Annual Report 2014 - Safra Net Banking

Transcription

Annual Report
2014
“If you choose to sail upon the seas
of banking, build your bank as
you would your boat, with the strength
to sail safely through any storm.”
Jacob Safra, founder
Safra Group
BRAZIL
Banco Safra S.A.
Banco J. Safra S.A.
Safra Leasing S.A. Arrendamento Mercantil
J. Safra Asset Management Ltda.
J. Safra Corretora de Valores e Câmbio Ltda.
Safra Seguros Gerais S.A.
Safra Vida e Previdência S.A.
Banco Safra (Cayman Islands) Limited
Banco Safra S.A., Luxembourg Branch
2 | Banco Safra 2014, Annual Report
Key Financial Indicators
(all amounts in millions of reais unless otherwise stated)
Net Income
Equity
8,734
1,547
1,254
1,281
7,247
1,359
5,614
7,559
6,016
1,048
Accum. until Accum. until Accum. until Accum. until Accum. until
Dec/10
Dec/11
Dec/12
Dec/13
Dec/14
Total Assets
Dec/10
Dec/11
Dec/12
Dec/13
Dec/14
39.5%
40.4%
Efficiency ratio
131,647
142,898
(-) Operating Efficiency
50.0%
45.5%
111,452
85,657
36.8%
73,313
(+) Operating Efficiency
Dec/10
Dec/11
Dec/12
Expanded Credit Portfolio
Dec/13
Dec/14
Accum. until Accum. until Accum. until Accum. until Accum. until
Dec/10
Dec/11
Dec/12
Dec/13
Total funds
(free, raised and managed assets)
(1)
76,474
174,648
154,901
67,639
141,396
58,380 58,123
125,709
44,211
Dec/10
Dec/14
100,683
Dec/11
Dec/12
Dec/13
Dec/14
Dec/10
Dec/11
Dec/12
Dec/13
Dec/14
(1) Includes endorsements, sureties and corporate bonds.
Banco Safra 2014, Annual Report | 3
Contents
Global Economy | 10 – 21
Message from the CEO | 6 – 9
Brazilian Economy | 22 – 33
Curitiba | PR | Botanic Garden
Contents
Financial Statements | 42 – 105
Banco Safra | 34 – 41
Locations Around Brazil | 106 – 109
Message from
the CEO
Rio de Janeiro | RJ | Lapa Arches
Message from the CEO
In 2014 the global economic recovery proceeded gradually but
unevenly, and more slowly than expected. The pace of economic
growth was faster in the United States, with the eurozone growing
moderately and the Japanese economy contracting. In emergingmarket economies the focus remained on the intensity of China’s
slowdown, while other important EM economies continued to
display modest growth.
In Brazil, economic activity accompanied the dynamics of the main
EM economies, with gross domestic product (GDP) stalling during
the year and growth reaching a mere 0.1%.
It is important to note that the government continued to auction
infrastructure project concessions to the private sector, especially
in the toll road segment, and that the inflow of foreign direct
investment remained vigorous, above all in the automotive industry.
The Brazilian banking system continued to display low short-term
liquidity risk and high solvency. The stock of credit grew more slowly,
while interest rates on loans to individuals and companies rose, but
delinquencies and loan loss coverage remained relatively stable.
In this context Banco Safra, faithful as always to its traditional
conservative business management strategy, achieved a solid and
consistent financial performance in 2014. Net income in the year
amounted to R$1.5 billion, for growth of 13.9% compared with
2013, and corresponding to an annual return on equity of 19.0%.
Equity rose 15.5% during the year, reaching R$8.7 billion in
December 2014. The expanded credit portfolio, including sureties,
guarantees and other credit risk instruments, grew 13.1% to
R$76.5 billion. The traditional liquidity maintained by Banco Safra
corresponded to 2.7 times the bank’s equity at year-end.
Delinquencies, measured as the proportion of loans more than
90 days past due, accounted for only 0.7% of the portfolio at end2014, Banco Safra’s best rate in the past ten years and also the
best among the major banks that operate in Brazil. Nevertheless,
the bank increased in 2014 its loan loss reserves, provisioning
above the minimum required by the Central Bank. The balance of
loan loss provision totaled R$2.1 billion at end-2014 for a coverage
ratio of 481.4%, one of the highest in the banking industry.
It is also worth mentioning that Standard & Poor’s reaffirmed
Banco Safra’s investment grade and the ratings even after the
revision made in 2014 in the Brazil’s sovereign rating and the
ratings of several Brazilian banks. In fact, Safra is rated as high as
any financial institution in Brazil. Fitch Ratings and Moody’s also
continued to award Safra an investment grade rating.
Another point that must be stressed is that the institution
continues to conduct its business in accordance with high
standards of socio-environmental responsibility, adopting best
practice in terms of sustainability and supporting projects devoted
to fostering social wellbeing, heath, culture and education.
Brazil faces major challenges in 2015. The new economic team
has launched plans to resume production of a public-sector primary
surplus, including a timetable of much-needed fiscal adjustments
to balance the budget and stabilize government gross debt in
proportion to GDP.
Another priority is reducing the share of state-owned banks in the
credit market, slowing the growth of their assets and cutting the
subsidies they receive from the National Treasury.
These adjustments come at a price in the short run but will be
fundamental to a recovery of economic growth, which is expected
to pick up by the end of 2015, when signs of improving activity
and falling inflation will point to a new cycle of development with
sustainable economic growth and rising participation by the
financial system and capital markets.
With this outlook in mind, we see no risk of a downgrade for Brazil
in the near term by the main international rating agencies, noting
that S&P has recently reaffirmed its investment grade rating for
the sovereign.
Rossano Maranhão
Chief Executive Officer
Global
Economy
São Paulo | SP | Luz Railway Station
Global Economy
Economic Environment in 2014 and Outlook for 2015
Although world economic growth was not as vigorous as in the years
leading up to the 2008-09 financial crisis, 2014 saw another
step toward consolidation of the recovery. The International
Monetary Fund (IMF) estimates that global GDP grew 3.3% last year,
repeating 2013 growth. The pattern seen during most of 2013
persisted throughout 2014, with the developed countries growing
moderately while the performance of the emerging economies was
more modest.
Figure 1: Global manufacturing PMI (points)
56.0
Developed countries
55.0
Emerging countries
54.0
53.0
52.0
51.0
50.0
49.0
48.0
47.0
46.0
2012
Source: Bloomberg; Banco J. Safra
2013
2014
Global Economy
Central banks in the major economies
kept the level of monetary accommodation high. However, whereas the European
Central Bank (ECB) and the Bank of Japan
(BoJ) injected additional monetary stimulus, the US Federal Reserve (Fed) ended
its quantitative easing bond-buying program in the end of 2014.
After a period of slow growth due to
adverse weather early in the year, the US
economy accelerated significantly showing
a considerable improvement in the labor market. The unemployment rate fell
to 5.6%, well below the level seen during
the recession, when it reached 10.0%, and
closer to the pre-crisis low (4.7%). Steadily
rising in employment level and household
wealth in terms of property and stocks
stimulated consumption. Late in the year the
fall in fuel prices increased disposable
income and also helped bolster consumer
spending.
Figure 2: CPI inflation (year over year)
7.0%
USA
6.0%
Eurozone
5.0%
Japan
China
4.0%
3.0%
2.0%
1.0%
0.0%
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-1.0%
Global Economy
Inflation continued to fall in most of the
industrialized countries in 2014, reflecting
the persistently high level of slack in global industry and above all the sharp fall in
international prices of important commodities. Oil prices fell 46% year over year; iron
ore prices fell 48%.
Figure 4: Euro (EUR) and Japanese Yen (JPY)
1.45
EUR/USD (LHS)
USD/JPY (RHS, inverted)
1.40
Crude oil (WTI)
Iron ore
140
90
1.30
100
1.25
110
1.20
120
1.15
2012
130
2013
2014
120
100
80
60
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40
Sharply decelerating inflation expectations and current inflation data, alongside
the still fragile economic recovery in the
eurozone, especially in France and Italy, led
the ECB to continue to implement unconventional monetary policy measures.
Reaffirming its commitment to end
Japan’s deflationary spiral, the BoJ also
raised the level of monetary accommodation after it became clear that the April
sales tax hike had negatively affected
economic activity. Like the euro, the yen
depreciated against the dollar in response
to the introduction of additional stimulus
measures.
80
1.35
Figure 3: Crude oil and iron ore (price in USD)
160
70
In 2015 we expect global growth to improve modestly compared with 2014. The
main central banks will continue to pursue
diverging monetary policies. While the Fed
is likely to begin tightening in mid-year, the
ECB will continue to add more stimulus and
Japan’s monetary policy is unlikely to deviate from its current path, although the BoJ
may opt not to expand its asset-buying program any further.
It is important to note that in the context of monetary policy divergence lower oil
prices will boost consumer spending in the
major economies, since cheaper fuel increases household disposable income.
The US will once again be the top
economic performer in 2015, with growth
projected to reach about 3%, reflecting
the fall in unemployment, rising consumer
confidence and falling oil prices, among
other factors.
Europe should continue to grow moderately, although expansion of the ECB’s balance sheet and more favorable credit conditions present positive risks to this scenario.
Global Economy
Figure 5: Quarterly GDP growth (annualized)
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
The labor market performed well during
the year, unsurprisingly given the continuous improvement in economic activity. The unemployment rate, which ended
2013 on 6.7%, reached 5.6% at end-2014
and net job creation exceeded 200,000
in every month but one, totaling almost
3 million in the year, the best result
since 1999.
Figure 6: Net job creation (million)
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
-6.0
1999
The economic environment in Japan
should be more expansionary, given that
in 2014 it was negatively affected by the
significant sales tax hike introduced in the
second quarter. In China 2015 is set to be
similar to last year in the sense that economic adjustments and reforms will continue to be implemented at the cost of more
moderate growth.
USA
The US economy performed fairly well in
2014, although it got off to a weak start.
GDP contracted 2.1% in 1Q14 compared
with the previous quarter in annualized
terms, owing largely to very cold weather in
most regions of the country, which severely affected household consumption and
above all investment.
The transience of this fall in economic
activity became clear in 2Q14, when GDP
grew 4.6% compared with the previous
quarter thanks to a positive performance
by precisely those sectors that had been
adversely affected by the harsh winter
weather early in the year.
The economy continued to perform robustly in the second half. GDP growth in
3Q14 accelerated to 5.0%, the fastest
pace in 11 years.
In 4Q14 GDP growth slowed to 2.2%,
although the rise in consumer spending
accelerated to 4.2%, the fastest growth
rate since the start of 2006. Household
consumption was bolstered by a 33% fall
in fuel prices, which had the same effect
as a significant tax cut. In the 12 months
of 2014, the US economy grew 2.4%, compared with 2.2% in 2013.
Global Economy
Figure 7: Inflation and wages (year over year)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
PCE deflator
Core PCE
Average hourly
earnings
Employment cost index
the increase in disposable income due to
falling energy prices and the rising level of
employment.
We believe the Fed will begin monetary
tightening in second-half 2015, in light of
the steady pace of economic growth. Even
if inflation remains below target, the fed
funds rate will be raised so that monetary
conditions can be adjusted very gradually
in the coming years, which will also avoid
an excessive increase in the financial system’s leverage.
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Given the prospect of continuing economic growth with strong job creation, the
Fed was able to continue the process of
reducing the volume of bonds purchased
under its quantitative easing program.
Known as tapering, this process had begun
in December 2013. The QE program ended in October 2014, and discussion of the
timing of the first rise in the federal funds
rate began.
Although the economy grew robustly
throughout the year, the absence of inflationary pressures allowed the Fed to signal
that monetary tightening would be gradual
once initiated.
Consumer inflation measured by the
PCE deflator reached 1.7% in the 12
months through May, after which it decelerated, largely owing to the impact of the fall
in fuel prices, ending the year on 0.7%. The
core PCE, which excludes food and energy,
stayed in the range of 1.5% for most of the
year. Thus both measures ended the year
below the 2.0% target.
Earnings growth was also very moderate. Average hourly earnings rose only
1.7% in the year, while the employment
cost index (ECI) rose 2.3%, both in nominal
terms.
In 2015 the US economy is likely to
continue performing well, largely thanks to
Global Economy
Eurozone
After two years of economic contraction,
eurozone GDP resumed positive growth in
2014. The pace of expansion was modest,
reaching only 0.9% in the year, compared
with contractions of 0.7% and 0.4% in
2012 and 2013 respectively.
The top performer among the major eurozone economies was Spain, where GDP
grew 1.4% in 2014 after a series of economic reforms and fiscal adjustment in the
previous year. Germany, which accounts
for about a quarter of eurozone GDP, grew
1.6% in the period.
Meanwhile, France and Italy presented
disappointing results. The former grew only
0.4%, while the latter contracted 0.4%.
countries. In France the unemployment
rate rose from 10.2% in 2013 to 10.3% in
2014. In Italy it rose from 12.5% to 12.7%.
In Germany the unemployment rate
again trended down, falling from 5.1%
at end-2013 to 4.8% in December 2014.
The data also shows that more than
110,000 people ceased to be unemployed
in the period.
Figure 8: Unemployment rate
30.0%
25.0%
Eurozone
Italy
Germany
Spain
France
20.0%
15.0%
10.0%
2014
5.0%
Eurozone
-0.4
0.9
0.0%
Germany
0.2
1.6
France
0.4
0.4
Italy
-1.7
-0.4
Spain
-1.2
1.4
Greece
-4.0
0.7
Portugal
-1.4
0.9
Ireland
0.2
4.8
Ja
Source: Eurostat; Banco J. Safra
Not by chance, the labor market displayed highly negative dynamics in both
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Table 1: GDP growth (%)
Eurozone inflation decelerated gradually during the year. In December the
12-month inflation rate reached -0.2%,
compared with +0.8% a year earlier. This
deceleration largely reflected energy prices,
which fell 6.3% in the year. The core rate,
which excludes energy and food, rose 0.7%
in 2014, the same as in the previous year.
Global Economy
As inflation fell further below the target
(just under 2%), and economic activity in
France and Italy remained weak, the ECB
stepped up monetary easing. In June and
September it cut its main refinancing rate
still further to 0.05%, and at the September
meeting it also decided to start buying asset-backed securities and covered bonds.
Even looser monetary conditions and a
relatively stable political situation contributed to lower interest rates for final borrowers. Although bank spreads remained
high compared with the pre-crisis period, in
2014 the uptrend seen in previous years
went into reverse.
Lending improved during the year, although the rate of growth in corporate loans
remained in negative territory despite lower
interest rates and an increased supply of
credit, while the volume of consumer loans
rose only slightly.
On the fiscal side, the European Commission estimates that the nominal deficit
fell slightly in 2014, reaching 2.6% of GDP
compared with 2.9% in 2013. The sharpest fall is believed to have occurred in
Greece, whose deficit reportedly dropped
from 12.2% in 2013 to 2.5% in 2014 as a
result of the fiscal adjustment implemented continuously for the past several years.
Meanwhile, both France and Italy saw their
deficits increase (Table 2).
Figure 9: Bank spreads (basis points)
400
Small business
350
Home loans
Large corporations
300
250
200
150
100
50
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Global Economy
Table 2: Fiscal result and gross debt (% GDP)
2013
Fiscal result
2014
Gross debt
Fiscal result
Gross debt
Eurozone
-2.9
93.1
-2.6
94.3
Germany
0.1
76.9
0.4
74.2
France
-4.1
92.2
-4.3
95.3
Italy
-2.8
127.9
-3.0
131.9
Spain
-6.8
92.1
-5.6
98.3
Greece
-12.2
174.9
-2.5
176.3
Portugal
-4.9
128.0
-4.6
128.9
Ireland
-5.7
123.3
-4.0
110.8
Source: European Commission; Banco J. Safra
The eurozone’s total public debt is estimated to have risen from 93.1% of GDP in
2013 to 94.3% in 2014. Greece remained
the most indebted country, with a debt-toGDP ratio of more than 175%. Germany’s
fell from 76.9% to 74.2% in the same period. Those of France, Italy and Spain probably continued to rise.
We remain cautiously optimistic about
the outlook. The introduction of bold monetary stimulus measures together with the
prospect of rising demand and growth in
the supply of credit should produce a gradual acceleration of economic growth in the
eurozone in 2015. On the other hand, the
social situation is likely to remain delicate.
The unemployment rate remains very high,
ranging from 30% to 60% among young
people in the peripheral countries.
In this context we believe the ECB will
conclude that monetary policy can be kept
extremely loose for a fairly long period.
Moreover, if the economy or inflation shows
signs of deterioration, the ECB has already
demonstrated its capacity to do even more
to prevent the recovery from derailing
or inflation from falling even further below
target.
Despite the forces that are preventing
the recovery from picking up steam, the eurozone economy is set to grow about 1.5%
in 2015. With politicians more prepared
to accept that fiscal targets should be
met over a longer period than initially
expected, national governments will enjoy more leeway to reduce the intensity of
fiscal tightening, especially in the peripheral countries.
Global Economy
Asia
The Chinese economy decelerated again in
2014 and, for the first time since 1989,
failed to meet the growth target set by the
government at the start of the year.
Figure 11: Annual growth of credit
120%
Total credit
100%
Bank credit
80%
Non-bank credit
60%
Figure 10: Chinese GDP (annual growth)
16%
40%
20%
14%
0%
12%
-20%
10%
-40%
8%
2009
6%
4%
2010
2011
2012
2013
2014
2%
0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
The slowdown was due to continuation
of policies adopted in the previous year,
which basically sought more balanced
growth, with less reliance on investment
and exports and more on household consumption.
Also as a consequence of this new approach to economic policy, the government
endeavored to limit the growth of credit.
Lending fell 3.9% in 2014 compared with
the previous year. Official bank loans grew
10.0%, while off balance sheet lending
(shadow banking) fell 19.7%.
With regard to prices, slower domestic
growth and falling prices of the main commodities imported by China led consumer
price inflation measured by the CPI to decelerate and producer price inflation measured
by the PPI to fall deeper into negative terri-
tory in 2014. The CPI rose 1.5% in the year,
compared with 2.5% in 2013, while the PPI
fell 3.3%, compared with -1.4% in 2013.
Japan’s economy stalled after performing well in 2013, when GDP grew 1.6%.
The weaker performance seen in 2014 was
largely due to the impact of the April sales
tax hike from 5% to 8%.
Figure 12: Japanese GDP (annual growth)
6%
4%
2%
0%
-2%
-4%
-6%
-8%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Global Economy
Private demand rose 9.2% in annualized terms in 1Q14 in anticipation of the
tax hike, but contracted 13.6% in 2Q14,
jeopardizing economic growth in the year.
In response to the economy’s weak dynamism after the tax hike, in October the
BoJ unexpectedly decided to expand its asset-buying program from US$65 billion to
US$80 billion per month. The decision to
inject additional stimulus into the economy was justified not only by decelerating
GDP growth but also by the fall in inflation,
which was due to cheaper oil.
In 2015 the Chinese economy is set to
continue rebalancing and a more moderate
pace of growth is likely, while Japan’s economic performance may be a positive surprise given that the second sales tax hike
scheduled for October has been postponed
and the BoJ has shown determination to
put an end to deflation.
Brazilian
Economy
Brasília | DF | Planalto Palace
Brazilian Economy
Economic growth
The Brazilian economy’s performance fell far short of expectations
in 2014, even compared with the frustrating pace of growth seen
in the previous three years. GDP grew 0.1% in the year, taking the
average for President Dilma Rousseff’s first term to only 2.1%.
On the supply side, industry contracted 1.2%, while services and
agriculture grew 0.7% and 0.4% respectively, offsetting the industrial sector’s negative contribution to GDP in 2014.
Figure 13: GDP (annual growth)
7.6%
8.0%
7.0%
Average 2005-2010
6.0%
Average 2011-2014
6.0%
5.0%
5.0%
4.0%
4.0%
3.9%
3.1%
3.0%
1.8%
2.7%
2.0%
1.0%
0.1%
0.0%
-0.2%
-1.0%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: IBGE; Banco J. Safra
On the demand side, household consumption decelerated
sharply, rising 0.9% compared with 2.9% in 2013, and investment
also fell significantly, contracting 4.4% after expanding 6.1% in
2013. The external sector contributed only 0.1 of a percentage
point to GDP, while government consumption continued to expand
above average, rising 1.3% in 2014.
Brazilian Economy
Table 3: GDP (annual growth, in %)
2008
2009
2010
2011
2012
2013
2014
GDP – Market prices
5.0
-0.2
7.6
3.9
1.8
2.7
0.1
Agriculture
5.5
-3.8
6.8
5.6
-2.5
7.9
0.4
Industry
3.9
-4.8
10.4
4.1
0.1
1.8
-1.2
Mining
4.0
-2.3
14.8
3.3
-0.8
-2.5
8.7
Manufacturing
3.8
-9.4
9.5
2.2
-0.9
2.0
-3.8
Construction
4.8
7.5
13.1
8.3
2.8
4.7
-2.6
Power, gas & water production/distrib.
2.6
0.1
6.5
5.6
0.4
0.4
-2.6
4.8
1.9
5.8
3.4
2.4
2.5
0.7
Commerce
5.4
-2.4
11.1
2.3
1.6
3.5
-1.8
Transportation
7.3
-4.9
11.4
4.3
1.2
5.8
2.0
Information services
9.9
-0.4
5.6
6.5
5.4
6.5
4.6
13.2
8.4
9.4
5.3
2.2
1.7
0.4
Other services
4.6
2.8
3.3
4.7
3.1
0.0
0.1
Real estate activities & rental
1.4
2.9
4.9
1.8
4.4
4.5
3.3
Public administration
0.6
3.4
2.2
1.9
1.0
1.8
0.5
Household consumption
6.4
4.2
6.4
4.8
3.9
2.9
0.9
Government consumption
2.1
2.9
3.9
2.2
3.2
2.2
1.3
12.7
-1.9
17.8
6.6
-0.6
6.1
-4.4
Exports
0.4
-9.2
11.7
4.8
0.5
2.1
-1.1
Imports
17.0
-7.6
33.6
9.4
0.7
7.6
-1.0
Services
Financial intermediation
GFCF
Even greater deterioration could be
seen in public finance in 2014. The primary fiscal result was -0.6% of GDP, the first
deficit since the start of the time series
in 2001. This reflected much faster growth
of expenditure than tax revenue despite
the contribution of extraordinary (non-recurring) receipts. Slow economic growth in
conjunction with tax breaks explains the
disappointing performance of revenue, but
the acceleration of government expenditure was excessive and unsustainable.
The dollar strengthened worldwide
during the year, in response to the antici-
pated normalization of US monetary policy.
In this context the Central Bank of Brazil
(BCB) proceeded with its program of dollar
swaps throughout the period. In 2Q14, disappointment at the news of US economic
deceleration in 1Q14 partly reversed the
dollar’s appreciation and the Brazilian Real
(BRL)-US Dollar (USD) exchange rate returned to the range of 2.20. In the second
half, however, the BRL depreciated again,
first because the dollar appreciated globally in response to expectations that the
Federal Reserve would soon end its asset-buying program, and second because
Brazilian Economy
of the uncertainty fueled by Brazil’s presidential electoral campaign. The BRL/USD
exchange rate ended the year on 2.66,
equivalent to 13.4% devaluation compared
with 2.34 at end-2013.
Inflationary pressures remained high
despite weak economic growth. Indeed,
current inflation exceeded the upper limit
of the target range for much of the year
and ended 2014 on 6.4%, taking the average for the last four years to 6.2%. Administered prices contributed to the inflationary pressures, accelerating as their
realignment began. This is expected to
persist in 2015. Local currency depreciation driven by external factors as well as
electoral uncertainty at home generated
additional pressure in 2014.
The Central Bank tightened monetary
conditions during the entire year in an effort to force inflation back on target (see
next section for more details).
The pursuit of heterodox macroeconomic
policies in recent years, christened a “new
macroeconomic matrix” by the former economic team, did not produce the expected
results in terms of economic growth. On the
contrary, it disorganized public finance, held
down administered prices, which must now
be realigned, and had a highly negative effect on levels of confidence and investment
throughout the economy.
In this context the highlight of the year
was the electoral process, which fueled
expectancy regarding the likelihood of a
change in macroeconomic policy. The decision announced by President Dilma Rousseff
shortly after re-election to appoint a new
economic team committed to reinstating
the “macroeconomic tripod” (fiscal equilibrium, inflation targeting, and a floating
exchange rate) came as a positive surprise for the markets. In our interpretation,
it sent a strong positive signal that the
government is minded to implement the
economic policy adjustments required to
assure a resumption of consistent growth
despite the negative effects of these adjustments in 2015 and 2016.
Inflation and monetary policy
Despite the deceleration of free-market
prices, in the context of weak economic activity the start of the process of realigning
administered prices led inflation to reach
6.41% at end-2014, up compared with
2013 (5.91%) and once again above the
midpoint of the target range (4.5%).
Free-market prices rose 6.7% in 2014,
down compared with the previous year
(7.3%). The main contributions to this improvement came from decelerating prices
of food (7.1%) and manufactured goods
(4.3%), as well as service inflation, which
reached 8.3% in 2014 after remaining
close to 9.0% for three years. This movement reflected weaker economic activity
and a looser labor market.
Administered prices rose 5.3% in 2014,
up sharply compared with the previous year
(1.5%). The acceleration was due to realignment of these prices, especially fuel,
electricity and public transportation, all of
which were frozen in 2013.
Brazilian Economy
Figure 14: Selic rate (end of month, in % p.a.)
Table 4: IPCA (annual change, in %)
Weight
2013
2014
100.0
5.9
6.4
Administered prices
23.8
1.5
5.3
Free-market prices
IPCA
76.2
7.3
6.7
Food at home
16.1
7.6
7.1
Services
36.0
8.7
8.3
Manufactured goods
24.1
5.1
4.3
14.0%
13.0%
12.0%
11.75%
11.0%
10.0%
9.0%
The IGP-M rose 3.7% in 2014, down
compared with 2013 (5.5%). This deceleration reflected sharply lower industrial
price inflation (1.6%, compared with 7.8%
in 2013). In particular, iron ore prices fell
almost 40% in 2014.
Given the persistence of high inflation,
the Central Bank decided to proceed with
the monetary tightening cycle implemented
in April 2013.
However, tightening was not continuous. At the first four meetings of 2014, the
Central Bank’s Monetary Policy Committee
(Copom) raised its benchmark lending rate
(Selic) by 100 basis points, from 10.00%
to 11.00% per annum. At the May meeting, noting that the economy was clearly
decelerating and based on the argument
that part of the lagging effects on inflation
of the rate hikes already implemented had
yet to materialize, the Copom decided to
interrupt the tightening cycle and left the
Selic on hold for two more meetings.
At the October meeting the Copom surprised the markets by raising the Selic rate
again. This time the hike was 25 bps, justified by a deterioration in the balance of
risks to inflation owing to intensification of
relative price adjustments across the economy. The pace of tightening accelerated in
8.0%
7.0%
2008
2009
2010
2011
2012
2013
2014
Source: BCB; Banco J. Safra
December, when the Copom raised the Selic 50 bps to 11.75% p.a.
Key Economic Indicators
Economic Activity
Economic activity decelerated more than expected in 2014, and investment fell sharply.
Repeating a pattern observed since
2008, retail sales growth contrasted markedly with the performance of industrial production. In 2014 the latter was negative,
which only widened the gap.
Industrial production contracted 3.2%
in the year. All categories fell, led by capital
goods, which contracted 9.6%. This strongly negative performance was influenced by
the fall in investment due above all to the
deterioration in business confidence seen
throughout the year. Intermediate goods
fell 2.7%, and consumer durables contracted 9.1%, mainly reflecting decelerating
production of motor vehicles. Non-durables
and semi-durables also contracted, albeit
only slightly (0.3%).
Brazilian Economy
Figure 15: Manufacturing executive confidence index (ICI),
seasonally adjusted – in points
Figure 16: Retail sales and industrial production
(index number, seasonally adjusted – Jan/06 = 100, in points)
200.0
120.0
115.0
180.0
Retail sales
110.0
Industrial production
105.0
160.0
100.0
140.0
95.0
90.0
120.0
85.0
80.0
100.0
75.0
70.0
2008
80.0
2009
2010
2011
2012
2013
2014
Source: FGV; Banco J. Safra
Narrow retail sales (excluding motor
vehicles and building materials) expanded
2.2% in 2014, down compared with the
previous year (4.3%). In fact, this was the
weakest result in 11 years, illustrating the
loss of dynamism in consumer spending,
a reflection of slower average earnings
growth despite the labor market’s persistent tightness, more moderate expansion of credit, and the lowest level of consumer confidence since the 2008 crisis.
Broad retail sales fell 1.7%, decelerating
sharply compared with the 3.6% growth
seen in 2013, mainly owing to the fall in
auto sales.
The unemployment rate averaged 4.8%
in 2014, an all-time low. This was less than
in 2013 (5.4%), reflecting a fall in the workforce rather than a rise in employment,
which in fact trended down during the year.
The number of people in paid work fell
0.1% in 2014 (after rising 0.7% in 2013),
while the workforce fell 0.7% (+0.6% in the
previous year).
2006
2007
2008
2009
2010
2011
2012
2013
In the formal labor market net job creation performed modestly during the entire
year, reaching only 152,700 at end-2014
(down from 730,700 in 2013). This was
the worst result since the current statistical series began in 1999.
On the income side, the low unemployment rate continued to pressure wages,
which rose at a faster rate than before.
The average nominal wage rose 9.0%
in 2014 (8.0% in 2013), while real earnings rose 2.7% (1.9% in 2013). The total
wage bill (understood as the number of
people in paid employment times average
real earnings) grew 2.6% in real terms,
little changed compared with the growth
seen in 2013.
In sum, the labor market remained tight
but probably approached full employment:
hence the decelerating rate of growth
in the number of people in paid employment in 2014.
2014
Brazilian Economy
Figure 17: Unemployment rate
12.0%
11.0%
10.0%
Non seasonally adjusted
9.0%
8.0% in 2013. Earmarked credit, extended mainly by state-owned banks, continued
to expand far more strongly: in 2014 the
stock grew 19.6%, although once again
this was significantly less than in 2013
(24.5%).
Seasonally adjusted
8.0%
Figure 18: Credit operations (growth in 12 months)
7.0%
50.0%
6.0%
5.0%
Unearmarked corporate loans
40.0%
4.0%
2006
Unearmarked loans to individuals
45.0%
Earmarked loans
35.0%
2007
2008
2009
2010
2011
2012
2013
2014
30.0%
25.0%
Credit
The economic slowdown and rising interest rates again dampened lending in
2014. Credit expanded at the lowest rate
in the current statistical series. This deceleration reflected both a reduction in the
willingness of private-sector banks to extend credit and weaker demand for consumer loans owing to the high debt-to-income ratio.
The total stock of credit grew to 58.9%
of GDP at end-2014, from 56.0% a year
earlier, reaching the highest level of the series in proportional terms. As noted above,
however, the rate of growth decelerated,
reaching 11.3% year over year compared
with 14.7% in 2013.
This was the lowest growth in the statistical series, which has displayed a downtrend since mid-2011.
The stock of unearmarked loans to individuals grew 5.5%, down from 7.8% in 2013,
while the stock of unearmarked corporate
loans grew only 3.9%, decelerating from
20.0%
15.0%
10.0%
5.0%
0.0%
2008
2009
2010
2011
2012
2013
2014
The total delinquency rate fell mo
derately in the year. This was due to a
decrease in non-performing loans to indivi
duals, since corporate loan delinquencies
rose a little.
An analysis of unearmarked loans
shows delinquencies falling only 0.2 pp to
6.5%, after a fall of 2.0 pp in 2013. The difference reflected dilution of the forces that
drove the downtrend in 2013, mainly loss
of representativeness of older loans and
improving total portfolio quality, alongside
firmer control of disbursements by banks.
Moreover, moderation of the level of
activity, led loan delinquencies to fall only
marginally in 2014.
Brazilian Economy
Figure 19: Loan delinquencies: Unearmarked loans
to individuals
9.0%
Old methodology
New methodology
8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%
2008
2009
2010
2011
2012
2013
2014
Credit originating in state-owned and private-sector banks continued to expand at
very different rates. While lending by the former rose 16.5% in 2014, the latter lent only
5.8% more, confirming the difference in bank
lending appetite in these two segments and
taking the share of state-owned banks in the
total stock of credit to 53.6%.
Interest rates on unearmarked loans
continued to rise, reflecting the monetary
tightening cycle implemented by the Central
Bank. Rates on loans to individuals reached
43.4% p.a. in December, up from 38.0%
p.a. a year earlier. Rates on corporate loans
reached 23.3%, up from 21.4% previously.
Figure 20: Interest rates: Unearmarked loans (% p.a.)
50.0%
Loans to individuals
Corporate loans
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
2011
2012
2013
2014
External Sector
The current-account deficit reached a record US$90.9 billion in 2014, equivalent
to 4.2% of GDP, compared with US$81.1
billion in 2013 (3.6% of GDP). After remaining practically stable in the range of 2.0%
of GDP in the period 2011-12, the current
account clearly deteriorated since 2013.
The reasons for the rise in the deficit were
the same in 2014 as in the previous year.
First, the merchandise trade balance deteriorated sharply. Until 2013 Brazil typically
posted an annual trade surplus of US$20
billion or more, but the 2013 surplus was
a mere US$2.4 billion and in 2014 the
result was a deficit of US$3.9 billion, the
first negative result since 2000. The 2014
deficit was due mainly to a contraction of
almost US$17 billion in exports, which
were negatively affected by falling prices of
important raw materials such as iron ore.
The second reason for the deterioration
in the current account in 2014 was a rise
of US$3.6 billion in equipment rental payments. International travel expenses totaled US$18.7 billion, practically the same
as in 2013 after several years of strong
growth. The leveling-off of this item, which
was growing until 2013, was due a number
of factors, including local currency depreciation and moderate growth of incomes and
credit. Finally, interest payments and profit
and dividend remittances were practically
unchanged in 2014 compared with the previous year.
Besides the increase in the current-account deficit, the quality of its financing
also deteriorated. In the past few years
until 2012 the flow of foreign direct investment (FDI) was more than sufficient to
cover the current-account deficit, enabling
Brazil to build up its international reserves.
However, because acceleration of the
deficit to the level of US$80 billion was
not accompanied by growth in the flow of
FDI, which remained in the range of US$60
Brazilian Economy
billion, external financing became more
dependent on the flow of foreign portfolio investment (FPI) in stocks and bonds,
which pursues gains deriving from the differential between domestic and overseas
interest rates. In 2014, net FDI amounted
to US$62.5 billion, down slightly compared
with 2013 (US$64 billion) while net FPI
was US$31.7 billion, down considerably
more compared with 2013 (US$37 billion).
In the foreign exchange market, the
BRL/USD exchange rate began 2014 in the
range of 2.40, fell to around 2.20 in April
and stayed there until end-August, when
it embarked on a distinct decline, ending
the year on 2.66. This latter movement reflected both the dollar’s global appreciation
and pressure in the domestic market due
to the election campaign, the Petrobras
corruption scandal and speculation about
the next government.
Pressure on the foreign exchange market led the Central Bank (BCB) to extend its
program of dollar swap auctions until the
end of 2014, offering daily swaps to the
tune of US$200 million and using auctions
of repo lines whenever deemed necessary. Between introduction of the program
in August 2013 and December 31, 2014,
the BCB auctioned dollar swaps totaling
US$111.3 billion. Even so the BRL depreciated 13.4% against the USD in 2014.
Figure 21: FDI and current account (% GDP)
5.0%
In December the BCB announced that
the dollar swap program was being adjusted to continue providing a hedge against
exchange-rate variation as well as injecting
liquidity into the foreign exchange market. It extended the program to March 31,
2015, but reduced the daily volume offered
from US$200 million to US$100 million as
of January. At the end of March 2015 the
program was terminated, although the BCB
promised to roll over the existing stock
of swaps for the time being. It also conti
nued auctioning repo lines as required by
liquidity conditions in the foreign exchange
market.
Figure 22: Exchange rate (BRL/USD, end of month)
2.80
2.60
2.40
2.20
2.00
1.80
1.60
1.40
2008
2009
2010
2011
2012
2013
2014
The foreign exchange balance ended
2014 showing a deficit of US$9.3 billion,
resulting from a net outflow of US$13.4 billion in the financial account and a surplus
of US$4.2 billion in the trade account.
FDI
4.0%
Public Finance
The public-sector primary result in 2014 was
a deficit of R$32.5 billion (-0.63% of GDP),
the worst result in the statistical series beginning in 2001 and far short of the target
stipulated by the latest Report on Primary
Revenue & Expenditure published by the
Planning Ministry in November 2014.
Current-account deficit
3.0%
2.0%
1.0%
0.0%
2008
2009
2010
2011
2012
2013
2014
Brazilian Economy
However, the government persuaded Congress to amend the 2014 Budget Guidelines
Law (LDO) so as to deduct investment in the
Growth Acceleration Program (PAC) and foregone revenue due to tax incentives from the
primary surplus, effectively eliminating the
official primary surplus target and complying
with the applicable legislation even while reporting a primary deficit.
The nominal public-sector deficit (primary surplus plus interest expense) reached
R$343.9 billion in 2014, or 6.7% of GDP, up
3.45 pp compared with 2013. The primary
deficit in 2014 and the nominal increase in
interest expense (to R$311.4 billion, or 6.1%
of GDP, from R$248.9 billion, or 5.1% of GDP
in 2013) contributed to this movement.
Figure 23: Public-sector primary surplus
(trailing 12 months, % GDP)
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
2008
2009
2010
2011
2012
2013
2014
Public-sector net debt (PSND) rose 3.1
pp to 36.7% of GDP in 2014, from 33.6%
in 2013. Current GDP growth lowered the
debt-to-GDP ratio by 1.9 pp, while the local
currency depreciation of 13.4% accounted
for a reduction of another 1.9 pp and net asset recognition for a further 0.1 pp. In the
opposite direction, the primary deficit raised
the ratio by 0.6 pp, appropriated nominal interest added 6.1 pp, and parity adjustment
to the basket of currencies comprised in net
foreign debt raised it by a further 0.2 pp.
General government gross debt (GGGD)
rose 6.6 pp to 63.4% of GDP, from 56.7%
in 2013, reflecting exchange-rate variation,
which contributed 0.5 pp, and the 6.1 pp due
to nominal interest, as already noted.
The fiscal deterioration outlined above
evidences the need for an adjustment to balance the budget in order to restore credibility
and maintain investment grade. This fiscal
adjustment will necessarily have to include
measures that stabilize and then reduce
gross debt by increasing the primary surplus,
reducing subsidies to state-owned banks
and limiting current expenditure, as well as
tax changes to bolster revenue.
Outlook
Brazil began 2015 under the aegis of a
new economic team facing major challenges. The need for fiscal and monetary adjustment in the context of an already weakened economy demands considerable skill
on the part of the economic team and government firmness, since the effects of the
adjustment will be reflected by a higher unemployment rate and lower income growth.
At the same time, these challenges must
be overcome to recoup the government’s
credibility, rebuild business and consumer
confidence, and resume economic growth
on a sustainable basis.
We expect investment to decelerate
in response to the criminal investigations
into corruption involving Petrobras and its
major contractors. Investment by both the
oil giant and government may be negatively
affected as ongoing and future projects are
reviewed and/or deferred.
In addition, the Southeast region faces
a severe water crisis. However, while there
is still a risk of electricity rationing, the
weakness of economic activity will lead to
a fall in demand for power and this reduces
the likelihood of official rationing.
Brazilian Economy
Despite the negative effects on economic growth of the implementation of contractionary economic policies, the fall in
investment by government and Petrobras,
rationalization of power consumption and
the water shortage in the Southeast, we
believe recovering confidence in the economic outlook will have a beneficial effect
on activity from 2016 onward.
In light of the above, our economic scenario for 2015 is based on the following
assumptions:
- A fiscal adjustment involving both
spending cuts and measures to increase
revenue. The latter will include reinstatement of the CIDE fuel tax, the withdrawal of
electricity subsidies, reintroduction of the
IPI excise tax rates reduced in recent years,
a rise in the IOF financial transactions tax
and other taxes on beverages, cosmetics
and imports, and a rise in the PIS/Cofins
tax on financial income. The government is
also seeking to reduce part of the payroll
tax exemption. On the expenditure side,
changes are being made to social benefits
that will result in less spending on these
items. Cuts in running costs are also expected, and above all in capital costs (investment), as well as the withdrawal of
electricity subsidies. In sum, we forecast a
primary surplus equivalent to 1.2% of GDP,
complying with the target set by the new
economic team. However, it is important to
note that the weakness of the economy will
make achievement of this target especially
challenging, and that the adjustment will
have a further contractionary effect on the
economy and pressure inflation, which is
already high.
- The BRL/USD exchange rate is expected to end the year on 3.40, corresponding
to depreciation of almost 32%, in response
to factors such as the strong global dollar, the unfavorable outlook for commodity
rices, the end of the BCB’s program of
p
dollar swaps, and foreign funding difficulties for Petrobras and other oil and gas
companies.
- Inflation is expected to reach 8.8% in
2015, with free-market prices accelerating
compared with 2014 owing to the effects
of significant local currency depreciation,
but also with strong pressure from administered prices due to the withdrawal of
electricity subsidies and reinstatement of
the CIDE and IPI taxes.
- The external sector will be affected
by stronger local currency depreciation
and the economic slowdown, so that the
merchandise trade balance will re-enter
positive territory, with a projected surplus
of R$5 billion in 2015, compared with a
deficit in 2014. Cheaper oil will also help
improve the trade balance, but lower prices
of agricultural and metal commodities will
limit the recovery.
- The adverse effects of the 1.3% GDP
contraction include the need for additional fiscal consolidation and monetary tightening, less investment by Petrobras, less
investment in infrastructure and the water
crisis in the Southeast.
Finally, the political difficulties faced
by the government owing to the outcome
of the elections, which bolstered the opposition, as well as a more independent
Congress and the involvement of coalition
party leaders in the Petrobras corruption
scandal, constitute an additional risk to the
outlook for 2015. The need to implement
unpopular reforms including fiscal consolidation and monetary tightening requires
a strong government to withstand pressure and assure approval of the reforms by
Congress.
Last review on June 16, 2015
Banco Safra
Salvador | BA | Rio Branco Palace
Banco Safra
Banco Safra’s net income totaled R$1,547 million in 2014, for
13.9% growth compared with the previous year (R$1,359 million).
With this result, one of the best in recent years, the institution
maintained its consistent growth record.
Consolidated stockholders’ equity grew 15.5%, reaching R$8.7
billion at end-December 2014, and in conjunction with net income
in the period this resulted in an annual return on average equity of
19.0%, maintaining the institution’s historical performance on this
measure and similar to ROAE for the largest Brazilian banks.
Safra’s consolidated assets totaled R$142.9 billion at end2014, for growth of 8.5% compared with a year earlier.
The BIS capital adequacy ratio was 14.0%, comfortably above
the 11.0% minimum set by the Central Bank of Brazil, with Tier I
capital accounting for 11.5%, of which 10.5% was core capital.
Banco Safra implemented a series of improvements to its Internal Capital Adequacy Assessment Process (ICAAP), a self-assessment process applicable to all banks with total assets in
excess of R$100 billion and begun in 2012. Regulated by the Central Bank, the program evaluates all capital and risk management
processes and procedures at all hierarchical levels, including a
prospective capital plan for at least three years ahead.
Throughout 2014 Brazil proceeded with the major regulatory
change begun in 2013, advancing in the implementation of Basel
III, which is being phased in until 2019. All the relevant effects for
Banco Safra are reflected in the ratios for December 2014.
Banco Safra’s efficiency ratio (the lower the better) ended
2014 on 40.4% (39.5% in 2013), reflecting the continuity of its
traditional management system and the efficacy of its internal
controls.
Although liquidity has been high for several years, it was reinforced in 2014 and at end-December reached R$23.5 billion, 2.7
times the bank’s equity.
The leading international rating agencies reaffirmed Banco Safra’s investment grade rating. In 2014 Standard & Poor’s revised
the Sovereign rating and the ratings of several Brazilian banks. As
a result, Safra’s rating is the best awarded to financial institutions
Banco Safra
in Brazil. Similarly, Fitch Ratings affirmed
the Asset Management rating of J. Safra
Asset Management, as the “Highest Standard”.
Credit and Services
Safra’s expanded loan portfolio, including
guarantees, sureties and other credit risk
instruments, reached R$76.5 billion in
2014, for growth of 13.1% compared with a
year earlier. Guarantees and sureties grew
41.3% year over year, led by an increase in
operations for large corporate clients.
Delinquencies, measured as the proportion of loans more than 90 days past
due, accounted for only 0.7% of the portfolio at end-2014, Banco Safra’s best rate in
the past ten years and also the best among
the major banks that operate in Brazil.
Credit facilities rated AA and A, the lowest risk rating on the scale established by
the Central Bank, accounted for 89.5% of
the portfolio.
Despite the improvement in the non-performing loan ratio and the bank’s traditionally conservative lending strategy, levels of
loan loss provision (LLP) remained high. At
end-December 2014, LLP reached R$2.1
billion, more than the total amount of all
loans over 14 days past due. Additional provision amounted to R$949 million,
compared with R$462 million on December 31, 2013. The loan loss coverage ratio
reached 481.4% (227% on December 31,
2013), one of the highest in the Brazilian
banking system.
Banco Safra operates a network of 109
branches in Brazil, as well as 19 in-company service points (PABs), offering nationwide coverage thanks to their geographic
distribution and location in the main state
capitals, largest cities, and economic development hubs.
It also has two foreign branches, in
Grand Cayman and Luxembourg, guaranteeing the institution’s presence to support the expansion of international trade.
Asset Management
In 2014 Banco Safra continued to prioritize
individuals and institutional investors in order to assure increasing dilution of funding
sources and lengthen the average maturity
of deposits and other funds managed by
the bank.
Total funds (free, raised and managed
assets) grew to R$174.6 billion on December 31, 2014. The funding highlight was the
issuance of financial bills totaling R$15.1
billion, which helped lengthen funding maturities, enhance the efficiency of liquidity
management and assure security for clients. Safra maintained the program begun
in late 2013 to sell subordinated financial
bills to clients of the institution in the local market. These securities are eligible
for inclusion in Tier II capital under Basel
III and the Central Bank of Brazil’s rules.
The balance exceeded R$450 million at
end-2014.
Safra’s investment funds held R$40.6
billion in December 2014, for significant
Banco Safra
growth of 33.3% in the period (R$30.5 billion in December 2013).
In the international bond market the
institution remained active throughout
the year. The highlights were an issue of
US$300 million in perpetual subordinated debt eligible for Tier I capital and two
issues of senior notes in Swiss francs:
CHF350 million in the first quarter, then
the largest issue in Swiss francs by a bank
in Latin America, and a successful issue of
CHF100 million in the fourth quarter.
Another important highlight was the
volu
me of transactions performed in the
local fixed-income market, thanks to which
Banco J. Safra was ranked fourth by ANBIMA in the origination of Real Estate
Receivables Certificates (CRIs). The bank
coordinated, structured and distributed
CRI transactions totaling R$360 million,
as well as almost R$800 million in capital
market transactions. Banco J. Safra also
acted as lead coordinator for CPFL’s first
issue of infrastructure debentures.
In 2014 Safra again ranked among the
leading financial institutions accredited to
act as onlending agents for the Finame
capex financing program run by BNDES, the
national development bank, with R$11.9
billion in aggregate onlending to the productive sector and guarantees extended to
projects financed by BNDES.
Sustainability
Banco Safra adopts sustainability best
practices in managing its business. To this
end it monitors the criteria and indicators
used in the process of extending credit and
is a signatory to Brazil’s Green Protocol
(Protocolo Verde, 1995, a code of conduct
and best practices under which financial
institutions mainstream environmental
concerns into their decision-making processes), among other measures.
Safra also supports projects devoted
to fostering social wellbeing, heath, culture and education. The entities benefited
included UNIBES, the Jewish-Brazilian Social Welfare Association, which helps people who live in downtown São Paulo, and
Fundação Dorina Nowill para Cegos, which
cares for and promotes the social inclusion
of the visually impaired by producing and
distributing free Braille, audio and digital
books.
In the area of healthcare, Safra works
with AACD, which cares for handicapped children, and with GRAAC, a childhood cancer
support group that has an internationally
recognized hospital and pediatric oncology
institute in São Paulo. Other examples are
its support for Hospital Albert Einstein,
Hospital Sírio-Libanês, Hospital do Câncer
in Barretos, Hospital AC Camargo and APAE
SP, which promotes the social integration of
the developmentally disabled and respect
for their rights.
In the area of culture, the institutions
Safra supports by sponsoring exhibitions
or donating works include the São Paulo
Museum of Modern Art (MAM), which has
one of the most important collections in
Latin America, the São Paulo Jewish Cultural Center, and the Soccer Museum (Museu
do Futebol).
In 1982 Safra created a Cultural Project with the aim of helping to disseminate
and recover Brazil’s historical and cultural
traditions by publishing books about the
leading museums, their collections and facilities.
Each year a new book in the Museus
Brasileiros series is published. The series
now comprises 33 volumes with a total
print run of more than 400,000 copies.
The 33rd volume, published in 2014, is
about Museu do Futebol in São Paulo.
São Luiz | MA | Colonial houses
Relatório Anual Banco Safra 2014 | 39
Banco Safra
Teatro J. Safra is committed to offering
a diversified program of quality events that
prioritize the democratization of access
to culture. These include arts courses for
young people from low-income households,
a free acting workshop, and a theater laboratory, among others. A 50% discount on
tickets is granted to residents of the local
community in São Paulo’s Barra Funda
neighborhood in order to facilitate access
to Teatro J. Safra’s programming.
Through FEBRABAN, the Brazilian Federation of Banks, Banco Safra sponsors
some 100 scholarships under the federal government’s Science Without Borders
Program, which strengthens and fosters
the growth and internationalization of Brazilian science and technology, innovation
and competitiveness through international
exchange and mobility.
Human Resources
Banco Safra ended 2014 with 5,824 employees, who among other benefits receive
first-class medical and dental care, educational and daycare allowances, food baskets, and access to a wide array of cultural
and social activities organized by their association.
Pay, taxes and charges, excluding expenses relating to severance and labor
contingencies, totaled R$1.3 billion in
2014. Social benefits disbursed to employees and their dependants amounted
to R$95 million, including in particular investment in employee education, training
and development, which comprised approximately 19,700 participations in face-toface and distance courses for a total of
some 39,800 training hours.
The main programs comprised training
for sales teams, administrative staff and
operations support personnel (back office),
as well as preparatory or refresher courses
for mandatory certification (ANBIMA CPA 10
and CPA 20, ANBIMA’s CGA Fund Manager
Certification Program, and the São Paulo
Stock Exchange’s PQO Operational Qualification Program). The bank also maintained
its investment in support for staff pursuing
undergraduate degrees, MBAs and graduate qualifications, and for the training and
inclusion of persons with special needs
(PSN) in partnership with FEBRABAN.
The Banco Safra Trainee Program was a
major highlight for the second consecutive
year. Launched in 2014, this is the largest
trainee program in the Brazilian financial
services industry. In 2015 some 21,000
recent students and graduates from courses and colleges all over Brazil applied for
traineeships under the program. Twenty-nine were engaged as trainees to work
in a range of strategic areas. They began
attending a 12-month face-to-face training
course in January 2015. The course started with a banking module administered by
Fundação Getulio Vargas (FGV), followed by
meetings and presentations with several
of Safra’s executives, and job rotation in
departments relating to their areas of interest.
Challenges and Opportunities
The expectation for 2015 is that it will be
a year of important adjustments to Brazil’s
macroeconomic fundamentals, in pursuit
of a resumption of economic growth on a
sustainable basis.
Banco Safra
In this context the incentives offered by
state-owned banks are set to be reduced.
This may open up opportunities for penetration of the credit market.
In the short run, uncertainty in the market will result in volatility, fueling demand
from our customers and clients for hedging
transactions and enhancing the visibility
of the institution’s differentiators, such as
agility and the capacity to develop custom
products.
In the medium term, the return of economic growth at a significant pace will increase the demand for credit.
Against this backdrop, at the start of
2015 the institution reviewed its segmen-
tation strategy, proceeding with its continuous pursuit of proximity to customers and
clients, guaranteeing first-rate service, and
offering effective and timely solutions.
Safra Group
Banco Safra is part of an international
network of banks recognized worldwide for
tradition, security, and conservative business management. The Group operates
in 19 countries, and in December 2014
had R$621.1 billion in total funds (free,
raised and managed assets), with equity of
R$40.1 billion.
Financial
Statements
Olinda | PE | Ribeira Market
BANCO SAFRA S.A. AND SAFRA CONSOLIDATED
Balance Sheet
page 44
Statement of Income
page 46
Statement Changes in Equity
Statement of Cash Flows
Statement of Value Added
page 47
page 48
page 50
Notes to the Financial Statements
page 51
Summary of Audit Committee’s Report
Report of Independent Auditors
page 104
page 102
Financial Statements
Balance Sheet
CONSOLIDATED
R$ 000
ASSETS
Notes
12.31.2014
12.31.2013
142,714,604
131,475,660
792,417
701,010
41,361,180
32,854,168
38,223,212
27,120,705
Interbank deposits
2,042,689
3,108,070
Foreign currency investments
1,095,279
2,625,393
CURRENT AND NON-CURRENT ASSETS
Cash
Short-term interbank investments
3(b) and 4
3(c) and 4 and 5
Open market investments
Reserves with the Brazilian Central Bank
Marketable securities and derivative financial instruments
6
3(d) and 7
Own portfolio
Subject to repurchase agreements
Restricted deposits - Brazilian Central Bank
Subject to guarantees
Derivative financial instruments
1,438,387
1,194,944
40,935,315
37,115,826
23,036,224
10,587,765
9,906,165
19,098,764
872,240
663,217
1,569,867
1,560,288
764,700
1,543,346
Guarantors resources for the technical reserves for
insurance and supplementary pension plans
4,786,119
3,662,446
53,475,713
52,748,894
Transactions with credit characteristics
55,461,848
54,333,857
(Allowance for loan losses)
(1,986,135)
(1,584,963)
Credit operations
Other financial assets
10(b)
3(f) and 8
11
2,887,622
5,856,067
Foreign exchange portfolio
11(a)
2,189,109
5,197,026
Negotiation and intermediation of securities
11(b)
438,193
201,285
1,713
151,983
Interbank and interdepartmental transactions
Sundry
Other sundry credits
Other assets
Not for own use
258,607
305,773
1,581,394
833,477
3(h)
242,576
171,274
13(b)
120,551
70,496
122,025
100,778
13(a)
Prepaid expenses
Investments
Property and equipment in use
3(i)
3(j) and 15
Other property and equipment assets in use
(Accumulated depreciation)
Intangible Assets
3(k) and 15
Intangible assets
(Accumulated amortization)
TOTAL ASSETS
The accompanying notes are an integral part of these financial statements.
9,565
9,445
121,111
105,217
336,253
289,807
(215,142)
(184,590)
52,393
56,577
98,733
94,890
(46,340)
(38,313)
142,897,673
131,646,899
CONSOLIDATED
R$ 000
LIABILITIES
Notes
CURRENT AND NON-CURRENT LIABILITIES
Cash
3(m) and 9(a)
12.31.2014
12.31.2013
134,135,193
124,061,281
9,657,907
10,082,439
Demand deposits
894,371
871,435
Savings deposits
1,655,929
1,479,830
Interbank deposits
2,795,386
3,818,723
Time deposits
4,312,221
3,912,451
Open market funding
62,152,399
55,989,366
Own portfolio
29,614,994
36,561,586
Third party portfolio
17,213,927
1,841,990
Unrestricted portfolio
15,323,478
17,585,790
25,789,548
19,975,174
23,072,033
17,682,137
Funds from acceptance and issuance of securities
3(m) and 9(b)
3(m) and 9(c)
Funds from financial bills, bills of credit and similar notes
Liabilities for marketable securities abroad
2,717,515
2,293,037
16,810,825
17,132,453
Foreign borrowings
8,284,416
8,410,932
Domestic onlendings
8,025,622
8,542,481
Borrowings and onlendings
3(m) and 9(d)
Other borrowings
3(d) and 7(b)
500,787
179,040
5,540,719
6,549,291
Insurance and supplementary pension fund operations
3(n) and 10(c)
4,743,014
3,665,362
Subordinated debt
3(m) and 9(e)
4,334,904
2,914,559
Other financial liabilities
11
3,195,627
6,031,109
11(a)
2,068,927
5,211,999
Collection of taxes and similar
11(b)
Other
Other liabilities
9,582
8,584
235,305
241,781
457,496
246,941
424,317
321,804
1,910,250
1,721,528
Social and statutory
16(b)
11,989
11,497
Taxes and social security contributions
14(c)
965,102
816,800
Sundry
13(c)
933,159
893,231
DEFERRED INCOME
28,926
26,240
8,733,554
7,559,378
Share capital
4,362,440
4,362,440
Revenue reserves
4,392,950
3,225,198
EQUITY
3(q)
16
Carrying value adjustments
TOTAL LIABILITIES
(21,836)
(28,260)
142,897,673
131,646,899
Statement of Income
CONSOLIDATED
R$ 000
Notes
2014
2013
13,576,849
10,981,439
Credit operations
6,621,315
5,811,837
Result from transactions with marketable securities
6,654,442
5,279,702
Result from derivative financial instruments
(348,269)
(468,828)
INCOME FROM FINANCIAL INTERMEDIATION
Finance income from insurance and pension plan operations
10(d)
408,271
187,135
Foreign exchange transactions
11(a)
90,976
88,477
119,436
66,481
30,678
16,635
Compulsory investments
6
Other finance income
EXPENSES ON FINANCIAL INTERMEDIATION
(9,644,668) (7,170,078)
Funds obtained in the market
(8,766,724) (6,458,722)
(423,451)
(474,489)
(384,505)
(172,358)
(69,988)
(64,509)
BEFORE THE ALLOWANCE FOR LOAN LOSSES
3,932,181
3,811,361
RESULT FROM ALLOWANCE FOR LOAN LOSSES
(778,122) (1,035,023)
Financial expenses with pension plan funds
Other finance costs
10(d)
12(c-I and II)
GROSS PROFIT ON FINANCIAL INTERMEDIATION
Allowance for loan losses
Recovery of credits written off as loss
3(f) and 8(b-II)
3(f) and 8(c)
(1,054,300) (1,253,780)
276,178
218,757
GROSS PROFIT ON FINANCIAL INTERMEDIATION
3,154,059
2,776,338
OTHER OPERATING RESULTS
1,055,514
830,306
Income from services rendered
13(d)
702,481
528,309
Income from bank fees
13(d)
199,535
189,456
Result from insurance, reinsurance and pension plan
3(n) and 10(d)
GROSS RESULTS FROM OPERATIONS
OTHER OPERATING INCOME (EXPENSES)
13(e)
Administrative expenses
13(f)
(622,082)
(600,939)
(276,128)
(251,128)
13(g)
111,178
422,797
2(a) and 13(h)
(25,958)
(104,157)
1,995,507
1,780,062
OPERATING INCOME
NON-OPERATING INCOME
INCOME BEFORE TAXES
INCOME TAX AND SOCIAL CONTRIBUTION
3(p) and 14(a-I)
NET INCOME FOR THE YEAR
Earnings per share in R$
(1,401,076) (1,293,155)
14(a-II)
Other operating income
Other operating expenses
112,541
3,606,644
(2,214,066) (1,826,582)
Personnel expenses
Tax expenses
153,498
4,209,573
285
81
1,995,792
1,780,143
(448,658)
(421,422)
1,547,134
1,358,721
1,00
0,90
Statement of Changes in Equity
Carrying
R$ 000
AT JANUARY 1, 2013
Reverse share split
Capital increase
Paid-up
Revenue
value
Retained
capital
reserves adjustments
earnings
4,219,440
2,604,150
–
143,000
(204)
–
423,170
–
Total
7,246,760
–
–
(204)
–
–
143,000
–
(451,430)
Carrying value adjustments –
available–for–sale securities
–
–
Net income for the year
–
–
(451,430)
–
1,358,721
1,358,721
Allocation:
Legal reserve
–
67,936
–
(67,936)
–
Special reserve
–
553,316
–
(553,316)
–
Interest on capital
–
–
–
(337,469)
(337,469)
Dividends
–
–
–
(400,000)
(400,000)
AT DECEMBER 31, 2013
4,362,440
3,225,198
(28,260)
–
7,559,378
Carrying value adjustments –
available-for-sale securities
–
–
Net income for the year
–
–
6,424
–
–
1,547,134
6,424
1,547,134
Allocation:
Legal reserve
–
77,357
–
(77,357)
–
Special reserve
–
1,090,395
–
(1,090,395)
–
Interest on capital
–
–
(379,382)
AT DECEMBER 31, 2014
4,362,440
–
4,392,950
(21,836)
–
(379,382)
8,733,554
Statement of Cash Flows
CONSOLIDATED
R$ 000
Notes
2014
2013
1,987,335
2,126,771
1,547,134
1,358,721
CASH FLOWS FROM OPERATING ACTIVITIES
ADJUSTED PROFIT
Profit for the years
Adjustments to profit:
Depreciation and amortization
13(f)
48,325
40,612
Allowance for loan losses
8(b-II)
1,054,300
1,253,780
Foreign exchange variation on cash and cash equivalents
Provisions for contingent civil, labor and other liabilities
(104,458)
–
12(c-I)
(42,384)
90,234
12(c-II and III)
(57,266)
(374,282)
instruments and hedge
7(c)
(64,295)
139,412
Trading securities
7(c)
205,434
66,745
Derivative financial instruments (assets and liabilities)
7(c)
(71,935)
(40,405)
Obligations related to unrestricted repurchase agreements
7(c)
(192,516)
(14,282)
Fair value hedge
7(c)
(5,278)
127,354
Provisions for tax and social security contingencies and legal obligations
Adjustment to market value of trading securities, derivative financial
Financial income/expenses on assets and liabilities of investment
and financing
(272,548)
743,726
Available for sale
7(a-III)
(523,443)
410,132
Held to maturity
7(a-III)
(15,446)
(13,157)
9(c-II)
(163,998)
108,111
9(e-II)
430,339
238,640
Interest and foreign exchange variation on liabilities on marketable
securities abroad
Interest and foreign exchange variation on subordinated debts
Other material events
2(a)
12,566
14(a-I)
448,658
421,422
Taxes paid
(582,697)
(1,546,854)
Current
(539,083)
(1,029,417)
Provision for current and deferred income taxes
Tax, social security and legal obligations
CHANGES IN ASSETS AND LIABILITIES
In short-term interbank investments
12(c-II and III)
–
(43,614)
(517,437)
(3,090,676)
(8,520,410)
447,595
(5,588,989)
23,286
(15,877,282)
In derivative financial instruments (assets/liabilities)
(168,815)
1,278,323
In the Brazilian Central Bank reserves
(243,443)
(16,652)
(2,359,329)
(6,834,111)
316,720
179,041
(135,155)
63,599
Collected taxes and other
998
(3,431)
Interbank and interdepartmental transactions (assets/liabilities)
143,794
(52,587)
Negotiation and intermediation of amounts (assets/liabilities)
(26,353)
106,449
333,436
65,011
In securities - for trading
In credit operations
In other financial assets and liabilities
Other
(continued)
CONSOLIDATED
R$ 000
Notes
In other receivables
In other assets
In deposits
In open market funding - own portfolio
Own securities
Federal Government Securities
In borrowings and onlendings
2014
2013
56,620
202,101
(71,302)
(55,752)
(424,532)
(1,876,337)
(6,754,076)
11,775,252
2,257,672
5,222,655
(9,011,748)
6,552,597
(321,628)
4,786,599
Borrowings abroad
(126,516)
4,801,567
Domestic onlendings
(516,859)
(54,611)
321,747
39,643
5,389,896
3,188,020
Other borrowings
In funds from acceptances and issues of securities
9(c-II)
In insurance and supplementary pension fund operations
In other liabilities
NET CASH USED IN OPERATING ACTIVITIES
1,098,403
606,675
(80,071)
(287,298)
(1,103,341)
(6,393,639)
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received
Available-for-sale securities
–
7(a-III)
Additions
Sales/Redemptions
Securities held to maturity
12,394,358
(11,491,547)
(7,560,446)
7,209,817
19,954,804
7(a-III)
Additions
Redemptions
Purchase of investments
152,909
(4,281,730)
4,928
(13,008)
(50,000)
(123,600)
54,928
110,592
–
(1,121)
Purchase of property and equipment in use
15(b)
Sale of property and equipment in use
15(b)
(236)
1,292
Addition to intangible assets
15(b)
(22,439)
(30,226)
(4,336,837)
12,470,735
NET CASH PROVIDED (USED IN) BY INVESTING ACTIVITIES
(37,360)
(33,469)
CASH FLOWS FROM FINANCING ACTIVITIES
9(c-II)
Additions
Redemptions
Subordinated debt - additions
Interest on capital paid
601,025
–
1,428,254
–
(827,229)
9(e-II)
–
102,640
(322,475)
(543,232)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
1,272,109
(440,592)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(4,168,069)
5,636,504
Cash and cash equivalents at the beginning of the years
11,491,967
5,855,463
Foreign exchange variation on cash and cash equivalents
104,458
Cash and cash equivalents at the end of the years
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
16
993,559
4
–
7,428,356
11,491,967
(4,168,069)
5,636,504
Statement of Value Added
CONSOLIDATED
R$ 000
Notes
Revenue
2014
2013
14,743,826 12,703,451
Financial operations
13,576,849 11,450,267
Banking services and income from bank fees
13(d)
902,016
717,765
Result from insurance and pension plan
10(d)
153,498
112,541
111,463
422,878
Other operating income and non-operating income
Expenses
(10,448,748) (8,778,086)
Financial operations
(9,644,668) (7,638,906)
Result from allowance for loan losses
(778,122) (1,035,023)
Other operating expenses
13(h)
Expenses from acquired inputs
(25,958)
(104,157)
(457,079)
(454,342)
Facilities
13(f)
(24,829)
(23,992)
Data processing and telecommunications
13(f)
(53,041)
(50,874)
Third-party services
13(f)
(44,624)
(51,533)
Financial system services
13(f)
(48,137)
(46,369)
Surveillance services, security and transport
13(f)
(39,269)
(32,649)
Legal and notary fees
13(f)
(82,294)
(88,762)
Other
13(f)
(164,885)
(160,163)
3,837,999
3,471,023
Gross value added
(48,325)
(40,612)
Total value added to distribute
Retentions - depreciation and amortization
13(f)
3,789,674
3,430,411
Distribution of value added
3,789,674
3,430,411
1,211,108
1,122,570
Personnel
Remuneration and profit sharing
13(e)
935,548
842,392
Benefits
13(e)
94,913
84,670
Government Severance Indemnity Fund for Employees (FGTS)
Labor contingencies
13(e)
Other
13(e)
Taxes and contributions
Federal
State
Municipal
Remuneration on third parties’ capital – rentals
13(f)
Remuneration on capital
Interest on capital and dividends
16
Profits reinvested for the year
49,625
43,936
97,020
116,028
34,002
35,544
914,754
843,135
864,320
793,232
491
1,370
49,943
48,533
116,678
105,985
1,547,134
1,358,721
379,382
737,469
1,167,752
621,252
BOARD OF DIRECTORS
José Manuel da Costa Gomes – Accountant – CRC nº 1SP219892/O-0
Notes to the Financial Statement
(all amounts in thousands of reais unless otherwise stated)
1. Operations
Banco Safra S.A. and its subsidiaries (together “Safra”, “Safra Group”, “Company”
and/or “Bank”), are engaged in asset, liability and accessory operations inherent in
the related authorized lines of business
(commercial, including foreign exchange,
housing loans, credit, financing and investment, and commercial leasing), and
complementary activities among which are
insurance operations, supplementary pension fund, brokerage and distribution of securities, management of credit cards and
investment funds, and managed portfolios,
in accordance with current legislation and
regulations.
2. Presentation of the financial statements
a) Presentation of the financial statements
The consolidated financial statements of
Banco Safra S.A. and subsidiaries (“CONSOLIDATED”) approved by the Board of
Directors on 2/2/2015, have been prepared and are presented in conformity with
accounting practices adopted in Brazil,
in accordance with Law 6,404/1976
(Brazilian Corporate Law) and respective
changes introduced by Laws 11,638/2007
and 11,941/2009, associated to the
standards issued by the National Monetary
Council (CMN), the Brazilian Central Bank
(BACEN), the Brazilian Securities Commission (CVM), National Council of Private
Insurance (CNSP) and the Superintendence of Private Insurances (SUSEP), as
applicable.
Leasing operations are presented under the financial method, that is, at the
present value in the Balance sheet with
its respective financial result presented on
the Credit operations account of the Statement of income.
Advances on foreign exchange contracts are presented in conjunction with
the foreign exchange portfolio for credit
operations. The presentation of foreign
exchange gains and losses is adjusted
so that income and expenses represent only the changes and differences in
exchange rates applied to the foreign currency amounts.
As of the fourth quarter of 2014, Safra
has recognized tax credits from temporary
differences arising from the recording of
allowances for loan losses (Minimum required ALL) and tax claims for risk events
occurred during the year. The amount recognized in the period was R$ 565,644,
as presented in Note 14(b-I). Additionally,
due to the expected worsening of the economic scenario in 2015, Safra revised its
loan loss provisioning model, including
guarantees and sureties, and recorded
R$ (578,210) of additional ALL, as presented in Note 8 (b-II ). To improve comparability of the statement of income between
the years, we are presenting these material events, totaling R$ (12,566), under
“Other Operating Expenses” - Note 13(h).
b) Basis of consolidation
The balance sheet accounts and the income and expenses between the parent and
subsidiary companies, as well as the unrealized profits between the consolidated companies, were eliminated on consolidation.
The Exclusive investment funds of the consolidated companies were consolidated.
The securities and investments included in
the portfolios of these funds are classified
by transactions and were distributed into
types of Notes, in the same categories in
which they were originally allocated.
The entities located overseas, principally under the Bank branches in the
Cayman Islands and Luxembourg, are consolidated in the financial statements. The
balances of these consolidated entities,
excluding the amounts of transactions
among them, were translated at the foreign
exchange rate ruling on December 31 and
are presented below:
12.31.2014
Assets
Liabilities
Equity
Profit
Total at 12.31.2014
17,713,930
15,319,042
2,394,888
96,551
Total at 12.31.2013
14,863,731
12,852,621
2,011,110
92,255
The consolidated financial statements include Banco Safra and its subsidiaries shown
below, including the exclusive investment funds fully consolidated as from 2013,
highlighting:
OWNERSHIP INTEREST (%)
12.31.2014
12.31.2013
Banco Safra (Cayman Islands) Limited. (1)
100,00
100,00
J. Safra Corretora de Valores e Câmbio Ltda.
100,00
100,00
J. Safra Asset Management Ltda.
100,00
100,00
Safra Leasing S.A. – Arrendamento Mercantil
100,00
100,00
Banco J. Safra S.A.
100,00
100,00
Sercom Comércio e Serviços Ltda.
100,00
100,00
Safra Vida e Previdência S.A.
100,00
100,00
Safra Seguros Gerais S.A.
100,00
100,00
SIP Corretora de Seguros Ltda. (2)
100,00
100,00
(1) Foreign entity.
(2) As of November 2013, SIP Corretora de Seguros Ltda. has become the brokerage firm for the Insurance Companies of the Safra Group.
3. Significant accounting practices
a) Determination of results
Profit is determined on the accrual basis of
accounting, that is, income and expenses
are included in the period in which they occur, simultaneously when they are realized,
regardless of receipt or payment.
b) Cash flows
I. Cash and cash equivalents - represented by cash and deposits held at call with
financial institutions, recorded in line item
‘Cash’, interbank deposits retrievable
within 90 days, with an immaterial risk
of market value variation. ‘Cash equivalents’ are amounts held for the purpose
of settling short term cash obligations and
not for investment or other purposes.
II. Statement of cash flows - prepared in line
with the criteria set out in Accounting Standard CPC 03 – Statements of cash flows,
approved by CMN Resolution 3,604/2008.
This standard foresees the statements of
cash flows being made up of amounts used
for operating, investing and financing purposes. These being:
•Operating activities are the main income
generating activities of the entity that
are neither investing nor financing activities. Included in this section are the
funding activities that are carried out for
the purposes of financial intermediation
and other operational activities that are
typical of a financial institution;
•Investing activities are those related to
the buying and selling of long-term assets and other investments not included
as cash equivalents, such as available-for-sale and held-to-maturity investments; and
•Financing activities are those that result
in changes to the size and composition of
the entity’s and third party capital. Included in this section are structured funding
activities aimed at raising resources to
finance the entity itself.
Cash flows from operating activities are
presented using the indirect method. Cash
flows from investing and financing activities are presented based on gross payments and receivables.
c) Short-term interbank investments
Interbank investments are stated at cost
plus, when applicable, accrued income and
monetary and foreign exchange variations
up to the balance sheet date, calculated
on a pro rata basis.
d) Marketable securities and derivative financial instruments
In accordance with Brazilian Central Bank
(BACEN) Circular 3,068/2001, securities
are classified according to management’s
intention into three specific categories:
•Trading – securities acquired to be actively and frequently traded. The securities are stated in current assets, regar-
dless of their maturities and adjusted to
market against income for the period;
•Available-for-sale – securities that can be
traded but which are not acquired to be
actively and frequently traded or held to
maturity. Accrued income is recognized
in the Statement of income, and unrealized gains and losses arising from market
value fluctuations are recognized in a
specific account in equity, net of taxes;
•Held-to-maturity – securities which the
Bank has the intention and financial
capacity to hold in portfolio up to their
maturity. These securities are stated at
cost, plus income accrued.
The reconsideration of how securities are
categorized occurs when the half-yearly statements are being prepared, taking
into consideration their intended use and
financial capacity, in accordance with procedures established by BACEN Circular
3,068/2001.
Derivative financial instruments used to
hedge exposures to risks through the change of certain characteristics of the financial
assets and liabilities hedged that are considered highly effective and follow all the requirements of designation and documentation under BACEN Circular 3,082/2002 are
classified as accounting hedges according to
their nature:
•Market risk hedge - hedged financial
assets or liabilities and the related derivative financial instruments, including
assets classified as available for sale
and its tax effects, are recorded at
market value, with the related gains or
losses recognized in the Statement of
income; and
•Cash flow hedge - hedged financial assets or financial liabilities and the related derivative financial instruments are
recorded at market value, with the related gains or losses, net of taxes, recognized in a specific account of equity entitled “Carrying value adjustments”. The
non-effective hedge portion is recognized
directly in the Statement of income.
Derivative financial instruments contracted
at the request of customers or on behalf
of the Company itself that do not meet the
accounting hedge criteria established by
the Brazilian Central Bank, especially derivative financial instruments used to manage overall risk exposure, are recorded at
market value, with gains and losses recognized directly in the Statement of income.
e) Market value measurement
The market value measurement methodology (probable realizable value) of securities and derivative financial instruments
is based on the economic scenario and
pricing models developed by management
and include gathering of average prices
practiced in the market, applicable at the
Balance sheet date. Accordingly, when these items are financially settled, the actual
results could differ from the estimates.
f)Credit operations and allowance for loan
losses
These are recorded at present value based
on the index and contractual interest rate,
on a pro rata basis, calculated up to the
Balance sheet date. The revenues related
to transactions that are delayed for 60 days
or more are recognized in the Statement of
income only when received, regardless of
their risk level classification.
The Bank records monthly allowances
for loan losses in conformity with the minimum provisioning levels established by
CMN Resolution 2,682/1999, which requires the classification of transactions into
nine risk levels, from “AA” (minimum risk)
to “H” (maximum risk), and also based on
an analysis of the risks involved in the realization of the receivables, periodically performed and reviewed by management, which
considers, among others, the historical experience with borrowers, the economic scenario and global and specific portfolio risks.
For the purposes of presentation in the
notes, lending operations and their respective allowances are classified into two
groups: i) Normal course and general allowance for loan losses - transactions without
delay and/or with installments overdue
up to 14 days, and ii) Normal course and
specific allowance for loan losses - transactions with installments overdue for more
than 14 days.
The transactions classified in level “H”
are written off against assets after six months from their classification into this level,
and then are controlled in a memorandum
account for at least five years and while all
collection procedures are not exhausted.
Renegotiated transactions remain at
least at the same risk level in which they
were classified. Renegotiated transactions
that had already been written off are rated
in risk level H, and any income from the renegotiation is only recognized when actually
received. When a significant amount is paid
or new material events justify changing a
transaction’s risk level, the transaction may
be reclassified into a lower risk rating.
g) Write down of financial instruments
In accordance with CMN Resolution 3,533/
2008, financial assets are written down
when the contractual rights to the cash flows
from these assets expire, or when substantially all the risks and rewards of ownership
of the instrument are transferred. When
substantially all the risks and rewards are
not transferred nor retained, Safra assesses
the control of the instrument in order to determine whether it should be maintained in
assets.
Securities linked to repurchase and assignment of credit with co-obligation are not
derecognized because Safra retains substantially all the risks and rewards to the extent
there is, respectively, a commitment to repurchase them at a predetermined amount or to
make payments in the event of default of the
original debtor of the credit operations.
Financial liabilities are written down if
the obligation is contractually extinguished
or settled.
h) Other assets
These correspond basically to assets not
held for use, especially those received in
lieu of payment, and prepaid expenses,
corresponding to the use of resources
whose benefits or services will occur in
future periods.
i) Investments
These are stated at cost, adjusted by impairment.
j)Property and equipment in use
These correspond to rights in tangible assets that are maintained or used in the
Bank and its subsidiaries’ activities, including those rights received as a result
of transactions that transfer the risks,
rewards, and control of such assets to the
Bank. They are stated at cost, net of accumulated depreciation. Depreciation is
calculated on the straight-line method at
annual rates based on the economic useful lives of assets, as follows: properties
in use - 4%; communication and security
systems, facilities, aircraft, and furniture
and fixtures - 10%; and vehicles and data
processing equipment - 20%. They are adjusted by impairment.
k) Intangible assets
These correspond to rights in intangible assets that are maintained or used in the entity’s activities. Intangible assets with finite
useful lives are amortized on the straight-line method over the estimated period in
which they will generate economic benefits
and adjusted by impairment.
l)Impairment of non-financial assets
CMN Resolution 3,566/2008 provides the
procedures applicable to the recognition,
measurement and disclosure of impairment and requires compliance with CPC
Technical Pronouncement 1 - Impairment
of assets.
The impairment of non-financial assets
is recognized as a loss when the book
value of an asset or a cash generating
unit is higher than its recoverable or realizable value. A cash-generating unit is the
smallest identifiable group of assets which
generates substantial cash flows irrespective of other assets and groups of assets.
Impairment losses, when applicable, are
recorded in the Statement of income in the
period in which they are identified.
Non-financial assets are periodically
reviewed for impairment, at least on an annual basis, to determine if there are any
indications that the assets’ recoverable or
realizable value is impaired.
Accordingly, in conformity with the above standards, Safra Group’s management
is not aware of any material adjustments
that might affect the ability to recover the
amounts recorded in property and equipment and intangible assets at 12.31.2014
and 2013.
m)Open market funding and borrowings
and onlendings
The recorded amounts include charges, monetary adjustments (on a pro rata basis) and
foreign exchange variations, as applicable,
incurred through the balance sheet date.
Incurred transaction costs mainly relate
to amounts paid to third parties for intermediation, placement and distribution services
for entity securities. They are accounted for
against the securities and recognized on a
monthly basis to the appropriate expense account i.e. “pro rata temporis”, except when
the instruments are measured at fair value
through the profit or loss.
n) Insurance, reinsurance and supplementary pension plan operations
I. Receivables from insurance and reinsurance operations
•Premiums receivable - refer to financial
resources flowing to the Bank as receipt
of premiums related to insurance, recorded on the date of issuance of the policies. An allowance for loan losses is recorded for these amounts and, in case of
non-payment, they are written off through
the unilateral cancellation of the insurance coverage.
•Reinsurance technical provisions - comprise technical provisions referring to
reinsurance operations. Reinsurance
operations are carried out in the normal
course of activities in order to limit its
potential losses. The liabilities related
to reinsurance operations are presented
gross of their respective recoveries, since the existence of a contract does not
exempt the Company from its obligations
to the policyholders.
•Deferred acquisition costs - include direct and indirect costs related to the
origination of insurances. These costs,
except for the commissions paid to the
brokers and others, are recorded directly
in the Statement of income, when incurred. The commissions are deferred
and are recognized in the Statement of
income in proportion to the recognition
of the revenues with premiums, that is,
for the term corresponding to the insurance contract.
II. Technical reserves of insurance and supplementary pension plan
Insurance and supplementary pension plan
reserves are recorded based on technical
actuarial notes, in accordance with criteria
established by SUSEP and National Council of Private Insurances (CNSP) Resolution
281/2013 and SUSEP Circular 462/2013,
and subsequent modifications:
a) Insurance:
•Provision for unearned premiums (PPNG)
- corresponds to the coverage of claims
and expenses to be incurred for the risks
assumed on the calculation base date,
irrespective of their issue, corresponding to the remaining period in effect. It
is calculated based on the commercial
premium, gross of reinsurance and net
of coinsurance ceded, also comprising
the estimate for current risks not issued
(PPNG-RVNE). Between the issuance and
the initial date of effectiveness of the
risk, the non-elapsed effectiveness period considered is the same as the risk
effectiveness term. After the issue and
initial date of effectiveness of the risk,
the provision is calculated on a daily pro
rata basis. PPNG related to retrocession
transactions is recognized based on information received from the reinsurance
company;
•Provision for unsettled claims (PSL) - based on estimates of indemnities relating
to claims received until the end of the
period, and monetarily restated according to SUSEP regulations.
•Reserve for incurred but not reported losses (IBNR) - calculated based on actuarial studies and recorded to cover claims
that have occurred but not notified by the
insured party.
•Provision for Related Expenses (PDR) recorded to cover the amounts expected
from expenses related to claims, and it
is recorded in accordance with the methodology approved in the actuarial technical note.
•Complementary Provision for Contributions (PCC) - established, when it is noted an insufficiency relating to the PPNG,
as accrued in the Liability Adequacy Test
(LAT). The adjustments that could arise
from insufficiencies in the other technical provisions, accrued in the LAT, are
carried out in the provisions.
b) Supplementary pension plan:
•Reserves for unvested and vested benefits - represent the amount of the obligations assumed with the participants of
the defined contribution plans PGBL and
VGBL and are recognized according to
the methodology established in a technical actuarial note approved by SUSEP.
•Provision for Related Expenses (PDR) recorded to cover the amounts expected
from expenses related to claims, and it
is recorded in accordance with the methodology approved in the actuarial technical note.
•Complementary Provision for Contributions (PCC) - established when it is noted insufficiency related to the technical
provisions PPNG, PMBAC and PMBC, as
accrued in the Liability Adequacy Test
(LAT). The adjustments that could arise
from insufficiencies in the other technical provisions, accrued in the LAT, are
carried out in the provisions.
c) Liability Adequacy Test (LAT):
The Adequacy Test is to assess the liabilities arising from the contracts of the
certificates of insurance plans (except
for Compulsory Automobile Insurance for
Personal Damages (DPVAT), Compulsory
Ship and Cargo Insurance for Personal Damages (DPEM) and Housing Insurance of
the National Housing System (SFH)) and
of open-end supplementary pension plan,
considering the minimum assumptions determined by SUSEP and by the Company’s
own internal actuaries. This test is carried
out on a quarterly basis, in accordance with
the criteria established by SUSEP Circular
457/2012, and subsequent modifications.
The LAT result is the difference between: i) the amount of the current estimate
of cash flows; and ii) the sum of the accounting balance of the technical provisions
on the period end date (PPNG, PPNG-RVNE,
PSL, IBNR, PMBAC and PMBC), deducted
from the deferred acquisition costs and intangible assets directly related to the technical allowances.
III. Calculation of insurance, reinsurance
and supplementary pension plan earnings
Insurance premiums, net of co-insurance
premiums, as well as acquisition costs, are
recognized at the point of issue of the policy contract or invoice. Insurance premium
income is recognized in the Statement of
income over the course of the policy risk
period. This is achieved by establishing an
unearned premium reserve and deferred
acquisition costs.
Reinsurance premiums are deferred
and recognized over the course of the covered period.
Pension plan contributions are recognized as received. Income and expenses arising from insurance operations with DPVAT
are recognized based on the information
received from Seguradora Líder dos Consórcios do Seguro DPVAT S.A.
o) Provisions, contingent assets and liabilities, and legal, tax and social security
obligations
The recognition, measurement and
disclosure of the provisions, contingent
assets and liabilities and legal obligations
are made in conformity with the criteria set
forth in the CPC Technical Pronouncement
25 - Provisions, Contingent Liabilities and
Contingent Assets, approved by CMN Resolution 3,823/2009 and BACEN Circular
Letter 3,429/2010, as described below:
(i) Contingent assets - possible assets arising from past events and whose existence
will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events that are not fully under the control of the entity. The contingent assets are
not recognized in the financial statements,
but are disclosed in the notes when it is probable that a gain from these assets will be
realized. However, when there is evidence
that the realization of the gain from these
assets is virtually certain, the assets are no
longer classified as contingent and start to
be recognized.
(ii) Contingent provisions and liabilities - a
present (legal or constructive) obligation
as a result of past events, in which it is
probable that an outflow of resources will
be required to settle the obligation and the
amount can be reliably measured, should
be recognized by the entity as a provision.
If the outflow of resources to settle the
obligation is not probable or cannot be reliably measured, then a contingent liability
is characterized, the recognition of a provision not being required but only a disclosure in the notes, unless the likelihood of
having to settle the obligation is remote.
Contingent liabilities also result from
possible obligations arising from past
events and whose existence will be confirmed only by the occurrence of one or more
uncertain future events that are not fully
under the control of the entity. These possible obligations should also be disclosed.
Management evaluates obligations, based on the best estimates and taking into
consideration the opinion of legal advisors,
and records a provision when the likelihood
of a loss is considered probable, and only
discloses the information when the likelihood is considered possible. Obligations
for which there is a remote chance of loss
are neither provided nor disclosed.
(iii) Legal (tax and social security obligations) - refer to lawsuits challenging the legality or constitutionality of certain taxes.
The amount under litigation is quantified,
provided and adjusted on a monthly basis.
The judicial deposits not linked to provisions for contingencies and legal obligations
are restated on a monthly basis.
p) Taxes
Taxes are calculated at the rates below,
considering, with respect to the respective
calculation bases, the applicable legislation for each charge:
Income tax
15.00%
Income tax surcharge
10.00%
Social Contribution (1)
15.00%
Social Integration Program (PIS) (2)
0.65%
Social Contribution on Revenues
(COFINS) (2)
Services Tax (ISS)
4.00%
Up to 5.00%
(1) Non-financial institution subsidiaries continue to be subject to
a rate of 9% for this contribution;
(2) Non-financial institution subsidiaries that perform a non-cumulative calculation continue to be subject to PIS and COFINS rates
of 1.65% and 7.6%, respectively.
Taxes are recognized in the statement
of income, except when they relate to items
recognized directly in equity.
Deferred taxes, represented by tax credits and deferred tax liabilities, are calculated on the temporary differences between
the tax bases of assets and liabilities and
their carrying amounts in the financial statements.
Tax credits from temporary differences
arise mainly from the fair value measurement of certain assets and liabilities, including derivative contracts, provisions for
tax contingencies, civil and labor contingencies, and allowances for loan losses
(Minimum required ALL), and are recognized only when all of the requirements for
their constitution are met, as established
by CMN Resolution 3,059, of December
20, 2002.
Taxes related to fair value adjustments
of financial assets available for sale are recognized as a corresponding entry to the
adjustment in equity and are subsequently
recognized in income as realized gains and
losses of the respective financial assets.
q) Deferred income
Refers to income received before fulfillment
of the obligation from which it arose. The
recognition, as effective income, will be recorded over the term of the transaction.
r)Use of accounting estimates
The preparation of financial statements
requires management to utilize its best
judgment to make estimates and assumptions that affect the amounts of certain
financial and non-financial assets and liabilities, income and expenses and other
transactions, such as: (i) the market value
of certain financial assets and financial
liabilities and derivative financial instruments; (ii) depreciation rates of property
and equipment items; (iii) amortization of
intangible assets; (iv) provisions required
to cover risks of contingent liabilities; (v)
tax credits; (vi) impairment of trade receivables, and (vii) insurance and pension
plan technical reserves. The amounts of
the possible liquidation of these assets
and liabilities, financial or otherwise, may
differ from those estimates.
4. Cash and cash equivalents
12.31.2014
Cash and cash equivalents
Open market investments – own portfolio
12.31.2013
792,417
701,010
5,450,451
7,665,411
90,209
500,153
Interbank deposits
1,095,279
2,625,393
Total
7,428,356
11,491,967
5. Interbank investments
12.31.2014
12.31.2013
Amounts by maturity
Open market investments
Up to
From 91 to
Over
90 days
365 days
365 days
Total
Total
38,223,212
–
–
38,223,212
27,120,705
5,450,451
–
–
5,450,451
7,665,411
Third-party portfolio - National Treasury (1)
17,334,552
–
–
17,334,552
1,884,062
Short position - National Treasury (1)
15,438,209
–
–
15,438,209
17,571,232
1,198,022
2,042,689
3,108,070
–
1,095,279
2,625,393
32,854,168
Own portfolio – National Treasury
Interbank deposits (2)
Foreign currency investments (3)
539,894
1,095,279
304,773
–
Total at 12.31.2014
39,858,385
304,773
1,198,022
41,361,180
Total at 12.31.2013
30,528,892
1,412,333
912,943
32,854,168
(1) Backed by funds obtained in the open market - Note 9(b).
(2) At 12.31.2014, of this amount, R$ 208,976 (R$ 406,812 at 12.31.2013) refers to transactions linked to rural credit.
(3) Mainly with related parties – Note 18(c).
6. Reserves with the brazilian central bank
Reserves with the Brazilian Central Bank are substantially made up of compulsory deposits, as follows:
Remunerated (1)
Non-remunerated
Abroad
Total
12.31.2014
12.31.2013
1,185,860
1,037,335
186,365
141,434
66,162
16,175
1,438,387
1,194,944
(1) The gain arising from compulsory deposits subject to remuneration was R$ 119,436 (R$ 66,481 in 2013), and has been disclosed in
the Statement of income as compulsory investments.
7. Securities and derivative financial instruments
a) Marketable securities
I. By maturity by class
12.31.2014
12.31.2013
Mark-to-
Trading securities
Government securities - National Treasury
National Treasury Bills (LTN)
National Treasury Notes (NTN)
Financial Treasury Bills (LFT)
Linked to Technical Reserve – Note 10(b)
Quotas of investment funds
Private securities
Restated
market
Market
No stated
Up to
From 91 to
Over
cost
adjustment
value
maturity
90 days
365 days
365 days
value
30,023,786
(221,867)
29,801,919
282,726
801,821
24,187,923
4,529,449
30,030,640
23,692,835
(223,903)
23,468,932
–
721,726
22,747,206
21,393,160
(204,911)
21,188,249
–
708,867
2,226,841
(18,990)
2,207,851
–
–
72,834
(2)
72,832
–
4,786,119
–
24,224
–
484,170
Shares
Debentures
Promissory Notes
Foreign securities - Private securities
9,884
–
24,235,406
2,207,851
–
1,477,052
12,859
59,973
–
–
–
24,224
24,224
–
1,829
–
(14)
1,829
420,115
–
72,110
–
(7,848)
1,028,590
–
20,479,382
494,054
9,898
72,110
25,747,282
256,670
1,843
1,036,438
–
4,786,119
410,217
1,829
4,529,449
–
492,225
–
–
–
420,115
–
3
Market
80,095
34,824
3,524,531
–
14,786
–
699,428
–
138,462
–
560,966
72,110
–
948,492
–
–
44,613
Shares
–
–
–
–
–
–
–
44,613
Bank Deposit Certificate
91,390
–
91,390
–
80,095
11,295
–
–
937,197
–
937,197
–
–
Denmark
945,045
Eurobonds
Linked to Technical Reserve – National Treasury Bills – Note 10(b)
Private securities
Debentures
Certificates of real estate receivables (CRI)
Shares
Bank Deposit Certificates (1)
3
(7,848)
–
3
–
3
–
–
–
–
10,237,384
(23,654)
10,213,730
–
324,113
2,690,707
7,198,910
5,397,393
4,438,183
(28,303)
4,409,880
–
56,334
1,957,691
2,395,855
2,846,620
122,449
(981)
121,468
–
56,334
4,315,734
(27,322)
4,288,412
–
–
–
2,678,686
–
–
–
2,677,620
1,994,847
–
1,994,847
–
–
60,901
–
60,901
–
–
–
–
–
–
106,293
2,740,327
–
265,107
–
1,791,191
337,827
137,915
1,226,777
1,657,020
219,625
–
60,901
208,546
–
–
Financial bills
27,166
–
27,166
–
–
2,464
24,702
40,081
19,077
(1,066)
18,011
–
–
3,224
14,787
11,716
83,567
–
83,567
–
62,015
21,552
3,126,230
–
2,672
111,694
Eurobonds
Eurobonds – Market value hedge – Note 7(d)
Securities held to maturity (2)
Private securities – Promissory notes
Derivative financial instruments – Assets – Note 7(b-I(1))
5,715
324,352
(8,095)
316,257
–
2,796,163
13,810
2,809,973
–
2,672
–
256,255
33,781
25,138
Rural Certificates (CPR)
3,120,515
203,092
–
621,322
–
Promissory Notes
–
40,352
2,355,503
493,128
Securities issued abroad
493,128
–
–
(1,066)
24,782
1,932,909
–
3,011,864
31,160
282,425
416,584
2,729,439
769,497
154,966
–
154,966
–
154,966
–
–
144,447
99,974
–
99,974
–
99,974
–
–
90,915
54,992
–
54,992
764,700
–
289,591
54,992
–
644,932
119,768
–
–
289,804
1,543,346
37,115,826
41,061,068
(125,753)
40,935,315
282,726
1,570,491
27,063,935
12,018,163
37,160,328
(44,502)
37,115,826
414,225
5,278,763
23,486,877
7,935,961
Trading securities
30,047,073
(16,433)
30,030,640
389,087
3,322,605
22,985,643
3,333,305
5,450,168
(52,775)
5,397,393
25,138
579,119
436,278
4,356,858
Derivative financial instruments - Assets - Note 7(b-I(1))
144,447
1,518,640
–
24,706
53,532
185,305
Total at 12.31.2014
Securities held to maturity
–
1,186,081
80,534
Total at 12.31.2013
721,671
144,447
–
20,878
32,654
90,915
1,543,346
–
1,356,161
32,302
154,883
II. Per characteristic
12.31.2014
12.31.2013
Insurance and
Restricted
deposits –
Subject to
guarantee
Own
agreements –
Brazilian
guarantees
reserves –
financial
portfolio
Note 9(b)
Central Bank
provided (3)
Note 10(b)
instruments
Government securities – National Treasury 15,630,514
pension plan
Subject to
repurchase
12,949,561
41,067
2,639,886
Total
Total
9,906,165
872,240
1,569,867
–
28,058,790
28,893,197
7,384,115
119,877
956,138
–
–
21,409,691
24,570,528
31,765
–
–
72,832
34,824
581,964
–
–
6,496,263
4,217,379
–
2,522,050
–
752,363
80,004
Derivative
Quotas of Compulsory Automobile
Insurance for Personal Damages
(DPVAT) funds – Government securities
Quotas of funds - Subject to guarantee
Quotas of investment funds – PGBL/VGBL
Private securities
Debentures
Shares
Promissory Notes
–
–
–
–
80,004
–
80,004
–
–
–
–
176,666
–
176,666
–
4,529,449
70,466
–
–
–
–
–
4,529,449
3,454,065
3,250,890
–
–
–
–
–
3,250,890
1,994,525
2,414,962
–
–
–
–
–
2,414,962
780,591
1,829
–
–
–
–
–
1,829
163,600
210,669
–
–
–
–
–
210,669
53,532
Financial bills
27,166
–
–
–
–
–
27,166
40,081
24,224
–
–
–
–
–
24,224
14,788
Bank Deposit Certificates (1)
493,128
–
–
–
–
–
493,128
721,671
Certificates of real estate receivables (CRI)
60,901
–
–
–
–
–
60,901
208,546
Rural Certificates (CPR)
18,011
–
–
–
–
–
18,011
11,716
4,154,820
–
–
–
–
–
4,154,820
1,230,693
–
–
–
–
–
–
–
44,612
–
Shares
Bank Deposit Certificate
91,390
–
–
–
–
–
91,390
Denmark
937,197
–
–
–
–
–
937,197
–
Eurobonds
316,260
–
–
–
–
–
316,260
416,584
2,809,973
–
–
–
–
–
2,809,973
769,497
–
–
–
–
764,700
764,700
1,543,346
37,115,826
Eurobonds – Market value hedge –
Note 7(d)
Derivative financial instruments - Assets
–
Total at 12.31.2014
23,036,224
9,906,165
872,240
1,569,867
4,786,119
764,700
40,935,315
Total at 12.31.2013
10,587,765
19,098,764
663,217
1,560,288
3,662,446
1,543,346
37,115,826
7,362,547
19,098,764
663,217
1,560,288
Private securities
1,994,525
–
–
–
1,230,693
–
–
–
–
–
–
–
–
Derivative financial instruments - Assets
–
208,381
–
28,893,197
3,454,065
–
5,448,590
–
1,230,693
1,543,346
1,543,346
(1) Mainly comprising time deposit with Special Guarantees from the Credit Guarantee Fund (FGC).
(2) Securities classified as held to maturity, if valued at market value, would present a negative adjustment of R$ (18) (R$ (620) at 12.31.2013).
(3) Relates to derivative guarantees worth R$ 1,354,936 (R$ 1,112,330 at 12.31.2013) held in custody worth R$ 157,684 (R$ 389,524 at 12.31.2013) and amounts for civil and labor suits (Note 12(c-I)) worth
R$ 57,067 (R$ 58,435 at 12.31.2013).
III. Changes of the financial assets
Available-for-sale
01.01 to
Held-to-maturity
01.01 to
01.01 to
01.01 to
12.31.2014
12.31.2013
12.31.2014
12.31.2013
5,397,393
17,459,884
144,447
118,282
Acquisition in the period
11,491,547
7,560,446
50,000
Sales in the period
(6,219,690)
(19,508,724)
Interest income and redemptions
(1,610,464)
(446,080)
(54,927)
(110,592)
1,143,780
1,120,150
15,446
13,157
1,125,412
976,801
15,446
–
15,183
–
–
At the beginning of the period
Profit or loss
Receipt of interest
Dividend income
Profit (loss) on the sale
–
123,600
–
13,157
412
278,327
–
–
17,956
(150,161)
–
–
Adjustments in changes in fair value – Note 16(d)
11,164
(788,283)
–
–
Fair value variation in the period - Note 16(d-II)
11,576
(509,956)
–
–
(412)
(278,327)
–
–
10,213,730
5,397,393
154,966
144,447
Fair value hedge
Profit/loss from sale of securities - Note 16(d-II)
At the end of the period
In 2014, there were no reclassifications of securities.
b) Derivative financial instruments (assets
and liabilities)
The use of derivative financial instruments
by Banco Safra and its subsidiaries has as
its main objectives:
•provide to its customers structured fixed
income products that hedge their assets
and liabilities against risks, substantially,
from currency and interest rate fluctuations, and
•neutralize the risks taken by Safra in the
following operations (economic hedges
and/or accounting hedge – Note 7(d)):
- Loans and borrowings contracted at fixed rates and other borrowings (Note 9),
and
-Investment abroad – together with interbank transactions for future settlement
the foreign currency derivatives are employed to minimize the effects on results
of exposure to the foreign exchange variation of investments abroad. These derivatives are contracted with a higher value to
include their tax effects - “over hedge”.
The main purpose of the use of derivative
financial instruments by Banco Safra and
its subsidiaries is to provide to their customers products that hedge these customers’ assets against risks from currency
and interest rate fluctuations. Furthermore,
these instruments are used by the Bank in
the daily management of the risks assumed
in its operations, including the hedging of
the portfolio of fixed interest securities and
operations defined by management.
The main risks related to the derivative financial instruments are: credit risk,
market risk, and liquidity risk, as defined
below:
•Credit risk is the exposure to losses in
the event of default by counterparties or
by debtors of contracted amounts.
•Market risk is the exposure to fluctuations in interest rates, foreign exchange
rates, commodity prices, stock market
prices, and other values, and due to the
type of product, volume of operations, terms and conditions of the agreement and
underlying volatility.
•Liquidity risk is the risk arising from mismatches between negotiable assets and
payable liabilities in transactions with derivative financial instruments that might
affect the payment ability of the entity,
taking into consideration the currencies
and settlement terms of their assets and
liabilities.
Banco Safra and its subsidiaries’ positions are monitored by an independent
control function, which uses a specific system to manage risk, including calculating
the Value at Risk (VaR) with a confidence
interval of 99 percent, stress tests, back
testing and other technical resources. The
Group has a Market Risk Committee, consisting of high-ranked executives, which
meets on a weekly basis to analyze the
market conditions and a Treasury and Risk
Committee, including members of the Executive Committee, which meets on a monthly basis to discuss detailed aspects of
Market Risk management and review risk
limits, stress scenarios, strategies and
outcomes.
I. Asset and liability accounts
1) By type of operation
12.31.2014
12.31.2013
Amounts by maturity
Mark-toRestated
market
cost adjustment
Up to
91 to
Over
value
90 days
365 days
365 days
value
4,603
9,183
1,150
1,041
32,921
84,321
30,613
52,698
1,010
20,938
79
167
14,936
–
Option premiums
51,400
88
–
167
–
655
Foreign currency
32,532
32,855
65,387
22,279
42,098
1,010
Interbank Deposit (DI) Index
18,693
–
18,693
8,332
10,361
–
Shares
Term
Purchases receivable
87
(13)
74
2
165,656
–
165,656
165,656
79
82,907
82,907
82,828
–
Market
14,936
Non Deliverable Forward (NDF)
Bovespa Index
From
Market
–
–
–
72
–
2,739
17,003
–
541
–
1,182,174
–
–
1,171,297
–
–
1,171,297
–
–
–
Federal Government
Securities (LTN)
Sales receivable
Private entities - Shares
82,828
82,828
–
79
82,907
82,907
(79)
82,749
82,749
–
–
–
–
–
10,877
–
–
1,856
–
–
9,021
Federal Government
Securities (LTN)
(79)
82,749
82,749
268,063
86,847
354,910
16,358
52,095
286,457
12,428
17,716
30,144
934
7,248
21,962
25,347
254,369
68,838
323,207
13,270
45,442
264,495
275,339
34
41
75
–
Commodities
348
(352)
(4)
–
(4)
–
246
Shares
884
604
1,488
2,154
(666)
–
4,276
72,361
71,329
Swap – Amounts receivable
Interest rate
Foreign currency
Bovespa Index
Credit default swaps (CDS)
Future
82,828
143,883
–
143,883
994
–
994
Total assets at 12.31.2014
644,932
1,518,640
119,768
764,700
–
75
–
–
305,208
–
193
32,795
994
1,190
1,543,346
289,591
185,305
289,804
24,706 1,543,346 1,356,161
32,302
154,883
12.31.2014
12.31.2013
Amounts by maturity
Mark-toRestated
market
Market
Up to
91 to
Over
cost adjustment
value
90 days
365 days
365 days
value
(37,284)
(12,373)
(11,981)
(12,930)
(9,787)
(841,639) (2,103,179) (1,164,858)
(4,302,581)
(37,284)
Option premiums (1)
(4,196,601)
Bovespa Index
Foreign currency
Shares
Term
Purchases payable
Sales deliverable – Government
–
86,925 (4,109,676)
(3,809)
(1,678)
(5,487)
87,668
(4,088,465)
(14,862)
86
(14,776)
(6,960)
(7,816)
–
(13,421)
(1,797)
849
(948)
(312)
(636)
–
(464)
(165,656)
–
(165,656)
(165,656)
–
–
(1,180,323)
(82,828)
(79)
(82,907)
(82,907)
–
–
(1,171,302)
–
–
–
–
–
(1,171,302)
(82,828)
(79)
(82,907)
–
–
(149)
(654)
(830,757) (2,092,999) (1,164,709)
(4,288,042)
79
–
(82,907)
(1,728)
(82,749)
(82,749)
(116,732) (1,096,224)
(116,817)
(694,854)
(284,553)
(1,010,567)
Interest rate
(279,213)
(106,652)
(385,865)
(53,647)
(185,473)
(146,745)
(400,136)
Foreign currency
(688,407)
(9,939)
(698,346)
(63,170)
(497,368)
(137,808)
(491,773)
Bovespa Index
–
–
(979,492)
Swap - amounts payable (1)
(82,828)
(3,610)
Market
(4,176,133)
Federal Government Securities (LTN)
From
–
(9,021)
–
–
–
–
–
–
(7,781)
Commodities
(3,660)
146
(3,514)
–
(3,514)
–
(31,109)
Shares
(8,212)
(287)
(8,499)
–
(8,499)
–
(61,738)
–
–
–
–
–
–
(18,030)
(112,143)
–
(112,143)
(112,143)
–
–
(28,400)
(28,127)
8,391
(19,736)
(23)
–
Other
Future
(19,713)
(17,633)
(6,549,291)
Total liabilities at 12.31.2014
(5,519,303)
(21,416) (5,540,719) (1,248,651) (2,810,014) (1,482,054)
Total liabilities at 12.31.2013
(6,551,002)
(1,711) (6,549,291) (2,092,680) (3,073,200) (1,383,411)
(1) Includes premiums of structured fixed income transactions in the amount of R$ 4,424,949 (R$ 4,816,337 at 12/31/2013) - Note 9.
2) By counterparty
12.31.2014
12.31.2013
Valores por prazos de vencimentos
Restated Mark-to-market
Financial institutions
BM&F BOVESPA
Legal entities
Individuals
Market
Up to
From 91 to
cost
adjustment
value
90 days
423,060
28,293
451,353
248,537
83,346
51,314
29,319
80,633
30,507
50,126
167,006
54,654
221,660
9,843
50,186
Over
365 days 365 days
119,470
–
Market
value
1,380,280
18,292
161,631
143,857
3,552
7,502
11,054
704
1,647
8,703
917
644,932
119,768
764,700
289,591
185,305
289,804
1,543,346
Total assets at 12.31.2013 1,518,640
24,706
1,543,346
1,356,161
32,302
154,883
12.31.2014
12.31.2013
Valores por prazos de vencimentos
Restated Mark-to-market
BM&F BOVESPA
Market
Up to
From 91 to
Over
cost
adjustment
value
90 days
365 days
365 days
Market
value
(678,896)
94,637
(584,259)
(315,409)
(239,019)
(29,831)
(1,421,668)
(61,287)
1,382
(59,905)
(25,692)
(29,414)
(4,799)
(14,540)
(3,165,816)
Legal entities
(3,210,071)
(86,791) (3,296,862)
(735,733)
(1,774,122)
(787,007)
Individuals
(1,569,049)
(30,644) (1,599,693)
(171,817)
(767,459)
(660,417)
(1,947,268)
(6,549,292)
Total assets at 12.31.2014 (5,519,303)
(21,416) (5,540,719) (1,248,651)
(2,810,014) (1,482,054)
Total assets at 12.31.2013 (6,551,003)
1,711 (6,549,292) (2,092,680)
(3,073,200) (1,383,411)
II. Composition by notional value
1) By type of operation
12.31.2014
12.31.2013
Amounts by maturity
Long positions
Short positions
Option premiums (1)
Long positions
Shares
Bovespa Index
Foreign currency
Short positions
Shares
Bovespa Index
Foreign currency
Interest rate
Term
Long positions
Government Securities
Shares
Short positions
Government Securities
Swap (1)
Assets
Interest rate
Foreign currency
Local currency
Commodities
Shares
Other
Liabilities
Interest rate
Foreign currency
Commodities
Bovespa Index
Shares
Other
Future
Long positions
Interest rate
Currency coupon
Foreign currency
Bovespa Index
Short positions
Interest rate
Currency coupon
Foreign currency
Bovespa Index
Commodities
Total at 12.31.2014
Total at 12.31.2013
Up to
From 91 to
Over
90 days
389,905
178,881
211,024
365 days
283,880
108,140
175,740
365 days
192,681
113,482
79,199
Total
866,466
400,503
465,963
Total
554,675
278,029
276,646
14,855,606
35,393,047
15,115,876
65,364,529
61,229,595
2,822,368
7,317
2,188,851
–
626,200
12,033,238
19,929
57,062
2,188,851
9,767,396
–
502,335
82,881
–
82,881
–
419,454
–
419,454
4,913,548
754
4,677,341
1,709
233,744
30,479,499
22,905
25,105
4,674,900
25,756,589
–
–
–
–
–
–
–
–
–
79,867
79,867
15,036,009
6,929
5,434
–
14,798,054
225,592
–
–
–
–
–
–
–
–
7,815,783
8,071
6,866,192
1,709
939,811
57,548,746
49,763
87,601
6,863,751
50,322,039
225,592
502,335
82,881
–
82,881
–
419,454
–
419,454
6,176,531
33,928
5,987,959
11,647
142,997
55,053,064
96,033
7,699
5,968,558
48,980,774
–
2,404,962
1,224,632
1,171,297
9,028
44,307
1,180,330
1,171,302
9,028
6,763,734
1,242,364
5,444,899
–
–
76,471
–
6,763,734
990,480
5,773,254
–
–
–
–
32,501,509
1,097,652
–
93,699
500,322
503,631
31,403,857
27,880,178
3,509,589
14,090
–
–
2,474,516
57,487,605
43,235,586
9,920,157
5,006,180
4,469,743
391,889
3,300
46,783
2,262
9,920,157
3,070,070
6,793,223
16,500
–
40,364
–
8,820,960
2,037,619
–
2,037,619
–
–
6,783,341
6,376,730
406,611
–
–
–
643,534
55,061,578
61,592,520
3,725,971
2,714,878
1,011,093
–
–
–
–
3,725,971
2,367,281
1,358,690
–
–
–
–
17,838,392
7,361,839
504,943
6,856,896
–
–
10,476,553
4,602,016
5,874,537
–
–
–
2,656
36,875,576
39,977,316
20,409,862
8,963,422
10,925,735
391,889
3,300
123,254
2,262
20,409,862
6,427,831
13,925,167
16,500
–
40,364
–
59,160,861
10,497,110
504,943
8,988,214
500,322
503,631
48,663,751
38,858,924
9,790,737
14,090
–
–
3,120,706
149,424,759
144,805,422
14,544,651
8,772,066
5,178,081
345,621
180,147
68,736
–
14,544,651
6,242,477
7,371,454
415,752
38,307
396,118
80,543
64,718,735
5,405,281
687,700
4,194,500
467,454
55,627
59,313,454
54,304,170
4,970,762
15,390
823
22,309
1,352,804
144,805,422
–
–
–
(1) Includes the amount of R$ 51,874,145 (R$ 51,235,671 at 12/31/2013) referring to structured fixed income transactions.
2) Places of negotiation by counterparty
Locations
12.31.2014
12.31.2013
BM&F
Financial
Legal
Total notional Total notional
BOVESPA
institutions
entities
Individuals
7,170,476
2,472,818
amount
amount
Central System for
Custody and Financial
Settlement of Securities
(CETIP)
16,015,135
11,284,339
BM&F BOVESPA
–
59,977,696
Over the counter – abroad
–
3,120,706
33,922,751 15,460,838
–
–
36,942,768
75,735,850
109,361,285
67,716,767
3,120,706
1,352,805
Total at 12.31.2014
16,015,135
74,382,741
41,093,227
17,933,656 149,424,759 144,805,422
Total at 12.31.2013
76,668,659
9,944,043
38,722,608
19,470,112 144,805,422
III. Credit derivatives
Banco Safra uses derivative financial instruments of credit in order to offer their customers, through the issuance of securities, opportunities to diversify their investment
portfolios.
Banco Safra holds the following positions in credit derivatives, shown at their notional
values:
Risks transferred (1)
12.31.2014
12.31.2013
(1,549,242)
(640,935)
(1,549,242)
(640,935)
1,556,626
711,869
1,556,626
711,869
Credit swap whose underlying assets are:
Marketable securities
Risks received (1)
Credit swap whose underlying assets are:
Marketable securities
Net transferred exposure total
Net received exposure total
–
–
7,384
70,934
(1) The transferred and received risks refer to the same issuers.
During the period there was no occurrence of a credit event related to the facts set forth
in the agreements.
There was no significant impact on the calculation of required regulatory capital as of
12/31/2014, in accordance with CMN Resolution 4,193/2013.
c) Developments and market value adjustment
I. Changes
At the beginning of the period - Adjustment to market value
01.01 to
01.01 to
12.31.2014
12.31.2013
(209,914)
717,781
Trading securities
(16,433)
50,312
(48,628)
739,655
26,417
(13,988)
Hedge fair value – Note 7(d)
Securities available for sale
Other
13,756
(526)
(185,026)
(57,672)
(4,146)
–
(180,880)
(57,672)
Activity affecting:
75,459
(927,695)
Profit or loss
64,295
(139,412)
(205,434)
(66,745)
Trading securities
Other
Equity – Available for sale – Note 16(d-I)
At the end of the period – Adjustment to market value
Trading securities
Obligations related to unrestricted repurchase agreements – Note 9(b)
Other
71,935
40,405
192,516
14,282
5,278
(127,354)
17,956
(4,146)
(12,678)
(123,208)
11,164
(788,283)
(134,455)
(209,914)
(221,867)
(16,433)
(37,464)
(48,628)
98,352
26,417
206,272
13,756
(179,748)
(185,026)
13,810
(4,146)
(193,558)
(180,880)
2014
2013
II. Realized and unrealized income
Fair market value Adjustment for securities and derivative financial
instruments in the Statement of income – Note 7(c-I)
64,295
(139,412)
Fair market value Adjustment for unrealized futures operations
(46,481)
171,548
Profit / (loss) on the sale of securities - Realized
(18,721)
228,435
(19,133)
(49,892)
Negotiation
Available for sale – Note 7(a-III)
Total
412
278,327
(907)
260,571
d) Hedge de ativos e passivos financeiros
The aim of the designated hedge accounting applied by Safra is to protect against the effects of market interest rates (Interbank Deposit Certificate (CDI) or Libor) or foreign exchange variations to assets and liabilities fair value (depending on their nature).
Market value
Strategy - Market Risk Hedge
Fixed portfolio
(1)
MTM object to
Hedge
hedge – Note 7(c)
derivative
12.31.2014
12.31.2013
12.31.2014
12.31.2013
16,502,132
17,151,572
(102,025)
(79,365)
2,809,973
769,497
13,810
(4,146)
149,806
249,094
501
(942)
instrument
Futuros DI
Notional value
12.31.2014
12.31.2013
(15,709,382)
(17,137,842)
Marketable Securities - Available for sale –
Eurobonds – Note 7(a-I)
Assets in foreign currency (1)
Swap Libor x Pré
Futuros DDI
(2,608,675)
768,356
(185,794)
(260,466)
Time deposits – Structured Defined
Contribution (CD) – Note 9(a)
(918,640)
–
16,971
–
Swap Libor x Pré
906,283
Liabilities for marketable securities
abroad – Note 9(c)
(2,438,595)
(1,793,082)
(3,588)
(6,187)
(719,146)
(797,552)
3,512
(3,093)
(704,882)
–
(10,603)
(290,648)
7,856
7,509
2,591,173
1,912,762
820,554
832,851
Fixed rate funding, 8/8/2012 –
R$ 800,000
Futuros DI
US$ 300,000
–
Futuros DDI
–
767,592
R$ 300,000
(265,812)
Futuros DI
307,708
312,319
Swap Libor x Pré
959,075
–
274,737
–
229,099
–
CHF 350,000
(956,886)
–
(10,934)
–
CHF 100,000
(270,923)
–
(2,341)
–
Fixed rate funding, CLN
(225,828)
–
(1,681)
–
Swap Libor x Pré
Subordinated debt – Medium term
notes – Note 9(e)
(2,270,032)
(1,296,496)
(105,417)
(94,386)
2,274,605
1,296,496
US$ 500,000, 01.27.2012
(1,475,368)
(1,296,496)
(111,952)
(94,386)
Swap Libor x Pré
1,475,368
1,296,496
US$ 300,000, 06.06.2014
(794,664)
–
6,535
–
Swap Libor x Pré
799,237
13,834,644
15,080,585
(179,748)
Total
(185,026)
(12,731,790)
–
(13,420,694)
(1) Financial assets and liabilities with fixed rates, mainly credit operations and funding – Note 11. The notional value at the methodology equivalent/year represents (R$ 16,433,142) (R$ (17,091,205) at
12.31.2013).
The effectiveness of hedges designated by Safra for accounting purposes is in accordance with the parameters set out in BACEN
Circular 3,082/2002.
8. Credit portfolio
a) Credit operations and the related allowance per risk level
12.31.2014
Níveis de risco
12.31.2013
AA
A
B
C
D
E
F
G
H
Total
Total
Borrowings, discounted receivables and portfolios acquired
15,374,333
5,767,458
2,213,291
877,959
130,121
122,246
71,475
40,054
506,572
25,103,509
27,110,842
Financing
11,976,162
930,419
171,737
181,865
4,558
13,264,951
9,482,247
10,814
1,300,847
1,491,633
5,665
881,489
807,062
12,659
1,079,844
986,165
Rural and agro-industrial financing
–
–
210
–
–
1,135,871
62,758
86,226
2,440
1,399
–
1,339
Housing loans
656,459
78,986
68,726
66,001
5,205
–
387
Advances on foreign exchange contracts
831,362
37,194
159,632
38,534
463
–
–
60
–
Onlendings - National Bank for Economic and Social
Development (BNDES)/ Government Agency for
Machinery and Equipment Financing (FINAME)
6,957,469
247,786
366,290
85,346
44,460
42,575
5,597
1,247
120,118
7,870,888
8,555,008
Direct consumer credit and leases
2,331,662
3,184,062
149,094
74,956
34,586
17,357
12,521
8,449
91,283
5,903,970
5,826,916
1,689,346
3,097,559
111,104
69,948
30,486
16,557
12,051
7,665
80,831
5,115,547
5,478,331
86,503
37,990
784
10,452
788,423
348,585
5,192
56,350
73,984
55,461,848
54,333,857
Direct consumer credit
Finance lease
642,316
Other receivables
50,328
–
830
5,008
–
4,100
–
800
–
470
–
–
Total transactions with credit characteristics
at 12.31.2014
Past due
39,313,646
–
10,308,663
–
1,327,101
216,234
182,178
91,529
49,810
756,861
351,694
216,215
109,273
83,970
47,619
29,695
535,071
1,373,537
2,000,479
2,864,132
1,110,886
106,961
98,208
43,910
20,115
221,790
54,088,311
52,333,378
–
–
91,529
49,810
Normal course
39,313,646
Guarantees and sureties
15,688,251
87,366
567,011
5,091
1,119
379
Total with guarantees and sureties at 12.31.2014
55,001,897
10,396,029
3,782,837
1,332,192
217,353
182,557
(51,543)
(32,158)
(39,813)
(21,647)
(54,651)
(45,749)
(3,517)
(6,486)
(10,927)
(25,191)
(23,810)
(51,543)
(28,641)
(33,327)
(10,720)
(29,460)
(21,939)
(14,077)
(42,997)
(62,601)
(380,019)
(154,679)
(102,735)
(40,924)
(14,936)
Minimum allowance required
–
Specific
–
General
–
Additional allowance
Provision for guarantees and sureties – Note 11
Total provision at 12.31.2014
(149,959)
–
10,308,663
3,215,826
–
–
82,462
16,431,679
11,625,376
839,323
71,893,527
65,959,233
(34,863)
(756,861)
(1,037,285)
(1,123,163)
(20,786)
(535,071)
(625,788)
(848,631)
(221,790)
(411,497)
(274,532)
(948,850)
(461,800)
–
–
(1,127)
(8,427)
(4,868)
(325)
(379)
(149,959)
(95,667)
(103,186)
(424,700)
(176,651)
(157,765)
(86,673)
(49,799)
(82,462)
(97,588)
40,907,581
8,377,241
2,501,328
977,020
331,178
230,622
125,516
71,603
811,768
209
571,356
276,876
204,675
109,391
81,010
53,805
703,157
2,000,479
8,377,032
1,929,972
700,144
126,503
121,231
44,506
17,798
108,611
52,333,378
–
–
(839,323) (2,083,723)
Total transactions with credit characteristics
at 12.31.2013
Past due
Normal course
Guarantees and sureties
Total with guarantees and sureties at 12.31.2013
Minimum allowance required
–
40,907,581
–
40,907,581
–
–
–
8,377,241
2,501,328
977,020
–
331,178
–
230,622
125,516
71,603
–
54,333,857
11,625,376
811,768
65,959,233
–
(41,886)
(25,014)
(29,311)
(33,157)
(69,178)
(62,742)
(50,107)
(811,768)
(1,123,163)
Specific
–
(1)
(5,714)
(8,306)
(20,467)
(32,817)
(40,505)
(37,664)
(703,157)
(848,631)
General
–
(41,885)
(19,300)
(21,005)
(12,690)
(36,361)
(22,237)
(12,443)
(108,611)
(274,532)
(143,901)
(41,048)
(49,689)
(68,294)
(66,220)
(46,095)
(25,084)
(21,469)
Total provision at 12.31.2013
(143,901)
(82,934)
(74,703)
(97,605)
(99,377)
(115,273)
(87,826)
(71,576)
–
(461,800)
(811,768) (1,584,963)
–
(1,584,963)
b) Allowance for loan losses
I. Composition of portfolio and allowance for loan losses
12.31.2014
Credit Portfolio
Past due
Normal
Minimum Allowance Required
Total
Specific
General
Total
(697,344)
Borrowings, discounted receivables
and portfolios acquired
663,631
24,439,878
25,103,509
(393,728)
(303,616)
18,728
13,246,223
13,264,951
(4,829)
(11,659)
(16,488)
9,931
1,290,916
1,300,847
(9,920)
(2,953)
(12,873)
Housing loans
7,960
873,529
881,489
(2,763)
(6,720)
(9,483)
Financing
Onlendings - BNDES / FINAME
25,788
1,054,056
1,079,844
(12,009)
(3,635)
(15,644)
381,831
7,489,057
7,870,888
(101,105)
(47,365)
(148,470)
260,476
5,643,494
5,903,970
(96,242)
(35,541)
(131,783)
237,154
4,878,393
5,115,547
(85,590)
(33,345)
(118,935)
Finance lease
23,322
765,101
788,423
(10,652)
(2,196)
(12,848)
Outros Créditos
5,192
51,158
56,350
(5,192)
(8)
(5,200)
Total at 12.31.2014
1,373,537
54,088,311
55,461,848
(625,788)
(411,497) (1,037,285)
Total at 12.31.2013
2,000,479
52,333,378
54,333,857
(848,631)
(274,532) (1,123,163)
II. Changes in the provision for credit operations
Total provision
Additional
Total
Constitution/ provision –
provision at
at 01.01.2014
(reversal)
722,484
730,633
6,275
30,504
Note 2(a)
Write-offs
12.31.2014
–
(755,773)
697,344
–
(20,291)
16,488
12,873
Borrowings, discounted receivables
and portfolios acquired
Financing
2,781
12,629
–
(2,537)
Housing loans
6,004
6,608
–
(3,129)
4,317
11,327
–
–
149,482
133,812
–
Onlendings - BNDES/FINAME
(134,824)
9,483
15,644
148,470
217,798
116,252
–
(202,267)
131,783
187,650
105,744
–
(174,459)
118,935
Finance lease
30,148
10,508
–
(27,808)
12,848
Other receivables
14,022
6,107
–
(14,929)
5,200
1,123,163
1,047,872
–
(1,133,750)
1,037,285
461,800
(11,500)
498,550
–
948,850
17,928
79,660
–
97,588
Total minimum allowance required
Provision for guarantees and sureties –
Note 11
Total allowance
–
1,584,963
1,054,300
578,210 (1,133,750)
2,083,723
Total provision
Constitution/
at 01.01.2013
(reversal)
Write-offs
12.31.2013
1,407,752
1,066,980
(1,351,569)
1,123,163
275,000
186,800
1,682,752
1,253,780
Total
Total minimum allowance required
Total allowance
In recognizing the provision above, Banco
Safra’s management not only considers the
minimum provisioning levels defined by CMN
Resolution 2,682/1999 but also thoroughly
provision at
–
(1,351,569)
461,800
1,584,963
analyzes the risk of loan losses supported by
a widely tested and periodically re-evaluated
internal credit rating methodology approved
by Management.
In December 2014, due to the expected
worsening of the economic scenario for 2015,
Banco Safra adjusted its model for recording
Additional ALL, including guarantees and sureties, to include in its calculations a worsening
of the risk factors that have not yet been fully
captured in the CMN Resolution 2,682/1999
provisioning model. This adjustment generated the effect of R$ (578,210), as presented
in Note 2(a).
Nonaccrual amounts receivable greater
than 60 days past due are R$ 584,921
(R$ 905,064 at 12/31/2013) and greater
than 90 days past due are R$ 412,581
(R$ 698,335 at 12.31.2013).
e) Breakdown of the credit portfolio by
activity
Public sector: Industry
12.31.2014
12.31.2013
11,436
136
Private sector:
c) Renegotiated loans and recovery of
receivables
The balance of renegotiated loans was
R$ 441,230 (R$ 462,790 at 12/31/2013),
and provision for loan losses was
R$ 283,335 (R$ 293,477 at 12.31.2013).
The receivables recovered in the period
amounted to R$ 276,178 (R$ 218,757
in 2013). Breakdown of the portfolio by
maturity:
d) Composition of the portfolio by maturity
PAST DUE
12.31.2014
12.31.2013
1,373,537
2,000,479
Past due operations:
From 15 to 30 days
541,869
765,601
From 31 to 60 days
246,747
329,814
From 61 to 90 days
172,340
206,729
From 91 to 180 days
215,597
317,176
From 181 to 365 days
NORMAL COURSE
196,984
381,159
54,088,311
52,333,378
136,407
108,447
Rural
1,390,725
1,570,360
Industry
13,987,784
14,227,559
Commerce
16,363,628
15,140,118
654,472
855,554
17,144,264
17,220,075
5,286,406
4,837,530
Other services
Individuals
Housing
Total
Outstanding installments:
482,525
55,461,848
54,333,857
f) Concentration of credit
12.31.2014
12.31.2013
1st to 10th largest customers
5,989,051
5,684,374
11th to 50th largest customers
7,411,623
7,328,118
51st to 100th largest customers
4,774,869
4,288,997
100 major customers
18,175,543
17,301,489
Other customers
37,286,305
37,032,368
Total
55,461,848
54,333,857
g) Credit commitments (off balance)
The off-balance amounts referring to financial guarantee contracts are as follows:
12.31.2014
12.31.2013
guarantees provided (1)
16,431,679
11,625,376
Installments overdue – Overdue up
to 14 days
623,133
Guarantees, sureties and other
From 1 to 30 days
8,102,930
7,589,148
Credit limits committed (2)
10,430,758
7,659,332
From 31 to 60 days
5,346,756
5,277,089
Total
26,862,437
19,284,708
From 61 to 90 days
4,730,023
4,853,752
Contractual term:
From 91 to 180 days
9,134,271
9,214,974
Up to 90 days
12,014,285
8,392,952
8,876,757
7,867,757
From 91 to 365 days
5,025,367
4,115,778
17,761,167
17,422,211
Over 365 days
9,822,785
6,775,978
55,461,848
54,333,857
Over 365 days
TOTAL
(1) Refer to liabilities for guarantees, sureties and other guarantees provided;
(2) Refer to credit limits granted and not used, characterized by the cancellation option
by Safra, with the average term of 90 days.
9. Open market funding, borrowings and onlendings, and managed funds
12.31.2014
Deposits from customers
Deposits (1) (a)
Open market funding - own securities (b)
12.31.2013
Short term
Long term
Total
Short term
Long term
Total
34,291,511
24,380,590
58,672,101
31,083,122
18,658,610
49,741,732
5,162,802
1,699,719
6,862,521
5,329,662
934,054
6,263,716
14,448,923
5,334,226
19,783,149
12,686,511
4,838,966
17,525,477
11,499,876
11,572,157
23,072,033
9,487,326
8,194,811
17,682,137
3,179,910
1,245,039
4,424,949
3,579,623
1,236,714
4,816,337
4,529,449
4,529,449
3,454,065
3,454,065
45,196,397
7,020,658
52,217,055
42,808,172
4,682,036
47,490,208
2,653,581
141,805
2,795,386
3,582,688
236,035
42,369,250
38,463,889
2,717,515
761,595
1,531,442
–
Funds from financial bills, bills of credit
and similar notes (c)
Structured fixed income transactions (2)
Supplementary pension plan funds (3)
–
Market resources
Interbank deposits (a)
Open market funding (4) (b)
42,369,250
Marketable debt securities abroad (c)
Subordinated debt (e)
Borrowings and onlendings (d)
Total funds raised
–
173,566
2,543,949
–
–
3,818,723
38,463,889
2,293,037
4,334,904
4,334,904
2,914,559
2,914,559
12,243,544
4,567,281
16,810,825
11,990,056
5,142,397
17,132,453
91,731,452
35,968,529
127,699,981
85,881,350
28,483,043
114,364,393
Managed funds (f)
Total funds under management
(1)
(2)
(3)
(4)
–
36,088,553
27,010,591
163,788,534
141,374,984
Does not include interbank deposits.
Funds recorded in derivative financial instruments (Note 7(b- I(1)).
Recorded in liabilities with insurance and supplementary pension plan transactions - Note 10(b).
Does not include own securities.
a) Deposits
12.31.2014
12.31.2013
Amounts by maturity
No stated
Up to
From 91 to
Over
maturity
90 days
365 days
365 days
Total
Total
894,371
–
–
–
894,371
871,435
1,655,929
–
–
–
1,655,929
1,479,830
Demand deposits
Savings deposits
Interbank deposits
(1)
–
1,637,400
1,016,181
141,805
2,795,386
3,818,723
Time deposits
–
429,390
2,183,112
781,079
3,393,581
3,912,451
Time deposits - Hedge - Note 7(d)
–
–
–
918,640
918,640
Total at 12.31.2014
2,550,300
2,066,790
3,199,293
1,841,524
9,657,907
Total at 12.31.2013
2,351,265
2,693,165
3,867,920
1,170,089
10,082,439
(1) Of this amount, R$ 907,713 (R$ 1,667,238 at 12/31/2013) refers to operations linked to rural credit.
–
10,082,439
b) Open market funding
12.31.2014
12.31.2013
Amounts by maturity
Own portfolio
Up to
From 91 to
Over
90 days
365 days
365 days
Total
Total
15,048,920
9,231,848
5,334,226
29,614,994
36,561,586
9,831,845
19,036,109
19,783,149
17,525,477
17,213,927
1,841,990
National treasury
9,831,845
Own securities
5,217,075
-–
–
9,231,848
5,334,226
Third-party portfolio – National Treasury –
Note 5
17,213,927
–
–
Unrestricted portfolio – National Treasury –
LTN – Note 5 (1)
15,323,478
15,323,478
17,585,790
Total at 12.31.2014
47,586,325
9,231,848
5,334,226
62,152,399
55,989,366
Total at 12.31.2013
45,147,908
6,002,492
4,838,966
55,989,366
–
–
(1) The amount of the adjustment to market value is R$ (206,272) (R$ (13,756) at 12/31/2013) - Note 7(c).
c) Funds from acceptance and issue of securities
I. Composition
12.31.2014
12.31.2013
Amounts by maturity
Up to
From 91 to
Over
90 days
365 days
365 days
Total
Total
Funds from financial bills, bills of credit
and similar notes
4,017,145
7,482,731
11,572,157
23,072,033
17,682,137
Financial bills
2,643,824
4,516,599
7,957,041
15,117,464
12,775,958
680,167
1,450,982
2,270,026
4,401,175
2,705,305
88,859
138,885
106,821
334,565
108,660
355,744
1,168,871
967,459
2,492,074
2,048,679
Agribusiness credit notes
Mortgage bills
House Loan Bills
Debentures
–
Certificate of structured operations
33,064
33,064
248,551
207,394
–
237,746
693,691
43,535
33,844
139,722
2,543,949
2,717,515
2,293,037
688,279
719,146
797,552
–
Medium Term Note - (Reais) - Hedge –
Note 7(d) - Fixed 10.25% per year
30,867
–
Medium Term Note - (U.S. dollar) –
–
–
–
–
265,812
265,812
–
–
1,227,809
1,227,809
–
–
–
225,828
225,828
–
53,124
53,187
–
–
704,882
Hedge - Note 7(d) - Fixed 3.50% per year
Medium Term Notes – (Pré) – Hedge –
290,648
Nota 7(d) – Pré 10,75% a.a. (1)
Medium Term Notes – (CHF) – Hedge –
Nota 7(d)
(1)
Medium Term Notes – Libor + pré –
Hedge – Nota 7(d) (1)
Medium Term Note – (U.S. dollar)
Medium Term Note - Libor + fixed
–
(1)
63
46,908
2,977
139,659
83,097
225,733
453,047
Total at 12.31.2014
4,050,989
7,622,453
14,116,106
25,789,548
19,975,174
Total at 12.31.2013
2,646,736
7,602,185
9,726,253
19,975,174
(1) Includes incurred transaction costs of structured fixed income transactions in the amount of R$ 5,055 (R$ 3,986 at 12.31.2013) - Note 3(m).
II. Transactions
1) Funds from financial bills, bills of credit and similar notes
01.01 to 12.31.2014
17,682,138
Funding
16,505,457
Redemptions
(13,372,079)
Allocation in the result - interest
2,256,517
23,072,033
2) Liabilities for marketable securities abroad
01.01 to 12.31.2014 01.01 to 12.31.2013
2,293,037
2,823,287
Foreign exchange variation
(194,630)
174,460
1,428,254
28,107
Redemptions
(827,229)
(538,385)
Interest paid
(125,931)
(288,614)
Funding
Allocation in the result
Interest
Variation in mark-to-market adjustment - Note 7(d)
144,014
94,182
156,563
222,265
(12,549)
(128,083)
2,717,515
2,293,037
d) Borrowings and onlendings
12.31.2014
12.31.2013
Amounts by maturity
Up to
From 91 to
Over
90 days
365 days
365 days
Total
Total
Foreign borrowings (1)
5,972,945
1,994,003
317,468
8,284,416
8,410,932
Domestic onlendings
1,395,923
2,379,886
4,249,813
8,025,622
8,542,481
31,684
114,600
146,284
1,511
National treasury
–
BNDES
295,446
494,369
878,402
1,668,217
1,417,730
FINAME
1,068,793
1,770,917
3,371,411
6,211,121
7,123,240
Other borrowings
500,787
–
–
500,787
179,040
17.132.453
Total at 12.31.2014
7.869.655
4.373.889
4.567.281
16.810.825
Total at 12.31.2013
3,956,999
8,033,057
5,142,397
17,132,453
(1) Credit lines opened for import and export financing.
e) Subordinated debit
I. Composition of the balance per security and rate
Securities/Rates
12.31.2014
Bank Deposit Certificates (CDB) – 106% of CDI (1)
Financial bills (LF)
- CDI (110,5% to 114%)
12.31.2013
699,215
698,845
1,365,657
919,218
661,824
422,295
6,385
4,067
672,689
490,118
- General Marke Price Index (IGPM) +
(interest from 3.89% to 6.68% per year)
- Amplified Consumer Price Index (IPCA) +
(interest from 4.43% to 8.75% per year)
- Fixed (10.92% to 14.25% per year)
Medium term notes - Hedge - Note 7(d)
- US$ 300,000 + 7.00% per year - Note 18(c)
24,759
2,738
2,270,032
1,296,496
794,664
- US$ 500,000 + 6.75% per year
Total (2)
–
1,475,368
1,296,496
4,334,904
2,914,559
(1) Of the amount issued, R$ 1,430 (R$ 1,430 at 12/31/2013) is in the portfolio.
(2) Operations with half yearly and quarterly interest payments.
II. Composition of the balance per characteristic and maturity term
Securities
Perpetual
Approved
Without termination clause
With termination clause
In process of approval
With termination clause
Total at 12.31.2014
Total at 12.31.2013
2016
794,664 1,091,959
–
794,664
1,091,959
–
–
–
–
–
2019
2020
2021
2022
2024
14,567
482,110
148,210 1,618,293
3,532
482,110
30,382 1,475,368
3,213
–
57,771
4,153,335
3,083,032
117,828
142,925
319
14,567
1,070,303
8,528
79,308
616
35,346
181,569
8,528
79,308
616
35,346
181,569
794,664 1,091,959
539,881
156,738 1,697,601
4,148
49,913
4,334,904
1,067,555
428,396
119,239 1,296,496
2,873
–
57,771
–
Total
–
2,914,559
III. Transactions
01.01 to 12.31.2014 01.01 to 12.31.2013
2,914,559
2,657,265
303,743
169,336
Funding
993,559
102,640
Perpetual
660,750
Other
332,809
102,640
(205,283)
(149,453)
Interest paid
Allocation in the result
Interest
Variation in mark-to-market adjustment (hedge) - Note 7 (d)
–
328,326
134,771
331,879
218,757
(3,553)
(83,986)
4,334,904
2,914,559
f) Managed funds
The Safra Group, in conjunction with JS Administração de Recursos S.A. (related party), is
responsible for the management, administration and distribution of quotas of investment
funds, as follows:
12.31.2014
12.31.2013
Managed funds (1)
36,088,553
27,010,591
Funds in quotas
30,786,828
26,045,398
Exclusive funds
5,332,527
9,015,815
Consolidated supplementary pension plan - Note 10(b)
4,529,449
3,454,065
76,737,357
65,525,869
Total stockholders’ funds
(1) Includes financial investments in Banco Safra S.A. of R$ 3,990,124 (R$ 5,199,488 at 12/31/2013), mainly represented by resale
agreements backed by government bonds.
Income from fund management, administration and quota distribution fees, recorded in
‘Income from services rendered’, totals R$ 321,528 (R$ 232,256 in 2013) - Note 13(d).
When revenue from the related party is included, the amount is R$ 365,047 (R$ 267,223
in 2013) - Note 18(c).
10. Insurance, reinsurance and supplementary pension plan operations
a) Receivables from insurance and reinsurance operations
12.31.2014
12.31.2013
Premiums receivable - Note 10(a-I)
26,144
34,004
Reinsurance technical provisions - Note 10(a-II)
15,618
18,441
2,599
11,280
165
1,436
Deferred acquisition costs
Pension funds investments to redeem
Other insurance operating receivables and supplementary pension
Total – Note 11
6,433
8,308
50,959
73,469
12.31.2014
12.31.2013
I. Premiums receivable
(1) Analysis of balance
Overdue (1)
3,001
3,793
From 1 to 30 days
7,151
7,543
From 31 to 60 days
3,267
3,539
From 61 to 180 days
9,595
8,347
735
869
1
1
Credit risk
(973)
(1,074)
Risks effective but not yet issued
3,367
10,986
26,144
34,004
Over 365 days
Total
(1) Refers mainly to the installments overdue by up to 90 days.
(2) Changes during the period
01.01 to 12.31.2014 01.01 to 12.31.2013
34,004
27,683
(+) Premiums issued and policies in process of issuance
for risks already underwritten (1)
(-) Receipts (2)
(+) Variation of credit risks
(+) Interest on receipt of premiums
Saldo no final do período
197,322
183,913
(209,246)
(180,823)
102
(227)
3,962
3,458
26,144
34,004
(1) Does not include the coinsurance premium of R$ 6,773 (R$ 9,325 at 12/31/2013) and reinsurance premium of R$ 6,942
(R$ 9,491 at 12/31/2013).
(2) Does not include DPVAT of R$ 75,815 (R$ 57,300 at 12/31/2013).
II. Reinsurance assets – technical reserves
(1) Changes during the period
01.01 to 12.31.2014
Reserve for
Unearned
premium
Unsettled
not reported
reserve
claims (1)
losses
Total
4,700
12,988
753
18,441
(1,476)
11,754
(34)
10,244
(108)
(14,668)
611
15,618
Changes in technical reserves
incurred but
Recovery
–
(14,560)
Monetary restatement
–
1,601
3,224
11,783
–
1,601
(1) Includes 29 (20 at 12/31/2013) judicial claims of R$ 7,467 (R$ 9,465 at 12/31/2013).
b) Guarantors resources for the technical reserves for insurance and supplementary
pension plans
Quotas of investment funds – PGBL/VGBL
12.31.2014
12.31.2013
4,786,119
3,662,446
4,529,449
3,454,065
Repurchase agreements - Debentures
107,769
–
Private securities
689,659
344,797
Bank Deposit Certificates (CDB)
134,271
116,952
Financial bills
453,469
170,199
Debentures
Shares
Promissory Notes
National treasury
5,448
3,781
46,937
53,865
49,534
3,737,436
–
3,104,341
651,437
551,976
903,047
1,191,558
2,182,952
1,360,807
Other
(5,415)
4,927
256,670
208,381
Government securities - National Treasury Bills
–
137,915
Quotas of funds – Linked to Technical Reserve
176,666
–
National treasury – National Treasury Bills
174,828
–
1,838
–
Other securities
Other
Quotas of investment funds - DPVAT agreement
80,004
70,466
Receivables from reinsurance operations
12,394
18,442
Creditor rights - Insurance premium receivables
10,508
10,829
4,809,021
3,691,717
Total
c) Insurance and supplementary pension plan operations (liabilities)
As of December 31, the insurance and supplementary pension plan operations were
stated as follows:
12.31.2014
12.31.2013
4,730,077
3,644,611
Transactions with insurance companies
1,765
2,297
Transactions with reinsurance companies
6,140
8,775
Technical provisions - Note 10(c-I(1))
Commissions and other insurance liabilities
Total
5,032
9,679
4,743,014
3,665,362
I. Technical provisions
(1) Analysis
12.31.2014 12.31.2013
12.31.2014
Insurance
Reserve for unvested and vested benefits
–
Provision for unearned premiums
–
79,449
12.31.2013
12.31.2014
Pension Plan
78,706
4,529,399
–
12.31.2013
Total
3,453,926
4,529,399
3,453,926
79,449
78,706
–
Provision for unsettled claims
19,664
20,625
–
–
19,664
20,625
DPVAT agreement
79,972
70,527
–
–
79,972
70,527
2,225
–
Losses incurred but not reported (IBNR)
Complementary Provision for Contributions (PCC)
2,327
–
–
–
17,183
2,327
2,225
16,590
17,183
16,590
Provision for Related Expenses (PDR)
–
–
1,239
914
1,239
914
Redemptions to be regulated
–
–
844
1,098
844
1,098
Total
181,412
4,548,665
3,472,528
4,730,077
3,644,611
172,083
(2) Coverage
12.31.2014
12.31.2013
4,809,021
3,691,717
(4,730,077)
(3,644,611)
78,944
47,106
01.01. to 12.31.2014
01.01. to 12.31.2013
3,472,528
2,910,921
Contributions
471,194
375,350
Net transfers accepted
690,465
423,586
Redemptions
(470,723)
(409,618)
Benefits paid
(222)
(208)
384,505
172,022
Guarantors resources for the technical reserves for insurance and supplementary pension
plans – Note 10(b)
Technical provisions - Note 10(c-I(1))
Excess coverage
(3) Changes in the mathematical provision for supplementary pension plans
Financial restatement
Change in provisions
918
475
4.548.665
3.472.528
(4) Complementary Provision for Coverage (PCC) and Liability Adequacy Test (LAT)
The calculation of the Liability Adequacy Test (LAT) carried out at 12/31/2014 did not result in the constitution
of a provision for the insurance product. The provision occurred only in the pension fund product of R$ 17,183
(R$ 16,590 at 12/31/2013) and took into consideration the interest rates and actuarial tables contracted by its
participants (rates of 0%, 3% or 6% plus restatement of IGPM or IPCA and AT-1983 and AT-2000 tables). The other
actuarial decreases that are part of the calculation of the LAT are: projections of redemptions (persistence table),
rate of conversion into granted benefits, expected interest rate made available by SUSEP (forward interest rate
structure (ETTJ)), in accordance with the interest curve related to the index of the obligation. For the calculation of
the mortality biometric variable estimate, the table BR-EMS V.2010-m is considered, implemented with “Improvement” in accordance with G scale disclosed in the website of the Society of Actuaries (SOA).
d) Result from insurance and supplementary pension plan
Income from financial intermediation
2014
2013
23,766
14,777
408,271
187,135
(384,505)
(172,358)
153,498
112,541
183,607
165,097
(3,138)
(15,992)
Financial income from insurance and supplementary
pension plan operations
Financial expenses from insurance and supplementary
pension plan operations
Result of the operations with insurance, reinsurance
and supplementary pension plan (1)
Premium income
Changes in technical reserves
Claims expenses
(2,330)
(2,312)
Selling expenses – Note 18(c)
(26,509)
(39,621)
Other income and expenses (1)
1,868
5,369
Income from rendering of services with pension funds
management - Note 13(d)
Total
35,510
29,011
212,774
156,329
(1) Includes the net result of the DPVAT agreement.
11. Other financial assets and liabilities
12.31.2014
Assets
Foreign exchange portfolio - Note 11(a)
Collection of taxes and similar
Negotiation and intermediation of securities - Note 11(b)
Other
Roll over of amounts to release
Credits without characteristics of underwriting
Liabilities
Assets
Liabilities
2,189,109 2,068,927 5,197,026 5,211,999
–
9,582
438,193
457,496
–
201,285
8,584
246,941
1,713
235,305
151,983
241,781
258,607
424,317
305,773
321,804
–
39,322
207,147
Hedge market adjustment - Note 7(d)
Receivables from insurance and reinsurance operations –
12.31.2013
501
50,959
–
102,025
–
–
232,304
–
73,469
48,457
–
80,307
–
Note 10(a)
Provision for guarantees and sureties – Note 8(a) and (b-II)
–
Exclusive non-controlling fund obligations – Note 2(b)
Credit card administration obligations
Total
97,588
–
–
–
74,495
–
103,450
–
110,887
–
89,590
2,887,622 3,195,627 5,856,067 6,031,109
a) Foreign exchange portfolio
12.31.2014
12.31.2013
Assets
Liabilities
Assets
Liabilities
915,236
782,191
2,104,110
2,034,879
Foreign exchange purchases pending settlement (M.E.)
and Obligations for foreign exchange purchase (M.N.)
133,045
Interbank for timely settlement
733,286
733,286
2,008,302
2,008,302
48,905
48,905
26,518
26,577
1,273,873
1,286,736
3,092,916
3,177,120
Other
–
69,290
–
Receivables for foreign exchange sales (M.N.) and
Foreign exchange sales pending settlement (M.E.)
–
(5,634)
–
73,781
Interbank for timely settlement
265,670
265,670
2,008,589
2,008,589
Interbank for future settlement
536,792
536,792
1,054,536
1,054,536
(-) Advances received
(19,834)
Other
491,245
489,908
42,111
40,214
2,189,109
2,068,927
5,197,026
5,211,999
Total
Foreign exchange transactions
–
(12,320)
90,976
–
88,477
b) Negotiation and intermediation of securities
12.31.2014
Assets
12.31.2013
438,193
201,285
312,151
111,110
Settlement and clearinghouse (1)
94,990
49,590
Financial assets and commodities pending settlement
31,052
40,585
457,496
246,941
176,350
120,075
33,508
66,326
247,638
59,075
Debtors pending settlement (1)
Liabilities
Creditors pending settlement (1)
Settlement and clearinghouse
(1)
Financial assets and commodities pending settlement
Other
–
1,465
(1) Refers mainly to transactions on stock exchanges recorded by J. Safra Corretora de Valores e Câmbio Ltda.
12. Contingent assets and liabilities and
legal obligations – tax and social security
a) Contingent assets
Safra Leasing SA – Arrendamento Mercantil
requested the Secretary of Receita Federal
(the Brazilian tax authority) for Tax Credits
in the amount of R$ 49,885, originating
with the final judgment of the court case
litigating the repeated overpayment resulting from undue payments related to CPMF
(a type of tax) on commercial leases - from
2000 to 2004. The tax offset was recorded
in July 2014 and is disclosed in the Statement of Income as “Other Operating Income” – Note 13 (g).
b) Provisions and contingent liabilities
Contingent liabilities are as follows:
I. Civil lawsuits
Civil lawsuits are represented mainly by indemnity claims for property and/or moral
damages due to direct consumer credit operations, collections and loans, protests of
notes, inclusion of customer data in credit
restriction databases and elimination of inflation effects in connection with economic
plans on savings account balances.
These lawsuits are evaluated when a
court notification is received, and are classified as mass, when related to similar causes with insignificant amount, or as special,
when there is a special characteristic in the
lawsuit received, arising from the significance of the amount involved, or from matter
with corporate importance or different from
ordinary lawsuits.
The allowance recorded for mass lawsuits received is calculated on a monthly
basis at the average historical cost of payments of lawsuits terminated in the last 12
months, also considering the average of the
fees paid in the same period and causes
terminated due to successful welcome. This
average cost is restated quarterly and multi-
plied by the amount of outstanding lawsuits
in the portfolio on the last business day of
the month.
The special lawsuits are evaluated individually concerning the likelihood of loss,
and are periodically reviewed and quantified
based on the judicial stage, on the proof
presented and/or on the jurisprudence in
accordance with the evaluation of management and internal lawyers. A provision is
constituted at the full amount for lawsuits
classified as a probable loss.
II. Labor lawsuits
Lawsuits filed to claim alleged labor rights
derived from the labor legislation specifically relating to financial institutions, especially overtime.
These labor lawsuits are evaluated when
a court notification is received, and are classified as technical.
The lawsuits are evaluated individually
by the likelihood of loss, and are periodically
reviewed and quantified based on the phase of the process, on the proof presented
and on the jurisprudence in accordance with
the evaluation of management and internal
lawyers. A provision is constituted insofar
as the probability of loss is considered probable, and readjusted by a non-linear regression between the technical evaluation
and the payments carried out historically
over the previous two years. This regression is recalculated on an annual basis.
The provision arising from the technical
evaluation is readjusted at the amounts of
the judicial deposits. The full amount of the
deposits is provisioned by in cash and 85%
of the amount of the deposits in government bonds.
III. Other risks
Specific contingencies quantified and provided for per individual evaluation, basically
represented by Salary Variations Compensation Fund (FCVS) provisions.
IV. Tax and social security lawsuits
These are represented mainly by administrative proceedings and lawsuits related to municipal and federal taxes.
They are individually quantified when the notification of the proceedings is received,
based on the amounts assessed and are restated monthly. The provision is constituted
at the full amount for proceedings classified as a probable loss.
c) The provisions constituted and the related changes during the periods were as follows:
I. Civil, labor and other
01.01 to
01.01 to 12.31.2014
At the beginning of the period at 01.01.2014
Monetary adjustment/Charges (2)
Changes in the period reflected in the results (3)
12.31.2013
Civil
Labor
Other
Total
Total
288,312
224,610
42,063
554,985
463,611
839
12,203
11,790
71,474
210,174
11,364
–
(25,546)
97,020
–
Constitution/ (reversal)
(12,241)
102,994
–
90,753
228,646
Reversal due to successful welcome
(13,305)
(5,974)
–
(19,279)
(18,472)
(35,793)
(90,268)
–
(126,061)
(131,730)
Payment
Other changes
–
At the end of the period at 12.31.2014 (1)
Guarantee deposits (4)
Guarantee securities
(5)
–
1,125
1,125
1,140
44,027
513,726
554,985
238,337
231,362
40,300
72,149
–
112,449
1,306
55,761
–
57,067
Total amounts guaranteed at 12.31.2014
41,606
127,910
–
169,516
Guarantee deposits (4)
32,282
69,792
–
102,074
Guarantee securities (5)
1,239
57,196
–
58,435
33,521
126,988
–
160,509
Total amounts guaranteed at 12.31.2013
(1)
(2)
(3)
(4)
(5)
Note 13(c).
Recorded in other finance costs.
Notes 13(g) - Civil contingencies and 13(e) - Labor contingencies.
Note 13(a).
Note 7(a-II).
At 12/31/2014, the amount of the contingent liabilities classified as a possible loss
related to civil claims, not recognized, is R$ 16,724 (R$ 3,190 at 12/31/2013). There
are no labor contingent liabilities classified as possible loss.
II. Tax and social security contingencies and legal obligations
01.01 to
01.01 to 12.31.2014
12.31.2013
Taxes and
At the beginning of the period at 01.01.2014
Monetary adjustment/Charges
(2)
Changes in the period reflected in income (3)
social security
Legal
contingencies
obligations
Total (1)
Total (1)
287,510
27,005
314,515
1,006,424
22,222
424
22,646
44,030
161,830
(2,728)
159,102
(220,645)
Constitution (4)
235,828
–
235,828
79,648
Reversal (5)
(73,998)
(2,728)
(76,726)
(300,293)
Payment
(32,428)
(11,186)
(43,614)
(517,437)
Other changes
–
–
At the end of the period at 12.31.2014
439,134
13,515
452,649
Guarantee deposits at 12.31.2014 (6)
27,223
10,244
37,467
(6)
28,750
17,360
46,110
Guarantee deposits at 12.31.2013
–
2,143
314,515
(1) Note 14(c).
(2) Recorded in other finance costs.
(3) The changes of the tax contingency reflected in the statement of income and the tax credit effect arising from the enrollment in the
Program for Lump Sum Payment or Installment Payment of Federal Taxes and the amount referring to the recovery of the Tax on Bank Account Outflows (CPMF) on leasing operations - Note 12(a) totaled R$ 80,393 and are recognized in other operating income – Note 13(g).
(4) In 2014, represented mainly by the constitution of a Social Security Contribution contingency of R$ 177,396 relating to the taxable
events in the period from 2009 to 2014.
(5) In 2014, mainly represented by the reversal of the ICMS contingency on import operations realized at the risk and expense of Safra
Leasing, whose reclassification of likelihood of loss was changed to remote.
(6) Note 13(a).
III. The primary lawsuits involving tax
and social security contingencies are as
follows:
•
Social
Security
Contribution
of
R$ 187,117 relating to the taxable mevents in the period from 2009 to 2014.
•Services Tax (ISS) on banking activities
– a number of tax assessment notices
and judicial claims related to the tax levied on revenues from banking activities,
which are not included in the price
for services rendered, amounting to
R$ 86,209 (R$ 81,562 at 12/31/2013).
•Corporate Income Tax (IRPJ) and Social
Income on Net Income (CSLL) – Tax Loss
(PF) Compensation lock - the Company
defended the full offset of tax loss in the
case of termination of the Company, of
R$ 23,875.
•IRPJ and CSLL – Exclusion of R$ 19,436
related to fees not considered remuneration for the taxable event of 2005.
13. Other asset, liability and result accounts
a) Other sundry receivables
12.31.2014
12.31.2013
Deferred tax assets - Note 14(b-I)
869,434
332,187
Debtors for deposits in guarantee of contingencies
240,820
229,820
Tax and social security contingencies and legal obligations (1)
128,371
127,746
Civil, labor - Note 12(c-I)
112,449
102,074
398,607
142,990
Asset transactions to be processed
32,386
90,022
Other
40,147
38,458
Total
1,581,394
833,477
Taxes and contributions to be offset (2)
(1) Payments linked to tax and social security contingencies and legal obligations are disclosed in Note 12(c-II).
(2) At 12/31/2014, it includes tax credits arising from the enrollment in the Program for Lump Sum Payment or Installment Payment of
Federal Taxes.
b) Other amounts and assets – Assets not for own use
Comprised mainly of properties received for the payment of debts.
The assets and properties received as payment are intended for sale and the funds obtained are used to reduce the outstanding debts. The following table shows the changes
during the periods:
01.01 to 12.31.2014 01.01 to 12.31.2013
Recoveries/resumption assets
Sale of the asset
Reversal/(supplement) of provision
70,450
21,849
201,372
94,354
(104,508)
(21,378)
(46,763)
(24,329)
120,551
70,496
c) Other payables
12.31.2014
12.31.2013
Provision for contingent liabilities - civil, labor and other - Note 12(c-I)
513,726
554,985
Provision for payments to be made
247,855
239,379
Liability operations to be processed
97,603
53,531
Other
73,975
45,336
Total
933,159
893,231
d) Banking services and income from bank fees
Custody and investment management fee - Note 9(f)
Fund management
2014
2013
321,528
232,256
286,018
203,245
35,510
29,011
25,204
22,355
Income from rendering of services with pension funds management –
Note 10(d)
Broker fees
Collections
79,548
72,798
154,672
123,799
Credit card operations
71,988
40,631
Foreign exchange services
26,428
20,351
Guarantees provided
Other
23,113
16,119
702,481
528,309
Credit operations
67,041
75,186
Charges on DOC/TED transfers
12,904
12,659
Packages of services and registrations
50,333
38,251
Other current account services
69,257
63,360
Total revenues from bank fees
199,535
189,456
Total
902,016
717,765
2014
2013
935,548
842,392
Total revenues from the performance of services
e) Personnel expenses
Remuneration and profit sharing
Benefits
94,913
84,670
239,593
214,521
1,270,054
1,141,583
Labor contingencies - Note 12(c-I)
97,020
116,028
Dismissal of employees
34,002
35,544
131,022
151,572
1,401,076
1,293,155
2014
2013
Social charges
Sub-total
Sub-total
Total
f) Administrative expenses
Facilities
24,829
23,992
116,678
105,985
Publicity and advertising
11,650
10,406
Data processing and telecommunications
53,041
50,874
Third-party services
44,624
51,533
Travel
37,423
37,074
Financial system services
48,137
46,369
Security, surveillance services and transport
39,269
32,649
Protection of information
74,235
92,960
Depreciation and amortization
48,325
40,612
Legal and notary fees
82,294
88,762
Other
41,577
19,723
Total
622,082
600,939
Rent - Note 18(c)
g) Other operating income
2014
2013
Tax and social security contingencies - Note 12 (c–II)
80,393
420,455
Labor contingencies - Note 12 (c–I)
25,546
–
Other
5,239
2,342
Total
111,178
422,797
h) Other operating expenses
In 2014, it includes an amount of R$ 12,566 related to material events - Note 2(a)
and in 2013, it is mainly composed of civil contingencies in the amount of R$ 94,147 –
Note 12(c-I).
14. Taxes
a) Analysis of income tax and social contribution expenses
I. Reconciliation of income tax and social contribution charges
2014
2013
1,995,792
1,780,143
(798,317)
(712,057)
349,659
290,635
Foreign exchange gains on investments abroad
116,199
119,834
Interest on capital
151,753
134,988
Profit before income tax and social contribution
Charges (income tax and social contribution) at standard rates - Note 3(p)
Permanent (additions) deductions
Dividends and interest on foreign debt bonds
Non-deductible expenses, net of non-taxable income
1,184
5,906
13,249
2,695
67,274
27,212
(448,658)
(421,422)
Deferred tax assets not recognized in the period/recognized in
previous periods and others
Income tax and social contribution for the period
II. Tax expenses
2014
2013
224,905
198,775
39,731
38,304
Municipal real estate tax (IPTU)
6,152
5,443
Other
5,340
8,606
Total
276,128
251,128
PIS and COFINS
Service tax (ISS)
b) Deferred taxes
I. Origin of income tax and social contribution
Supplementary
At 01.01.2014
Designation
Realization
constitution (1)
At 12.31.2014
213,835
28,212
(58,130)
50,958
234,875
Provisions for contingencies
115,268
(354)
(19,639)
–
95,275
Labor
Civil
89,527
28,566
(38,491)
–
79,602
Tax (1)
–
Other
ALL
(1)
9,040
–
–
–
–
–
–
50,958
–
–
50,958
9,040
514,686
514,686
Fair market value adjustment of trading securities
13,222
4,637
(8,685)
–
9,174
Other
41,254
47,176
(31,291)
–
57,139
268,311
80,025
(98,106)
Total deferred tax assets on temporary differences
–
565,644
815,874
Tax loss and negative social contribution
43,508
(5,017)
–
38,491
Fair market value adjustment of available-for-sale
20,368
(4,650)
(649)
–
15,069
332,187
75,375
(103,772)
securities
Total deferred tax assets – Note 13(a)
565,644
869,434
(1) In the fourth quarter of 2014, Safra recognized the tax effect arising from temporary differences of allowances for loan losses (Minimum required ALL) and tax contingencies,
upon the designation of these provisions, by recording tax credits arising from risk events which occurred during the year. The tax impact arising from the risk events which occurred
prior to 2014 will continue to be recognized once the respective provisions become deductible, thereby maintaining consistency and uniformity of the accounting treatment used in
the previous periods. These accounting practices are in conformity with the standards established by CMN Resolution 3,059, of December 20, 2002.
At 12.31.2014, the unrecognized balance of tax credits resulting from temporary differences amounted to
R$ 742,966 (R$ 1,085,282 at 12.31.2013), and refer primarily to the tax liability arising from the designation of
the required minimum allowance for loan losses and tax assets originated by risk events which occurred prior to
2014, in the amount of R$ 363,426 and tax credits arising from the designation of an additional allowance for loan
losses, of R$ 379,540.
II. Deferred tax liabilities
Excess depreciation
Adjustment to market valeu of derivative financial instruments
Other
Total – Note 14 (c)
12.31.2014
12.31.2013
161,458
227,144
11,838
9,814
1,320
590
174,616
237,548
III. Expected realization of deferred tax assets on temporary differences, income tax and social contribution losses
and deferred taxes on excess depreciation.
Tax credits
Temporary
Period
Provision for
Net
deferred taxes
deferred
differences
Tax losses
Total
and contributions
taxes
2015
300,899
13,575
314,474
(43,387)
271,087
343,580
2016
352,798
24,355
377,153
(33,573)
2017
38,893
561
39,454
(20,613)
18,841
2018
31,006
–
31,006
(16,867)
14,139
2019
43,161
–
43,161
(16,867)
26,294
64,186
(43,309)
20,877
Total
2020 to 2024
830,943
64,186
38,491
–
869,434
(174,616)
694,818
Present Value (1)
706,630
34,128
740,758
(135,311)
605,447
(1) For adjustment to present value, the CDI projected interest rate for future periods was used, net of tax effects.
c) The tax and social security obligations are shown below
Income tax and social contribution payable
Taxes and contributions payable
12.31.2014
12.31.2013
241,415
192,843
96,422
71,894
Provision for deferred taxes and contributions - Note 14(b-II)
174,616
237,548
Tax and social security contingencies and legal obligations - Note 12(c-II)
452,649
314,515
Total
965,102
816,800
15. Property and equipment in use and intangible assets
a) Analysis
12.31.2014
12.31.2013
Accumulated
depreciation/
Cost
Permanent assets
Accumulated
Property and
amortization equipment, net
depreciation/
Cost
Property and
amortization equipment, net
336,253
(215,142)
121,111
289,807
(184,590)
105,217
Facilities, furniture and equipment in use
92,498
(48,727)
43,771
72,032
(41,170)
30,862
IT and data processing equipment
67,825
(43,946)
23,879
55,123
(37,196)
17,927
Construction in progress
Transportation system
Other
Intangible assets – Software
7,711
158,738
(119,225)
7,711
12,066
–
12,066
39,513
144,710
(103,343)
41,367
9,481
(3,244)
6,237
5,876
(2,881)
2,995
98,733
(46,340)
52,393
94,890
(38,313)
56,577
2014
2013
2014
2013
b) Changes
Property and equipment
Intangible assets
105,217
94,898
56,577
45,105
Acquisitions
37,360
29,715
27,079
30,462
Disposals
(2,549)
(1,292)
–
Foreign exchange variation and transfers
Depreciation/amortization expenses
(546)
2,785
3,754
(4,640)
310
(21,702)
(21,858)
(26,623)
(18,754)
121,111
105,217
52,393
56,577
16. Equity
d) Value adjustment of the financial assets
available for sale
a) Shares
The capital of Banco Safra S.A. is represented by 772,810,443 common
shares (772,810,443 at 12.31.2013)
and 770,834,855 (770,834,855 at
12.31.2013) preferred shares of stockholders domiciled in Brazil, with no par value,
totaling 1,543,645,298 (1,543,645,298
at 12.31.2013).
I. Changes in adjustment of financial assets:
01.01 to
01.01 to
12.31.2014
12.31.2013
(28,260)
423,170
Adjustments in changes in fair value
6,424
(451,430)
Securities held for sale - Note 7(c)
11,164
(788,283)
11,576
(509,956)
(412)
(278,327)
Fair value adjustment in the period
Profit from sale of securities –
b) Dividends and interest on capital
The stockholders have a right to a minimum dividend equivalent to 1% of the capital corresponding to common and preferred shares.
At the meeting of the Board of Directors held on 12.11.2014, the stockholders approved the payment of interest
on own capital on 12.18.2014 totaling
R$ 379,382, which, net of income tax
represents R$ 322,475.
In line item “Social and Statutory”
there is an included amount of R$ 11,989
(R$ 11,497 at 12.31.2013), which relates
to dividends and interest on own capital
payable.
Note 7(a-III)
Tax impact
Gross amount - Note 7(c)
Tax impact
Profit
Legal
Special (1)
(37,464)
(48,628)
15,629
20,368
2014
2013
1,547,135
1,358,721
Note 16(d-I)
6,424
(451,430)
Change in unrealized gains/(losses)
6,661
(292,039)
Fair value adjustment in the period
11,576
(509,956)
Tax impact
(4,915)
217,917
(237)
(159,391)
(412)
(278,327)
Gain on sale of securities –
12.31.2014
12.31.2013
4,392,950
3,225,198
313,940
236,583
4,079,010
2,988,615
(1) Reserve aims to promote the formation of resources for future development of
these resources to capital, payment of interim dividends, maintaining operating margin
compatible with the development of the company’s and / or expansion of their activities.
(28,260)
Financial assets available for sale –
Notes 7(a-III)
Revenue reserves
336,853
(21,836)
II. Statement of comprehensive income:
Realized gains transferred to income
c) Revenue reserves
(4,740)
Tax impact
Comprehensive income
175
118,936
1,553,559
907,291
17. Risk management
Banco Safra has a set of rules and procedures to ensure compliance with legal provisions, regulatory standards, best market
practices, and its internal policies. Banco
Safra concentrates its operating, liquidity
and market risk management frameworks
on the Corporate Risk Board and its credit
risk management framework on the Credit
Analysis Department, thus establishing the
basis for compliance with the prevailing regulations.
In the site of Banco Safra (www.safra.
com.br) information concerning the management structures for credit, market, liquidity and operation risk and risk management is available. The risk management
report will be available at that address at
the time set by the Central Bank Circular
3,678/2013.
a) Credit risk
Banco Safra is exposed to credit risk, which
is the risk that arises when a counterparty
causes a financial loss by failing to meet a
contractual obligation. Significant changes
in the economy or in the financial health of
a specific segment of industry that represent a concentration in the portfolio held
by Banco Safra can result in losses that
differ from those provided for on the Balance Sheet date. Therefore, Banco Safra carefully controls the exposure to credit risk.
Exposures to this type of risk mainly
arise from direct loan operations, indirect
loan operations (with the intermediation
of financial agents), debentures, financial
investments, derivatives and other securities. There is also the credit risk in connec-
tion with financial agreements not recorded
in the Balance Sheet, such as loan commitments or pledging of collaterals, sureties
and guarantees.
The Credit Risk Management Committee concentrates the Credit Risk governance to ensure full visibility across the entire
credit life cycle. In order to ensure the necessary independence of the risk function,
this committee is comprised of executive
officers and superintendents responsible
for Corporate Risk Management, Credit
Analysis, Policies, Modeling and Portfolio
Management, Monitoring, Collection and
Validation. Depending on the nature of the
issue, the Committee may refer it to the
Board of Directors.
b) Market risk
Market risk is the possibility of losses arising from fluctuations in market prices in
the positions held.
Banco Safra tracks its total exposure to
market risks, measured by the daily Value
at Risk (VaR) at a 99% confidence level,
adopting as a policy a maximum expected loss of less than 3% of its regulatory
capital. To be able to comply with this regulation, the Bank sets targets for Treasury
that are compatible with this risk exposure.
Banco Safra’s market risk assessments
also include the use of stress metrics, contemplating crises in historical periods and
prospective stressed economic scenarios,
in addition to the effects of stress among
risk factor families. Additionally, stop loss
limits are established.
The Market Risk area actively participates in the approval of new products or
financial instruments that may introduce
new risk factors for Treasury management.
As it is responsible for mark-to-market
pricing processes and result and risk calculation, the approval of the Market Risk
area is required before new products are
implemented.
The policies that govern market risk management - Market Risk Policy and Market
Risk Limits Policy - are disclosed to Treasury, control and support areas (liquidity
and market risk managers, internal audit,
internal controls and compliance, liquidity
and market risk validation and information
technology) through the corporate intranet,
in addition to the disclosure of the Market
Risk management framework to the public.
c) Liquidity risk
Liquidity risk consists of the possibility that
the Bank may not have sufficient financial
resources to honor its commitments as a
result of mismatches between payments
and receipts, considering the different currencies and settlement terms of rights and
obligations.
To manage liquidity risk, there are committees for the management of assets and
liabilities, convened every month, with the
objective of defining the liquidity strategies
to be followed in a two-year horizon. Cash
is monitored on a daily basis and reported
to the responsible managers and officers.
Banco Safra submits to the Brazilian Central Bank the liquidity risk reports determined by CMN Resolution 4,090/2012, with
specifications established by BACEN Circular 3,393/2008. These reports are prepared based on management information of
the Investment Risk area to comply with
the prevailing regulations.
The Investment Risk area uses statistics and projections on the behavior of payments and receipts to assess impacts on
cash over time in a series of scenarios:
planning or normality, run off, stress and
hard stress and there is also the possibility of using an arbitrary scenario. The results from the application of these scenarios are discussed at the meetings of the
Committee of Assets and Liabilities.
d) Capital management
Banco Safra’s capital risk management
objectives encompass a concept wider
than “equity” and include the following
aspects:
-Comply with the requirements established by the regulatory bodies of the
bank markets where it operates.
- Safeguard its operating capacity so that
it continues providing return to stockholders and benefits to other stakeholders.
- Maintain a solid capital base to support
the development of its business.
Capital adequacy and the use of regulatory capital are monitored by Banco Safra,
through techniques based on guidelines
established by the Basel Committee, as
implemented by the Brazilian Central Bank
(BACEN), for oversight purposes. The required information is submitted to the appropriate body on a monthly basis.
The bank authority requires that
each bank or group of bank institutions
maintains a minimum regulatory capital
ratio of 11%.
Banco Safra’s regulatory capital is divided into two tiers:
Tier I capital – share capital, retained
earnings and reserves for the recognition
of retained earnings.
Tier II capital – qualified subordinated
debt and unearned income arising from the
measurement at fair value of equity instruments available for sale.
Risk-weighted assets are measured by
a hierarchy of five risk weightings determined according to the nature of each asset
and its corresponding liability - in addition
to reflecting estimated market, liquidity and credit risks and other associated
risks – considering all possible guarantees. A similar treatment is adopted for the
exposure that is not accounted for, with
some adjustments being made to reflect
the more contingent nature of potential
losses.
e) Operating risk
Operating risk is the possibility of incurring losses from failure, deficiency or
inadequate internal procedures, personnel
and systems, or external events.
Operating risk also includes the legal
risk associated with the inappropriateness
or deficiency in agreements entered into by
Banco Safra and its subsidiaries, as well
as sanctions arising from non-compliance
with legal provisions and damages to third
parties arising from the activities performed by Banco Safra and its subsidiaries.
The legal risk is assessed on a continuous
basis by Banco Safra´s legal areas and
specific Committees with that scope.
This definition excludes the risk of reputation or image as well as other risks, such
as strategic or business risks.
The Operating Risk Area is an independent control unit, segregated from the
internal audit. The Operating Risk Area
is responsible for meeting the requirements arising from BACEN Resolution
3,380/2006 on the need for identification,
evaluation, monitoring, control and mitigation of operating risk, as well as for the
preparation and maintenance of the Operating Risk Policy. It is also responsible for
Internal Control and Compliance activities.
f) Sensitivity analysis (Trading and Banking
portfolios)
In accordance with the classification criteria for operations foreseen lwithin CMN
Resolution 3,464/2007, BACEN Circular
3,354/2007 and the New Capital Agreement of BASEL II, financial instruments
are divided into Trading portfolio (Trading)
and Structural portfolio (Banking).
The Trading Portfolio comprises all operations, including derivatives, held for the
purposes of trading or destined for hedging other financial instruments used for
this strategy. They consist of transactions
for reselling, obtaining price change benefits, either actual or expected, or for realizing arbitrations. This portfolio has rigid
limits defined by the risk controllers and is
monitored on a daily basis.
The Banking portfolio covers all operations that do not fall into the Trading portfolio, and are typically structural operations
for the institutions business lines and the
respective hedges that may or may not be
made through the use of derivatives. As a
result, the derivatives in this portfolio are
not used for speculative purposes.
The sensitivity analysis below is a simulation and does not take into consideration management’s ability to react were
such circumstances to occur, which would
certainly mitigate the losses that would be
incurred. In addition to this, the impacts
presented below do not represent accounting losses as the methodology used is
not based on Safra’s accounting practices.
12.31.2014
TRADING PORTFOLIO
Scenarios
Risk factors
Risk of variation in:
1
2
3
Shares
Share price variation
(85)
(2,122)
(4,244)
Commodities
Operations subject to price variation
Coupon and currencies
Foreign currency coupon rate and foreign exchange rate variation
Fixed income
Variation in interest rates denominated in Real
(2)
(59)
(118)
(4,935)
(165,785)
(328,987)
(879)
(137,708)
(260,256)
Total without correlation
(5,901)
(305,674)
(593,605)
Total with correlation
(4,143)
(30,258)
(73,092)
TRADING AND BANKING PORTFOLIO
Scenarios
Risk factors
Risk of variation in:
1
Commodities
Operations subject to price variation
2
3
(2)
(59)
(118)
Coupon and currencies
Foreign currency coupon rate and foreign exchange rate variation
Fixed income
Variation in interest rates denominated in Real
(3,976)
(99,504)
(199,007)
(40)
(12,013)
(23,611)
Total without correlation
(4,018)
(111,576)
(222,736)
Total with correlation
(3,931)
(87,148)
(174,711)
The sensitivity analysis was carried out
using the following scenarios:
•Scenario 1: Application of movements of
one basis point in the interest rates, and
1% in price variations based on market
information (BM&F Bovespa, Anbima
etc.). Example: the Real/Dollar rate used
was R$ 2.6746 and the 1 year pre-fixed
rate was 12.98% per year.
•Scenario 2: Application of a movement
of 25% in the respective curves or prices, based on the market. Example: the
Real/Dollar rate used was R$ 3.3101
and the 1 year pre-fixed rate was 16.21%
per year.
•Scenario 3: Application of a movement
of 50% in the respective curves or prices, based on the market. Example: the
Real/Dollar rate used was R$ 3.9722
and the 1 year pre-fixed rate was 19.45%
per year.
g) Underwriting risk
The underwriting risk is the possibility of
losses which, directly or indirectly, may be
contrary to the Company’s expectations in
relation to the actuarial and technical bases
used for the calculation of premiums, contributions and technical reserves arising from
insurance and pension plan operations.
Safra has a risk underwriting policy which describes all procedures and rules for
the acceptance of the risk. This policy is
prepared by the technical department and
describes all the rules for the analysis and
acceptance of risks, and also contains
guidelines for the analysis of risks subject
to previous analysis, as well as the excluded risks.
Safra’s Technical Directors carry out
the risk assessment and it involves the
following activities:
I. Follow-up and assessment of the conditions of co-insurance;
II. Development of new products;
III. Discussion/definition of the policies of
acceptance with the actuary;
IV. Negotiation of reinsurance agreements
and of conditions and fee for temporary policies;
V. Preparation of insurance proposals;
VI. Studies for new policies;
VII. Recovery of reinsurance amounts; and
VIII.Technical support to customers and
nominees.
The Technical Board, responsible for
the assessment of the underwriting risks,
is also responsible for the coordination of
the development of the products or any
changes in them, including acceptance policies, methodology for the calculation of
premiums and provisions, as well as the
negotiations involving coinsurance and
reinsurance.
Safra adopts a policy of transfer of
risks in reinsurance and coinsurance, therefore it prevents low frequency claims with
a high value from affecting the stability of
the result of its operations. The changes
in life or mortality expectations, which directly affect the assumed risk, are controlled through a periodical follow-up carried
out by the actuarial area of Safra and the
result is reflected, if necessary, in the adjustments of technical provisions.
The main lines in which Safra operates
are: comprehensive, credit life insurance,
personal accident, life, transportation and
multiple peril.
The main business risk of insurance
operations is the loss ratio variation. The
main business risk of supplementary pension plan operations is the technical provision variation. Sensitivity analyses were
prepared for these risks and the results
obtained are not material.
h) Fair value of financial assets and liabilities
I. Methodology of calculating market value:
The fair value of financial instruments is
determined based on the price that would
be received to sell an asset or paid to
transfer a liability in a transaction conducted between independent participants at
the measurement date, without bias. There are different levels of data that must be
used to measure the fair value of financial
instruments: the observable data that reflect quoted prices for identical assets or
liabilities in active markets (Level 1), the
data that are directly or indirectly observable as assets or similar liabilities (level
2), identical assets or liabilities in illiquid
markets and unobservable market data
that reflect the very premises of the Safra when pricing an asset or liability (Level
3). This maximizes the use of observable
inputs and minimizes the use of unobservable inputs to determine fair value.
To arrive at an estimate of fair value of
a financial instrument measured based on
unobservable market, Safra first determines the appropriate model to be adopted
and the lack of monitoring of significant
data, evaluates all data based on relevant
experience in lead data evaluation, including but not limited to, yield curves, interest rates, volatilities, prices on equity or
debt, exchange rates and credit curves.
Also, with respect to products that are not
exchange traded, the decision of Safra
should be considered to assess the appropriate level of valuation adjustments to reflect counterparty credit quality, the actual
amount of credit, liquidity constraints and
parameters unobservable when relevant.
Although it is believed that the valuation
methods are appropriate and consistent
with those prevailing in the market, the use
of different methodologies or assumptions
to determine the fair value of certain financial instruments could result in a different
estimate of fair value at the reporting date
and / or settlement.
II. Rating level of financial assets and liabilities at fair value
12.31.2014 (1)
Trading securities
Level 1
Level 2
Total
28,136,529
1,665,390
29,801,919
National treasury
23,468,932
Private securities
421,944
72,110
494,054
91,393
937,197
1,028,590
4,154,260
631,859
4,786,119
24,224
24,224
2,677,620
7,403,757
–
23,468,932
Related technical reserves for insurance and
pension – Note 10(b)
National treasury
Private securities
Derivative financial instruments – Assets
–
4,726,137
4,409,880
–
–
2,677,620
316,257
166,650
–
598,050
4,409,880
2,677,620
316,257
764,700
–
14,936
14,936
Option premiums
–
84,321
84,321
Term
165,656
–
165,656
Swaps - amounts receivable
–
354,910
354,910
–
143,883
143,883
Future
Derivative financial instruments – liabilities
994
(185,392)
–
(5,355,327)
994
(5,540,719)
–
(37,284)
(37,284)
Option premiums
–
(4,109,676)
(4,109,676)
Term
Swaps - amounts payable
Future
(165,656)
–
(165,656)
–
(1,096,224)
(1,096,224)
–
(112,143)
(112,143)
(19,736)
–
(19,736)
(15,323,478)
–
(15,323,478)
Obligations related to unrestricted repurchase
agreements – Note 9(b)
Strategy – Fair value hedge - Note 7(d)
–
13,834,644
13,834,644
Fixed rate portfolio
–
16,502,132
16,502,132
Marketable securities - Available for sale – Eurobond
–
2,809,973
2,809,973
Assets in foreign currency
–
149,806
149,806
Time deposits – Structured Defined Contribution (CD)
–
(918,640)
(918,640)
–
(2,438,595)
(2,438,595)
Subordinated debit – Medium term notes
–
(2,270,032)
(2,270,032)
(1) There were no transactions classified as Level 3.
i) Foreign exchange exposure
The values of exposure to gold and foreign
currency assets and liabilities subject to
foreign exchange fluctuation, including deri-
vative financial instruments and permanent
investments abroad, presented to the legal
authorities are:
I. Per currency
12.31.2014
Other
Assets
Short-term interbank investments
Reserves with the Brazilian Central Bank
Own portfolio
Subject to repurchase agreements
Restricted deposits – Brazilian Central Bank
Subject to guarantees provided
Guarantors resources for the technical reserves for insurance and
supplementary pension plans
Credit operations
Other financial assets
Other
Other sundry receivables
Other assets
Investment
Permanent assets
Intangible assets
Total assets
Long position - Future foreign exchange coupon - Note 8(b-II)
Future
NDF
Foreign exchange swap
Off-Balance – Assets
Total at 12.31.2014
Total at 12.31.2013
BRL
261,657
40,265,903
1,372,225
37,194,002
19,829,896
9,906,165
872,240
1,569,867
229,715
42,251,284
1,972,201
1,273,871
698,330
1,580,498
241,643
9,549
96,157
51,571
125,296,690
9,790,737
14,090
125,115
4,118,032
14,047,974
139,344,664
121,437,047
11,027,641
874,306
874,123
183
896
933
16
24,954
822
17,108,454
8,988,214
446,419
741,350
8,876,994
19,052,977
36,161,431
26,243,862
196,788
41,115
41,115
–
–
–
–
–
–
492,529
–
53,904
–
2,048,741
2,102,645
2,595,174
1,049,897
53,475,713
2,887,622
2,189,109
698,513
1,581,394
242,576
9,565
121,111
52,393
142,897,673
18,778,951
514,413
866,465
15,043,767
35,203,596
178,101,269
148,730,806
Liabilities
Deposits
Open market funding
Funds from acceptance and issue of securities
Insurance and supplementary pension plan operations
Other financial liabilities
Other
Subordinated debit
Other liabilities
Deferred income
Total liabilities
Short position - Future foreign exchange coupon – Note 8(b-II)
Future
NDF
Foreign exchange swap
Off-Balance – Liabilities
Total at 12.31.2014
Total at 12.31.2013
7,059,593
62,152,399
24,056,264
8,526,153
4,712,342
4,743,014
1,812,563
781,835
1,030,728
2,859,471
1,896,286
28,926
117,847,011
8,988,214
500,323
741,350
1,118,601
11,348,488
129,195,499
112,593,114
2,154,237
–
504,031
8,267,751
578,064
–
1,378,353
1,284,869
93,484
1,475,433
13,964
–
14,371,833
9,790,737
–
125,115
13,250,793
23,166,645
37,538,478
27,723,074
444,077
–
1,229,253
16,921
250,313
–
4,711
2,223
2,488
–
–
–
1,945,275
–
14,090
–
674,373
688,463
2,633,738
855,240
9,657,907
62,152,399
25,789,548
16,810,825
5,540,719
4,743,014
3,195,627
2,068,927
1,126,700
4,334,904
1,910,250
28,926
134,164,119
18,778,951
514,413
866,465
15,043,767
35,203,596
169,367,715
141,171,428
4,786,119
US$
454,778
1,095,277
–
3,628,831
3,206,328
–
–
–
422,503
–
currencies
75,982
–
66,162
112,482
–
–
–
–
112,482
–
Total
792,417
41,361,180
1,438,387
40,935,315
23,036,224
9,906,165
872,240
1,569,867
764,700
4,786,119
II. Net exposure – Equity
12.31.2014
Other
Assets
Off-Balance sheet – Assets
currencies
Total
492,529
142,897,673
14,047,974
19,052,977
2,102,645
35,203,596
36,161,431
2,595,174
178,101,269
(117,847,011)
(14,371,833)
(1,945,275)
(134,164,119)
(11,348,488)
(23,166,645)
(688,463)
(35,203,596)
(129,195,499)
(37,538,478)
(2,633,738)
(169,367,715)
10,149,165
(1,377,047)
(38,564)
8,733,554
(1,725,429)
1,725,429
8,423,736
348,382
Liabilities
Off-Balance sheet – Liabilities
Net position (1)
“Tax Over Hedge”
US$
17,108,454
139,344,664
Asset position
Liability position
BRL
125,296,690
(2)
Net position – “Over Hedge”
–
(38,564)
–
8,733,554
(1) Equity.
(2) Centralizes the tax impact of Exchange results of foreign investments (Note 7(b)).
18. Related-party transactions
a) Management remuneration
Corporate documents from 2014 established the maximum management’s remuneration at R$ 87,900 (R$ 103,300 in
2013). Remuneration received by manage-
ment came to R$ 83,157 (R$ 74,542 in
2013).
The Group does not possess any longterm benefits, contract termination benefits,
or share-based payment arrangements for
any key management personnel.
b) Ownership interest
Stockholders
Joseph Yacoub Safra
Minority
Total
c) Related-party transactions
Transactions between related parties are
disclosed in accordance with CMN Resolution 3,750/2009. These are arm’s length
transactions, in the sense that their value,
period of execution, and rates involved are
Amounts
(%)
1,543,145,293
99.97
500,005
0.03
1,543,645,298
100.00
the market average at the time of the transaction.
Transactions between consolidated companies were eliminated for the purposes of
the consolidated financial statements and
continue to be considered void of risk.
Assets (liabilities)
12.31.2013
2014
2013
117,956
195,907
67
48
83,199
147,040
6,319
5,192
–
28,438
43,675
–
1,087,177
1,905,226
Banque J.Safra Sarasin S.A.
Safra National Bank of New York
Safra Securities
Banque J. Safra Sarasin S.A.
–
Amounts receivable
Safra Internacional Bank and Trust Ltd.
–
1,087,177
17
67
48
–
–
1,321
1,738
1,321
1,693
–
1,905,226
45
–
–
–
(4,304)
(11,439)
–
–
(1,048,696)
(1,622,601)
29,534
(437,535)
(430)
(1,314)
Demand deposits
Interbank deposits
Revenues (expenses)
12.31.2014
–
(22,834)
(682,013)
(993,485)
32,302
(15,377)
(366,683)
(191,581)
(2,338)
(6,143)
(493)
(82)
(47)
13
(53,187)
(46,908)
(1,575)
(4,075)
Funds from acceptance and issue of securities – Debentures
(33,064)
(43,535)
(3,750)
(3,876)
Funds obtained in the open market – Instituto Morashá de Cultura
Liabilities for marketable securities abroad –
Escola Beit Yaacov
(31,458)
(6,262)
–
(33,226)
(1,606)
(4,047)
Emerald Gestão de Investimentos Ltda.
Others
(3,579)
(515)
–
(3,027)
(171)
(334)
Subordinated debts – Medium term notes –
Joseph Yacoub Safra – Nota 9(e)
(794,664)
(25,435)
–
(629)
(265)
–
–
–
Insurance commissions – Canárias Corretora de Seguros S.A.
–
–
(5,887)
(42,015)
Other income from services
–
–
1,278
984
–
–
1,374
995
Safra Securities
–
–
(96)
(11)
Rental expenses – Note 13(f)
–
–
(72,701)
(70,144)
Exton Participações Ltda.
–
–
(36,441)
(35,553)
J. Safra Participações Ltda.
–
–
(19,938)
(18,896)
Lebec Participações Ltda.
–
–
(6,778)
(6,475)
Acauã Construtora Ltda.
–
–
(4,139)
(4,058)
Darien Participações Ltda.
–
–
(1,880)
(1,781)
Harvel Participações Ltda.
–
–
(1,425)
(1,364)
Altadena Participações Ltda.
–
–
(1,158)
(1,280)
Others
–
–
(942)
(737)
Funds managed – Note 9(f)
Financial investments
(3,990,124)
(5,199,488)
–
–
Revenue from management fees and fund management –
JS Administração de Recursos S.A.
–
–
43,519
34,967
19. Other information
a) Insurance policy
Despite Banco Safra and its subsidiaries
having a reduced risk from the non-concentration of assets in one place, the Bank has
the policy of insuring these assets to a level
necessary to cover any eventual claims.
b) Law 12,973/2014
On 4/2/2014, Law 12,973 was published,
as a conversion of MP 627/13 into Law,
changing the Brazilian federal tax legislation on IRPJ, CSLL, PIS and COFINS. The
following aspects are highlighted:
(i) It creates a new taxation system for the
calculation of the taxes above, ending
the Transitional Tax System; and
(ii)addresses the taxation of the legal entity domiciled in Brazil, in relation to the
equity addition arising from the interest
in profit accrued abroad by subsidiaries
and associates; and profit accrued by a
legal entity which is a subsidiary company abroad.
Safra does not expect changes from Law
12,973/14 to have relevant impacts on the
financial statements.
c) Audit committee
The Audit Committee is made up of five
members nominated by the Board. Three
of these are directors of the Bank, one of
whom is designated as a Qualified member,
and the other two are independent members. The Committee’s aim is to monitor
and accompany: the effectiveness of internal controls, the quality and integrity of the
financial statements, and the work of the
internal and independent auditors.
Summary of Audit Committee’s Report
Safra Financial Group’s Audit Committee is a statutory body
that operates in accordance with National Monetary Council (CMN)
Resolution 3.198 of May 27, 2004 and National Private Insurance
Council Resolution 312 of June 16, 2014.
Safra Financial Group has a single Audit Committee, which is part
of the structure of B
anco Safra S.A., the Group’s lead institution.
The Audit Committee has five members appointed by the Board
of Directors, three of whom are directors of the company, and two
of whom are independent. A full-time secretary coordinates the
committee’s activities.
The Audit Committee operates in accordance with its bylaws and
an annual work plan.
In second-half 2014 the committee’s evaluation and supervision
activities included the following items:
a)Planning and performance of independent and internal audits
b)Solutions to recommendations and orders received from regulatory bodies
c)Structure and functioning of Group companies’ internal controls
d)Integrity and quality of financial statements and the respective
reports
e)Confirmation of aspects relating to the
independence of independent and internal auditors, and to lack of restrictions on
their actions
f)Appraisal of compliance by the management of Safra Financial Group with the
recommendations of independent and internal auditors
g)Integrity and quality of the financial statements in accordance with the applicable
laws and regulatory standards
In addition to the above, the committee
accompanied the activities of teams of inspectors from the Central Bank of Brazil and
the Office of Private Insurance Oversight, as
well as the solutions adopted to implement
their requests and recommendations.
In light of the work carried out, the Audit
Committee recommends that the Board of
Directors approve the consolidated financial statements dated February 2, 2015,
referring to the period ended December 31,
2014.
h)Activities of the Ombudsman
i)Activities to prevent money laundering
and combat terrorism financing
São Paulo, February 2, 2015.
Report of Independent Auditors
To the Board of Directors and Stockholders
Banco Safra S.A.
We have audited the accompanying consolidated financial statements of Banco Safra S.A. and its subsidiaries (“Safra”), which
comprise the consolidated balance sheet as at December 31, 2014
and the consolidated statements of income, changes in equity and
cash flows for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with
accounting practices adopted in Brazil, applicable to institutions
authorized to operate by the Brazilian Central Bank (BACEN), and
for such internal control as management determines is necessary
to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
Independent auditor’s responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit in
accordance with Brazilian and International Standards on Auditing.
Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to
obtain audit evidence about the amounts
and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the
financial statements, whether due to fraud
or error. In making those risk assessments,
the auditor considers internal control relevant to the Institution’s preparation and fair
presentation of the financial statements in
order to design audit procedures that are
appropriate in the circumstances, but not
for the purpose of expressing an opinion on
the effectiveness of the Institution’s internal
control. An audit also includes evaluating
the appropriateness of accounting policies
used and the reasonableness of accounting
estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our audit opinion.
PricewaterhouseCoopers
Auditores Independentes
CRC nº 2SP000160/O-5
Opinion
In our opinion, the consolidated financial
statements referred to above present fairly,
in all material respects, the financial position of Banco Safra S.A. and its subsidiaries
as at December 31, 2014, and its consolidated financial performance and cash flows
for the year then ended, in accordance with
accounting practices adopted in Brazil,
applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).
Other matters
Statement of value added
We also have audited the consolidated statements of value added for the year ended
December 31, 2014, which are the responsibility of management and are presented
voluntarily. This statement was subject to
the same audit procedures described above
and, in our opinion, is fairly presented, in all
material respects, in relation to the financial
statements taken as a whole.
Sao Paulo, February 3, 2015
Luiz Antonio Fossa
Accountant
CRC nº 1SP196161/O-8
Locations
Around Brazil
Manaus | AM | Amazon Opera House
106 | Relatório Anual Banco Safra 2013
Relatório Anual Banco Safra 2013 | 107
HEADQUARTERS
Av. Paulista, 2100
Tel.: (11) 3175.7575
Cep: 01310-930
SÃO PAULO (SP)
Guarulhos International
Airport of São Paulo
Cumbica
1º floor - Wing B
Tel.: (11) 2413.8100
Fax: (11) 2413.8107
Cep: 07141-970
Alphaville
Al. Rio Negro, 1084 - lj. 2
Tel.: (11) 4166.6520
Fax: (11) 4166.6545
Cep: 06454-000
Angélica
Rua Maranhão, 527
Tel.: (11) 3829.2211
Fax: (11) 3829.2202
Cep: 01240-001
Barão
Rua Barão de
Itapetininga, 215
Tel.: (11) 3124.7400
Fax: (11) 3124.7403
Cep: 01042-001
Berrini
Av. Eng. Luís Carlos
Berrini, 1062
Tel.: (11) 5503.2298
Fax: (11) 5503.2202
Cep: 04571-000
Bom Retiro
Rua da Graça, 109
Tel.: (11) 3353.3370
Fax: (11) 3353.3362
Cep: 01125-001
Graça
Rua da Graça, 206
Tel.: (11) 2177.5550
Fax: (11) 2177.5581
Cep: 01125-000
Mooca
Av. Paes de Barros, 242
Tel.: (11) 2797.6699
Fax: (11) 2797.6672
Cep: 03114-000
Santo Amaro
Av. Santo Amaro, 7123
Tel.: (11) 5525.2240
Fax: (11) 5525.2202
Cep: 04701-200
Brás
Rua Mendes Júnior, 605
Tel.: (11) 2799.9970
Fax: (11) 2799.9982
Cep: 03013-011
Higienópolis
Av. Angélica, 1263
Tel.: (11) 3821.2200
Fax: (11) 3821.2202
Cep: 01227-100
Morumbi
Av. Morumbi, 8384
Tel.: (11) 5097.2220
Fax: (11) 5097.2202
Cep: 04703-004
Saúde
Rua Carneiro da Cunha, 39/39A
Tel.: (11) 5591.2150
Fax: (11) 5591.2168
Cep: 04144-000
Central XV/Boa Vista
Rua XV de Novembro, 212
Tel.: (11) 3293.7111
Fax: (11) 3293.7101
Cep: 01013-000
Ipiranga
Rua Silva Bueno, 1100
Tel.: (11) 2066.7140
Fax: (11) 2066.7102
Cep: 04208-000
Pacaembu
Praça Charles Miller, 8
Tel.: (11) 2886.5555
Fax: (11) 2886.5519
Cep: 01234-010
Sírio Libanês
Rua Barata Ribeiro, 360 - loja
Tel.: (11) 3122.6700
Fax: (11) 3122.6717
Cep: 01308-000
Cidade Jardim
Av. Brig. Faria Lima, 2668
Tel.: (11) 3039.2211
Fax: (11) 3039.2203
Cep: 01452-002
Itaim
Rua Joaquim Floriano, 737
Tel.: (11) 3074.1604
Fax: (11) 3074.1602
Cep: 04532-031
Paraíso
Praça Oswaldo Cruz, 74
Tel.: (11) 3265.2212
Fax: (11) 3265.2202
Cep: 04004-070
Sumaré
Av. Sumaré, 1106
Tel.: (11) 3868.6420
Fax: (11) 3868.6450
Cep: 05016-110
Dom José Gaspar
Av. São Luiz, 84
Tel.: (11) 3124.7300
Fax: (11) 3124.7302
Cep: 01046-010
JK
Av. Juscelino Kubitscheck, 1327
Tel.: (11) 3217.2511
Fax: (11) 3217.2502
Cep: 04543-011
Tatuapé
Rua Cantagalo, 76
Tel.: (11) 2095.6175
Fax: (11) 2095.6162
Cep: 03323-010
Einstein
Av. Albert Einstein, 665
Tel.: (11) 3745.2200
Fax: (11) 3745.2230
Cep: 05652-000
Lapa
Rua Roma, 695
Tel.: (11) 3677.2226
Fax: (11) 3677.2202
Cep: 05050-090
Paulista/Augusta/
Luiz Coelho/
Haddock Lobo/
Av. Paulista, 2100
Tel.: (11) 3175.8877
Fax: (11) 3175.8904
Cep: 01310-930
Faria Lima/Gabriel Monteiro
Av. Brig. Faria Lima, 1581
Tel.: (11) 3035.2219
Fax: (11) 3035.2203
Cep: 01451-001
Moema
Av. Min. Gabriel Resende
Passos, 500
Tel.: (11) 5053.2255
Fax: (11) 5053.2265
Cep: 05421-022
Santana
R. Voluntários da Pátria,
1409
Tel.: (11) 2224.7311
Fax: (11) 2224.7302
Cep: 02011-100
Trianon
Av. Paulista, 1063
Tel.: (11) 3178.2250
Fax: (11) 3178.2204
Cep: 01311-200
Vila Maria
Av. Guilherme Cotching, 955
Tel.: (11) 2633.1150
Fax: (11) 2633.1140
Cep: 02113-013
Locations Around Brazil
Araçatuba
R. Floriano Peixoto, 120 sl. 43
Tel.: (18) 3607-1360
Fax: (18) 3607-1357
Cep: 16010-220
Bauru
Rua Rio Branco
Quadra 24-65
Tel.: (14) 3104.4010
Fax: (14) 3104.4003
Cep: 17016-190
Campinas
Cambuí
Rua Olavo Bilac, 101
Tel.: (19) 3753.8500
Fax: (19) 3753.8528
Cep: 13024-110
Campinas
Rua Dr. Costa Aguiar, 700
Tel.: (19) 3733.8530
Fax: (19) 3733.8502
Cep: 13010-061
Nova Campinas
Av. José de Souza
Campos, 900
Tel.: (19) 2103.6750
Fax: (19) 2103.6810
Cep: 13092-123
Guarulhos
Rua Felício Marcondes, 365
Tel.: (11) 2472.4112
Fax: (11) 2472.4102
Cep: 07010-030
Jundiaí
Rua Rangel Pestana, 305
Tel.: (11) 4583.4395
Fax: (11) 4583.4384
Cep: 13201-000
Mogi das Cruzes
Av. Voluntário Fernando
Pinheiro Franco, 249 - loja
Tel.: (11) 4736.9100
Fax: (11) 4736.9124
Cep: 08710-500
Osasco
Rua Antônio Agu, 1015
Tel.: (11) 3652.2200
Fax: (11) 3652.2202
Cep: 06013-000
Piracicaba
Praça José Bonifácio, 783
Tel.: (19) 3437.8511
Fax: (19) 3437.8502
Cep: 13400-340
Ribeirão Preto
Alto da Boa Vista
Rua Ignácio Luiz Pinto, 82
Tel.: (16) 3913.9555
Fax: (16) 3913.9571
Cep: 14025-680
Corporate Ribeirão
Av. Presidente Vargas, 2164
Tel.: (16) 2111.5555
Fax: (16) 2111.5581
Cep: 14025-700
Ribeirão Preto
Rua Duque de Caxias, 521
Tel.: (16) 3977.4933
Fax: (16) 3977.4925
Cep: 14015-020
Santo André
Rua Senador Flaquer, 304
Tel.: (11) 4433.3300
Fax: (11) 4433.3302
Cep: 09010-160
Santos
Rua São Francisco, 165
Tel.: (13) 3226.2207
Fax: (13) 3226.2221
Cep: 11013-201
MACEIÓ (AL)
Rua do Sol, 154
Tel.: (82) 2121.5202
Fax: (82) 2121.5244
Cep: 57020-070
Porto Alegre
Rua dos Andradas, 1035
Tel.: (51) 2131.3722
Fax: (51) 2131.3717
Cep: 90020-007
São Bernardo do Campo
Rua Mal. Deodoro, 490
Tel.: (11) 4122.6221
Fax: (11) 4122.6202
Cep: 09710-000
MANAUS (AM)
Rua José Paranaguá, 186
Tel.: (92) 2121.9150
Fax: (92) 2121.9130
Cep: 69005-130
Caxias do Sul
Rua Júlio de Castilhos, 1500
Tel.: (54) 2101.7500
Fax: (54) 2101.7522
Cep: 95010-000
São Caetano do Sul
Rua Manoel Coelho, 560
Tel.: (11) 4223.7310
Fax: (11) 4223.7302
Cep: 09510-101
MINAS GERAIS (MG)
Belo Horizonte
Av. João Pinheiro, 215
Tel.: (31) 2122.7947
Fax: (31) 2122.7929
Cep: 30130-180
Novo Hamburgo
Rua Júlio de Castilhos, 400
Tel.: (51) 2123.9900
Fax: (51) 2123.9909
Cep: 93510-130
São José do Rio Preto
R. Bernardino de Campos, 3390
Tel.: (17) 3214.6212
Fax: (17) 3214.6244
Cep: 15015-300
São José dos Campos
Av. 9 de Julho, 95 - salas 2 a 4
Tel.: (12) 3924.4425
Fax: (12) 3924.4402
Cep: 12243-000
Sorocaba
Rua São Bento, 141
Tel.: (15) 3331.8560
Fax: (15) 3331.8502
Cep: 18010-030
BELÉM (PA)
Av. Nazaré, 811
Tel.: (91) 4005.4950
Fax: (91) 4005.4917
Cep: 66035-170
BRASÍLIA (DF)
SCS - Qd. 6 - Bl. A - lj. 76
Ed. Sofia
Tel.: (61) 2102.4490
Fax: (61) 2102.4433
Cep: 70300-968
CAMPO GRANDE (MS)
Rua Mal. Rondon, 1740
Tel.: (67) 2106.6870
Fax: (67) 2106.6845
Cep: 79002-200
CUIABÁ (MT)
Av. Hist. Rubens de
Mendonça, 1757
Tel.: (65) 2121.7423
Fax: (65) 2121.7404
Cep: 78050-000
FORTALEZA (CE)
Aldeota
Av. Santos Dumont, 2750
Tel.: (85) 4006.5950
Fax: (85) 4006.5914
Cep: 60150-161
Fortaleza
Rua Barão do Rio Branco, 716
Tel.: (85) 4006.6250
Fax: (85) 4006.6242
Cep: 60025-060
GOIÂNIA (GO)
Goiânia/Centro-Oeste
Av. República do Líbano, 2030
Tel.: (62) 4005.4200
Fax: (62) 4005.4229
Cep: 74115-030
Nova Suíça/Anápolis
Av. T63 - Quadra 585
Lote 01
Tel.: (62) 3237.9800
Fax: (62) 3237.9802
Cep: 74280-235
Savassi
Av. do Contorno, 6082
Tel.: (31) 2127.6230
Fax: (31) 2127.6220
Cep: 30110-110
RECIFE (PE)
Boa Viagem
Av. Conselheiro Aguiar, 3190
Tel.: (81) 2129.7823
Fax: (81) 2129.7818
Cep: 51020-021
Juiz de Fora
Av. Barão do Rio Branco, 2957
Tel.: (32) 3313.3132
Fax: (32) 3313.3103
Cep 36010-012
Recife
Av. Dantas Barreto, 514
Tel.: (81) 2122.1290
Fax: (81) 2122.1277
Cep: 50010-360
Uberlândia
Av. Afonso Pena, 778
Tel.: (34) 2101.1300
Fax: (34) 2101.1342
Cep: 38400-130
RIO DE JANEIRO (RJ)
Barra da Tijuca
Av. das Américas, 500
Tel.: (21) 2122.8112
Fax: (21) 2122.8132
Cep: 22640-100
NATAL (RN)
Av. Prudente de Morais, 2936
Tel.: (84) 4005.3720
Fax.: (84) 4005.3711
Cep: 59022-400
PARANÁ (PR)
Curitiba
Batel
Rua Comendador Araújo, 565
5º andar - conjuntos 501 e 502
Tel.: (41) 2102.5500
Fax: (41) 2102.5549
Cep: 80420-908
Curitiba
Rua Marechal Deodoro, 240
Tel.: (41) 2106.1460
Fax: (41) 2106.1417
Cep: 80010-010
Portão
Rua Francisco Frischiman, 3166
Tel.: (41) 2106.5000
Fax: (41) 2106.5002
Cep: 80320-250
Cascavel
Rua Barão do Cerro Azul, 1266
Tel.: (45) 2101.5220
Fax: (45) 2101.5210
Cep: 85801-080
Londrina
Av. Higienópolis, 270
Tel.: (43) 2101.9416
Fax: (43) 2101.9484
Cep: 86020-040
Maringá
Rua Santos Dumont,
2699/2705
Tel.: (44) 2101.4720
Fax: (44) 2101.4730
Cep: 87013-050
RIO GRANDE DO SUL (RS)
Moinhos de Vento/
Corporate Porto Alegre
Rua Mariante, 86 - lj. 3 a 5
Tel.: (51) 2139.6240
Fax: (51) 4009.5580
Cep: 90430-180
Bonsucesso
Rua Cardoso de Morais, 247
Tel.: (21) 2131.2311
Fax: (21) 2131.2332
Cep: 21032-000
Candelária
Praça Pio X, 17
Tel.: (21) 2199.2818
Fax: (21) 2199.2917
Cep: 20040-020
Castelo
Av. Erasmo Braga, 277
Tel.: (21) 2122.5011
Fax: (21) 2122.5031
Cep: 20020-000
Copacabana
Av. Atlântica, 1782 - lj. A e B
Tel.: (21) 2545.1900
Fax: (21) 2545.1918
Cep: 22021-001
SALVADOR (BA)
Iguatemi
Av. Tancredo Neves, 148
Shopping Center
Iguatemi Bahia
Tel.: (71) 2106.8334
Fax: (71) 2106.8328
Cep: 41828-900
Salvador
Av. Estados Unidos, 14
Tel.: (71) 2106.4501
Fax: (71) 2106.4527
Cep: 40010-020
SANTA CATARINA (SC)
Blumenau
Rua 7 de Setembro, 673
Tel.: (47) 2123.6650
Fax: (47) 2123.6640
Cep: 89010-201
Chapecó
Av. Getúlio Dorneles Vargas, 927
Tel.: (49) 3661.1119
Fax: (49) 3661.1152
Cep: 89802-002
Criciúma
Rua Saldanha da Gama, 3954
Tel.: (48) 2101.3200
Fax: (48) 2101.3203
Cep: 88802-470
Florianópolis
Rua Arcipreste Paiva, 187
Tel.: (48) 2107.3540
Fax: (48) 2107.3536
Cep: 88010-530
Joinville
Rua do Príncipe, 158
Tel.: (47) 2101.7640
Fax: (47) 2101.7633
Cep: 89201-000
SÃO LUIZ (MA)
Av. Cel. Colares Moreira, 07-Lj. 01
Tel.: (98) 2109.9655
Fax: (98) 2109.9670
Cep: 65075-440
VITÓRIA (ES)
Av. N. Sra. dos Navegantes, 451
Tel.: (27) 2121.1720
Fax: (27) 2121.1766
Cep: 29050-335
Ipanema
Rua Visconde de Pirajá, 240
Tel.: (21) 2141.2100
Fax: (21) 2141.2132
Cep: 22410-000
Niterói
Av. Ernani do Amaral
Peixoto, 479
Tel.: (21) 2199.5603
Fax: (21) 2199.5632
Cep: 24020-072
Private Leblon
Rua Dias Ferreira, 190
sala 702
Tel.: (21) 3797.4300
Fax: (21) 3797.4349
Cep: 22431-050
Rio Branco
Av. Rio Branco, 80
Tel.: (21) 2122.3400
Fax: (21) 2122.3432
Cep: 20040-070
BRANCHS OUTSIDE BRAZIL
CAYMAN
190 Elgin Avenue, Grand Cayman,
KY1-9005, Cayman Islands
LUXEMBURGO
10-12, Boulevard F.-D. Roosevelt,
L-2450, Luxembourg
Banco Safra SA
Administration Board
Carlos Alberto Vieira
president
Rossano Maranhão Pinto
Alberto Joseph Safra
David Joseph Safra
João Inácio Puga
Silvio Aparecido de Carvalho
Board of Directors
Rossano Maranhão Pinto
chief executive officer
Agostinho Stefanelli Filho
Alberto Corsetti
Eduardo Pinto de Oliveira
Eduardo Sosa Filho
Ernesto David Chayo
Fernando Cruz Rabello
Helio Albert Sarfaty
Hiromiti Mizusaki
Jayme Srur
Luiz Fabiano Gomes Godoi
Marcio Appel
Paulo Sérgio Cavalheiro
Sergio Luiz Ambrosi
Sidney da Silva Mano
Silvio Aparecido de Carvalho
To obtain copies of this Banco Safra Annual Report 2014, please write to:
Superintendência de Comunicação do Grupo Safra – Avenida Paulista, 2100 – 8º andar
São Paulo – SP – Brasil – CEP 01310-930

Annual Report 2014 - Safra Net Banking

Transcription

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