
B. Operation nature and purpose
C. Nature and amount of assumed obligations and generated rights in issuer favor in operation consequence
Escrow Deposits
We have no further comment.
Guarantees
Guarantees and sureties are offered to organizations assessed as low risk by the Institution and there was no
record in 2012, 2013 or 2014 that Banrisul had had to honor such sureties and guarantees. The provision of
guarantees and sureties generates revenue for the Institution arising from fees.
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Custody of Securities and Co-obligation in Import, Export and Credit Assignment
The amount reported in item 10.8 as custody services offered to customers, refers to checks deposited, foreign
exchange values in custody and values in custody at the Central Bank of Brazil, among others.
Given the default of debentures that compose the portfolios of two funds managed by the Bank in January 2015,
the probable loss was fully provisioned, with negative impacts of 0.57% in and 0.65% in the unit price of the
mentioned funds.
Pool Group Management
Property Lease
10.10 Main components of the Company’s business plan:
a. Investments
The investments in technological modernization and expansion, reform and revitalization of the branch network
focused, in the year of 2014, in the expansion of storage capacity and data processing, the deployment of security
solutions in the internet banking channel, as well as payment mechanisms that support the acquiring area, beyond
the scope of expanding the network of service availability as a differential. In 2014, R$325 million was invested in
technological modernization, enhancements, renovations and branch expansions.
Expansion / Technological Modernization
Banrisul invested R$264 million in technological modernization in 2014, aimed at facilitating the strategy for
operational efficiency, whether in communications infrastructure and data processing, continuous improvement
of the security mechanisms and access performance in the different service channels.
IT infrastructure initiatives implemented in 2014, focused mostly on the implementation of mechanisms to ensure
the availability of Banrisul communication, data storage capacity and increased processing capacity. As to the
functionality of corporative systems, the main actions involved improvements in the features for the transference
of current accounts between branches and the addition of new services for the Mobile Banking solution. As to
security, it is worth highlighting the use of state-of-art security features in the internet banking channel, shielding
the customer’s equipment against unauthorized transactions, the adoption of security parameters to ensure the
protection of communication channels, infrastructure and systems, and payment solutions that support the
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acquiring area and the issue of credit cards.
Renovations and Expansions
In 2014, Banrisul invested R$61 million in network renovations and expansions, including the renovation of sites
and new facilities, with wider and modern structures within accessibility standards. Banrisul network comprises
98.5% of Rio Grande do Sul’s population, besides rendering services in several other Brazil’s states, especially in
Santa Catarina and Paraná.
In 2014, Banrisul customer service network totaled 1,328 service points, distributed in 528 branches, of which 484
located within the state of Rio Grande do Sul, 29 in the state of Santa Catarina, 13 in other Brazilian states, two
abroad, 206 banking service points and 594 ATMs. This year, 11 branches were opened and six service points
transformed into full branches. Banrisul innovated in relation to customer service, by being available to service
INSS beneficiaries in periods differently from ordinary working hours. The project to expand branches network
foresees the remodeling of seven sites in 2015, in addition to relocating initiatives and the use of different funding
sources for specific activities during the year.
To fund such investments, the Bank uses own resources obtained from statutory and expansion reserves. The
Bank's bylaws sets forth the reserves for technological modernization, which have been constituted in full, based
on 25% of net income. It also constituted an expansion reserve, which is reported on the capital budget
accompanying the financial statements sent to regulatory agencies, as disciplines the Corporate Law.
b. Acquisitions already disclosed of plants. equipment. patents or other assets which could materially affect the
Company’s production capacity
Acquired in March 2012, the loans promoting network called Bem Promotora de Vendas Serviços S.A., specializing
in the distribution of payroll loans, is present in in the most populous regions of Brazil and represents an
opportunity for the Bank to expand loan origination outside the State of Rio Grande do Sul. The insertion into other
markets composes the Bank’s strategy for growth and geographic deconcentration.
c. New products and services. indicating: (i) description of surveys in progress already disclosed; (ii) total
amounts disbursed by the Company in connection with surveys for development of new products or services;
(iii) projects in progress already disclosed; and (iv) total amounts disbursed by the Company in connection with
the development of new products or services
Regarding to the research and development of new products or the improving of the existing ones, Banrisul has
been conducting various projects to incorporate technological innovations. In 2014, approximately R$12 million
was invested in 148 IT projects, taking into account only the manpower involved. Among the topics that Banrisul
has been investing there are: credit, insurance, portability, exchange, network and processing cards, rewards
program, mobile and internet banking, technologies involving banking security question, data center efficiency and
communication with customers, among others.
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10.11 Comments on other factors materially affecting the operating performance and which have not been
identified or commented in the other items of this sections
There are no other factors materially affecting the Company’s operating performance and which have not been
identified or commented in the other items of this Section 10.
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NIRE 43300001083
COMPENSATION OF DIRECTORS, EXECUTIVE OFFICERS
AND FISCAL COUNCIL’S MEMBERS
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147
PROPOSED COMPENSATION OF THE MEMBERS OF THE BOARD OF DIRECTORS, BOARD OF EXECUTIVE
OFFICERS, FISCAL COUNCIL AND AUDIT COMMITTEE, TO BE SUBMITTED TO THE SHAREHOLDERS OF THE BANK
OF THE STATE OF RIO GRANDE DO SUL SA, THE ANNUAL GENERAL MEETING TO BE HELD IN APRIL 2015, IN
ACCORDANCE WITH ARTICLE 12 OF CVM INSTRUCTION 481, OF DECEMBER 17, 2009
It has been proposed the total amount of up to R$11,000,000.00 (eleven million Reais) for the compensation of
the Management, including the remuneration of the members of the Board of Directors, of the Board of Executive
Officers, Audit Committee and of the Fiscal Council, and the Representation Allowance of the Executive Officers
and the respective legal costs, for the year of 2015, commencing on the ASM/ESM of 2015 until the next one of
2016.
The Executive Officers are entitled to receiving thirteen compensations per year and are eligible to Profit Sharing,
the latter calculated in accordance with the criteria defined by the collective bank employees bargaining
agreement calculated based on the remuneration.
It will be established the following remuneration:
 Management
Chief Executive Officer: salary of R$18,698.93 and representation allowance of R$18,698.93
Vice-President: salary of R$17,764.01 and representation allowance of R$17,764.01
Executive Officer: salary of R$16,828.31 and representation allowance of R$16,828.31
Board of Directors: monthly gross salary of R$8,243.92, per member
Fiscal Council: monthly gross salary of R$6,595.13, per active member
Audit Committee: monthly gross salary of R$13,190.29, per active member
 Subsidiaries’ Management
Chief Executive Officer: salary of R$7,749.18 and representation allowance of R$7,749.18
Executive Officer: salary of R$6,974.27 and representation allowance of R$6,974.27
Board of Directors: monthly gross salary of R$2,893.03, per member
Fiscal Council: monthly gross salary of R$2,169.77, per active member
The compensation of the Executive Officers shall not exceed the ceiling set in Article 1 of the Rio Grande do Sul’s
State Law no. 14,676 of January 15, 2015, which limits the same monthly allowance in cash to the Justices of the
Court of the State of Rio Grande do Sul, equivalent to R$30,471.11 (thirty thousand, four hundred seventy nine
Reais and eleven cents) in April 2014. The compensation and the profit sharing cannot exceed the total
aforementioned amount, although they are not added one another, nor with the remuneration of the month in
which payment is carried out, nor with the advance of holiday pay, nor with the 13 th salary, the additional holiday
pay and profit sharing.
Executive Officers who are Banrisul’s employees or who have being transferred from other gubernatorial bureaus
may opt to continue receiving their original pay plus the amount corresponding to the representation allowance.
The Controlling Shareholder may opt, during the year, to change the compensation of Management, in compliance
with the laws and/or relevant state ordinances, even retroactively, pending the approval of the next Annual
Shareholders’ Meeting, if any, for such changes.
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148
In 2014 the annual ceiling amount of R$6,500,000.00 (six million five hundred thousand reais) was set for the
compensation of the Management, which includes the payment of Board of Directors, Fiscal Council, Executive
Board and the Representation Allowance for the Executive Officers, as well as the respective legal costs, for the year
2014.
However, the total actually distributed amount as compensation of the Management, including salary,
representation allowance and the respective legal costs, amounted to R$3,652,773.34 for the year 2014. The
difference between the amount set in the ASM/ESM 2014 and the actually paid to the management is related to the
fact that of the nine members of the Board of Directors, only five of them have received their pays in full from July
2012 on, as two are part of the Executive Board and two have declined receiving any pay whatsoever.
The Directors that are also members of the Executive Board or hold positions in the State Administration do not
receive compensation because of the limit set forth by State Law No. 13,670, dated January 14, 2011. In turn,
members of the Executive Board and the Fiscal Council Banrisul who occupy positions at the State or the federal
Administration may choose not to receive any compensation to comply with the limit set forth by State Law No.
13,670, of January 14, 2011.
Differences between the amounts of the proposal for the year 2015 and the previous proposal for the year 2014 and
those included in Item 13 of the Company's Reference Form arise from:
I.
mismatch between the periods covered by the compensation proposals to the Administration and the
period covered by the Reference Form (fiscal year);
II.
the limit to the compensation of Banrisul's Management for the year 2014, that shall not exceed the ceiling
set out in Article 2 of State Law No. 13,670, of January 14, 2011, limiting the individual compensation paid
to the Justices of the State Court of Rio Grande do Sul as of April, 2014, amounting to R$26,589.68 (twentysix thousand, five hundred eighty-nine reais and sixty-eight cents), although vacation pay and any additional
thereof related, 13th salary and profit sharing cannot be added to comply with the limit;
III.
the limit to the compensation of Banrisul's Management for the year 2015, that shall not exceed the ceiling
set out in Article 2 of State Law No. 14,676, of January 15, 2015, limiting the individual compensation paid
to the Justices of the State Court of Rio Grande do Sul as of January 15, 2015, which limits the compensation
of the Justices of the State Court of Rio Grande do Sul to R$30,471.11 (thirty thousand, four hundred and
seventy-one reais and eleven cents), although vacation pay and any additional thereof related, 13 th salary
and profit sharing cannot be added to comply with the limit;
IV.
the accounting for social charges;
V.
the accounting for the new plans of Banrisul Foundation for Social Security, which went through an actuarial
reassessment, according to the accounting rules set forth by CPC 33 (R1) and the Deliberation No. 695/12
from CVM.
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NIRE 43300001083
REFERENCE FORM
ITEM 13. MANAGEMENT COMPENSATION
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150
13.1 Description of the compensation policy or practice with respect to the Board of Directors, Statutory and
Non-statutory Board of Executive Officers, Fiscal Council, Statutory Committees and Audit, Risk, Financial and
Compensation Committees, discussing the following aspects:
a. Compensation policy or practice goals
We are mixed-capital Company, controlled by the State Government of Rio Grande do Sul. Consequently, in
addition to the general provisions of Law 6.404/76 and the regulations issued by the Brazilian Securities and
Exchange Commission applicable to publicly-held companies, our management compensation policy is subject to
public law rules, including regulatory laws and instructions issued by the State Government of Rio Grande do Sul.
The compensation of the members of our Board of Executive Officers is set forth by our shareholders meeting,
subject to corporate governance standards and the rules stipulated by our controlling shareholder under
Resolution no. 04/2005, dated November 25, 2009, issued by the Corporate Governance Committee for StateControlled Entities of the State of Rio Grande do Sul, created by Decree no. 42,273/07 of the State Government of
Rio Grande, which assigned to such committee the responsibility for determining the compensation of managers
of state-controlled companies. Moreover, from 2011 on, the management compensation should observe the limit
set by State Law no. 13,670 of January 14, 2011.
The features of the compensation of our Boards are described below:
Board of Directors
b. Breakdown of the compensation, including:
i. Description
of
compensation
components and the purpose of each
component
ii. Proportion of each component in
overall compensation
iii. Calculation and adjustment method of
each compensation component
iv. Reasons to
explain compensation
composition
v. the existence of members unpaid by
the issuer and the reason for this fact
The compensation of the members of our Board of
Directors is determined by resolution passed by our
shareholders meeting. As our standard practice, our
managers are not paid for two offices held at the same
time; accordingly, members of the Board of Directors who
are also members of the Board of Officers or the Audit
Committee receive only the compensation for the latter,
and not the compensation stipulated for members of the
Board of Directors.
From 2011 to 2014, the Vice-Chairman and one of the
members of our Board of Directors also held the offices of
Chief Executive Officer and Vice-President, respectively.
Salary: fixed monthly salary.
Salary: 100%
Not applicable. Remuneration without bound indicator.
The compensation of our management is composed of fixed
portion established in accordance with legal requirements
set forth by applicable legislation and other rules aimed at
mixed-capital companies in the State of Rio Grande do Sul.
The Board of Directors members who are part of the
Executive Board of Banrisul and/or positions in the State
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151
Administration do not receive compensation because of the
wage ceiling set by State Law No. 13,670, of January 14,
2011.
c. Key performance indicators taken into
consideration on the determination of each
compensation component
d. How the compensation is structured to
reflect the growth
of the performance
indicators
e. How the compensation policy or practice is
aligned with the Company’s short, medium and
long-term interests
f. Existence of compensation paid by subsidiary,
controlled or direct or indirect controlling
companies
g. Existence of any compensation or benefit
subject to the occurrence of any given
corporate event, such as transfer of the
Company’s shareholding control
Not applicable.
Not applicable.
Not applicable. The compensation of our management is
composed of fixed portion only.
The overall compensation payable to our management is
paid by us.
Nihil.
13.1.ii – Worksheet stating the participation held by each element of compensation described in item 13.1.b.i in
the total compensation of the Board of Directors, as mentioned in item 13.1.
BOARD
2014
%
2013
%
2012
386,417.24
100
424,194.80
100
444,405.00
Board of Directors
Compensation
The compensation of the members of our Board of Executive
Offices is determined by our shareholders meeting, observing
the principles of corporate governance and the rules
established by the controlling shareholder.
Executive Officers who are originally Banrisul’s employees or
public servants from the State of Rio Grande do Sul may opt
to continue receiving their original pay.
Until 2010, to Banrisul’s employees in the function of
Executive Officers, compensation includes profit sharing,
calculated in accordance with the criteria defined by the
collective bank employees bargaining agreement, which is
calculated as a fixed percentage upon the salary of the
beneficiary.
From 2011 on, as stated on Article 19 of the Company's
Bylaws, the payment of profit sharing may be extended to all
members of the Board of Executive Officers.
Additionally, our Executive Officers are entitled to receive a
fixed Representation Allowance, which amount is set by our
Board of Directors, fixed at 50% of the compensation payable
with respect to the respective position.
April 30, 2015
152
i.
Description
of
compensation
component
ii. Proportion of each component in overall
compensation
iii. Calculation and adjustment method of
iv.
Reasons
to
compensation composition
explain
v.
the existence of members
unpaid by the issuer and the reason for this fact
d. How the compensation is structured to reflect
the growth of the performance indicators
long-term interests
companies
subject to the occurrence of any given corporate
event, such as transfer of the Company’s
Salary: fixed monthly salary.
Representation Allowance.
Profit Sharing, calculated in accordance with the criteria
defined by the collective bank employees bargaining
agreement, which is calculated upon the salary of the
beneficiary.
Salary: 50% of the fixed monthly compensation;
Representation Allowance: 50% of the fixed monthly
compensation;
Profit Sharing: variable, calculated in accordance with the
criteria defined by the collective bank employees bargaining
agreement, which is calculated upon the salary of the
beneficiary.
The Board of executive Officers members who are part of the
Executive Board of Banrisul and/or positions in the State
Administration do not receive compensation because of the
wage ceiling set by State Law No. 13,670, of January 14, 2011.
Not applicable.
Not applicable.
Not applicable. The compensation of the Executive Officers is
composed by salary (fixed part), by the representation
allowance (also in a fixed percentage) and the profit sharing
(PLR), calculated in accordance with the criteria defined by
the collective bank employees bargaining agreement, which
is calculated upon the salary of the beneficiary.
The overall compensation payable to our management is paid
by us.
Nihil.
the total compensation of the Board of Executive Officers, as mentioned in item 13.1.
BOARD
2014
%
2013
%
2012
%
Salary
Representation Allowance
Profit Sharing
Other Variable Compensation
1,072,419.88
1,072,419.88
67,990.83
-
48.5%
48.5%
3.1%
1,016,779.52
1,016,779.52
108,244.26
47.5%
47.5%
5.0%
997,120.37
997,120.37
89,678.67
48%
48%
4%
TOTAL
2,212,830.58
100%
2,141,803.30
100%
2,083,919.40
100%
April 30, 2015
153
Fiscal Council
Our Fiscal Counsel is a permanent by composed by renowned professionals, with the powers and duties
determined in law. Compensation of the members of our Fiscal Council is annually set by our shareholders in the
Annual Shareholders’ Meeting, subject to the provisions of paragraph 3 of Article 162 of Law 6.404/76.
i.
Description
of
compensation
component
ii.
Proportion of each component in
iii.
Calculation and adjustment method of
iv.
Reasons to explain compensation
composition
v.
the existence of members unpaid by
long-term interests
companies
There is a permanent Fiscal Council, composed of renowned
professionals, with the powers and duties conferred by law,
and their remuneration is established by the shareholders
meeting, subject to paragraph 3 of Article 162 of the
Companies Act by actions.
Compensation: fixed monthly salary.
Salary: 100% of the fixed monthly compensation.
Not applicable. All members receive compensation.
Or
The Fiscal Council members who are part of the State and
Federal Administration may not receive compensation
because of the wage ceiling set by State Law No. 13,670, of
January 14, 2011.
There is no variable compensation, only the fixed monthly
salary, without bound indicator.
Not applicable.
The monthly compensation paid to members of the Fiscal
Council was set by the shareholders meeting which elected
them, and shall not be lower, for each member in office, than
ten percent the average compensation assigned to each
officer, net of benefits, representation and profit sharing.
by us.
Nihil.
April 30, 2015
154
the total compensation of the Fiscal Council, as mentioned in item 13.1.
BOARD
2014
%
2013
%
357,471.95
100
339,355.81
100
2012
%
Fiscal Council
Compensation
289,888.80
100
Audit Committee
i.
Description
of
compensation
component
ii.
Proportion of each component in
iii.
Calculation and adjustment method of
iv.
Reasons to explain compensation
composition
v.
The existence of members unpaid by
long-term interests
companies
We have a permanent Audit Committee, consisting of three
members, appointed by our Board of Directors, subject to the
requirements of the Central Bank of Brazil. The monthly
compensation payable to the members of our Audit
Committee is also set by our Board of Directors.
Compensation: fixed monthly salary.
Salary: 100% of the fixed monthly compensation.
Not applicable. All members receive compensation.
Or
The members of the Audit Committee who are part of the
State and Federal Administration may not receive
compensation because of the wage ceiling set by State Law
No. 13,670, of January 14, 2011
There is no variable compensation, only the fixed monthly
salary, without bound indicator.
Not applicable.
The monthly compensation paid to members of the Audit
Committee was set considering the fixed amount paid to the
members of the Board of Executive Officers as salary and the
Company’s short, medium and long term interests, being
compatible with the (local) market remuneration, stimulating
Committee members towards the improvement of practices
and aligning themselves the objectives of the Bank.
by us.
Nihil.
April 30, 2015
155
the total compensation of the Audit Committee, as mentioned in item 13.1.
BOARD
2014
%
2013
%
2012
%
428,966.70
100
411,060.15
100
393,811.20
100
Audit Committee
Compensation
13.2 Compensation recorded in net income for the last two fiscal years and estimated compensation for the
current year payable to the board of directors, statutory board of executive officers and fiscal council:
Total expected compensation for the year (2015) – Yearly figures
Members
Bonus
Planned compensation
Planned representation allowance
Planned amount in the compensation plan if the goals are achieved
Profit Sharing
Minimum amount planned in compensation plan
Maximum amount planned in compensation plan
Total compensation
Social charges
Total compensation + social charges
Board of
Directors
8.58
n/a
386,417.24
n/a
386,417.24
n/a
n/a
n/a
n/a
386,417.24
Board of
Executive
Officers
8.42
n/a
1,072,419.88
1,072,419.88
n/a
2,144,839.76
67,990.83
n/a
n/a
n/a
67,990.83
2,212,830.59
Fiscal
Council
5.00
n/a
357,471.95
n/a
357,471.95
n/a
n/a
n/a
n/a
357,471.95
Total
22.00
1,816,309.07
1,072,419.88
2,888,728.95
67,990.83
2,956,719.78
Total expected compensation for the year ended 12/31/2014 – Yearly figures
Members
Bonus
Amount effectively recognized for the fiscal year
Profit Sharing
Total compensation
Social charges
Board of
Directors
8.58
n/a
386,417.24
n/a
386,417.24
n/a
n/a
n/a
n/a
386,417.24
386,417.24
Board of
Executive
Officers
8.42
n/a
1,072,419.88
1,072,419.88
n/a
2,144,839.76
67,990.83
n/a
n/a
n/a
67,990.83
2,212,830.59
696,053.57
2,908,884.16
Fiscal
Council
5.00
n/a
357,471.95
n/a
357,471.95
n/a
n/a
n/a
n/a
357,471.95
357,471.95
Total
22.00
1,816,309.07
1,072,419.88
2,888,728.95
67,990.83
2,956,719.78
696,053.57
3,652,773.35
Members
Bonus
Board of
Directors
9.00
n/a
Board of
Executive
Officers
9.00
n/a
Fiscal
Council
5.00
n/a
Total
23.00
-
April 30, 2015
156
Profit Sharing
Total compensation
Social charges
424,194.80
n/a
424,194.80
n/a
n/a
n/a
n/a
424,194.80
424,194.80
1,016,779.52
1,016,779.52
n/a
2,033,559.04
108,244.26
n/a
n/a
n/a
108,244.26
2,141,803.30
635,000.00
2,776,803.30
339,355.70
n/a
339,355.70
n/a
n/a
n/a
n/a
339,355.70
339,355.70
1,780,330.02
1,016,779.52
2,797,109.54
108,244.26
2,905,353.80
635,000.00
3,540,353.80
Members
Bonus
Profit Sharing
Total compensation
Social charges
Board of
Directors
9.00
n/a
444,405.00
n/a
444,405.00
n/a
n/a
n/a
n/a
444,405.00
444,405.00
Board of
Executive
Officers
9.00
n/a
997,120.37
997,120.37
n/a
1,994,240.74
89,678.67
n/a
n/a
n/a
89,678.67
2,083,919.41
669,000.00
2,752,919.41
Fiscal
Council
4.42
n/a
289,888.80
n/a
289,888.80
n/a
n/a
n/a
n/a
289,888.80
289,888.80
Total
22.42
1,731,414.17
997,120.37
2,728,534.54
89,678.67
2,818,213.21
669,000.00
3,487,213.21
Year 2012 – Regarding this value, we inform that: a) the comparison of Table 13.2 of this Reference Form with Note 25 to the Financial
Statements 4Q2012 presents a difference in the total amount of remuneration of Administrators relating to the value of the remuneration of
the Audit Committee (R$393,811.20) included in such note; b) of the nine members of the Board of Directors since July 2012, only five are fully
paid, considering that two are also members of the Executive Board and two others declined any pay. The number of members of each body
corresponds to the annual average number of members of each body on a monthly basis, to two decimals.
Year 2013 – Regarding this value, we inform that: a) the comparison of Table 13.2 of this Reference Form with Note 25 to the Financial
Statements 4T2013 there shows a difference in the total amount of remuneration of Administrators relating to the value of the remuneration
of the Audit Committee (R $ 411,060.15) included in that footnote b) of the nine members of the Board of Directors since July 2012, only five
are fully paid, considering that two are also members of the Executive Board and two others declined any pay. The number of members of each
body corresponds to the annual average number of members of each body on a monthly basis, to two decimals.
Year 2014 - Regarding this value, we inform that: a) comparing the table above of this Form with Note 25 to the 4Q14 Financial Statements
there is a difference in the total amount of management remuneration relating to the remuneration of the Audit Committee (R$428,966.70)
included in that note; b) of the nine members of the Board of Directors since July 2012, only five are fully paid, considering that two are also
members of the Executive Board and two others declined any pay. In June 2014 is the resignation of Director Olívio de Oliveira Dutra, without
replacement. c) In August 2014 is the resignation of the Officer Ivandre Jesus Medeiros. The number of members of each body corresponds to
the annual average number of members of each body on a monthly basis, to two decimal places.
Year 2015 - Amounts related to payment forecast for this year. In relation to its value, we reported that of the nine members of the Board of
Directors only seven are fully paid, given that two are members of the Executive Board. The number of members of each body corresponds to
the annual average number of members of each body calculated monthly, with two decimals.
13.3 With respect to the variable compensation for the 3 last fiscal years and the estimated compensation for
the current fiscal year:
April 30, 2015
157
Not applicable. Until 2010, the compensation payable to our management was composed of only one fixed portion
and representation allowance in fixed percentage rate, as described in item 13(a). From 2011 on, the bonuses paid
to Officers, also according to item 13(a), concerning the participation in profit sharing, are subject to the terms of
the collective bargaining applicable to all employees of the Bank.
Board of Directors (*)
Executive Board
Fiscal Council(*)
Total
Profit sharing
value accrued
in 2014
67.990,83
67.990,83
Profit sharing
value accrued
in 2013
108.244,26
108.244,26
Profit sharing
value accrued
in 2012
89.678,67
89.678,67
(*) 100% of the compensation of the Members of the Fiscal Council and Audit Committee is composed by fixed compensation.
13.4 With respect to the stock-based compensation plan of the Board of Directors and Statutory Board of
Executive Officers in force in the last fiscal year and the estimated stock-based compensation for the current
fiscal year:
a.
General terms and conditions
b.
Main goals of the plan
c.
Method of the plan’s contribution to achieve such goals
d.
How the plan is aligned with the Company’s compensation policy
e.
How the plan aligns the management’s and Company’s interests in the short, medium and long term
f.
Maximum number of shares
g.
Maximum number of stock options to be granted
h.
Conditions for purchase of shares
i.
Criteria for definition of the purchase or exercise price
j.
Criteria for definition of the exercise period
k.
Settlement method
l.
Restrictions on the transfer of share
m.
Criteria and events which, upon verification, will give rise to the interruption, modification or
cancellation of the plan
n.
Effects from the member’s withdrawal from the Company’s bodies on his/her rights set forth in the
stock-based compensation plan
Not applicable. We do not have any stock-based compensation plan.
April 30, 2015
158
13.5 Number of shares or quotas, and other securities convertible into shares or quotas, issued by the Company,
its direct or indirect controlling shareholders, controlled companies or companies under common control,
directly or indirectly held, in Brazil or abroad, by members of the board of directors, statutory board of executive
officers or fiscal council, separated by body, on the closing date of the last fiscal year.
Shareholder
Board of Directors
Executive Board
Fiscal Council
Total
ON
5
0
100
205,043,395
%
PNA
%
PNB
0.00000244%
0
0.00000000%
100
0.00000000%
4
0.00011333%
0
0.00004877%
90
0.00254990%
100
100.00%
3,529,551
100.00%
200,401,531
%
0.00004990%
0.00000000%
0.00004990%
Total
105
4
290
%
0.00002543%
0.00000122%
0.00007091%
100.00%
408,974,477
100.00%
13.6 With respect to the stock-based compensation recorded in the net income for the 3 last fiscal years and the
estimated stock-based compensation for the current fiscal year payable to the board of directors and the
statutory board of executive officers
13.7 With respect to outstanding options granted to the Board of Directors and the Statutory Board of Executive
Officers at the end of the last fiscal year
13.8 With respect to the options exercised and shares delivered relating to the stock-based compensation
payable to the Board of Directors and the Statutory Board of Executive Officers in the 3 last fiscal years
13.9 Summary description of the information necessary to understand the data disclosed in items “13.6” to
“13.8”, such as the explanation on the pricing method of stock and option amounts
13.10 Private pension plans in force offered to the members of the board of directors and the statutory board
of executive officers
Our Executive Officers who are members of our staff receive their regular career pension benefits.
April 30, 2015
159
(R$p.a., except number of members)
Board of
Executive
Officers
Board of Directors
Number of members
Name of the plans: Settled Plan CNPB no. 2013.0021- 65 (Defined Benefit)
FBPrevII - CNPB no. 2013.0022-38 (Variable Contribution)
Number of managers eligible to retirement
Conditions for early retirement:
Settled Plan: 55 years old + social security benefit granting, according to Article 27
of the regulations of the Plan
FBPrevII: 55 years old according to Article 40 of the regulation of the Plan
Adjusted amount of contributions accumulated in the private pension plan up to
the closing of the last fiscal year, less contributions made directly by
Management.
Total accumulated amount of contributions made during the last fiscal year, less
contributions made directly by Management
Total
0
4
4
0
0
0
0
0
0
2,959,523.90
2,959,523.90
1,584,751.44
1,584,751.44
13.11 Average compensation payable to the members of the Board of Directors, Board of Executive Officers and
Fiscal Council in the Two Last Fiscal Years
Board of Directors
Fiscal Council
(R$p.a., except for number of members)
Number of members
9
9
4,42
323,595.20
82,044.00
65,635.20
Smallest individual compensation
10,105.45
41,022.00
5,469.60
Average individual compensation
231,546.60
81,993.54
65,585.75
Highest individual compensation
2012 Note:
a) Messrs. Tulio Luiz Zamin, Guilherme Cassel and Ivandre de Jesus Medeiros, the Chief Executive Officer and members of the
Board of Executive Officers of Banrisul S.A., respectively, relocated from other bodies of the State Public Administration decided
to continue receiving their position-related compensation, plus representation allowance corresponding to the positions
performed according to Article 2 of the State Law 13,670 of January 14, 2011, restricted to the same monthly subsidy, in cash,
of Judges of the Court of Justice of the State of Rio Grande do Sul, corresponding to R$24,117.62. According to this law, the
Officer with the smallest compensation in the period was Mr. Guilherme Cassel. Average compensation of the statutory board
of executive officers – the average calculated amount is the ratio of R$2,083,919.40/9.00.
b) The number of Fiscal Council members increased from four to five as of August 2012, as defined at the Extraordinary and
Annual Shareholders’ Meeting of April 2012. The smallest compensation was received by the Board member, Mr. Rafael
Rodrigues Alves da Rocha, elected at the Extraordinary and Annual Shareholders’ Meeting of April, who attended one Board of
Directors’ Meeting and was replaced in the following meetings by his alternate Board member, Mr. Eduardo Ludovico da Silva.
Average compensation of the Fiscal Council – the average calculated amount is the ratio of R$289,889.00/4.42.
c) Out of nine Board members, only five received directors’ compensation, since two are members of the statutory board of
executive officers and the other two declined their compensation; the Board member with the highest individual compensation
in the period received 12 months of directors’ compensation, while the Board member with the smallest individual
compensation received directors' compensation corresponding to six months; the average calculated amount is the ratio of
R$444,405.00/5.42.
April 30, 2015
160
Board of Director
Fiscal Council
Number of members
9
299,058.56
722.65
237,978.14
9
84,838.96
84,838.96
84,838.96
5
67,871.14
33,137.02
67,871.14
2013 Note:
a) Messrs. Tulio Luiz Zamin, Flavio Luiz Lammel and Ivandre de Jesus Medeiros, the Chief Executive Officer and members of the
to continue receiving their position-related compensation, plus representation allowances corresponding to the positions
performed according to Article 2 of the State Law 13,670 of January 14, 2011, restricted to the same monthly subsidy, in cash,
of Judges of the Court of Justice of the State of Rio Grande do Sul, corresponding to R$24,117.62. According to this law, the
Officer with the smallest compensation in the period was Mr. Tulio Luiz Zamin. Average compensation of the statutory board
b) The Fiscal Council was comprised of five members in 2013. The member with the smallest compensation in the period was
Mr. Rubens Lahude, replaced by Mr. Bruno Luciano Radtke as per election at the Extraordinary and Annual Shareholders’
Meetings of April 2013. Average compensation of the Fiscal Council - The average calculated amount is the ratio of
R$339,355.81/5.00.
executive officers and the other two declined their compensation, whereas one declined of their compensation in 2011 and
since July 2012 the Chairman of the Board of Directors also declined from their pay. The average calculated amount is the ratio
of R$424,194.80/5.00.
Board of Director
Number of members
8.58
354,276.27
8,610.43
245,870.01
8.42
89,368.03
28,945.12
77,283.45
Fiscal Council
5
71,494.39
28,945.10
71,494.39
2014 Note:
a) Messrs. Tulio Luiz Zamin, Flavio Luiz Lammel and Ivandre de Jesus Medeiros, the Chief Executive Officer and members of the
to continue receiving their position-related compensation, plus representation allowances corresponding to the positions
performed according to Article 2 of the State Law 13,670 of January 14, 2011, restricted to the same monthly payment, in cash,
to Judges of the Court of Justice of the State of Rio Grande do Sul, corresponding to R$26,589.68. According to said law, the
Officer with the smallest compensation in the period was Mr. Tulio Luiz Zamin. Average compensation of the statutory board
b) Messrs. Bruno Luciano Radtke and João Victor Oliveira Rodrigues were the Fiscal Council members with the smallest
compensation in the period, amounting to R$28,945.10, as they were replaced by the shareholder’s meeting of April, 2014.
Average compensation of the Fiscal Council - The average calculated amount is the ratio of R$357,471.95/5.00.
executive officers and the Chairman and another member of the Board of Directors also declined their compensation. In August,
2014, the Board of Directors member Olívio de Oliveira Dutra resigned to run for the 2014 elections. The average calculated
amount is the ratio of R$386,417.24/5.00.
d) The average calculated amount for the Audit Committee is the ratio of R$428,966.70/3.00.
April 30, 2015
161
Board of Director
Fiscal Council
Number of members
9
411,359.99
411,359.99
411,359.99
9
98,927.04
98,927.04
98,927.04
5
79,141.56
79,141.56
79,141.56
2015 Note:
Amounts related to payment forecast for this year.
a) Average pay of the executive board - The average calculated amount is the ratio of R$3,702,239.87/9.00
b) Average pay of the fiscal council - The average calculated amount is the ratio of R$395,707.80/5.00
c) Regarding this values we inform that out of nine Board of Directors members, only seven receive compensation, since two
are members of the statutory board of executive officers and the Chairman of the Board of Directors and another member
declined their compensation. Average compensation of the Board of Directors - The average calculated amount is the ratio of
R$890,343.36/9.00.
d) The average calculated amount for the Audit Committee is the ratio of R$474,850.44/3.00.
13.12 Contractual arrangements, insurance policies or any other instruments which provide for management
compensation or indemnification methods in the event of removal/resignation from position or retirement and
which are the financial impacts on the Company
Not applicable. We do not have any contractual arrangements, insurance policies or any other instruments which
provide for management compensation or indemnification methods in the event of removal/resignation from
position or retirement.
13.13 With respect to the two last fiscal years, indicate the percentage rate of the overall compensation relating
to each management body recognized in the Company’s net income with respect to the members of the board
of directors, statutory board of executive officers or fiscal council who are parties related to the direct or indirect
controlling shareholders, as defined in the accounting policies discussing the matter
Board
Board of Directors
Fiscal Council
2014
2013
2012
23.13%
0.00%
28.10%
20.00%
0.00%
40.00%
23.13%
0.00%
28.10%
The amounts indicated in the table above refer to the compensation recognized in our financial statements paid
during 2012, 2013 and 2014. Mr. Odir Alberto Pinheiro Tonollier, Chairman of the Board of Directors, held the
position of State Secretary in the public administration of the state of Rio Grande do Sul, while Messrs. Andre Luiz
B. de Paiva Filho, João Victor Oliveira Domingues and Marcelo Tuerlinckx Danéris held the positions of Treasury
Deputy Secretary of the state of Rio Grande do Sul, Executive Coordinator of Higher Consulting of the state of Rio
Grande do Sul and Executive Secretary of the Economic and Social Development Council of Rio Grande do Sul. No
member of our Board of Executive Officers holds a similar position or is qualified as a related party to our
April 30, 2015
162
13.14 With respect to the two last fiscal years, indicate the amounts recognized in the Company’s net income as
compensation payable to the members of the board of directors, statutory board of executive officers or fiscal
council, divided by body, for any reason other than the position held by such members, such as consulting or
advisory commissions and services provided.
There was no payment of compensation to the members of the board of directors, statutory board of executive
officers or fiscal council for any reason, other than the position held.
13.15 With respect to the 3 last fiscal years, indicate the amounts recognized in the net income of the Company’s
direct or indirect controlling shareholders, subsidiaries or companies under common control, as compensation
payable to the members of the Company’s board of directors, statutory board of executive officers or fiscal
council, divided by body, describing the reason why such amounts were paid to such individuals.
Not applicable. We are controlled by the State Government of Rio Grande do Sul.
13.16 Other information deemed as material by the Company
a) All members of the Board of Directors, Board of Executive Officers and Fiscal Council are covered by the directors
and officers liability insurance (D&O), and the maximum indemnity threshold is R$10.0 million.
b) We inform that the compensation of the Audit Committee for current fiscal year is up to R$474,850.44, amount
of which composes the estimated amount of R$11,000,000.00, as approved in the minute nº 5 of March 20, 2015,
which includes the maximum limit to be distributed among the Management: Statutory Board of Executive
Officers, Board of Directors, Fiscal Council. This amount was established as ceiling, not necessarily reflecting the
effective payment of this item in the year.
April 30, 2015
163

BANCO DO ESTADO DO RIO GRANDE DO SUL S/A

Transcription

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