Company: BBD
Filing Date: 2025-03-31
Form Type: 20-F
Source: 0001292814-25-001244
Chunk: 411

Company: BANK BRADESCO
Filing Date: 2025-03-31
Form: 20-F
Item: Item 19
Chunk 411
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 control of the interest-rate
risk in the Banking Portfolio area is mainly based on the Economic Value of Equity (EVE) and Net Interest Income (NII) methodologies,
which measure the economic impact on the positions and the impact in the Company’s income, respectively, according to scenarios
prepared by the Company’s economists. These scenarios determine the positive and negative movements of interest rate curves that
may affect Company’s investments and capital-raising.

The EVE methodology consists of repricing
the portfolio exposed to interest rate risk, taking into account the scenarios of increases or decreases of rates, by calculating the
impact on present value and total term of assets and liabilities. The economic value of the portfolio is estimated on the basis of market
interest rates on the analysis date and of scenarios projected. Therefore, the difference between the values obtained for the portfolio
will be the Delta EVE.

In the case of the NII - Interest
Earning Portion, the methodology intends to calculate the Company’s variation in the net interest income (gross margin) due to eventual
variations in the interest rate level, that is, the difference between the calculated NII in the base scenario and the calculated NII
in the scenarios of increase or decrease of the interest rate will be Delta NII.

For the measurement of interest rate risk
in the Banking Portfolio, behavioral premises of the customers are used whenever necessary. As a reference, in the case of deposits and
savings, which have no maturity defined, studies for the verification of historical behaviors are carried out as well as the possibility
of their maintenance. Through these studies, the stable amount (core portion) as well as the criterion of allocation over the years are
calculated.

Financial Instrument Pricing

The Mark-to-Market Commission (CMM) is
responsible for approving or submitting fair value models to the Market and Liquidity Risk Commission. CMM is composed of business, back-office
and risk representatives. The risk area is responsible for the coordination of the CMM and for the submission of matters to the Executive
Committee for Risk Management for reporting or approval, whichever is the case.

Whenever possible, the Bank uses prices
and quotes from the securities, commodities and futures exchange and the secondary markets. Failing to find such market references, prices
made available by other sources (such as Bloomberg, Reuters and Brokerage Firms) are used. As a last resort, proprietary models are used
to price the instruments, which also follow the same CMM approval procedure and are submitted