Company: BBD
Filing Date: 2025-03-31
Form Type: 20-F
Source: 0001292814-25-001244
Chunk: 401

Company: BANK BRADESCO
Filing Date: 2025-03-31
Form: 20-F
Item: Item 19
Chunk 401
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 and magnitude, identifying their managers and mitigation
plans.

Counterparty Credit Risk

The counterparty credit risk to which
the Company is exposed includes the possibility of losses due to the non-compliance by counterparties with their obligations relating
to the settlement of financial asset trades involving bilateral flows, including the settlement of derivative financial instruments.

The Company exercises control over the
replacement cost and potential future exposures from operations where there is counterparty credit risk. Thereby, each counterparty’s
exposure referring to this risk is treated in the same way and is part of general credit limits granted by the Company’s to its
customers.

In short, the Counterparty Credit Risk
management covers the modeling and monitoring (i) of the consumption of the credit limit of the counterparties, (ii) of the portion of
the adjustment at fair value of the portfolio of credit derivatives (CVA - Credit Value Adjustment), segregated by counterparty,
and (iii) of the respective regulatory and economic capital. The methodology adopted by the Company establishes that the credit exposure
of the portfolio to certain counterparty can be calculated based on the Replacement Cost (RC) of its operations in different scenarios
of the financial market, which is possible through the Monte Carlo simulation process.

In the context of risk management, the
Company conducts studies of projection of capital, for example of the Stress Test of the ICAAP (Evaluation of Capital Adequacy) and TEBU
(Bottom-Up Stress Test). These are multidisciplinary programs involving minimally the areas of Business and Economic Departments, of Budget/Result
and Risk.

Regarding the forms of mitigating the
counterparty credit risk that the Company is exposed to, the most usual is the composition of guarantees as margin deposits and disposal
of public securities, which are made by the counterparty with the Company or with other trustees, whose counterparty’s risks are
also appropriately evaluated.

The calculation of the value of the exposure
relating to credit risk of the counterpart arising from operations with derivative instruments subject to the calculation of the capital
requirement through the standardized approach (RWACPAD) has been updated for the SA-CCR Approach (Standardized Approach for
Counterparty Credit Risk), following the Annex I of BCB Resolution No. 229, of 2022.

Credit-Risk Management Process

The credit risk management process is
conducted in a corporation-wide manner. This process involves several areas with specific duties, ensuring an efficient structure. Credit
risk measurement and control are conducted in a