Company: BBD
Filing Date: 2025-03-31
Form Type: 20-F
Source: 0001292814-25-001244
Chunk: 351

Company: BANK BRADESCO
Filing Date: 2025-03-31
Form: 20-F
Item: Item 19
Chunk 351
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 credit losses as a result of possible events of delinquency within 12 months after the reporting date; and

− Credit Losses expected for the
whole of lifecycle, i. e., credit losses that result from all possible events of delinquency throughout the expected lifecycle of a financial
instrument.

The measurement of expected losses for
the whole lifecycle is applied when a financial asset, on the reporting date, has experienced a significant increase in credit risk since
its initial recognition and the measurement of expected credit loss for 12 months is applied when the credit risk has not increased significantly
since its initial recognition. The Company assumes that the credit risk of a financial asset has not increased significantly when the
asset has a low credit risk on the reporting date.

With respect to Brazilian government bonds,
the Group has internally developed a study to assess the credit risk of these securities, which does not expect any loss for the next
12 months, that is, no provision is recorded for credit losses.

For loans, the amount of loss is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The asset’s carrying
amount is reduced through provisions and the amount of the loss is recognized in the consolidated statement of income.

The calculation of the present value of
the estimated future cash flows of a collateralized financial asset reflects the cash flows that may result from foreclosure less costs
for obtaining and selling the collateral.

The methodology and assumptions used for
estimating future cash flows are reviewed regularly to mitigate any differences between loss estimates and actual loss experience.

Following the recognition of expected credit
loss, interest income is recognized using the effective rate of interest, which was used to discount the future cash flows, on the accounting
value gross of provision, except for assets with problem of credit recovery, in which, the rate stated is applied at the net book value
of the provision.

The whole or part of a financial asset
is written off against the related credit loss expected when there is no reasonable expectation of recovery. Such loans are written off
after all the relevant collection procedures have been completed and the amount of the loss has been determined. Subsequent recoveries
of amounts previously written off are credited to the consolidated statement of income.

The criteria used to calculate the expected
credit loss and to determine the significantly increased credit risk are detailed in Note 40.2. - Credit risk.

  Interest