6-K 1 bbdbook1q18_6k.htm 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2018
Commission File Number 1-15250

BANCO BRADESCO S.A.
(Exact name of registrant as specified in its charter)
BANK BRADESCO
(Translation of Registrant's name into English)
Cidade de Deus, s/n, Vila Yara
06029-900 - Osasco - SP
Federative Republic of Brazil
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No ___X____

.

1 - Press Release | 3
Main Information | 4
Recurring Net Income vs. Book Net Income | 5
Summarized Analysis of Recurring Income | 5
Main Economic Indicators | 9
Guidance | 9
2 - Economic and Financial Analysis | 11
Interest-Earning and Non-Interest Earning Portions | 12
NII Interest Earning Portion | 13
Main Indicators of Loan Portfolio | 14
Loan Portfolio | 16
Expanded Loan Portfolio | 17
Main Funding Sources | 21
Insurance, Pension and Capitalization | 22
Fee and Commission Income | 27
Operating Expenses | 28
Additional Information | 29
Statement of Income Managerial vs. Recurring | 31
Balance Sheet Consolidated | 33
3 - Additional Information | 35
Return to Shareholders | 36
Additional Information | 37
Risk Management | 39
Capital Management | 40
Minimum Capital Required Grupo Bradesco Seguros | 40
Basel Ratio | 41
Corporate Governance | 42
Compliance and Integrity Program | 42
Investor Relations area IR | 42
Sustainability and Social Actions | 43
4 - Independent Auditors Report | 45
Limited Assurance Report about Supplementary Accounting Information included within the |
| 46
Economic and Financial Analysis Report |
5 - Complete Financial Statements | 49

Some numbers included in this Report have been subjected to rounding adjustments. As a result, some amounts indicated as total amounts in some charts may not be the arithmetic sum of the preceding numbers. Percentage variations not presented in the framework of this report, are related, in their majority, to the low value balances compared with the other periods presented.

Average Net Interest Income Rate
R$ million |  |  |  | Variation
| 1Q18 | 4Q17 | 1Q17 | 1Q18 x | 1Q18 x
Net Interest Income |  |  |  | 4Q17 | 1Q17
NII - Interest-earning portion - due to volume |  |  |  | (171) | (507)
NII - Interest-earning portion - due to spread |  |  |  | 3 | 100
- NII - Interest Earning Portion | 15,493 | 15,661 | 15,900 | (168) | (407)
- NII - Non-Interest Earning Portion | 193 | 152 | 136 | 41 | 57
Net Interest Income | 15,686 | 15,813 | 16,036 | (127) | (350)
Average Earning Portion Rate (1) | 6.6% | 6.8% | 7.2% |  |
(1) Average rate in the quarter = (Earning Portion / Total Average Assets Repos Permanent Assets).

Interest Earning Portion Average Rates (12 months)
| 1Q18 | 1Q17
R$ million | NII - Interest Earning Portion | Average Balance | Average Rate | NII - Interest Earning Portion | Average Balance | Average Rate
Credit Intermediation (1) | 11,690 | 415,962 | 11.6% | 12,781 | 432,409 | 12.0%
Insurance | 1,526 | 249,299 | 2.4% | 1,481 | 227,358 | 2.8%
ALM /Other (1) (2) | 2,277 | 367,642 | 2.1% | 1,638 | 408,650 | 1.6%
NII - Interest-Earning Portion | 15,493 | - | 6.6% | 15,900 | - | 7.4%
| 1Q18 | 4Q17
R$ million | NII - Interest Earning Portion | Average Balance | Average Rate | NII - Interest Earning Portion | Average Balance | Average Rate
Credit Intermediation (1) | 11,690 | 415,962 | 11.6% | 12,129 | 418,839 | 11.7%
Insurance | 1,526 | 249,299 | 2.4% | 1,460 | 243,996 | 2.4%
ALM /Other (1) (2) | 2,277 | 367,642 | 2.1% | 2,072 | 390,203 | 1.9%
NII - Interest-Earning Portion | 15,493 | - | 6.6% | 15,661 | - | 6.7%
(1) As per this quarter we considered the margin of the financial assets of fixed income, with characteristic of credit (mostly debentures) in the margin of credit intermediation, formerly classified as ALM/other. For the purposes of comparability, the previous periods have been reclassified; and
(2) It reflects, mainy, treasury operations in the assets and liabilities management (ALM).

Interest Earning Portion Volume Variation vs. Spread

o Credit Intermediation the reduction of the average spreads in operations with individuals is in line with the amendment of the mix of loan portfolios, which evolved into products with a lower rate and risk, like: consigned, real estate and CDC vehicles. Highlight to the evolution of the average daily origination for this segment, which grew 3% in the quarter and 35% compared to the daily average of the 1Q17. The behavior of the operations with companies is impacted by the lower credit demand, mainly of the corporate and middle market segments.

o Insurance the performance of the periods benefited from the good performance of the multimarket funds and of shares, highlighting the growth of 11.7% of the Ibovespa index this quarter.

o ALM/Other reflect, mainly, treasury operations in assets and liabilities management (ALM).

R$ million |  |  |  | Variation
| 1Q18 | 4Q17 | 1Q17 | 1Q18 x | 1Q18 x
Net Interest Income |  |  |  | 4Q17 | 1Q17
NII - Interest-earning portion - due to volume |  |  |  | (171) | (507)
NII - Interest-earning portion - due to spread |  |  |  | 3 | 100
- NII - Interest Earning Portion | 15,493 | 15,661 | 15,900 | (168) | (407)
- NII - Non-Interest Earning Portion | 193 | 152 | 136 | 41 | 57
Net Interest Income | 15,686 | 15,813 | 16,036 | (127) | (350)
Average NIM (1) | 6.6% | 6.8% | 7.2% |  |

R$ million | Credit | Insurance | ALM/Other | NII - Interest-Earning
Intermediation |  |  |  |  | Portion
1Q18 x | 1Q18 x | 1Q18 x | 1Q18 x | 1Q18 x | 1Q18 x | 1Q18 x | 1Q18 x
Volume x Spread | 4Q17 | 1Q17 | 4Q17 | 1Q17 | 4Q17 | 1Q17 | 4Q17 | 1Q17
NII - Interest-earning portion - due to volume | (83) | (486) | 32 | 143 | (120) | (164) | (171) | (507)
NII - Interest-earning portion - due to spread | (356) | (605) | 34 | (98) | 325 | 803 | 3 | 100
Variation NII - Interest-Earning Portion | (439) | (1,091) | 66 | 45 | 205 | 639 | (168) | (407)

Earning Portion of Credit Intermediation vs. ALL (Expanded)

The improvement of the quality of the loan portfolio has reduced the cost of delinquency (Expanded ALL) in the periods, boosting the evolution of the net margin of credit intermediation, offsetting the reduction in the gross margin. |  |

The charts below refer to the Loan Portfolio, as defined by Bacen:

Flow of Maturities (1) The loan portfolio by flow of maturities of operations has, as one of its features, a longer profile, mainly due to the presence of real estate financing and payroll-deductible loans. It must be noted that, due to their guarantees and characteristics, these operations are not only exposed to lower risk but also provide favorable conditions to gain customer loyalty. (1) Only normal course operations. |  |

Delinquency Ratio Over 90 days The ratio showed improvement for the fourth consecutive quarter, maintaining the decreasing trend, as presented in the graph, mainly related to the performance of the segments of Micro, Small and Medium-Sized Enterprises and Individuals, which in the last 12 months presented reductions in the balance of non-performing loans, of 30% and 21%, respectively. |  |

15-90 days In the quarter, short-term delinquency presented growth, impacted partly by seasonal issues at the beginning of the year that affected the segment of individuals, and, therefore, do not represent a trend variation, and specific cases of corporate clients. It is highlighted the improvement showed in the last 12 months for Micro, Small and Medium-Sized Enterprises and Individuals. In the 1Q18, loans were granted (without retention of risks and benefits, already written off as loss, totaling R$5.3 billion), which does not modify the delinquency ratio in the period. The sale value of these portfolios did not impact significantly the outcome. |  |

Effective Coverage Ratio

Monitoring the continuous improvement of the indicators of delinquency and of the ALL expenses (Expanded), the net losses of recoveries estimated for March 2018 indicates 3.7%, resulting in an effective coverage ratio of 269%. |  |

NPL Creation 90 days vs. Write-offs

As a consequence of the strengthening of the policy and of the processes of credit granted, the NPL Creation also follows the trend of decrease, reaching the lowest level of the last ten quarters, boosted by the reduction of delinquent credits in the segments of Micro, Small and Medium-Sized Enterprises and Individuals.

We have demonstrated below the opening of the NPL Creation per business segment.

Coverage Ratio

The adjacent graph presents the behavior of the ratios covering the allowance for loan losses in relation to default credits exceeding 60 and 90 days. In March 2018, ratios showed very comfortable levels. Along with the allowance for loan losses required by Bacen, Bradesco has an excess provision of R$6.9 billion to cover possible adverse scenarios, as well as other operations/ commitments with credit risk. |  |

Bacen Portfolio vs. Expanded Portfolio

The loan portfolio performance (Bacen), counts on the evolution of the segment of individuals, with emphasis on the growth of real estate credit, consigned and CDC vehicles. Also in relation to individuals, highlight to the growth in average daily origination, which raised 3% in the quarter and 35% compared to the first quarter of 2017.

The behavior of the operations with companies is impacted by the lower credit demand of the corporate and middle markets segments.

In the expanded portfolio, in addition to the effects mentioned above, the developments in the periods are impacted by the operations with sureties and guarantees, and debentures not renewed, which are almost entirely designed for large corporates.

| Mar18 | Dec17 | Mar17 | Variation %
|  |  |  | Quarter | 12 months
Individuals | 176,879 | 174,537 | 170,726 | 1.3 | 3.6
Companies | 194,520 | 195,542 | 211,225 | (0.5) | (7.9)
Loan Portfolio - Bacen | 371,399 | 370,079 | 381,950 | 0.4 | (2.8)
Sureties and Guarantees | 72,676 | 78,867 | 75,951 | (7.8) | (4.3)
Operations bearing Credit Risk - Commercial Portfolio (1) | 38,336 | 39,980 | 42,385 | (4.1) | (9.6)
Other (2) | 4,234 | 4,005 | 2,428 | 5.7 | 74.4
Expanded Loan Portfolio | 486,645 | 492,931 | 502,714 | (1.3) | (3.2)
(1) It includes debentures operations and promissory notes; and
(2) It considers letter of credit, advances of credit card receivables and co-obligation in the assignment of CRI and rural credit.

Expanded Loan Portfolio Breakdown By Customer Profile, Product and Currency
R$ million |  |  |  |
| Mar18 | Dec17 | Mar17 | Variation %
Customer Profile |  |  |  | Quarter | 12 months
Individuals | 177,814 | 175,469 | 171,820 | 1.3 | 3.5
Consumer Financing | 117,428 | 116,066 | 111,242 | 1.2 | 5.6
Payroll-deductible Loans | 45,281 | 43,968 | 39,937 | 3.0 | 13.4
Credit Card | 32,982 | 34,437 | 34,018 | (4.2) | (3.0)
CDC / Vehicle Leasing | 21,584 | 20,784 | 19,526 | 3.8 | 10.5
Personal Loans | 17,581 | 16,877 | 17,761 | 4.2 | (1.0)
Real Estate Financing | 34,396 | 33,687 | 32,589 | 2.1 | 5.5
Other Products | 25,990 | 25,716 | 27,989 | 1.1 | (7.1)
Rural Loans | 8,032 | 7,947 | 8,306 | 1.1 | (3.3)
BNDES/Finame Onlendings | 6,376 | 6,394 | 6,668 | (0.3) | (4.4)
Other | 11,582 | 11,374 | 13,015 | 1.8 | (11.0)
Companies | 308,831 | 317,462 | 330,894 | (2.7) | (6.7)
Working Capital | 39,894 | 40,075 | 43,807 | (0.5) | (8.9)
Operations Abroad | 28,436 | 29,776 | 33,671 | (4.5) | (15.5)
Export Financing | 30,979 | 26,335 | 29,120 | 17.6 | 6.4
Real Estate Financing | 25,886 | 27,179 | 28,612 | (4.8) | (9.5)
BNDES/Finame Onlendings | 21,945 | 24,261 | 27,705 | (9.5) | (20.8)
Overdraft Account | 6,894 | 6,566 | 7,798 | 5.0 | (11.6)
CDC / Leasing | 7,371 | 7,249 | 7,295 | 1.7 | 1.0
Rural Loans | 6,248 | 5,618 | 6,643 | 11.2 | (5.9)
Sureties and Guarantees | 72,060 | 78,267 | 75,251 | (7.9) | (4.2)
Operations bearing Credit Risk - Commercial Portfolio | 38,336 | 39,980 | 42,385 | (4.1) | (9.6)
Other | 30,782 | 32,155 | 28,608 | (4.3) | 7.6
Total Loan Operations | 486,645 | 492,931 | 502,714 | (1.3) | (3.2)
Domest Currency | 451,469 | 452,075 | 460,489 | (0.1) | (2.0)
Foreign Currency | 35,176 | 40,856 | 42,226 | (13.9) | (16.7)

Distribution by Business Sector
Among the segments of business, Retail and Prime are highlighted, which currently represent 35.8% of the total expanded portfolio and presented evolutions in the periods.
R$ million |  |  |  |  |  |  |
| Mar18 | % | Dec17 | % | Mar17 | % | Variation %
Business Segments |  |  |  |  |  |  | Quarter | 12 months
Retail | 129,248 | 26.6 | 125,470 | 25.5 | 121,079 | 24.2 | 3.0 | 6.7
Prime | 45,180 | 9.3 | 43,557 | 8.8 | 42,870 | 8.5 | 3.7 | 5.4
Corporate | 217,294 | 44.7 | 225,993 | 45.8 | 236,816 | 47.1 | (3.8) | (8.2)
Middle Market | 44,771 | 9.2 | 45,672 | 9.3 | 48,917 | 9.7 | (2.0) | (8.5)
Other / Non-checking account Holders (1) | 50,152 | 10.2 | 52,240 | 10.6 | 53,033 | 10.5 | (4.0) | (5.4)
Total | 486,645 | 100.0 | 492,931 | 100.0 | 502,714 | 100.0 | (1.3) | (3.2)
(1) It consists, mostly, of non-account holders, originating from the credit cards, payroll-deductible loans and financing of vehicles activities. |  |  |  |

Expanded Loan Portfolio Concentration By Economic Sector
R$ million | Mar18 | % | Dec17 | % | Mar17 | %
Economic Sector |  |  |  |  |  |
Public Sector | 11,577 | 2.4 | 13,518 | 2.7 | 12,484 | 2.5
Oil, derivatives and aggregate activities | 9,632 | 2.0 | 11,097 | 2.3 | 9,848 | 2.0
Production and distribution of electricity | 1,194 | 0.2 | 1,260 | 0.3 | 2,041 | 0.4
Other sectors | 751 | 0.2 | 1,161 | 0.2 | 595 | 0.1
Private Sector | 475,068 | 97.6 | 479,413 | 97.3 | 490,230 | 97.5
Companies | 297,254 | 61.1 | 303,944 | 61.7 | 318,410 | 63.3
Real estate and construction activities | 35,240 | 7.2 | 36,380 | 7.4 | 46,429 | 9.2
Retail | 29,853 | 6.1 | 33,565 | 6.8 | 34,396 | 6.8
Transportation and concession | 24,250 | 5.0 | 23,159 | 4.7 | 27,012 | 5.4
Services | 26,430 | 5.4 | 25,485 | 5.2 | 23,435 | 4.7
Wholesale | 13,920 | 2.9 | 13,307 | 2.7 | 14,385 | 2.9
Automotive | 12,691 | 2.6 | 13,370 | 2.7 | 17,599 | 3.5
Food products | 10,727 | 2.2 | 10,453 | 2.1 | 13,414 | 2.7
Other sectors | 144,143 | 29.6 | 148,225 | 30.1 | 141,740 | 28.2
Individuals | 177,814 | 36.5 | 175,469 | 35.6 | 171,820 | 34.2
Total | 486,645 | 100.0 | 492,931 | 100.0 | 502,714 | 100.0

Changes in the Expanded Loan Portfolio By Rating

In addition, as a consequence of the reinforcement of the policy and the credit granting processes and risk management, 94.3% of new borrowers were classified ratings from AA to C, presenting improvement of the quality of the loan portfolio.

|  |  | New customers between | Remaining customers from
Changes in Expanded Loan Portfolio by | Total Credit on March 2018 | April 2017 and | March 2017
Rating between March 2017 and 2018 |  |  | March 2018 |  |
| R$ million | % | R$ million | % | R$ million | %
Rating |  |  |  |  |  |
AA - C | 428,301 | 88.0 | 24,220 | 94.3 | 404,081 | 87.6
D | 12,546 | 2.6 | 244 | 0.9 | 12,302 | 2.7
E - H | 45,798 | 9.4 | 1,229 | 4.8 | 44,569 | 9.7
Total | 486,645 | 100.0 | 25,693 | 100.0 | 460,952 | 100.0

Expanded Loan Portfolio By Customer Profile and Rating (%) |  |  |  |
The range represented by credits classified between AA and C remained at comfortable levels. |  |  |
| Mar18 | Dec17 |  | Mar17 |
Customer Profile | By Rating | By Rating |  | By Rating |
| AA-C | D | E-H | AA-C | D | E-H | AA-C | D | E-H
Large Corporates | 87.9 | 2.4 | 9.7 | 88.4 | 3.5 | 8.1 | 89.4 | 3.1 | 7.5
Micro, Small and Medium-Sized Enterprises | 84.8 | 3.8 | 11.4 | 84.0 | 3.8 | 12.2 | 82.4 | 4.5 | 13.1
Individuals | 89.9 | 2.1 | 8.0 | 89.3 | 2.1 | 8.6 | 87.7 | 2.3 | 10.0
Total | 88.0 | 2.6 | 9.4 | 87.9 | 3.0 | 9.1 | 87.5 | 3.1 | 9.4

Bacen Portfolio Indicators

With the aim of facilitating the monitoring of the quantitative and qualitative performance of Bradesco’s loan portfolio, a comparative summary of the main figures and indicators is presented below:

|  |  |  | Variation%
|  |  |  | (unless otherwise stated)
R$ million (except %) | Mar18 | Dec17 | Mar17 | Quarter 12 months
Total Provision | 35,763 | 36,527 | 39,181 | (2.1) | (8.7)
- Specific | 16,499 | 16,887 | 21,575 | (2.3) | (23.5)
- Generic | 12,365 | 12,721 | 10,699 | (2.8) | 15.6
- Excess | 6,899 | 6,918 | 6,907 | (0.3) | (0.1)
Specific Provision / Total Provision (%) | 46.1 | 46.2 | 55.1 | (0.1) p.p. | (9.0) p.p.
Total Provision / Loans (%) | 9.6 | 9.9 | 10.3 | (0.3) p.p. | (0.7) p.p.
AA - C Rated Loans / Loans (%) | 87.6 | 87.2 | 86.9 | 0.4 p.p. | 0.7 p.p.
D-rated Operations under Risk Management / Loans (%) | 3.0 | 3.5 | 3.4 | (0.5) p.p. | (0.4) p.p.
E-H rated Loans / Loans(%) | 9.4 | 9.3 | 9.7 | 0.1 p.p. | (0.3) p.p.
D-rated loans | 11,137 | 12,933 | 13,131 | (13.9) | (15.2)
Provision for D-rated loans | 1,710 | 1,904 | 2,022 | (10.2) | (15.4)
Provision / D-rated loans (%) | 15.4 | 14.7 | 15.4 | 0.7 p.p. | -
D-H rated Non-Performing Loans | 23,205 | 23,597 | 29,090 | (1.7) | (20.2)
Total Provision / D-to-H-rated Non-performing Loans (%) | 154.1 | 154.8 | 134.7 | (0.7) p.p. | 19.4 p.p.
E-H Rated Loans | 34,901 | 34,527 | 37,062 | 1.1 | (5.8)
Provision for E-H rated loans | 31,478 | 32,113 | 34,557 | (2.0) | (8.9)
Provision / E-H rated loans (%) | 90.2 | 93.0 | 93.2 | (2.8) p.p. | (3.0) p.p.
E-H rated Non-Performing Loans | 20,191 | 20,510 | 25,166 | (1.6) | (19.8)
Total Provision / E-to-H-rated Non-performing Loans (%) | 177.1 | 178.1 | 155.7 | (1.0) p.p. | 21.4 p.p.

Funds Raised and Managed |  |  |  |  |
|  |  |  | Variation %
R$ million | Mar18 | Dec17 | Mar17 | Quarter 12 months
Demand Deposits | 33,177 | 34,082 | 30,564 | (2.7) | 8.5
Savings Deposits | 101,777 | 103,333 | 94,353 | (1.5) | 7.9
Time Deposits | 134,789 | 125,615 | 109,944 | 7.3 | 22.6
Debentures | 22,192 | 44,453 | 73,904 | (50.1) | (70.0)
Borrow ing and Onlending | 50,052 | 51,669 | 56,417 | (3.1) | (11.3)
Funds from Approvals and Issuance of Securities | 142,590 | 135,011 | 142,751 | 5.6 | (0.1)
Subordinated Debts | 22,993 | 27,050 | 35,046 | (15.0) | (34.4)
Eligible Debt Capital Instruments | 23,155 | 23,130 | 15,800 | 0.1 | 46.6
Subtotal | 530,725 | 544,343 | 558,779 | (2.5) | (5.0)
Securities Sold Under Agreements to Repurchase (1) | 273,738 | 269,109 | 277,359 | 1.7 | (1.3)
Interbank Deposits | 1,648 | 2,247 | 571 | (26.7) | 188.6
Working Capital (Ow n/Managed) | 86,026 | 81,720 | 75,952 | 5.3 | 13.3
Foreign Exchange Portfolio | 15,256 | 7,655 | 10,964 | 99.3 | 39.1
Payment of Taxes and Other Contributions | 3,341 | 1,114 | 4,490 | 199.9 | (25.6)
Technical Provisions for Insurance, Pension Plans and Capitalization Bonds | 251,231 | 246,653 | 229,433 | 1.9 | 9.5
Funds raised | 1,161,965 | 1,152,841 | 1,157,548 | 0.8 | 0.4
Investment Funds and Managed Portfolios | 841,983 | 834,646 | 786,139 | 0.9 | 7.1
Total Assets under Management | 2,003,948 | 1,987,487 | 1,943,687 | 0.8 | 3.1
(1) Does not consider debentures. |  |  |  |  |

Loans vs. Funding In order to analyze Loan Operations in relation to Funding, the following should be deducted from the total client funding the amount committed to reserve requirements at Bacen, the amount of available funds within the customer service network, along with the addition of, funds from domestic and foreign lines of credit that finance the demand for loans. Bradesco shows low dependency on interbank deposits and foreign lines of credit, given its capacity to obtain funding from clients effectively. |  | This is a result of significant capillarity, the broad diversity of products offered, and the market’s confidence in the Bradesco brand and the important presence in the client’s sector. Note that the use of funds provides a comfortable margin. It proves that Bradesco is capable of meeting demands for loaning funds through its own funding.

R$ million | Mar18 | Dec17 | Mar17 | Variation %
|  |  |  | Quarter 12 months
Funding vs. Investments |  |  |  |  |
Demand Deposits + Sundry Floating | 36,518 | 35,203 | 35,054 | 3.7 | 4.2
Savings Deposits | 101,777 | 103,333 | 94,353 | (1.5) | 7.9
Time Deposits + Debentures | 156,981 | 170,068 | 183,848 | (7.7) | (14.6)
Funds from Financial Bills | 139,720 | 131,933 | 139,784 | 5.9 | -
Customer Funds (1) | 434,996 | 440,537 | 453,039 | (1.3) | (4.0)
(-) Reserve Requirements | (70,814) | (66,714) | (61,637) | 6.1 | 14.9
(-) Available Funds (Real) | (14,297) | (13,107) | (9,801) | 9.1 | 45.9
Customer Funds Net of Reserve Requirements | 349,885 | 360,716 | 381,601 | (3.0) | (8.3)
Borrow ing and Onlending | 50,052 | 51,669 | 56,417 | (3.1) | (11.3)
Other (Securities Abroad + Subordinated Debt + Other Borrow ers - Cards) | 73,940 | 79,420 | 76,192 | (6.9) | (3.0)
Total Funding (A) | 473,877 | 491,805 | 514,210 | (3.6) | (7.8)
Expanded Loan Portfolio (Excluding Sureties and Guarantees) (B) | 413,969 | 414,064 | 426,763 | - | (3.0)
B / A | 87.4% | 84.2% | 83.0% | 3.2 p.p. | 4.4 p.p.
(1) It considers: Demand deposits, Miscellaneous Floating, Saving deposits, Time deposits, Debentures (with collateral of repo operations) and Credit Notes (considers Mortgage Bonds, Letters of Credit for Agribusiness, Financial Bills and Structured Operations Certificate).

Below is an analysis of Grupo Bradesco Seguro s Balance Sheet and Consolidated Statement of Income.

|  |  |  | Variation %
R$ million | Mar18 | Dec17 | Mar17 | Mar18 x Mar18 x
|  |  |  | Dec17 | Mar17
Assets |  |  |  |  |
Current and Long-Term Assets | 289,487 | 283,405 | 263,258 | 2.1 | 10.0
Securities | 278,982 | 272,612 | 251,140 | 2.3 | 11.1
Life and Pension Plans | 236,081 | 231,887 | 214,933 | 1.8 | 9.8
Other Lines | 42,901 | 40,725 | 36,207 | 5.3 | 18.5
Insurance Premiums Receivable | 3,431 | 3,676 | 3,791 | (6.7) | (9.5)
Other Loans | 7,073 | 7,117 | 8,327 | (0.6) | (15.1)
Permanent Assets | 6,158 | 5,963 | 5,039 | 3.3 | 22.2
Total | 295,645 | 289,368 | 268,297 | 2.2 | 10.2
Liabilities |  |  |  |  |
Current and Long-Term Liabilities | 261,142 | 256,122 | 238,753 | 2.0 | 9.4
Tax, Civil and Labor Contingencies | 2,298 | 2,160 | 2,292 | 6.4 | 0.3
Payables on Insurance, Pension Plan and Capitalization Bond Operations | 610 | 623 | 671 | (2.1) | (9.1)
Other liabilities | 7,003 | 6,686 | 6,357 | 4.7 | 10.2
Insurance Technical Provisions | 15,260 | 14,837 | 14,950 | 2.9 | 2.1
Life and Pension Plan Technical Provisions | 228,269 | 224,253 | 207,052 | 1.8 | 10.2
Capitalization Bond Technical Provisions | 7,702 | 7,563 | 7,431 | 1.8 | 3.6
Non-controlling Interest | 625 | 581 | 602 | 7.6 | 3.8
Shareholder's Equity (1) | 33,878 | 32,665 | 28,942 | 3.7 | 17.1
Total | 295,645 | 289,368 | 268,297 | 2.2 | 10.2
(1) In March 2018 the shareholders equity of Bradesco Seguros S.A., which controls the operational companies (insurance, pension and capitalization), is of R$16,632 million.

Consolidated Statement of Income |  |  |  |  |
|  |  |  | Variation %
R$ million | 1Q18 | 4Q17 | 1Q17 | 1Q18 x 1Q18 x
|  |  |  | 4Q17 | 1Q17
Insurance Written Premiums, Pension Plan Contributions and Capitalization Bond Income | 17,570 | 21,192 | 17,948 | (17.1) | (2.1)
Variation in Technical Provisions for Insurance, Pension Plans and Capitalization Bonds (1) | (7,710) | (11,015) | (7,792) | (30.0) | (1.1)
Premiums Earned from Insurance, Pension Plan Contribution and Capitalization Bond Income | 9,860 | 10,177 | 10,156 | (3.1) | (2.9)
Retained Claims | (6,253) | (6,178) | (6,313) | 1.2 | (1.0)
Capitalization Bond Draw s and Redemptions | (1,265) | (1,321) | (1,300) | (4.2) | (2.7)
Selling Expenses | (827) | (805) | (916) | 2.7 | (9.7)
Income from Insurance, Pension Plans and Capitalization Bonds | 1,515 | 1,873 | 1,627 | (19.1) | (6.9)
General and Administrative Expenses | (690) | (824) | (702) | (16.3) | (1.7)
Tax Expenses | (205) | (222) | (247) | (7.7) | (17.0)
Other Operating Income / Expenses | 410 | 294 | 69 | 39.5 | -
Operating Income | 1,030 | 1,121 | 747 | (8.1) | 37.9
Financial Results | 1,612 | 1,474 | 1,499 | 9.4 | 7.5
Equity Results | 157 | 155 | 194 | 1.3 | (19.1)
Income before Taxes and Profit Sharing | 2,799 | 2,750 | 2,440 | 1.8 | 14.7
Taxes and Contributions | (1,150) | (1,312) | (1,006) | (12.3) | 14.3
Profit Sharing | (26) | (24) | (23) | 8.3 | 13.0
Non-controlling interests in subsidiaries | (60) | (7) | (37) | - | 62.2
Net Income | 1,563 | 1,407 | 1,374 | 11.1 | 13.8
(1) Includes reinsurance premiums. |  |  |  |  |
Note: For comparison purposes, the effects of non-recurring events are not considered. |  |  |  |  |

Income Distribution of Grupo Bradesco Seguros e Previdência Written Premiums, Pension Plan Contributions and Capitalization Bond Income In the 1Q18 the turnover did not show the same performance when compared to the previous quarter due to the volume of the private pension contributions, which has an important seasonality, in the last quarter of each year. In comparison to the 1Q17, the turnover was impacted by the lower performance of the line of “life and pension plans”, decreased 5.4%. In the same period, we highlight the “health” product, which presented a growth of 4.9%. |

Life and pension plans The net income for the 1Q18 was in line with the results for the previous quarter. It is worth noting that the maintenance of claims ratio and the efficiency ratio indexes, whose contribution compensated for the decrease of 29.2% in the turnover of the line, was a consequence of the seasonality of the 4Q17, and the decrease in the financial results, a reflection of the behavior of the economic-financial ratios in the period. In the last 12 months the net income increased 19.9%, due to the increase in the commercialization ratio and maintenance of the administrative efficiency ratio. These factors compensated for the lower turnover, the increase in the claims ratio, and the decrease in the financial results, a reflection of the behavior of the economic-financial behavior in the period. Evaluation of Participants and Life and Personal Accident Policyholders | Health The net income of 1Q18 remained stable in the annual comparison and recorded an 14.1% increase in relation to the previous quarter, due to greater revenue, improvement in the efficiency ratio and increase in the financial and equity results. Number of Bradesco Saúde and Mediservice Policyholders

Net income increased in the quarterly and annually comparison. The improvement presented was due to the increase in the operating incomes and administrative efficiency ratio. | The growth of profit reflects the improvement of the claims, efficiency and commercialization ratios, mainly in property & casualty. The transfer of the portfolio of large risks to Swiss RE impacted the decrease in turnover, in comparison to the 1Q17.

Below is the composition of fee and commission income in the respective periods:

|  |  |  | Variation % | As % 1Q18
R$ million | 1Q18 | 4Q17 | 1Q17 | 1Q18 x | 1Q18 x
|  |  |  | 4Q17 | 1Q17
Card Income | 2,763 | 2,949 | 2,637 | (6.3) | 4.8 | 35.3
Checking Account | 1,748 | 1,727 | 1,601 | 1.2 | 9.2 | 22.3
Asset Management | 994 | 944 | 912 | 5.3 | 9.0 | 12.7
Loan Operations | 724 | 761 | 731 | (4.9) | (1.0) | 9.2
Collections and Payments | 612 | 613 | 586 | (0.2) | 4.4 | 7.8
Consortium Management | 383 | 389 | 369 | (1.5) | 3.8 | 4.9
Custody and Brokerage Services | 234 | 226 | 211 | 3.5 | 10.9 | 3.0
Underw riting / Financial Advisory Services | 153 | 245 | 180 | (37.6) | (15.0) | 2.0
Other | 220 | 208 | 203 | 5.8 | 8.4 | 2.8
Total | 7,831 | 8,062 | 7,430 | (2.9) | 5.4 | 100.0
Business Days | 61 | 61 | 63 | - | (2) | -

Highlights The evolution of the fee and commission income in 12 months reflects the good performance of practically all the lines, even with the lower number of business days in the period. The quarterly behavior reflects the seasonal effect of the end of the year, which impacted mainly on the income from the card activities, and the lower activity of the capital market, which affected the performance of the income from underwriting / financial advice. The results obtained with the fee and commission income shows signs of improvements in the management and the higher offer of products and services, widely available in the digital channels, in addition to the traditional channels, as well as with benefits of the process of segmentation of clients and the gains in synergies related to the acquisition of HSBC Brasil. Below are some highlights that influence the results of the income from the provision of services: o Cards – growth in the 12 months resulted in the increase of the volume and of the transactions made in the period and higher income with the annual fee, due to the end of the period of exemptions at the beginning of the relationship. o Checking account – growth in the periods observed is a reflection of the improvement in the management of the portfolio of services provided, highlighting the continuous improvement process, which aims to improve and expand the variety of products offered to clients according to their segmentation. o Asset Management – good performance resulting from the increase in the volume of the funds and portfolios managed, highlighting the multimarket funds. o Loan Operations – this line was impacted by the lower income from commissions on guarantees offered (sureties and guarantees). o Consortium – good performance due to the increase in the sales made, receipt from bids and average price, ensuring the leadership of Bradesco Consórcios in the segments in which it operates (real estate, auto and trucks/machinery and equipment). o Custody and Brokerage Services – growth in the quarter and in the 12 months, resulting from the increment of the total assets in custody and higher volumes of securities traded. |

Personnel and Administrative Expenses |  |  |  |  |  |
|  |  |  | Variation % | As of % 1Q18
R$ million | 1Q18 | 4Q17 | 1Q17 | 1Q18 x | 1Q18 x
|  |  |  | 4Q17 | 1Q17
Personnel Expenses |  |  |  |  |  |
Structural | 3,879 | 4,025 | 3,946 | (3.6) | (1.7) | 40.2
Payroll/Social Charges | 2,757 | 2,882 | 2,820 | (4.3) | (2.2) | 28.6
Benefits | 1,122 | 1,143 | 1,126 | (1.8) | (0.4) | 11.6
Non-Structural | 950 | 853 | 876 | 11.4 | 8.4 | 9.9
Management and Employee Profit Sharing | 466 | 486 | 506 | (4.1) | (7.9) | 4.8
Provision for Labor Claims | 407 | 266 | 167 | 53.0 | 143.7 | 4.2
Training | 21 | 44 | 31 | (52.3) | (32.3) | 0.2
Termination Costs | 56 | 57 | 172 | (1.8) | (67.4) | 0.6
Total | 4,829 | 4,878 | 4,822 | (1.0) | 0.1 | 50.1
Administrative Expenses |  |  |  |  |  |
Outsourced Services | 1,143 | 1,279 | 1,195 | (10.6) | (4.4) | 11.9
Depreciation and Amortization | 713 | 687 | 681 | 3.8 | 4.7 | 7.4
Data Processing | 570 | 636 | 563 | (10.4) | 1.2 | 5.9
Communication | 436 | 463 | 484 | (5.8) | (9.9) | 4.5
Rent | 304 | 302 | 306 | 0.7 | (0.7) | 3.2
Asset Maintenance | 290 | 355 | 294 | (18.3) | (1.4) | 3.0
Advertising and Marketing | 256 | 414 | 170 | (38.2) | 50.6 | 2.7
Financial System Services | 240 | 251 | 258 | (4.4) | (7.0) | 2.5
Security and Surveillance | 195 | 198 | 211 | (1.5) | (7.6) | 2.0
Transportation | 189 | 206 | 189 | (8.3) | - | 2.0
Utilities (Water, Electricity and Gas) | 106 | 105 | 114 | 1.0 | (7.0) | 1.1
Travel | 54 | 92 | 51 | (41.3) | 5.9 | 0.6
Materials | 59 | 74 | 77 | (20.3) | (23.4) | 0.6
Other | 255 | 278 | 261 | (8.3) | (2.3) | 2.6
Total | 4,810 | 5,340 | 4,854 | (9.9) | (0.9) | 49.9
Total Operating Expenses | 9,639 | 10,218 | 9,676 | (5.7) | (0.4) | 100.0
Customer Service Points | 74,126 | 73,474 | 72,726 | 0.9 | 1.9 | -

Personnel Expenses the reductions observed in the structural part are related, largely, to the effects of the Special Voluntary Severance Program Scheme PDVE, which started in August 2017, accepted by 7,400 employees, we also highlight the impact of the collective agreement in the annual comparison. In the non-structural part, the increase of expenses in the periods observed is a result of the higher expenses with the provision for labor claims, associated in part the high number of lawsuits filed at the end of 2017, probably, anticipating the entry into force of the labor reform.

Administrative Expenses the lower administrative expenses in the last 12 months, recorded in practically all of the lines, even considering inflation of the period, demonstrates the gains in synergy resulting from the acquisition of HSBC Brasil and the strategy of optimization of the points of service.

The coverage ratio presented an improvement for the third consecutive quarter, capturing the PDVE benefits, the revenue gained from the synergy of the acquisition of HSBC Brasil and the strategy of optimization of the points of service. We also highlight the higher fee and commission income from the provision of services, which have been capturing the positive results of the process of segmentation of clients and the efficiency obtained in the management and offer of products and services.

Other Operating Expenses, Net of Income

Other Operating Expenses, Net of Income presented a growth of 5.9% in the quarter and 11.1% in the last 12 months, due to higher variable expenses, mainly those related to the performance of strategic partnerships of the segment of credit cards and constitution of operating provisions.

Basel Ratio A large part of the reduction of capital tier I is related to the change in the schedule of application of deductions on the prudential adjustments, which went from 100% in 2018 (80% in 2017). The internal generation capital (net profit), continues with high contribution to the indicator. |

|  |  |  |  |  |  |  |  | Variation %
R$ million | 1Q18 | 4Q17 | 3Q17 | 2Q17 | 1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q18 x | 1Q18 x
|  |  |  |  |  |  |  |  | 4Q17 | 1Q17
Income Statement for the Period |  |  |  |  |  |  |  |  |  |
Recurring Net Income (1) | 5,102 | 4,862 | 4,810 | 4,704 | 4,648 | 4,385 | 4,462 | 4,161 | 4.9 | 9.8
Total Net Interest Income | 15,686 | 15,813 | 15,361 | 15,892 | 16,036 | 16,440 | 16,931 | 14,962 | (0.8) | (2.2)
Gross Credit Intermediation Margin | 11,690 | 12,129 | 12,119 | 12,517 | 12,781 | 13,586 | 13,802 | 11,570 | (3.6) | (8.5)
Net Credit Intermediation Margin | 7,798 | 6,724 | 7,540 | 7,139 | 7,499 | 7,290 | 8,060 | 6,546 | 16.0 | 4.0
Expanded Allowance for Loan Losses (ALL) Expenses | (3,892) | (5,405) | (4,579) | (5,378) | (5,282) | (6,296) | (5,742) | (5,024) | (28.0) | (26.3)
Fee and Commission Income | 7,831 | 8,062 | 7,822 | 7,496 | 7,430 | 7,545 | 7,450 | 6,624 | (2.9) | 5.4
Administrative and Personnel Expenses | (9,639) | (10,218) | (9,863) | (9,865) | (9,676) | (10,482) | (10,267) | (8,152) | (5.7) | (0.4)
Insurance Written Premiums, Pension Plan Contributions and Capitalization Bond Income | 17,570 | 21,192 | 18,637 | 18,512 | 17,948 | 21,247 | 17,733 | 17,253 | (17.1) | (2.1)
Statement of Financial Position |  |  |  |  |  |  |  |  |  |
Total Assets (2) | 1,303,842 | 1,298,328 | 1,311,672 | 1,291,184 | 1,294,139 | 1,293,559 | 1,270,139 | 1,105,244 | 0.4 | 0.7
Securities | 585,837 | 584,650 | 572,099 | 540,106 | 549,700 | 549,873 | 509,184 | 437,580 | 0.2 | 6.6
Expanded Loans Portfolio | 486,645 | 492,931 | 486,864 | 493,566 | 502,714 | 514,990 | 521,771 | 447,492 | (1.3) | (3.2)
- Individuals | 177,814 | 175,469 | 172,207 | 172,045 | 171,820 | 172,045 | 171,067 | 148,919 | 1.3 | 3.5
- Companies | 308,831 | 317,462 | 314,657 | 321,521 | 330,894 | 342,945 | 350,704 | 298,573 | (2.7) | (6.7)
Allowance for Loan Losses (ALL) | (35,763) | (36,527) | (36,557) | (37,536) | (39,181) | (40,714) | (40,416) | (31,875) | (2.1) | (8.7)
Total Deposits | 271,391 | 265,278 | 259,577 | 260,120 | 235,432 | 234,214 | 239,937 | 179,436 | 2.3 | 15.3
Technical Provisions | 251,231 | 246,653 | 239,287 | 233,640 | 229,433 | 223,342 | 213,608 | 190,649 | 1.9 | 9.5
Shareholders' Equity | 113,776 | 110,457 | 110,301 | 106,807 | 104,558 | 100,442 | 98,550 | 96,358 | 3.0 | 8.8
Assets under Management | 2,003,948 | 1,987,487 | 1,991,708 | 1,917,827 | 1,943,687 | 1,904,912 | 1,865,755 | 1,589,319 | 0.8 | 3.1
Performance Indicators (%) |  |  |  |  |  |  |  |  |  |
Recurring Net Income per Share - R$ (3) (4) | 2.91 | 2.84 | 2.77 | 2.72 | 2.64 | 2.56 | 2.58 | 2.59 | 2.4 | 10.3
Book Value per Common and Preferred Share - R$ (4) | 17.00 | 16.50 | 16.48 | 15.96 | 15.62 | 15.01 | 14.72 | 14.40 | 3.0 | 8.8
Annualized Return on Average Equity (5) (6) | 18.6 | 18.1 | 18.1 | 18.2 | 18.3 | 17.6 | 17.6 | 17.4 | 0.5 p.p. | 0.3 p.p.
Annualized Return on Average Assets (6) | 1.6 | 1.5 | 1.5 | 1.4 | 1.4 | 1.5 | 1.5 | 1.5 | 0.1 p.p. | 0.2 p.p.
12-month Net Interest Margin - NIM = Adjusted Net Interest Income /Average Assets Repos | 6.6 | 6.7 | 6.9 | 7.2 | 7.4 | 7.6 | 7.6 | 7.5 | (0.1) p.p. | (0.8) p.p.
Permanent Assets |  |  |  |  |  |  |  |  |  |
Fixed Asset Ratio (7) | 43.1 | 43.4 | 38.9 | 39.6 | 42.3 | 44.8 | 44.4 | 33.8 | (0.3) p.p. | 0.8 p.p.
Combined Ratio - Insurance (8) | 85.3 | 86.1 | 86.2 | 86.6 | 85.2 | 85.9 | 90.0 | 89.6 | (0.8) p.p. | 0.1 p.p.
Efficiency Ratio (ER) (3) (11) | 40.9 | 40.8 | 40.7 | 40.6 | 40.0 | 38.9 | 38.2 | 37.4 | 0.1 p.p. | 0.9 p.p.
Coverage Ratio (Fee and Commission Income/Administrative and Personnel Expenses) (3) | 78.8 | 77.8 | 75.9 | 74.3 | 75.3 | 76.2 | 78.0 | 80.2 | 1.0 p.p. | 3.5 p.p.
Market Capitalization - R$ million (9) | 237,219 | 200,521 | 208,250 | 169,618 | 178,208 | 160,813 | 160,472 | 144,366 | 18.3 | 33.1
Loan Portfolio Quality - % |  |  |  |  |  |  |  |  |  |
ALL / Loan Portfolio - Bacen | 9.6 | 9.9 | 9.9 | 10.0 | 10.3 | 10.4 | 10.1 | 9.3 | (0.3) p.p. | (0.7) p.p.
Non-performing Loans (> 60 days (10) / Loan Portfolio) | 5.4 | 5.6 | 5.7 | 6.0 | 6.7 | 6.5 | 6.4 | 5.8 | (0.2) p.p. | (1.3) p.p.
Delinquency Ratio (> 90 days (10) / Loan Portfolio) | 4.4 | 4.7 | 4.8 | 4.9 | 5.6 | 5.5 | 5.4 | 4.6 | (0.3) p.p. | (1.2) p.p.
Coverage Ratio (> 90 days (10)) | 219.3 | 211.4 | 207.7 | 202.5 | 182.1 | 188.4 | 189.1 | 201.0 | 7.9 p.p. | 37.2 p.p.
Coverage Ratio (> 60 days (10)) | 179.7 | 175.0 | 174.6 | 167.0 | 154.0 | 158.8 | 158.3 | 160.7 | 4.7 p.p. | 25.7 p.p.
Operating Limits % |  |  |  |  |  |  |  |  |  |
Basel Ratio - Total (7) | 15.9 | 17.1 | 17.7 | 16.7 | 15.3 | 15.4 | 15.3 | 17.7 | (1.2) p.p. | 0.6 p.p.
Tier I Capital | 12.4 | 13.1 | 13.4 | 12.5 | 12.0 | 12.0 | 11.9 | 13.7 | (0.7) p.p. | 0.4 p.p.
- Common Equity | 11.6 | 12.3 | 12.5 | 11.6 | 11.2 | 11.2 | 11.1 | 13.7 | (0.7) p.p. | 0.4 p.p.
- Additional Capital | 0.8 | 0.8 | 0.9 | 0.9 | 0.8 | 0.8 | 0.8 | - | - | -
Tier II Capital | 3.5 | 4.0 | 4.3 | 4.2 | 3.3 | 3.4 | 3.4 | 4.0 | (0.5) p.p. | 0.2 p.p.
(1) According to the non-recurring events described on page 5 of this Economic and Financial Analysis Report; |  |  |  |  |  |  |  |
(2) For more information, please check note 4 Balance Sheet and Managerial Statement of Income, in Complete Financial Statements of this report; |  |  |  |  |
(3) In the last 12 months; |  |  |  |  |  |  |  |  |  |
(4) For comparison purposes, shares were adjusted in accordance with bonuses and stock splits of the period; |  |  |  |  |  |  |  |
(5) Excluding mark-to-market effect of Available-for-Sale Securities recorded under Shareholders Equity; |  |  |  |  |  |  |  |  |
(6) Year-to-Date Adjusted Net Income; |  |  |  |  |  |  |  |  |  |
(7) Index calculation has followed regulatory guidelines set forth in Resolutions No. 4,192/13 (Prudential Conglomerate) and No. 4,193/13 (Basel III); |  |  |  |  |
(8) Excludes additional reserves; |  |  |  |  |  |  |  |  |  |
(9) Number of shares (excluding treasury shares) multiplied by the closing price for common and preferred shares on the period s last trading day; |  |  |  |  |
(10) Overdue loans; and |  |  |  |  |  |  |  |  |  |
(11) ER = (Personnel Expenses Employee Profit Sharing + Administrative Expenses)/ (Net Interest Income + Fee and Commission Income + Income from Insurance + Equity in the Earnings |  |
(Losses) of Unconsolidated and Jointly Controlled Subsidiaries + Other Operating Income Other Operating Expenses). |  |  |  |  |  |  |  |

Analytical Breakdown of Statement of Income – Managerial (1) vs. Recurring (3)

1Q18 x 4Q17 |  |  |  |  |  |  |  |
R$ million | First quarter of 2018 | Fourth Quarter of 2017
| Managerial Income Statement (1) | Reclassifications (2) | Non-Recurring Events | DRE | Managerial Income Statement (1) | Reclassifications (2) | Non-Recurring Events | DRE
Net Interest Income | 17,283 | (1,597) | - | 15,686 | 15,111 | 702 | - | 15,813
Expanded ALL | (4,599) | 707 | - | (3,892) | (5,413) | 8 | - | (5,405)
Gross Income from Financial Intermediation | 12,684 | (890) | - | 11,794 | 9,698 | 710 | - | 10,408
Income from Insurance, Pension Plans and |  |  |  |  |  |  |  |
Capitalization Bonds | 1,515 | - | - | 1,515 | 1,873 | - | - | 1,873
Fee and Commission Income | 7,835 | (4) | - | 7,831 | 8,080 | (18) | - | 8,062
Personnel Expenses | (4,829) | - | - | (4,829) | (4,878) | - | - | (4,878)
Other Administrative Expenses | (4,810) | - | - | (4,810) | (5,336) | (10) | 6 | (5,340)
Tax Expenses | (1,671) | (150) | - | (1,821) | (1,527) | (307) | 76 | (1,758)
Equity in the earnings (losses) of unconsolidated |  |  |  |  |  |  |  |
and jointly controlled subsidiaries | 27 | - | - | 27 | 30 | - | - | 30
Other Operating Income / Expenses | (2,789) | 95 | 657 | (2,037) | (3,957) | 1,153 | 881 | (1,923)
Operating Income | 7,962 | (949) | 657 | 7,670 | 3,983 | 1,528 | 963 | 6,474
Non-Operating Income | (214) | 205 | - | (9) | (242) | 126 | 100 | (16)
Income Tax / Social Contribution and | (3,281) | 744 | (22) | (2,559) | 52 | (1,654) | 6 | (1,596)
Non-controlling Interest |  |  |  |  |  |  |  |
Net Income | 4,467 | - | 635 | 5,102 | 3,793 | - | 1,069 | 4,862
(1) For more information, please check note 4 – Balance Sheet and Managerial Statement of Income, in chapter “Complete Financial Statements” of this eeport;
(2) Includes reclassifications in items from the statement of income which do not affect the Net Income, but allow a better analysis of business items, (i) hedge adjustment, which represents the partial result of derivatives used for hedge investments abroad, which in terms of Net Income, simply cancels the tax effect (IR/CS and PIS/COFINS) of this hedge strategy, in the amount of R$206 million in 1Q18 and R$1,812 million in 4Q17; and
(3) It refers to Managerial Statement of Income(1) with the reclassifications between lines, which do not affect the Net Income, and without the extraordinary events of the period.

Analytical Breakdown of Statement of Income – Managerial (1) vs. Recurring (3)

1Q18 x 1Q17 |  |  |  |  |  |  |  |
R$ million | First quarter of 2018 | Fisrt quarter of 2017
| Managerial Income Statement (1) | Reclassifications (2) | Non-Recurring Events | DRE | Managerial Income Statement (1) | Reclassifications (2) | Non-Recurring Events | DRE
Net Interest Income | 17,283 | (1,597) | - | 15,686 | 18,558 | (2,522) | - | 16,036
Expanded ALL | (4,599) | 707 | - | (3,892) | (8,308) | 3,026 | - | (5,282)
Gross Income from Financial Intermediation | 12,684 | (890) | - | 11,794 | 10,250 | 504 | - | 10,754
Income from Insurance, Pension Plans and |  |  |  |  |  |  |  |
Capitalization Bonds | 1,515 | - | - | 1,515 | 1,627 | - | - | 1,627
Fee and Commission Income | 7,835 | (4) | - | 7,831 | 7,439 | (9) | - | 7,430
Personnel Expenses | (4,829) | - | - | (4,829) | (4,822) | - | - | (4,822)
Other Administrative Expenses | (4,810) | - | - | (4,810) | (4,852) | (2) | - | (4,854)
Tax Expenses | (1,671) | (150) | - | (1,821) | (1,771) | (1) | - | (1,772)
Equity in the earnings (losses) of unconsolidated |  |  |  |  |  |  |  |
and jointly controlled subsidiaries | 27 | - | - | 27 | 58 | - | - | 58
Other Operating Income / Expenses | (2,789) | 95 | 657 | (2,037) | (693) | (1,736) | 596 | (1,833)
Operating Income | 7,962 | (949) | 657 | 7,670 | 7,236 | (1,244) | 596 | 6,588
Non-Operating Income | (214) | 205 | - | (9) | (134) | 82 | - | (52)
Income Tax / Social Contribution and | (3,281) | 744 | (22) | (2,559) | (3,031) | 1,162 | (19) | (1,888)
Non-controlling Interest |  |  |  |  |  |  |  |
Net Income | 4,467 | - | 635 | 5,102 | 4,071 | - | 577 | 4,648
(1) For more information, please check note 4 – Balance Sheet and Managerial Statement of Income, in chapter “Complete Financial Statements” of this report
(2) Includes reclassifications in items from the statement of income which do not affect the Net Income, but allow a better analysis of business items, particularly hedge adjustment, which represents the partial result of derivatives used for hedge investments abroad, which in terms of Net Income, simply cancels the tax effect (IR/CS and PIS/COFINS) of this hedge strategy, in the amount of R$206 million in 1Q18 and R$1,175 million in 1Q17; and
(3) It refers to Managerial Statement of Income(1) with the reclassifications between lines, which do not affect the Net Income, and without the extraordinary events of the period.

R$ million | Mar18 | Dec17 | Mar17 | Variation %
|  |  |  | Mar18 x | Mar18 x
Assets |  |  |  | Dec17 | Mar17
Current and Long-Term Assets | 1,274,394 | 1,267,893 | 1,263,948 | 0.5 | 0.8
Funds available | 18,098 | 15,224 | 12,029 | 18.9 | 50.5
Interbank Investments | 140,584 | 154,270 | 188,117 | (8.9) | (25.3)
Securities and Derivative Financial Instruments | 585,837 | 584,650 | 549,700 | 0.2 | 6.6
Interbank and Interdepartmental Accounts | 72,287 | 68,197 | 63,596 | 6.0 | 13.7
Loan and Leasing Operations | 325,764 | 324,439 | 339,269 | 0.4 | (4.0)
Allow ance for Loan Losses (ALL) | (35,763) | (36,527) | (39,181) | (2.1) | (8.7)
Other Receivables and Assets | 167,587 | 157,640 | 150,418 | 6.3 | 11.4
Permanent Assets | 29,448 | 30,435 | 30,191 | (3.2) | (2.5)
Investments | 2,134 | 2,182 | 1,726 | (2.2) | 23.6
Premises and Equipment and Leased Assets | 7,994 | 7,949 | 7,802 | 0.6 | 2.5
Intangible Assets | 19,320 | 20,304 | 20,663 | (4.8) | (6.5)
Total | 1,303,842 | 1,298,328 | 1,294,139 | 0.4 | 0.7
Liabilities |  |  |  |  |
Current and Long-Term Liabilities | 1,187,998 | 1,185,764 | 1,187,569 | 0.2 | 0.0
Deposits | 271,391 | 265,278 | 235,432 | 2.3 | 15.3
Securities sold under agreements to repurchase | 295,930 | 313,562 | 351,263 | (5.6) | (15.8)
Funds from Issuance of Securities | 142,590 | 135,011 | 142,751 | 5.6 | (0.1)
Interbank and Interdepartmental Accounts | 26,593 | 30,034 | 21,126 | (11.5) | 25.9
Borrow ings and Onlendings | 50,052 | 51,669 | 56,417 | (3.1) | (11.3)
Derivative Financial Instruments | 17,064 | 14,084 | 13,936 | 21.2 | 22.4
Technical provisions for insurance, pension plans and capitalization bonds | 251,231 | 246,653 | 229,433 | 1.9 | 9.5
Other liabilities | 133,147 | 129,473 | 137,211 | 2.8 | (3.0)
Deferred Income | 370 | 410 | 426 | (9.8) | (13.1)
Non-controlling Interest in Subsidiaries | 1,698 | 1,697 | 1,586 | 0.1 | 7.1
Shareholders' Equity | 113,776 | 110,457 | 104,558 | 3.0 | 8.8
Total | 1,303,842 | 1,298,328 | 1,294,139 | 0.4 | 0.7
(1) For more information, please check note 4 Balance Sheet and Managerial Statement of Income, in chapter Complete Financial Statements of this report.

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Service Channels

|  |  |  | Variatio n %
| Mar18 | Dec17 | Mar17 | M ar18 x | M ar18 x
|  |  |  | D ec17 | M ar17
Structural Information - Units |  |  |  |  |
Customer Service Points | 74,126 | 73,474 | 72,726 | 0.9 | 1.9
- Branches | 4,708 | 4,749 | 5,122 | (0.9) | (8.1)
- PAs | 3,908 | 3,899 | 3,971 | 0.2 | (1.6)
- PAEs | 936 | 928 | 1,004 | 0.9 | (6.8)
- Offsite ATM Netw ork - Bradesco | 58 | 63 | 97 | (7.9) | (40.2)
- Banco24Horas Netw ork | 11,160 | 11,050 | 10,960 | 1.0 | 1.8
- Bradesco Expresso (Correspondent Banks) | 38,856 | 38,708 | 38,525 | 0.4 | 0.9
- Bradesco Financiamentos | 14,424 | 14,002 | 12,971 | 3.0 | 11.2
- Losango | 63 | 63 | 63 | - | -
- Branches / Subsidiaries Abroad / Representation office | 13 | 12 | 13 | 8.3 | -
ATMs | 57,168 | 56,849 | 56,679 | 0.6 | 0.9
- Onsite Netw ork - Bradesco | 35,662 | 35,590 | 36,095 | 0.2 | (1.2)
- Banco24Horas Netw ork | 21,506 | 21,259 | 20,584 | 1.2 | 4.5
Employees | 97,593 | 98,808 | 106,644 | (1.2) | (8.5)
Outsourced Employees and Interns | 14,888 | 15,064 | 16,472 | (1.2) | (9.6)
Customers - In millions |  |  |  |  |
Total Customers (1) | 70.9 | 70.2 | 69.8 | 1.0 | 1.6
Account Holders (2) | 27.9 | 27.8 | 28.5 | 0.4 | (2.1)
Savings Accounts | 57.6 | 63.4 | 58.1 | (9.1) | (0.9)
Insurance Group | 53.0 | 53.4 | 50.4 | (0.7) | 5.2
- Policyholders | 47.3 | 47.6 | 44.7 | (0.6) | 5.8
- Pension Plan Participants | 2.8 | 2.9 | 2.6 | (3.4) | 7.7
- Capitalization Bond Customers | 2.9 | 2.9 | 3.1 | - | (6.5)
Bradesco Financiamentos | 1.3 | 1.3 | 1.3 | - | -
(1) Excludes overlap of clients; and
(2) As per the 1Q18, we started considering the salary accounts. For the effect of comparability the previous periods, presented in this report, have been reclassified.

Market Share of the Branches

| Mar18 | Market | Mar17 | Market
Region | Bradesco | Market | Share | Bradesco | Market | Share
North | 263 | 1,095 | 24.0% | 282 | 1,116 | 25.3%
Northeast | 858 | 3,378 | 25.4% | 862 | 3,453 | 25.0%
Midwest | 384 | 1,701 | 22.6% | 436 | 1,759 | 24.8%
Southeast | 2,446 | 10,701 | 22.9% | 2,660 | 11,073 | 24.0%
South | 757 | 3,843 | 19.7% | 882 | 3,990 | 22.1%
Total | 4,708 | 20,718 | 22.7% | 5,122 | 21,391 | 23.9%

Market Share in relation to the Market %

| Mar18 | Dec17 | Mar17
Bacen |  |  |
Bank |  |  |
Demand Deposits | N/A | 11.3 | 11.3
Savings Deposits | N/A | 14.1 | 14.1
Time Deposits | N/A | 10.8 | 10.3
Loans | 11.0 (1) | 11.0 | 11.3
Loans - Private Institutions | 24.0 (1) | 23.9 | 25.5
Loans - Vehicles Individuals (CDC + Leasing) | 13.9 (1) | 13.8 | 13.5
Payroll-Deductible Loans | 14.2 (1) | 14.1 | 13.6
Consortia |  |  |
Real Estate | 29.3 (1) | 29.5 | 28.1
Auto | 31.7 (1) | 31.8 | 30.5
Trucks, Tractors and Agricultural Implements | 16.2 (1) | 16.5 | 17.4
Internacional Area |  |  |
Export Market | 25.6 | 22.4 | 22.1
Import Market | 23.0 | 21.4 | 20.6
Insurance Superintendence (Susep), National Agency for Supplementary |  |  |
Healthcare (ANS) and National Federation of Life and Pension Plans (Fenaprevi) |  |  |
Insurance Premiums, Pension Plan Contributions and Capitalization Bond Income | 25.1 (1) | 25.8 | 25.7
Insurance Premiums (including Long-Term Life Insurance - VGBL) | 24.5 (1) | 24.9 | 24.9
Life/Personal Accident Insurance Premiums | 19.2 (1) | 20.2 | 20.8
Auto/P&C Insurance Premiums | 7.8 (1) | 8.8 | 8.6
Auto/Optional Third-Party Liability Insurance Premiums | 10.3 (1) | 12.1 | 11.4
Health Insurance Premiums | 47.7 (1) | 48.2 | 49.5
Income from Pension Plan Contributions (excluding VGBL) | 33.1 (1) | 36.6 | 33.6
Capitalization Bond Income | 28.7 (1) | 30.0 | 30.0
Technical provisions for insurance, pension plans and capitalization bonds | 26.6 (1) | 26.8 | 27.6
Income from VGBL Premiums | 26.6 (1) | 25.9 | 25.6
Income from Unrestricted Benefits Pension Plans (PGBL) Contributions | 29.2 (1) | 34.6 | 29.4
Pension Plan Investment Portfolios (including VGBL) | 28.0 (1) | 28.3 | 29.2
Anbima |  |  |
Investment Funds and Managed Portfolios | 20.9 | 21.5 | 22.2
Social Security National Institute (INSS)/Dataprev |  |  |
Benefit Payment to Retirees and Pensioners | 30.9 | 31.1 | 30.2
Brazilian Association of Leasing Companies (ABEL) |  |  |
Lending Operations | N/A | 18.7 | 18.4
(1) Reference Date: Feb/18; and
N/A Not available.

Ratings

Fitch Ratings |  |
International Scale (1) |  | National Scale
Viability | Support | Domestic Currency | Foreign Currency |  | Domestic
|  | Long-term | Short-term | Long-term | Short-term |  | Long-term | Short-term
bb | 4 |  |  |  |  |  |  |
|  | BB | B | BB | B |  | AAA(bra) | F1+(bra)
Moody´s Investors Service |  |
Global Scale |  | National Scale
Deposits - Domestic currency | Deposits - Foreign currency |  | Domestic Currency
Long-term | Short-term | Long-term | Short-term |  | Long-term | Short-term
Ba2 | NP | Ba3 | NP |  | Aa1.br | BR-1
S&P Global (2) |  | Austin Rating
Global Scale - Issuer Credit Rating | National Scale |  | National Scale
Foreign Currency | Domestic Currency | Issuer Credit Rating |
Long-term | Short-term | Long-term | Short-term | Long-term | Short-term (1) |  | Long-term | Short-term
BB- | B | BB- | B | brAA- | brA-1+ |  | brAAA | brA-1
(1) In March 2018 there was a revision of the rating of Brazil, resulting in a downgrade to the long-term ratings, support and viability on an international scale, with an impact on the financial institutions that are evaluated at the sovereign level; and
(2) In January 2018 there was a review of Brazil s rating (sovereign), resulting in a downgrade in the ratings on a long-term global scale, affecting Brazilian banks and insurance companies that are rated at the sovereign level, from BB to BB- .

Bradesco controls corporate risk management in an integrated and independent manner, preserving and valuing the Board's decisions, developing and implementing methodologies, models and measurement and control tools. It also provides training to employees at every level of the Organization, from business areas to the Board of Directors. The risk management activity structure has policies, standards and procedures, ensuring that the Organization maintains control compatible with the nature of its operations and the complexity of its products, services, activities, processes and systems, as well as the extent of its exposure to risk. |  | It is also composed of committees, commissions and departments that support the Board of Executive Officers and the Board of Directors in decision making. The most notable amongst these are the Integrated Risk Management and Capital Allocation Committee (COGIRAC) and Risk Committee, whose purpose is to advise the Board of Directors in the performance of its duties in the management and control of risks and capital. Detailed information regarding to risk management process, regulatory capital as well as Bradesco's risk exposures, can be found in the Risk Management Report - Pillar 3, available on the Investors Relations website at bradescori.com.br.

Bradesco has an area responsible for capital management centralization, named Capital Management, subordinated to the Department of Planning, Budget and Control, which acts jointly with the Integrated Risk Control Department, associated companies, business areas and Bradesco’s supporting areas. Additionally, this Governance is comprised of Executive Committees and one Non-Statutory Committee, which assist the Board of Directors and Board of Executive Officers in the decision-making process. The Capital Management structure, through adequate capital sufficiency planning, aims to provide conditions for capital monitoring and control, contributing to the achievement of goals set in the strategic objectives defined by Bradesco. In addition to the Committees structure, on an annual basis, the capital plan is devised by Bradesco, which is approved by the Board of Executive Officers and Board of Directors. It is also aligned with the strategic plan and encompasses a prospective outlook of at least three years. |  | The process of developing this plan considers threats and opportunities, market share and development goals, capital requirement projections based on risks, as well as capital held by Bradesco. Such projections are constantly monitored and controlled by the capital management area. With the implementation of the Capital Management, a Capital Adequacy Assessment Internal Process (ICAAP), which provides conditions to assess capital sufficiency in accordance with the base and stress and extreme crisis scenarios, in a prospective outlook to identify capital and contingency actions to be taken in the respective scenarios. Capital adequacy and sufficiency information represent fundamental tools to manage and support the decision-making process. Additional information on the capital management structure is available in the Risk Management Report – Pillar 3, and in the Integrated Report, on the Investor Relations website at bradescori.com.br.

According to CNSP Resolution No. 321/15, amended by Resolution No. 360/17, corporations should have an adjusted shareholders’ equity (ASE) equal to or higher than the minimum capital required (MCR). MCR is equivalent to the base capital or the risk capital, whichever is higher. According to CNSP Resolution No. 343/16, the ASE is valued economically, and should be calculated based on shareholders’ equity or net assets, considering the accounting adjustments and adjustments associated with changes in economic values. For companies regulated by the ANS, Normative Resolution No. 373/15 establishes that corporations should have adjusted shareholders’ equity equal to or higher than the Solvency Margin. |  | The capital adjustment and management process is continuously monitored and aims to ensure that Grupo Bradesco Seguros keeps a solid capital base to support the development of activities and cope with the risks in any market situation, in compliance with regulatory requirements and/or Corporate Governance principles. Companies must permanently maintain capital compatible with the risks for their activities and operations, according to the characteristics of each company belonging to Grupo Bradesco Seguros, represented by adequate capital levels. Grupo Bradesco Seguros permanently observes the limits required by the respective regulatory entities. The Minimum Capital Required in February 2018 was R$11.3 billion.

The table below shows the composition of the Reference Equity, of the Risk-Weighted Assets and of the Basel Ratio. From January 2018, the timetable for the application of deductions on the prudential adjustments resulted in 100% (2017 80% / 2016 60%).

|  |  |  | Basel III |  |
|  |  |  | Prudential Conglomerate |  |
R$ million | Mar18 | Dec17 | Sept17 | June17 | Mar17 | Dec16 | Sept16 | June16
Calculation Basis |  |  |  |  |  |  |  |
Regulatory Capital | 100,170 | 104,673 | 106,682 | 103,050 | 92,920 | 101,127 | 100,056 | 102,548
Tier I | 78,206 | 80,085 | 80,889 | 77,322 | 73,123 | 78,763 | 77,655 | 79,377
Common Equity | 73,101 | 75,080 | 75,363 | 71,949 | 67,915 | 73,747 | 72,655 | 79,377
Shareholders' Equity | 113,776 | 110,457 | 110,301 | 106,807 | 104,558 | 100,442 | 98,550 | 96,358
Non-controlling/Other | 186 | 69 | 84 | 39 | 34 | 61 | 17 | 18
Phase-in arrangements provided for Resolution No 4,192/13 | (40,861) | (35,446) | (35,022) | (34,898) | (36,677) | (26,756) | (25,912) | (16,999)
Additional Capital | 5,105 | 5,005 | 5,526 | 5,374 | 5,207 | 5,016 | 5,000 | -
Tier II | 21,964 | 24,588 | 25,793 | 25,728 | 19,797 | 22,364 | 22,401 | 23,171
Subordinated Debt (before Resolution No 4,192/13) | 5,651 | 7,641 | 8,354 | 8,730 | 9,650 | 12,560 | 13,693 | 14,796
Subordinated Debt (according to Resolution No. 4,192/13) | 16,313 | 16,947 | 17,438 | 16,998 | 10,147 | 9,804 | 8,708 | 8,375
Risk-Weighted Assets (RWA) | 631,159 | 611,442 | 604,581 | 618,611 | 607,464 | 656,189 | 657,148 | 580,568
Credit Risk | 567,007 | 554,929 | 547,411 | 550,859 | 546,210 | 589,977 | 588,914 | 527,254
Operational Risk | 53,510 | 47,605 | 47,605 | 47,222 | 48,157 | 50,444 | 50,444 | 38,502
Market Risk | 10,642 | 8,908 | 9,564 | 20,530 | 13,097 | 15,768 | 17,791 | 14,813
Total Ratio | 15.9% | 17.1% | 17.7% | 16.7% | 15.3% | 15.4% | 15.3% | 17.7%
Tier I Capital | 12.4% | 13.1% | 13.4% | 12.5% | 12.0% | 12.0% | 11.9% | 13.7%
Common Equity | 11.6% | 12.3% | 12.5% | 11.6% | 11.2% | 11.2% | 11.1% | 13.7%
Additional Capital | 0.8% | 0.8% | 0.9% | 0.9% | 0.8% | 0.8% | 0.8% | -
Tier II Capital | 3.5% | 4.0% | 4.3% | 4.2% | 3.3% | 3.4% | 3.4% | 4.0%
Subordinated Debt (before Resolution No 4,192/13) | 0.9% | 1.2% | 1.4% | 1.4% | 1.6% | 1.9% | 2.1% | 2.6%
Subordinated Debt (according to Resolution No. 4,192/13) | 2.6% | 2.8% | 2.9% | 2.7% | 1.7% | 1.5% | 1.3% | 1.4%

The Management of Banco Bradesco is comprised of the Board of Directors, which is composed of eight directors, and of its Board of Executive Officers, both with their own set of bylaws, with no fulfillment of the posts of Chairman of the Board of Directors and Chief Executive Officer, according to the statutory provision. Eight committees advise the Board of Directors: a) statutory: (i) Audit; and (ii) Remuneration; and b) non-statutory: (iii) Ethical Conduct; (iv) Risks; (v) Internal Controls and Compliance; (vi) Integrated Risk Management and Capital Allocation – COGIRAC; (vii) Sustainability; and (viii) Succession and Nomination. Various executive committees assist the activities of the Board of Executive Officers, being all regulated by their own set of bylaws. |  | The Fiscal Council, permanent supervisory body, is composed of five effective members and an equal number of alternate members. Minority preferred shareholders and non-controlling shareholders, holders of common shares are responsible for chosen two effective members and their respective alternates. Besides the Fiscal Council and the Audit Committee, Bradesco is submitted to Internal Audit which reports to the Board of Directors. In 2001, Bradesco adhered voluntarily to Level 1 of Corporate Governance of B3 and, in 2011, to the Self-Regulation Code and Best Practices of Publicly Traded Companies – ABRASCA. Further information is available on Bradesco’s Investor Relations website (bradescori.com.br – Corporate Governance Section).

The Senior Management and all the employees are committed to compliance with the laws and regulations applicable to activities, as well as the conduct of business by observing high standards of conduct and ethics. To ensure these commitments there are policies, standards, processes and systems for the monitoring of conduct, channels and mechanisms for handling complaints, in addition to a specific area for responses throughout the program. These components are supported by Committees linked to the Board of Directors, such as Ethical Conduct, Integrated Risk Management and Capital Allocation, Internal Controls and Compliance and supported by training and capacity building actions developed by Unibrad – Bradesco University for all the professionals, focused on the themes of Conduct, Controls and Compliance. |  | In meeting the best practices of corporate governance, the Bradesco Organization adopts its own program of integrity which is composed by a set of policies, standards and procedures aimed at for the prevention, monitoring, detection and response in relation to harmful acts foreseen in Law No. 12,846/13 and international laws, especially the Foreign Corrupt Practices Act and the United Kingdom Bribery Act.

The commitment to transparency, democratization of information, punctuality and the pursuit of the best practices are essential factors and are constantly reinforced by Bradesco’s Investor Relations area. In the first quarter of 2018, there were 34 events promoted with national and international investors, through conferences, meetings, conference calls and institutional presentations, assisting 360 investors. It also held two teleconferences of results to institutional investors. Also seeking to provide information more dynamically and intuitively, making the navigation in the virtual environment more assertive, Bradesco launched, in January 2018, the new Investor Relations website, which can be accessed on the address banco.bradesco/ri. The new virtual environment also has the characteristic of being responsive, allowing access to the same content through different devices. |  | Another highlight of the quarter was the publication of the Integrated Report, concerning the year of 2017. This document brings the main practices, results and challenges of the Organization throughout the year, as well as its strategic vision for the future. For the first time, following best market practices, we have created the document in its summarized version, which makes the reading more appealing. The version in the website format that offers even greater detail of indicators and related topics is scheduled for the end of April 2018.

Bradesco seeks to include sustainability in the business with the aim of increasing its capacity to thrive in the long term in a competitive and dynamic business environment. The perception that we are moving towards a transition to a new economy, more aligned with the development challenges that we face, leads us to incorporate social and environmental aspects in the management of risks and opportunities, in order to ensure positive results and the generation of shared value. The commitment to sustainability is also reinforced in the establishment of dialogs with various stakeholders, through adherence to corporate initiatives and voluntary commitments, such as: Global Compact Initiatives, Goals of Sustainable Development, Equator Principles, Carbon Disclosure Project – CDP (Climate Initiative), Principles for Responsible Investment (PRI), Businesses for the Climate (EPC), CEBDS (Brazilian Business Center for Sustainable Development), among others. The main decisions and monitoring of the strategy of sustainability are conducted by the Sustainability Committee, coordinated by the Chairman of the Board of Directors and with the participation of the Chief Executive Officer, as well as members of the Board of Directors and of the Board of Executive Officers. The Organization also has a Sustainability Committee composed of executives and officers from several areas, responsible for proposing strategies and solutions that promote the application of best practices of sustainability. The performance of the activities of sustainability of the Organization is reflected in the external assessments of the main indexes of Sustainability, such as the Dow Jones Sustainability Index (DJSI) – “World and Emerging Markets”, the New York Stock Exchange, the Corporate Sustainability Index (ISE), and the Carbon Efficient Index (ICO2), both of B3. |  | Leader in Sustainability Banco Bradesco was featured in the Bronze category of the Sustainability Yearbook 2018 of RobecoSAM that highlights the leading banks in sustainability, according to Dow Jones Sustainability Indices. 2,479 companies were evaluated from all over the world, belonging to 60 sectors. In the banking sector, 165 companies have undergone evaluation. Fundação Bradesco With a broad social and educational program in place for 61 years, Fundação Bradesco operates 40 schools across Brazil. In 2018, an estimated budget of R$664.717 million will benefit approximately 97,385 students enrolled in its schools at the following levels: basic education (from kindergarten to high school and higher secondary technical-professional education), youth and adult education; and preliminary and continuing vocational training, which focuses on creating jobs and income. Quality education free of charge, as well as uniforms, school supplies, meals, medical and dental assistance, will be ensured for more than 42 thousand students enrolled in the Basic Education system. It is estimated that more than 630 thousand students will also benefited with distance learning system (EaD), through its e-learning portal "Escola Virtual" (Virtual School). These students will conclude at least one of the various courses offered in its schedule, and another 11,987 students will benefit from projects and initiatives carried out in partnership with the Educa+Ação Program, and from Technology courses.

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To

Board of Directors and Shareholders of Banco Bradesco S.A. Osasco SP

We were engaged by Banco Bradesco S.A. ("Bradesco") to report on the consolidated supplementary accounting information of Banco Bradesco S.A. as of March 31, 2018 and for the three month period then ended, in the form of a limited assurance conclusion if, based on our engagement performed, described in this report, nothing has come to our attention that causes us to believe that the supplementary accounting information included within the Economic and Financial Analysis Report are not presented, in all material respects, based on the information referred to in the Criteria for preparing the supplementary accounting information paragraph.

Responsibilities of the Management of Bradesco

Management of Bradesco is responsible for preparing and adequately presenting the consolidated supplementary accounting information included within the Economic and Financial Analysis Report based on the criteria for the preparation of the supplementary accounting information described below, and for other information contained within this report, as well as the design, implementation and maintenance of internal controls that management determined as necessary to allow for such information that is free from material misstatement, whether due to fraud or error.

Independent Auditor´s Responsibility

Our responsibility is to review the supplementary accounting information included within the Economic and Financial Analysis Report prepared by Bradesco and to report thereon in the form of a limited assurance conclusion based on the evidence obtained. We conducted our engagement in accordance with the NBC TO 3000 - Assurance Engagement Other than Audit and Review (ISAE 3000). That standard requires that we comply with ethical requirements, including independence requirements, and plan and perform our procedures to obtain a meaningful level of limited assurance about whether we did not became aware of any fact that could lead us to believe that the supplementary accounting information included within the Economic and Financial Analysis Report are not presented, in all material respects, to the information referred to in the Criteria for preparing the supplementary accounting information paragraph.

The procedures selected were based on our understanding of the consolidated supplementary accounting information included within the Economic and Financial Analysis Report, as well as other circumstances of our work and our consideration of other areas that may contain material misstatements, regardless of whether they are caused by fraud or error. However, such procedures do not include investigation or detection of fraud or error.

Limited assurance is less than absolute assurance and reasonable assurance. Procedures to gather information to a limited assurance engagement are more limited than to a reasonable assurance engagement and, therefore, we obtain less assurance than a reasonable assurance engagement; consequentely, we do not express neither an audit opinion nor a reasonable assurance over the supplementary accounting information included within the Economic and Financial Analysis Report.

Our conclusion does not contemplate aspects related to any prospective information contained within the Economic and Financial Analysis Report, nor offers any guarantee if the assumptions used by Management to provide a reasonable basis for the projections presented. Therefore, our report does not offer any type of assurance on the scope of future information (such as goals, expectations and ambitions) and descriptive information that is subject to subjective assessment.

Criteria for Preparing the Supplementary Accounting Information

The consolidated supplementary accounting information disclosed within the Economic and Financial Analysis Report, as of March 31, 2018 and for the three month period then ended has been prepared by the Management of Bradesco, based on the information contained in the March 31, 2018 intermediate consolidated financial statements and the accounting information adjusted to the criteria described in Note 4 of such intermediate consolidated financial statements, in order to facilitate additional analysis, without, however, being part of the intermediate consolidated financial statements disclosed on this date.

Conclusion

Our conclusion has been formed on the basis of, and is limited to the matters outlined in this report.

Based on the procedures performed we did not became aware of any fact that lead us to believe that the consolidated supplementary accounting information included within the Economic and Financial Analysis Report are not presented, in all material respects, in accordance with the information referred to in the Criteria for preparing the supplementary accounting information paragraph.

Osasco, April 25, 2018

KPMG Auditores Independentes
CRC 2SP028567/O-1 F SP
Original report in Portuguese signed by

Rodrigo de Mattos Lia
Accountant CRC 1SP252418/O-3

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Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Management Report

Dear Shareholders, We hereby present the Consolidated Financial Statements of Banco Bradesco S.A. related to the year ended on March 31, 2018, prepared in accordance with the accounting practices used in Brazil and applicable to institutions authorized to operate by the Central Bank of Brazil. The gradual recovery of the Brazilian economy was maintained at the beginning of this year, with an emphasis on household consumption and investments. There was no deterioration in the trajectory of inflation; on the contrary, the benign scenario for prices has generated a downward trend in interest. Despite the recent episodes of volatility, the foundations of the world economy remain solid, with the resumption of investments and the maintenance of the prices of the main commodities at high levels. Among the major events at Bradesco Organization in the first quarter, the following are the most noteworthy: On March 13, in the Board of Directors’ Meeting, Mr. Octavio de Lazari Junior, a professional with nearly 40 years of work dedicated to the Organization, assumed the Presidency of the Bank's Board of Executive Officers succeeding Mr. Luiz Carlos Trabuco Cappi who, after 9 years he left the Board of Executive Officers and was reappointed to the Presidency of the Board of Directors in a role for which he had been elected on October 10, 2017. Bradesco presented, in the first quarter, a Net Income of R$4.467 billion, equivalent to R$0.67 per share and profitability of 16.3% over the average Shareholders’ Equity. The return on Average Total Assets was 1.5%. In terms of Interest on Own Capital, R$1.788 billion was destined to the shareholders, in gross values, in the period between January and March 2018, wherein R$331 million was paid monthly and R$1.457 billion provisioned. Taxes and contributions including pensions, paid or provisioned, totaled R$7.976 billion in the quarter, of which R$3.349 billion is related to taxes withheld and collected from third parties and R$4.627 billion calculated based on the activities developed by the Bradesco Organization, equivalent to 103.6% of the Net Income. At the end of the first quarter this year, the paid-up Share Capital totalled R$67.100 billion, which includes the increase of R$8.0 billion, with a bonus of 10.0% in shares, through the use of part of the balance of the account "Reserves from Profits – Statutory Reserve", decided in the Special Shareholders' Meeting held on March 12, 2018, and approved by the Central Bank of Brazil on March 16. | With this, the interest on own capital related to the month of May 2018, to be paid on June 1, 2018, will be incremented by 10.0%. Added to the Equity Reserves of R$46.676 billion, it resulted in a Shareholders’ Equity of R$113.776 billion, with a growth of 8.8% on the same period of the previous year, corresponding to the equity value of R$17.00 per share. The Market Value of Bradesco, based on the calculation of the listing of its shares, reached R$237.219 billion on March 31, 2018, equivalent to 2.1 times the Accounting Shareholders’ Equity. Managed Shareholders’ Equity is equivalent to 9.3% of the Consolidated Assets, totaling R$1.231 trillion, an increase of 3.5% compared to the same period of the previous year. As consequence, the basel reached 15.9%, higher than the minimum of 11.0% regulated by Resolution No. 4,193/13 of the National Monetary Council, according to the Basel Committee. At the end of the quarter, the immobilization index, compared to the Reference Equity, reached 43.1% in the Prudential Conglomerate, within the maximum limit of 50.0%, established by the Central Bank of Brazil. As provided by Article 8 of the Circular Letter No. 3,068/01 of the Central Bank of Brazil, Bradesco declares that it has the financial capacity and the intention of holding to maturity the securities classified under “held to maturity securities”. On March 31, 2018, the resources funded and managed amounted to R$1.933 trillion, 4.9% higher than the previous year, distributed as: R$500.543 billion in Demand Deposits, Time Deposits, Interbank Deposits, Savings Accounts and Securities Sold Under Agreements for Repurchase; R$841.983 billion in assets under management, comprising Investment Funds, Managed Portfolios and Third-Party Fund Quotas, a 7.1% increase; R$305.498 billion in the Exchange Portfolio, Borrowings and Onlendings in Brazil, Working Capital, Tax Payments and Collection and Related Charges, Funds From Issuance of Securities in Brazil, and Subordinated Debt in Brazil, a 1.3% increase.

50 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Management Report

R$251.231 billion in Technical Provisions for Insurance, Pension Plans and Capitalization Bonds, up by 9.5%; and R$33.843 billion in Foreign Funding, through public and private issues, Subordinated Debt Overseas, Securitization of Future Financial Flows and Borrowings and On-lendings Overseas, equivalent to US$10.182 billion. The expanded concept of the consolidated credit operations totaled R$486.645 billion in the end of the quarter, covering: R$117.428 billion in Consumption Finance, which includes R$32.982 billion of credit receivables from Credit Cards and R$45.281 billion in Consigned Loans; R$72.676 billion of Sureties and Guarantees; R$22.253 billion regarding operations of transfer of internal and external resources, originating mainly from the BNDES - Banco Nacional de Desenvolvimento Econômico e Social (National Bank for Social and Economic Development), excelling as one of the main distributing agents of loans; R$2.114 billion in Leasing; R$21.250 billion in business in the Rural Area; R$11.955 billion in Advance Payments on Exchange Contracts, for a Portfolio in the amount of US$10.263 billion of Financing for Export; and US$1.641 billion of operations in Import Finance in Foreign Currencies. The balance of the Real Estate Credit Portfolio was R$60.282 billion, whereby R$34.396 billion was intended for Individuals and R$25.886 billion for Legal Entities, and a total of 174,090 units financed. | The consolidated balance of provision for credit losses amounted to R$35.669 billion, equivalent to 9.6% of the total volume of credit operations, with R$6.887 billion of surplus provision in relation to the minimum required by the Central Bank of Brazil. Operating as an Investment Bank of the Organization, BBI advises clients on primary and secondary issuing of shares, merger transactions, purchase and sale of assets, structuring and distribution of debt instruments, such as debentures, promissory notes, CRIs, CRAs, real estate funds, FIDCs and bonds, among others, besides structured corporate finance operations and the financing of projects under the modality of Project Finance. In the quarter, transactions were made with a volume of over R$33.096 billion. BRAM - Bradesco Asset Management S.A. DTVM, one of the largest private holding of investment funds in Brazil, offers solutions of differentiated and appropriate investments to all profiles of clients, ensuring the highest standard of quality in services. It has among its biggest clients the main segments of Bradesco, like Prime, Corporate, Private, Varejo (Retail), Bradesco Empresas and Grupo Bradesco Seguros (Insurance Group), in addition to Institutional Investors in Brazil and Abroad, and various Family Offices. In the first three months of the year, R$657.6 billion was accumulated under its management. Grupo Bradesco Seguros, reaffirming its leading market position in the areas of Insurance, Capitalization and Open Supplementary Pensions, presented on March 31, 2018 a Net Income of R$1.563 billion and Shareholders’ Equity of R$33.878 billion. The net premiums issued for insurance, pension contributions and receipts of capitalization totaled R$17.570 billion, a decrease of 2.1% compared to the previous year. The Service Network of the Bradesco Organization is present, with an extensive and modern structure, throughout the national territory and in some strategic localities abroad. At the end of the quarter, there were 74,126 points of service, distributed as follows: 8,616 Branches and PAs (Service Branches) in Brazil (Branches: Bradesco – 4,702, Banco Bradesco Cartões - 1, Banco Bradesco Financiamentos - 2, Banco Bradesco BBI - 1, Banco Bradesco BERJ -1 and of Banco Alvorada - 1; and PAs: 3,908); 3 Branches abroad, with one Bradesco in New York, one Bradesco in Grand Cayman and one subsidiary Banco Bradesco Europa in London;

Bradesco 51

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Management Report

10 Overseas Subsidiaries and Representation Office (Banco Bradesco Argentina S.A., in Buenos Aires; Banco Bradesco Europa S.A., in Luxembourg; Bradesco North America LLC and Bradesco Securities, Inc., in New York; Bradesco Securities UK Limited, in London; Bradesco Securities Hong Kong Limited and Bradesco Trade Services Limited in Hong Kong; Cidade Capital Markets Ltd. in Grand Cayman, and Bradescard Mexico, Sociedad de Responsabilidad Limitada in Jalisco; and Representative Office, in Miami); 14,424 Service points of Bradesco Financiamentos, with 1,005 posts for Payroll Loans and 13,419 dealer/reseller posts for Vehicle Financing; 38,856 Bradesco Expresso service points; 936 In-company electronic service branches; 63 Losango service points; 58 External Terminals in the Bradesco Network; and 11,160 ATMs in the Banco24Horas Network, with 29 terminals shared by the networks. In parallel, it provided 35,662 ATMs, strategically distributed nationwide, and also has recycling machines with the unprecedented benefit of immediate deposit, aside from the 21,506 ATMs of the Banco24Horas network. By means of Digital Channels, such as Internet Banking, Bradesco Celular, Fone Fácil(Easy Phone) and Social Networks, clients have access to various products and services of the Bank, at any place and time, with comfort, convenience and security. And rounding out its Network, Bradesco currently has four major Digital Platforms, which serve clients from the “Exclusive” and “Prime” segments invited by the Bank, and those who have requested migration to the units because their relationship profiles are primarily digital. It also has the Bradesco Private Bank Digital Branch, enabling clients in all regions of Brazil to centralize their relationship both in their investments and in the banking account in a single segment. | The “next” platform, Bradesco’s 100% stand-alone digital platform, launched in 2017, interactively relates to users based on their behavior, and transforms money management into smart pathways toward one’s goals, with the best customer experience. Available to the hyperconnected public, it enables integrated solutions – through mobile applications – ensuring users the freedom to carry out account transactions spontaneously. The Bradesco Organization, in accordance with Instruction No. 381/03 of the Brazilian Securities and Exchange Commission, declares that, it did not contract nor have services provided by KPMG Auditores Independentes in the quarter that were not related to the external audit at a level greater than 5.0% of the total fees related to external audit services. Other services provided by the external auditors were pre-agreed procedures for review of information substantially financial, fiscal and actuarial. The Bank’s policy is in line with the principles of preserving the auditors’ independence, which is based on generally accepted international criteria, i.e. the auditors should not audit their own work, perform managerial duties for their clients or promote their customers’ interests. It is noteworthy that any eventual services not related to the external audit are submitted prior to the authorization of the Audit Committee. In the context of Human Capital, the Organization reinforces the strategy directed to the development of programs and solutions for the technical and behavioral training and development of its employees, through UniBrad, Universidade Corporativa Bradesco (Bradesco Corporate University), in order to keep them in constant harmony with the market, increasingly more demanding and competitive. In the quarter, 812 courses were given, with 149,142 participations. The welfare benefits in the period reached 235,919 people, ensuring good wellbeing, the improvement of the quality of life and the safety of employees and their dependents. The Fundação Bradesco, the main social action of the Organization, which focuses on educational and assistance programs, maintains 40 of its own Schools installed mainly in regions of high socio-economic deprivation, being present in all the Brazilian states and Federal District. This year, its budget is predicted to be R$664.717 million, whereby R$575.071 million is destined to cover Expenses of the Activities and R$89.646 million investments in Infrastructure and Educational Technology, which allows the institution to offer free, quality education to a) 97,385 students enrolled in its schools at the following levels: Basic Education (Kindergarten to High School) and Vocational Training (High School level);

52 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Management Report

To support the development of children and teenagers through the teaching of women's volleyball and basketball, the Programa Bradesco Esportes(Bradesco Sports Program) has, in the Municipality of Osasco, SP, Training and Specialist Centers. Activities are held in their own Sports Development Center, in all Fundação Bradesco’s schools, in Municipal Sports Centers, in one Municipal school, in State and private schools and in a leisure club. Annually, two thousand girls take part, from eight years old, reaffirming the Organization’s social commitment and displaying how it values talent, citizenship, as well as education, sport and health. Youth and Adult Education; and Preliminary and Continuing Vocational Training, focused on creating jobs and income; b) 630 thousand students who will complete at least one of the distance-learning courses on offer (EaD), through its e-learning portal “Escola Virtu@l”; and c) 11,987 people who will benefit through partnership projects, such as Programa Educa+Ação, and Technology courses. Food, medical-dental assistance, school materials and uniform are also provided free-of-charge to the more than 42 thousand students in Basic Education. The Bradesco Organization received important recognitions in the quarter, with the following highlights: · Bradesco topped the ranking of the Latin America Best Managed Banks 2018 Brazil, a survey conducted by the Euromoney magazine, which lists the best managed banks in Latin America; · For the seventh consecutive year, Bradesco is the most valuable brand in Brazil according to the ranking As Marcas Mais Valiosas do Brasil 2018(The Most Valuable Brands in Brazil 2018) prepared by IstoÉ Dinheiro Magazine and Kantar Consulting; · Highlighted in the award for Best Bank to Invest – MBI, Bradesco conquered first place in the categories of Best Multimarket Manager and Best Retail Manager. It also featured in the categories of Best Manager of Shares and Best Money Market Manager. The survey is conducted by the Center for Studies in Finance from the Fundação Getúlio Vargas in partnership with Fractual Consult, with publication via the Exame portal; | · BBI was elected, for the fourth time – as third consecutive – as the Best Investment Bank in Brazil and, for the first time, the Best Bank of M&A in Latin America in 2018, at the 19th edition of the Best Investment Bank Awards of the Global Finance magazine; and · Bram – Bradesco Asset Management – was the management company with the highest number of shareholders in 2017, according to a survey conducted by Economatica. It was also considered the largest private fund manager in 2017 in the ranking prepared by Anbima. It was also featured in the Investidor Institucional magazine, having 38 funds recognized as excellent in the ranking of Best Institutional Funds, drawn up by Morningstar. In the first quarter we achieved good results, which reaffirm the commitment of Bradesco to surpass expectations and always offer the best. For the successes obtained, we are grateful for the support and trust of our shareholders and clients and the dedicated and efficient work of our employees and other associates. Cidade de Deus, April 25, 2018 Board of Directors and Board of Executive Officers

Bradesco 53

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Consolidated Statement of Financial Position on March 31 – In thousands of Reais

Assets | 2018 | 2017
Current | 831,778,924 | 764,165,786
Cash and due from banks (Note 5) | 17,807,399 | 11,831,164
Interbank investments (Notes 3d and 6) | 139,717,892 | 187,590,965
Securities purchased under agreements to resell | 133,540,153 | 182,028,577
Interbank investments | 6,181,956 | 5,576,121
Allowance for losses | (4,217) | (13,733)
Securities and derivative financial instruments (Notes 3e, 3f, 7 and 34a) | 369,727,244 | 275,995,932
Own portfolio | 270,792,078 | 234,369,260
Subject to repurchase agreements | 59,844,304 | 8,681,101
Derivative financial instruments (Notes 3f, 7d II and 34a) | 17,817,291 | 18,801,187
Given in guarantee to the Brazilian Central Bank | - | 77,083
Given in guarantee | 15,212,070 | 12,197,912
Securities under resale agreements with free movement | 6,061,501 | 1,869,389
Interbank accounts | 70,901,622 | 62,661,301
Unsettled payments and receipts | - | 958,925
Reserve requirement (Note 8): |  |
- Reserve requirement - Brazilian Central Bank | 70,813,903 | 61,637,022
- SFH - housing finance system | 30,398 | 17,012
Correspondent banks | 57,321 | 48,342
Interdepartmental accounts | 177,940 | 141,800
Internal transfer of funds | 177,940 | 141,800
Loans (Notes 3g, 9 and 34a) | 133,666,531 | 138,911,292
Loans: |  |
- Public sector | 186,707 | 441,675
- Private sector | 151,320,062 | 160,919,391
Loans transferred under an assignment with recourse | 2,277,835 | 767,011
Allowance for loan losses (Notes 3g, 9f, 9g and 9h) | (20,118,073) | (23,216,785)
Leasing (Notes 2, 3g, 9 and 34a) | 957,074 | 1,213,509
Leasing receivables: |  |
- Private sector | 1,895,410 | 2,425,511
Unearned income from leasing | (866,329) | (1,114,941)
Allowance for leasing losses (Notes 3g, 9f, 9g and 9h) | (72,007) | (97,061)
Other receivables | 95,441,010 | 81,937,817
Receivables on sureties and guarantees honored (Note 9a-3) | 149,906 | 1,272,587
Foreign exchange portfolio (Note 10a) | 26,919,657 | 20,244,451
Receivables | 1,631,542 | 1,451,150
Securities trading | 3,385,334 | 1,103,820
Specific receivables | 29,808 | 15,349
Insurance and reinsurance receivables and reinsurance assets – technical provisions | 3,673,572 | 4,869,730
Sundry (Note 10b) | 61,415,186 | 55,696,102
Allowance for other loan losses (Notes 3g, 9f, 9g and 9h) | (1,763,995) | (2,715,372)
Other assets (Note 11) | 3,382,212 | 3,882,006
Other assets | 2,976,856 | 3,015,711
Provision for losses | (1,435,481) | (1,292,310)
Prepaid expenses (Notes 3i and 11b) | 1,840,837 | 2,158,605
Long-term receivables | 369,527,973 | 394,872,846
Interbank investments (Notes 3d and 6) | 1,152,275 | 417,018
Interbank investments | 1,152,275 | 417,018
Securities and derivative financial instruments (Notes 3e, 3f, 7 and 34a) | 146,831,845 | 172,514,409
Own portfolio | 116,444,588 | 143,574,637
Subject to repurchase agreements | 25,150,992 | 19,559,139
Derivative financial instruments (Notes 3f, 7d II and 34a) | 550,861 | 90,381
Privatization rights | 42,913 | 47,667
Given in guarantee | 4,057,651 | 3,840,581
Securities under resale agreements with free movement | 584,840 | 5,402,004
Interbank accounts | 1,207,779 | 792,351
Reserve requirement (Note 8): |  |

54 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Consolidated Statement of Financial Position on March 31 – In thousands of Reais

Assets | 2018 | 2017

- SFH - housing finance system | 1,207,779 | 792,351
Loans (Notes 3g, 9 and 34a) | 155,823,149 | 161,173,329
Loans: |  |
- Public sector | 4,000,000 | 3,000,000
- Private sector | 159,784,296 | 163,712,997
Loans transferred under an assignment with recourse | 5,616,833 | 7,436,120
Allowance for loan losses (Notes 3g, 9f, 9g and 9h) | (13,577,980) | (12,975,788)
Leasing (Notes 2, 3g, 9 and 34a) | 1,029,404 | 1,158,028
Leasing receivables: |  |
- Private sector | 2,208,152 | 2,476,968
Unearned income from leasing | (1,122,763) | (1,254,833)
Allowance for leasing losses (Notes 3g, 9f, 9g and 9h) | (55,985) | (64,107)
Other receivables | 62,673,672 | 57,426,870
Receivables | 23,914 | 17,688
Securities trading | 416,758 | 546,902
Sundry (Note 10b) | 62,314,175 | 56,879,897
Allowance for other loan losses (Notes 3g, 9f, 9g and 9h) | (81,175) | (17,617)
Other assets (Note 11) | 809,849 | 1,390,841
Prepaid expenses (Notes 3i and 11b) | 809,849 | 1,390,841
Permanent assets | 30,102,191 | 30,342,236
Investments (Notes 3j, 12 and 34a) | 8,003,779 | 7,302,621
Equity investment in unconsolidated and jointly controlled companies: |  |
- In Brazil | 7,855,657 | 7,151,965
Other investments | 402,857 | 405,409
Allowance for losses | (254,735) | (254,753)
Premises and equipment (Notes 3k and 13) | 7,811,648 | 7,567,273
Premises | 3,109,800 | 2,626,916
Other premises and equipment | 13,148,770 | 12,339,805
Accumulated depreciation | (8,446,922) | (7,399,448)
Intangible assets (Notes 3l and 14) | 14,286,764 | 15,472,342
Intangible Assets | 29,098,312 | 26,690,889
Accumulated amortization | (14,811,548) | (11,218,547)
Total | 1,231,409,088 | 1,189,380,868

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Bradesco 55

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Consolidated Statement of Financial Position on March 31 – In thousands of Reais

Liabilities | 2018 | 2017
Current | 820,529,564 | 816,905,150
Deposits (Notes 3n and 15a) | 166,499,869 | 158,683,331
Demand deposits | 33,186,022 | 30,564,866
Savings deposits | 101,777,091 | 94,352,635
Interbank deposits | 1,607,783 | 513,281
Time deposits (Notes 15a and 34a) | 29,928,973 | 33,252,549
Securities sold under agreements to repurchase (Notes 3n and 15b) | 224,785,922 | 237,622,407
Own portfolio | 104,150,229 | 83,224,613
Third-party portfolio | 110,419,012 | 145,111,284
Unrestricted portfolio | 10,216,681 | 9,286,510
Funds from issuance of securities (Notes 15c and 34a) | 77,106,668 | 90,469,564
Mortgage and real estate notes, letters of credit and others | 75,742,003 | 89,817,333
Securities issued overseas | 1,082,355 | 341,967
Structured Operations Certificates | 282,310 | 310,264
Interbank accounts | 20,729,285 | 16,678,238
Unsettled payments and receipts | 19,461,159 | 15,371,436
Correspondent banks | 1,268,126 | 1,306,802
Interdepartmental accounts | 5,048,262 | 4,447,819
Third-party funds in transit | 5,048,262 | 4,447,819
Borrowing (Notes 16a and 34a) | 18,002,052 | 19,333,284
Borrowing in Brazil - other institutions | 338 | 3,817
Borrowing overseas | 18,001,714 | 19,329,467
On-lending in Brazil - official institutions (Notes 16b and 34a) | 9,633,880 | 10,841,989
National treasury | 72,879 | 118,317
BNDES | 3,948,225 | 3,777,711
FINAME | 5,611,265 | 6,944,374
Other institutions | 1,511 | 1,587
Derivative financial instruments (Notes 3f, 7d II and 34a) | 17,929,526 | 15,487,259
Derivative financial instruments | 17,929,526 | 15,487,259
Technical provisions for insurance, pension plans and capitalization bonds (Notes 3o and 20) | 221,009,762 | 200,600,838
Other liabilities | 59,784,338 | 62,740,421
Payment of taxes and other contributions | 3,340,734 | 4,489,835
Foreign exchange portfolio (Note 10a) | 15,255,138 | 10,963,570
Social and statutory | 1,744,328 | 1,793,571
Tax and social security (Note 19a) | 2,429,059 | 2,489,552
Securities trading | 4,851,997 | 3,255,987
Financial and development funds | 1,299 | 1,465
Subordinated debts (Notes 18 and 34a) | 6,689,788 | 12,805,716
Sundry (Note 19b) | 25,471,995 | 26,940,725
Long-term liabilities | 296,134,877 | 267,004,015
Deposits (Notes 3n and 15a) | 105,158,726 | 76,772,007
Interbank deposits | 40,116 | 57,634
Time deposits (Notes 15a and 34a) | 105,118,610 | 76,714,373
Securities sold under agreements to repurchase (Notes 3n and 15b) | 4,098,070 | 17,157,119
Own portfolio | 4,098,070 | 17,157,119
Funds from issuance of securities (Notes 15c and 34a) | 65,483,158 | 49,833,289
Mortgage and real estate notes, letters of credit and others | 63,533,359 | 47,168,406
Securities issued overseas | 1,787,461 | 2,624,632
Structured Operations Certificates | 162,338 | 40,251
Borrowing (Notes 16a and 34a) | 1,449,775 | 2,755,840
Borrowing in Brazil - other institutions | 1,894 | 7,963
Borrowing overseas | 1,447,881 | 2,747,877
On-lending in Brazil - official institutions (Notes 16b and 34a) | 18,649,050 | 23,486,325
BNDES | 8,343,772 | 10,496,158

56 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Consolidated Statement of Financial Position on March 31 – In thousands of Reais

Liabilities | 2018 | 2017

FINAME | 10,305,278 | 12,990,167
Derivative financial instruments (Notes 3f, 7d II and 34a) | 347,893 | 217,953
Derivative financial instruments | 347,893 | 217,953
Technical provisions for insurance, pension plans and capitalization bonds (Notes 3o and 20) | 30,221,487 | 28,831,706
Other liabilities | 70,726,718 | 67,949,776
Tax and social security (Note 19a) | 5,245,316 | 4,880,715
Subordinated debts (Notes 18 and 34a) | 16,303,447 | 22,239,890
Eligible Debt Capital Instruments (Notes 18 and 34a) | 23,155,027 | 15,800,022
Sundry (Note 19b) | 26,022,928 | 25,029,149
Deferred income | 369,743 | 426,172
Deferred income | 369,743 | 426,172
Non-controlling interests in subsidiaries (Note 21) | 599,011 | 487,081
Shareholders' equity (Note 22) | 113,775,893 | 104,558,450
Capital: |  |
- Domiciled in Brazil | 66,261,525 | 58,361,600
- Domiciled overseas | 838,475 | 738,400
Capital reserves | 11,441 | 11,441
Profit reserves | 44,581,197 | 44,674,403
Asset valuation adjustments | 2,523,769 | 1,213,120
Treasury shares (Notes 22d and 34a) | (440,514) | (440,514)
Attributable to equity holders of the Parent Company | 114,374,904 | 105,045,531
Total | 1,231,409,088 | 1,189,380,868

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Bradesco 57

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Consolidated Statements of Accumulated Income on March 31 – In thousands of Reais

| 2018 | 2017
Revenue from financial intermediation | 32,232,127 | 41,647,914
Loans (Note 9j) | 16,669,718 | 19,089,420
Leasing (Note 9j) | 72,851 | 74,384
Operations with securities (Note 7g) | 7,331,682 | 12,067,080
Financial income from insurance, pension plans and capitalization bonds (Note 7g) | 9,074,226 | 10,026,655
Derivative financial instruments (Note 7g) | (1,689,421) | (1,003,312)
Foreign exchange operations (Note 10a) | (98,572) | 39,554
Reserve requirement (Note 8b) | 915,561 | 1,360,022
Sale or transfer of financial assets | (43,918) | (5,889)
Expenses from financial intermediation | 18,985,067 | 30,981,819
Retail and professional market funding (Note 15e) | 9,734,119 | 16,619,819
Adjustment for inflation and interest on technical provisions for insurance, pension plans and capitalization bonds (Note 15e) | 3,821,387 | 5,972,523
Borrowing and on-lending (Note 16c) | 849,866 | 108,116
Allowance for loan losses (Notes 3g, 9g and 9h) | 4,579,695 | 8,281,361
Gross income from financial intermediation | 13,247,060 | 10,666,095
Other operating income (expenses) | (5,486,230) | (3,609,874)
Fee and commission income (Note 23) | 6,035,809 | 5,788,892
Other fee and commission income | 4,013,319 | 3,963,452
Income from banking fees | 2,022,490 | 1,825,440
Retained premium from insurance, pension plans and capitalization bonds (Notes 3o and 20c) | 17,551,922 | 17,894,552
Net written premiums earned | 17,570,086 | 17,947,702
Reinsurance premiums paid | (18,164) | (53,150)
Variation in technical provisions for insurance, pension plans and capitalization bonds (Note 3o) | (7,691,410) | (7,738,291)
Retained claims (Note 3o) | (6,253,577) | (6,313,325)
Capitalization bond prize draws and redemptions (Note 3o) | (1,264,592) | (1,299,791)
Selling expenses from insurance, pension plans and capitalization bonds (Note 3o) | (827,081) | (917,365)
Payroll and related benefits (Note 24) | (4,635,373) | (4,635,886)
Other administrative expenses (Note 25) | (4,622,687) | (4,645,532)
Tax expenses (Note 26) | (1,510,122) | (1,650,878)
Share of profit (loss) of unconsolidated and jointly controlled companies (Note 12b) | 427,845 | 428,535
Other operating income (Note 27) | 1,683,928 | 4,603,269
Other operating expenses (Note 28) | (4,380,892) | (5,124,054)
Operating income | 7,760,830 | 7,056,221
Non-operating income (loss) (Note 29) | (209,938) | (132,926)
Income before income tax and social contribution and non-controlling interests | 7,550,892 | 6,923,295
Income tax and social contribution (Notes 33a and 33b) | (3,023,446) | (2,816,795)
Current income tax | (1,932,237) | (2,475,858)
Current Social Contribution | (1,171,740) | (1,579,557)
Deferred Tax | 80,531 | 1,238,620
Non-controlling interests in subsidiaries | (60,725) | (35,813)
Net income | 4,466,721 | 4,070,687

The accompanying Notes are an integral part of these Consolidated Financial Statements.

58 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Statements of Changes in Shareholders’ Equity - In thousands of Reais

Events | Capital | Capital reserves | Profit reserves | Asset valuation adjustments | Treasury shares | Retained earnings | Total
Share premium | Legal | Statutory
Balance on December 31, 2016 | 51,100,000 | 11,441 | 6,807,128 | 43,641,474 | (677,116) | (440,514) | - | 100,442,413
Capital increase with reserves | 8,000,000 | - | - | (8,000,000) | - | - | - | -
Asset valuation adjustments | - | - | - | - | 1,890,236 | - | - | 1,890,236
Net income | - | - | - | - | - | - | 4,070,687 | 4,070,687
Allocations: |  |  |  |  |  |  |  |
- Reserves | - | - | 203,534 | 2,022,267 | - | - | (2,225,801) | -
- Interest on Shareholders’ Equity Paid | - | - | - | - | - | - | (1,844,886) | (1,844,886)
Balance on March 31, 2017 | 59,100,000 | 11,441 | 7,010,662 | 37,663,741 | 1,213,120 | (440,514) | - | 104,558,450
Balance on December 31, 2017 | 59,100,000 | 11,441 | 7,540,016 | 42,361,997 | 1,884,536 | (440,514) | - | 110,457,476
Capital increase with reserves | 8,000,000 | - | - | (8,000,000) | - | - | - | -
Asset valuation adjustments | - | - | - | - | 639,233 | - | - | 639,233
Net income | - | - | - | - | - | - | 4,466,721 | 4,466,721
Allocations: |  |  |  |  |  |  |  |
- Reserves | - | - | 223,336 | 2,455,848 | - | - | (2,679,184) | -
- Interest on Shareholders’ Equity Paid and/or provisioned | - | - | - | - | - | - | (1,787,537) | (1,787,537)
Balance on March 31, 2018 | 67,100,000 | 11,441 | 7,763,352 | 36,817,845 | 2,523,769 | (440,514) | - | 113,775,893

The accompanying Notes are an integral part of these Consolidated Financial Statements.

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Consolidated Statement of Added Value Accumulated on March 31 - In thousands of Reais

Description | 2018 | % | 2017 | %
1 – Revenue | 33,176,043 | 237.2 | 40,963,661 | 303.5
1.1) Financial intermediation | 32,232,127 | 230.5 | 41,647,914 | 308.5
1.2) Fees and commissions | 6,035,809 | 43.2 | 5,788,892 | 42.9
1.3) Allowance for loan losses | (4,579,695) | (32.8) | (8,281,361) | (61.3)
1.4) Other | (512,198) | (3.7) | 1,808,216 | 13.4
2 – Financial intermediation expenses | (14,405,372) | (103.0) | (22,700,458) | (168.2)
3 – Inputs acquired from third-parties | (3,650,952) | (26.1) | (3,702,850) | (27.4)
Outsourced services | (1,171,905) | (8.4) | (1,225,014) | (9.1)
Data processing | (511,878) | (3.7) | (493,609) | (3.7)
Communication | (392,501) | (2.8) | (434,663) | (3.2)
Asset maintenance | (272,070) | (1.9) | (269,760) | (2.0)
Financial system services | (241,084) | (1.7) | (259,489) | (1.9)
Advertising and marketing | (228,117) | (1.6) | (140,453) | (1.0)
Security and surveillance | (193,925) | (1.4) | (209,986) | (1.6)
Transport | (185,474) | (1.3) | (185,591) | (1.4)
Material, water, electricity and gas | (158,266) | (1.1) | (184,427) | (1.4)
Travel | (57,765) | (0.4) | (49,288) | (0.4)
Other | (237,967) | (1.7) | (250,570) | (1.9)
4 – Gross value added (1-2-3) | 15,119,719 | 108.1 | 14,560,353 | 107.9
5 – Depreciation and amortization | (1,563,802) | (11.2) | (1,489,895) | (11.0)
6 – Net value added produced by the entity (4-5) | 13,555,917 | 96.9 | 13,070,458 | 96.8
7 – Value added received through transfer | 427,845 | 3.1 | 428,535 | 3.2
Share of profit (loss) of unconsolidated and jointly controlled companies | 427,845 | 3.1 | 428,535 | 3.2
8 – Value added to distribute (6+7) | 13,983,762 | 100.0 | 13,498,993 | 100.0
9 – Value added distributed | 13,983,762 | 100.0 | 13,498,993 | 100.0
9.1) Personnel | 4,114,252 | 29.4 | 4,080,520 | 30.2
Salaries | 2,045,003 | 14.6 | 2,177,118 | 16.1
Benefits | 1,094,353 | 7.8 | 1,097,214 | 8.1
Government Severance Indemnity Fund for Employees (FGTS) | 179,552 | 1.3 | 238,369 | 1.8
Other | 795,344 | 5.7 | 567,819 | 4.2
9.2) Tax, fees and contributions | 5,054,689 | 36.1 | 5,023,039 | 37.2
Federal | 4,736,459 | 33.9 | 4,775,675 | 35.4
State | 1,771 | - | 3,749 | -
Municipal | 316,459 | 2.3 | 243,615 | 1.8
9.3) Remuneration for providers of capital | 287,375 | 2.1 | 288,934 | 2.1
Rental | 286,568 | 2.0 | 287,286 | 2.1
Asset leasing | 807 | - | 1,648 | -
9.4) Value distributed to shareholders | 4,527,446 | 32.4 | 4,106,500 | 30.4
Interest on Shareholders’ Equity Dividends paid and/or provisioned | 1,787,537 | 12.8 | 1,844,886 | 13.7
Retained earnings | 2,679,184 | 19.2 | 2,225,801 | 16.5
Non-controlling interests in retained earnings | 60,725 | 0.4 | 35,813 | 0.3

The accompanying Notes are an integral part of these Consolidated Financial Statements.

60 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Consolidated Statement of cash flows accrued on March 31 - In thousands of Reais

| 2018 | 2017
Cash flow from operating activities: |  |
Income before income tax and social contribution and non-controlling interests | 7,550,892 | 6,923,295
Adjustments to net income before income tax and social contribution | 14,076,488 | 22,384,835
Effect of Changes in Exchange Rates in Cash and Cash equivalents | (167,514) | 375,023
Allowance for loan losses | 4,579,695 | 8,281,361
Depreciation and amortization | 1,563,802 | 1,489,895
Impairment losses of assets | 192,122 | 419,693
Expenses/ reversal with civil, labor and tax provisions | 1,080,374 | 494,429
Expenses with adjustment for inflation and interest on technical provisions for insurance, pension plans and capitalization bonds | 3,821,387 | 5,972,523
Share of profit (loss) of unconsolidated and jointly controlled companies | (427,845) | (428,535)
(Gain)/loss on sale of fixed assets | 19,543 | 10,862
(Gain)/loss on sale of foreclosed assets | 161,489 | 105,208
Foreign exchange variation of assets and liabilities overseas/Other | 3,253,435 | 5,664,376
Net income before taxes after adjustments | 21,627,380 | 29,308,130
(Increase)/Decrease in interbank investments | 1,406,357 | 1,623,011
(Increase)/Decrease in trading securities and derivative financial instruments | 6,592,353 | (6,584,819)
(Increase)/Decrease in interbank and interdepartmental accounts | (891,505) | (2,322,531)
(Increase)/Decrease in loans and leasing | (7,045,883) | 1,317,218
(Increase)/Decrease in insurance and reinsurance receivables and reinsurance assets | 243,256 | 275,923
(Increase)/Decrease in other receivables and other assets | (11,359,869) | (48,633)
(Increase)/Decrease in reserve requirement - Central Bank | (4,099,677) | (3,600,491)
Increase/(Decrease) in deposits | 6,451,233 | 1,219,660
Increase/(Decrease) in securities sold under agreements to repurchase | (4,583,552) | 12,800,595
Increase/(Decrease) in borrowings and on-lending | (1,556,250) | (1,778,564)
Increase/(Decrease) in technical provisions for insurance, pension plans and capitalization bonds | 757,297 | 117,864
Increase/(Decrease) in other liabilities | 7,195,168 | (1,131,315)
Increase/(Decrease) in deferred income | (39,990) | (51,013)
Income tax and social contribution paid | (3,424,500) | (3,337,493)
Net cash provided by/(used in) operating activities | 11,271,818 | 27,807,542
Cash flow from investing activities: |  |
Maturity of and interest on held-to-maturity securities | 1,525,629 | 1,109,563
Sale of/maturity of and interest on available-for-sale securities | 17,909,776 | 46,307,397
Proceeds from sale of foreclosed assets | 175,944 | 162,577
Sale of premises and equipment | 196,248 | 161,713
Purchases of available-for-sale securities | (35,835,882) | (43,477,016)
Purchases of held-to-maturity securities | (97,389) | (14,235)
Investment acquisitions | - | (1,316)
Purchase of premises and equipment | (658,920) | (334,837)
Intangible asset acquisitions | (263,263) | (305,830)
Dividends and interest on shareholders’ equity received | 422,596 | 188,112
Net cash provided by/(used in) investing activities | (16,625,261) | 3,796,128
Cash flow from financing activities: |  |
Funds from securities issued | 23,551,222 | 6,848,053
Settlement and Interest payments of Funds from issuance of securities | (18,169,821) | (21,357,191)
Issuance of subordinated debts | - | 294,646
Settlement and Interest payments of subordinated debts | (4,974,473) | (3,256,468)
Interest on Shareholders’ Equity Paid | (4,487,310) | (4,451,737)
Non-controlling interest | (25,115) | 2,459
Net cash provided by/(used in) financing activities | (4,105,497) | (21,920,238)
Net increase/(decrease) in cash and cash equivalents | (9,458,940) | 9,683,432
Cash and cash equivalents - at the beginning of the period | 156,054,442 | 181,230,427
Effect of Changes in Exchange Rates in Cash and Cash equivalents | 167,514 | (375,023)
Cash and cash equivalents - at the end of the period | 146,763,016 | 190,538,836
Net increase/(decrease) in cash and cash equivalents | (9,458,940) | 9,683,432

The accompanying Notes are an integral part of these Consolidated Financial Statements.

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Index of Notes to the Consolidated Financial Statements

The accompanying Notes are an integral part of these Consolidated Financial Statements are distributed as follow:

|  | Page
1) | OPERATIONS | 63
2) | PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS | 63
3) | SIGNIFICANT ACCOUNTING PRACTICES | 65
4) | MANAGERIAL STATEMENTS OF FINANCIAL POSITION AND STATEMENT OF INCOME BY OPERATING SEGMENT | 75
5) | CASH AND CASH EQUIVALENTS | 78
6) | INTERBANK INVESTMENTS | 79
7) | SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS | 80
8) | INTERBANK ACCOUNTS – RESERVE REQUIREMENT | 91
9) | LOANS | 92
10) | OTHER RECEIVABLES | 102
11) | OTHER ASSETS | 103
12) | INVESTMENTS | 103
13) | PREMISES AND EQUIPMENT | 105
14) | INTANGIBLE ASSETS | 105
15) | DEPOSITS, SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND FUNDS FROM ISSUANCE OF SECURITIES | 107
16) | BORROWING AND ON-LENDING | 109
17) | PROVISIONS, CONTINGENT ASSETS AND LIABILITIES AND LEGAL OBLIGATIONS – TAX AND SOCIAL SECURITY | 110
18) | SUBORDINATED DEBT | 114
19) | OTHER LIABILITIES | 115
20) | INSURANCE, PENSION PLANS AND CAPITALIZATION BONDS | 116
21) | NON-CONTROLLING INTERESTS IN SUBSIDIARIES | 118
22) | SHAREHOLDERS’ EQUITY (PARENT COMPANY) | 118
23) | FEE AND COMMISSION INCOME | 120
24) | PAYROLL AND RELATED BENEFITS | 120
25) | OTHER ADMINISTRATIVE EXPENSES | 120
26) | TAX EXPENSES | 121
27) | OTHER OPERATING INCOME | 121
28) | OTHER OPERATING EXPENSES | 121
29) | NON-OPERATING INCOME (LOSS) | 121
30) | RELATED-PARTY TRANSACTIONS | 122
31) | RISK AND CAPITAL MANAGEMENT | 124
32) | EMPLOYEE BENEFITS | 132
33) | INCOME TAX AND SOCIAL CONTRIBUTION | 133
34) | OTHER INFORMATION | 136

62 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

1) OPERATIONS

Banco Bradesco S.A. (Bradesco) is a private-sector publicly traded company and universal bank that, through its commercial, foreign exchange, consumer financing and housing loan portfolios, carries out all the types of banking activities for which it has authorization. The Bank is involved in a number of other activities, either directly or indirectly, through its subsidiaries, specifically leases, investment banking, brokerage, consortium management, credit cards, real estate projects, insurance, pension plans and capitalization bonds. All these activities are undertaken by the various companies in the Bradesco Organization (Organization), working together in an integrated manner in the market.

2) PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

Bradesco’s consolidated financial statements include the financial statements for Bradesco, its foreign branches and subsidiaries, in Brazil and overseas and SPEs (Special Purpose Entities) and investment funds of which the Organization's companies are the main beneficiaries or holders of the principal obligations, as established by Technical Pronouncement CPC 36 (R3), “Consolidation”. These statements were prepared in conformity with accounting practices adopted in Brazil applicable to institutions authorized to operate by the Brazilian Central Bank (Bacen), and are in conformity with accounting guidelines included in Laws No. 4,595/64 (Brazilian Financial System Law) and No. 6,404/76 (Brazilian Corporate Law), including amendments introduced by Laws No. 11,638/07 and No. 11,941/09, as they relate to the accounting for operations, complemented by the rules and instructions of the National Monetary Council (CMN), Bacen, Brazilian Securities and Exchange Commission (CVM), and where applicable, National Private Insurance Council (CNSP), Insurance Superintendence (Susep) and National Supplementary Healthcare Agency (ANS). The financial statements of the lease companies included in the consolidated financial statements were prepared using the finance lease method, under which the carrying amount of leased premises and equipment less the residual value paid in advance are reclassified.

Management states that it has disclosed all relevant information in the consolidated financial statements of Bradesco and that the accounting practices described above have been applied in a consistent manner in all years presented.

For the preparation of these consolidated financial statements, the intercompany transactions, balances of equity accounts, revenue, expenses and unrealized profits were eliminated and net income and shareholders’ equity attributable to the non-controlling interests were accounted for in a separate line. Goodwill on the acquisition of investments in associates, subsidiaries or jointly controlled companies is presented in the investments and intangible assets lines (Note 14a). The foreign exchange variation from foreign branches and investments is presented in the statement of income accounts used for changes in the value of the derivative financial instrument and borrowing and on-lending operations in order to offset these results with the hedges of these investments.

The financial statements include estimates and assumptions, such as: the calculation of estimated loan losses; fair value estimates of certain financial instruments; civil, tax and labor provisions; impairment losses of securities classified as available-for-sale and held-to-maturity securities and non-financial assets; the calculation of technical provisions for insurance, pension plans and capitalization bonds; and the determination of the useful life of specific assets. Actual results may differ from those based on estimates and assumptions.

Bradesco’s consolidated financial statements were approved by the Board of Directors on April 25, 2018.

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Notes to the Consolidated Financial Statements

Below are the significant directly and indirectly owned companies and investment funds included in the consolidated financial statements:

| On March 31
Activity | Equity interest
2018 | 2017
Financial Sector – Brazil |  |  |
Ágora Corretora de Títulos e Valores Mobiliários S.A. | Brokerage | 100.00% | 100.00%
Banco Alvorada S.A. | Banking | 99.99% | 99.99%
Banco Boavista Interatlântico S.A.(1) | Banking | - | 100.00%
Banco Bradescard S.A. | Cards | 100.00% | 100.00%
Banco Bradesco BBI S.A.(1) | Investment bank | 99.85% | 99.81%
Banco Bradesco BERJ S.A. | Banking | 100.00% | 100.00%
Banco Bradesco Cartões S.A. | Cards | 100.00% | 100.00%
Banco Bradesco Financiamentos S.A. | Banking | 100.00% | 100.00%
Banco Losango S.A. | Banking | 100.00% | 100.00%
Bradesco Administradora de Consórcios Ltda.(2) | Consortium management | 100.00% | 100.00%
Bradesco Leasing S.A. Arrendamento Mercantil | Leasing | 100.00% | 100.00%
Bradesco Kirton Corretora de Títulos e Valores Mobiliários S.A. | Brokerage | 99.97% | 99.97%
Bradesco S.A. Corretora de Títulos e Valores Mobiliários | Brokerage | 100.00% | 100.00%
BRAM - Bradesco Asset Management S.A. DTVM | Asset management | 100.00% | 100.00%
Kirton Bank Brasil S.A. | Banking | 100.00% | 100.00%
Tempo Serviços Ltda. | Services | 100.00% | 100.00%
Financial Sector – Overseas |  |  |
Banco Bradesco Argentina S.A.U (3) | Banking | 100.00% | 99.99%
Banco Bradesco Europa S.A. | Banking | 100.00% | 100.00%
Banco Bradesco S.A. Grand Cayman Branch (4) | Banking | 100.00% | 100.00%
Banco Bradesco S.A. New York Branch | Banking | 100.00% | 100.00%
Bradesco Securities, Inc. | Brokerage | 100.00% | 100.00%
Bradesco Securities, UK. | Brokerage | 100.00% | 100.00%
Insurance, Pension Plan and Capitalization Bond Sector |  |  |
Atlântica Companhia de Seguros | Insurance | 100.00% | 100.00%
Bradesco Argentina de Seguros S.A. (5) | Insurance | 99.98% | 99.98%
Bradesco Auto/RE Companhia de Seguros | Insurance | 100.00% | 100.00%
Bradesco Capitalização S.A. | Capitalization bonds | 100.00% | 100.00%
Bradesco Saúde S.A. | Insurance/health | 100.00% | 100.00%
Bradesco Seguros S.A. | Insurance | 100.00% | 100.00%
Bradesco Vida e Previdência S.A. | Pension plan/Insurance | 100.00% | 100.00%
Kirton Capitalização S.A. (6) | Capitalization bonds | 100.00% | 99.97%
Kirton Seguros S.A. (7) | Insurance | 98.54% | 98.08%
Kirton Vida e Previdência S.A. | Pension plan/Insurance | 100.00% | 100.00%
Odontoprev S.A. (5) | Dental care | 50.01% | 50.01%
Other Activities |  |  |
Andorra Holdings S.A. | Holding | 100.00% | 100.00%
Bradseg Participações S.A. | Holding | 100.00% | 100.00%
Bradescor Corretora de Seguros Ltda. | Insurance Brokerage | 100.00% | 100.00%
Bradesplan Participações Ltda. | Holding | 100.00% | 100.00%
BSP Empreendimentos Imobiliários S.A. | Real estate | 100.00% | 100.00%
Cia. Securitizadora de Créditos Financeiros Rubi | Credit acquisition | 100.00% | 100.00%
Columbus Holdings S.A. | Holding | 100.00% | 100.00%
Kirton Participações e Investimentos Ltda. (8) | Holding | - | 100.00%
Nova Paiol Participações Ltda. | Holding | 100.00% | 100.00%
União Participações Ltda. | Holding | 100.00% | 100.00%
Investment Funds (9) |  |  |
Bradesco FI RF Master II Previdência | Investment Fund | 100.00% | 100.00%
Bradesco F.I.C.F.I. R.F. VGBL F10 | Investment Fund | 100.00% | 100.00%

64 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

| On March 31
Activity | Equity interest
2018 | 2017

Bradesco F.I. Referenciado DI Performance | Investment Fund | 100.00% | 100.00%
Bradesco FI RF Master Previdência | Investment Fund | 100.00% | 100.00%
Brad Firf Master III Prev | Investment Fund | 99.86% | 99.51%
Bradesco FI RF Master Previdencia | Investment Fund | 100.00% | 100.00%
Bradesco Private FICFI RF PGBL/VGBL Ativo | Investment Fund | 100.00% | 100.00%
Bradesco FI Referenciado DI União | Investment Fund | 99.46% | 99.28%
Bradesco F.I.C. R.F. VGBL FIX | Investment Fund | 100.00% | 100.00%
Bradesco Private F.I.C.F.I. R.F. PGBL/VGBL Ativo-F 08 C | Investment Fund | 100.00% | 100.00%

(1) In November, 2017, Banco Boavista Interatlântico S.A. was merged into Banco Bradesco BBI S.A. increasing the interest by means of subscription of shares;

(2) In May 2017, Kirton Administradora de Consórcios Ltda. was merged into Bradesco Administradora de Consórcios Ltda.;
(3) Change in the percentage of participation, by assignment of quotas and change of corporate name to unilateral company;

(4) The special purpose entity International Diversified Payment Rights Company is being consolidated. The company is part of a structure set up for the securitization of the future flow of payment orders received overseas;
(5) Based on financial information from the previous month;
(6) Increase in interest, by means of acquisition of shares held by minority shareholders;

(7) Increase in interest by means of subscription of shares in July 2017;

(8) Company merged into Kirton Seguros S.A., in July 2017; and

(9) The investment funds in which Bradesco assumes or substantially retains the risks and benefits were consolidated.

3) SIGNIFICANT ACCOUNTING PRACTICES

a) Functional and presentation currencies

Consolidated financial statements are presented in Brazilian reais, which is also Bradesco’s functional currency. Foreign branches and subsidiaries are mainly a continuation of activities in Brazil, and, therefore, assets, liabilities and profit or loss are translated into Brazilian reais using the appropriate currency exchange rate, to comply with accounting practices adopted in Brazil. Foreign currency translation gains and losses arising are recognized in the period’s statement of income in the lines “Derivative Financial Instruments” and “Borrowing and On-lending”.

b) Income and expense recognition

Income and expenses are recognized on an accrual basis in order to determine the net income for the period to which they relate, regardless of when the funds are received or paid.

Fixed rate contracts are recognized at their redemption value with the income or expense relating to future periods being recognized as a deduction from the corresponding asset or liability. Finance income and costs are recognized daily on a pro-rata basis and calculated using the compounding method, except when they relate to discounted notes or to foreign transactions, which are calculated using the straight-line method.

Floating rate and foreign-currency-indexed contracts are adjusted for interest and foreign exchange rates applicable at the reporting date.

Insurance and coinsurance premiums, net of premiums paid for coinsurance and related commissions, are recognized upon the issue of the related policies/certificates/endorsements and invoices, or upon the beginning of the exposure to risk in cases in which the risk begins before the policy issuance, and is recognized on a straight-line basis over the policies’ effective period through the upfront recognition and subsequent reversal through the statement of income of the unearned premium reserve and the deferred acquisition costs. Revenues from premiums and the corresponding deferred acquisition costs, relating to existing risk for which no policy has been issued, are recognized in the statement of income at the beginning of the risk exposure, based on estimated figures.

The health insurance premiums are recognized in the premiums (results) account or provision for unearned premiums/considerations (PPCNG), according to the period of coverage of contracts in force on the reporting date.

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Notes to the Consolidated Financial Statements

Income and expenses arising from Mandatory Insurance For Personal Injury Caused by Motor Vehicles (DPVAT) insurance operations are recognized based on information provided by Seguradora Líder dos Consórcios do Seguro DPVAT S.A.

Accepted coinsurance and retrocession operations are recognized based on the information received from other insurers and IRB - Brasil Resseguros S.A. (IRB), respectively.

Reinsurance operations are recognized based on the premium and claims information provided, which is subject to the analysis of the re-insurers. The deductions of reinsurance premiums granted are consistent with the recognition of the corresponding insurance premium and/or terms of the reinsurance contract.

Contributions and agency fees are deferred and recognized in the statement of income on a straight-line basis over a period of 24 months for health insurance operations, and 12 months for other operations.

Pension plan contributions and life insurance premiums with survival coverage are recognized in the statement of income as they are received.

Revenue from capitalization bonds is recognized in the month in which they are issued, according to the types of collection, which may be in monthly payments or in a single payment. Each security has a nominal value, which is indexed to the Reference Rate (TR) interest rates defined in the plan. Technical provisions are recognized when the respective revenues are recognized.

The revenues arising from unclaimed and expired capitalization bonds (securities and non-redeemed draws) are recognized after the prescription period, that is, until November 2003, up to 20 years and five years after this date as established by law. The expenses related to commercialization of capitalization bonds are classified as “Acquisition Costs” and are recognized in the statement of income as incurred.

c) Cash and cash equivalents

Cash and cash equivalents include: funds available in currency, investments in gold, securities sold under agreements to repurchase and interest-earning deposits in other banks, maturing in 90 days or less, from the time of the acquisition, which are exposed to insignificant risk of change in fair value. These funds are used by Bradesco to manage its short-term commitments.

Cash and cash equivalents detailed balances are presented in Note 5.

d) Interbank investments

Securities purchased under agreements to resell are stated at their fair value. All other interbank investments are stated at cost, plus income earned up to the end of the reporting period, net of any devaluation allowance, if applicable.

The breakdown, terms and proceeds relating to interbank investments are presented in Note 6.

e) Securities – Classification

· Trading securities – securities acquired for the purpose of being actively and frequently traded. They are recognized at cost, plus income earned and adjusted to fair value with changes recognized in the Statement of Income for the period;

· Available-for-sale securities – securities that are not specifically intended for trading purposes or to be held to maturity. They are recognized at cost, plus income earned, which is recognized in profit or loss in the period and adjusted to fair value with changes recognized in shareholders’ equity, net of tax, which will be transferred to the Statement of Income only when effectively realized; and

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· Held-to-maturity securities – securities for which there is positive intent and financial capacity to hold to maturity. They are recognized at cost, plus income earned recognized in the Statement of Income for the period.

Securities classified as trading and available-for-sale, as well as derivative financial instruments, are recognized in the consolidated statement of financial position at their fair value. Fair value is generally based on quoted market prices or quotations for assets or liabilities with similar characteristics. If market prices are not available, fair values are based on traders’ quotations, pricing models, discounted cash flows or similar techniques to determine the fair value and may require judgment or significant estimates by Management.

Classification, breakdown and segmentation of securities are presented in Note 7.

f) Derivative financial instruments (assets and liabilities)

Derivative financial instruments are designed to meet the Company´s own needs to manage Bradesco´s global exposure, as well to meet customer requests, in order to manage its positions.

The operations are recorded at their fair value considering the mark-to-market methodologies adopted by Bradesco, and their adjustment can be recorded in the statement of income or equity, depending on the classification between accounting hedge, their categories and economic hedge.

Derivative financial instruments used to mitigate the risks of exposures in currencies, indexes, prices, rates or indexes are considered as hedge instruments, whose objectives are: (i) To control and frame operations, respecting exposure limits and current risks; (ii) Change, modify or reverse positions due to market changes and operational strategies; and (iii) Reduce or mitigate exposures of operations in markets that are inoperative, under conditions of stress or of low liquidity.

Instruments designated for hedge accounting purposes are classified according to their nature in:

· Market risk hedge: the gains and losses, realized or not, of the financial instruments classified in this category as well as the financial assets and liabilities, that are the object of the hedge, are recognized in the Statement of Income; and

· Cash flow hedge: the effective portion of valuation or devaluation of the financial instruments classified in this category is recognized, net of taxes, in a specific account in shareholders’ equity. The ineffective portion of the hedge is recognized directly in the Statement of Income; and

· Hedge of net investment in foreign operations - the financial instruments classified in this category are intended to hedge the exchange variation of investments abroad, whose functional currency is different from the national currency, and are accounted for in accordance with the accounting procedures applicable to the hedge category of cash flow, that is, with the effective portion recognized in shareholders' equity, net of tax effects, and the non-effective portion recognized in income for the period.

For derivatives classified in the hedge accounting category, there is a follow-up of: (i) strategy effectiveness, through prospective and retrospective effectiveness tests, and (ii) mark-to-market of hedge instruments.

A breakdown of amounts included as derivative financial instruments, in the statement of financial position and off-balance-sheet accounts, is disclosed in Note 7.

g) Loans and leases, advances on foreign exchange contracts, other receivables with credit characteristics and allowance for loan losses

Loans and leases, advances on foreign exchange contracts and other receivables with credit characteristics are classified by risk level, based on: (i) the parameters established by CMN Resolution No. 2,682/99, which requires risk ratings to have nine levels, from “AA” (minimum risk) to “H” (maximum risk)considering, among other things, the delay levels (as described in table below); and (ii) Management’s assessment of the risk level. This assessment, which is carried out regularly, considers current economic conditions and past experience with loan losses, as well as specific and general risks relating to contract, debtors and guarantors.

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Notes to the Consolidated Financial Statements

Past-due period (1) | Customer rating
● from 15 to 30 days | B
● from 31 to 60 days | C
● from 61 to 90 days | D
● from 91 to 120 days | E
● from 121 to 150 days | F
● from 151 to 180 days | G
● more than 180 days | H

(1) For transactions with terms of more than 36 months, past-due periods are doubled, as permitted by CMN Resolution No. 2,682/99.

Interest and inflation adjustments on past-due transactions are only recognized in the Statement of Income up to the 60th day that they are past due.

H-rated past-due transactions remain at this level for six months, after which they are written-off against the existing allowance and controlled in off-balance-sheet accounts for at least five years.

Renegotiated operations are maintained at least at the same rating in which they were classified.

Renegotiations of operations had already written-off against the allowance and that were recognized in off-balance-sheet accounts, are rated as level “H” and any possible gains derived from their renegotiation are recognized only when they are effectively received. When there is a significant repayment on the operation or when new material facts justify a change in the level of risk, the loan may be reclassified to a lower risk category.

The estimated allowance for loan losses is calculated to sufficiently cover probable losses, according to CMN and Bacen standards and instructions, together with Management’s assessment of the credit risk.

The classification of the credit operations of the same economic client or group is defined as the one that presents the highest risk, and, in exceptional cases, different ratings for a particular operation are accepted according to the nature, value, purpose of the operation and characteristics of the guarantees.

Type, values, terms, levels of risk, concentration, economic sector of client’s activity, renegotiation and income from loans, as well as the breakdown of expenses and statement of financial position accounts for the allowance for loan losses are presented in Note 9.

h) Income tax and social contribution (assets and liabilities)

Deferred tax assets, calculated on income tax losses, social contribution losses and temporary differences, are recognized in “Other Receivables - Sundry” and the deferred tax liabilities on tax differences in lease asset depreciation (applicable only for income tax), fair value adjustments on securities, inflation adjustment of judicial deposits, among others, are recognized in “Other Liabilities - Tax and Social Security”.

Deferred tax assets on temporary differences are realized when the difference between the accounting treatment and the income tax treatment reverses. Deferred tax assets on income tax and social contribution losses are realizable when taxable income is generated, up to the 30% limit of the taxable profit for the period. Deferred tax assets are recognized based on current expectations of realization considering technical studies and analyses carried out by Management.

The provision for income tax is calculated at 15% of taxable income plus a 10% surcharge. For financial companies, for companies considered as such and for the insurance industry, the social

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Notes to the Consolidated Financial Statements

contribution on the profit was calculated until August 2015, considering the rate of 15%. For the period between September 2015 and December 2018, the rate was changed to 20%, according to Law No. 13,169/15 and the rate will be 15% again as from January 2019. For the other companies, the social contribution is calculated considering the rate of 9%.

Due to the amendment of the rate, the Organization recognized, in September 2015, an incremental amount to the deferred tax of social contribution, considering the annual expectations of realization and their respective rates in force in each period, according to the technical study produced.

Provisions were recognized for other income tax and social contribution in accordance with specific applicable legislation.

The breakdown of income tax and social contribution, showing the calculations, the origin and expected use of deferred tax assets, as well as unrecognized deferred tax assets, is presented in Note 33.

i) Prepaid expenses

Prepaid expenses consist of funds already disbursed for future benefits or services, which are recognized in the profit or loss on an accrual basis.

Incurred costs relating to assets that will generate revenue in subsequent periods are recognized in the Statement of Income according to the terms and the amount of expected benefits and directly recognized in the Statement of Income when the corresponding assets or rights are no longer part of the institution’s assets or when future benefits are no longer expected.

In the case of the remuneration paid for the origination of credit operations or leases to the banking correspondents related to credit operations originated during 2015 and 2016, Bradesco opted to recognize part of the total value of compensation, pursuant to the provisions of Bacen Circular Letter No. 3,738/14. As of 2017, the remuneration mentioned is fully recognized as an expense.

Prepaid expenses are shown in detail in Note 11b.

j) Investments

Investments in unconsolidated companies, where Bradesco has significant influence over the investee or holds at least 20% of the voting rights, and jointly controlled companies, are accounted for using the equity method.

Tax incentives and other investments are stated at cost, less allowance for losses/impairment, where applicable.

Subsidiaries are consolidated – the composition of the main companies are disclosed in Note 2. The composition of unconsolidated and jointly controlled companies, as well as other investments, are disclosed in Note 12.

k) Premises and equipment

Relates to the tangible assets used by the Bank in its activities, including those resulting from transactions that transfer risks, benefits and control of the assets to the Bank.

Premises and equipment are stated at acquisition cost, net of accumulated depreciation, calculated by the straight-line method based on the assets’ estimated economic useful life, using the following rates: real estate – 4% per annum; installations, furniture, equipment for use, security systems and communications – 10% per annum; transport systems – 10% to 20% per annum; and data processing systems – 20% to 40% per annum, and adjusted for impairment, when applicable.

The breakdown of asset costs and their corresponding depreciation, as well as the unrecognized surplus value for real estate and the fixed asset ratios, is disclosed in Note 13.

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Notes to the Consolidated Financial Statements

l) Intangible assets

Relates to the right over intangible assets used by the Bank in its activities.

Intangible assets comprise:

· Future profitability/acquired client portfolio and acquisition of right to provide banking services: they are recognized and amortized over the period in which the asset will directly and indirectly contribute to future cash flows and adjusted for impairment, where applicable; and

· Software: stated at cost less amortization calculated on a straight-line basis over the estimated useful life (20% p.a.), from the date it is available for use and adjusted for impairment, where applicable. Internal software development costs are recognized as an intangible asset when it is possible to show the intent and ability to complete and use the software, as well as to reliably measure costs directly attributable to the intangible asset. These costs are amortized during the software’s estimated useful life, considering the expected future economic benefits.

Intangible assets and the movement in these balances by class are presented in Note 14.

m)Impairment

Financial and non-financial assets are tested for impairment.

Objective evidence of impairment may comprise the non-payment or payment delay by the debtor, possible bankruptcy process or the significant or extended decline in an asset value.

An impairment loss of a financial or non-financial asset is recognized in the profit or loss for the period if the carrying amount of an asset or cash-generating unit exceeds its recoverable value. Impairment losses are presented in Note 7.

n) Deposits and funds obtained in the open market

These are recognized at the value of the liabilities and include, when applicable, related interest accrued at the end of the reporting period, calculated on a daily pro-rata basis.

The composition of the securities recorded in deposits and funds obtained in the open market, as well as their maturities and amounts recorded in equity and income accounts, are presented in Note 15.

o) Technical provisions relating to insurance, pension plans and capitalization bonds

· Damage, health and group insurance lines, except life insurance with survival coverage (VGBL):

- The unearned premium reserve (PPNG) is calculated on a daily pro-rata basis, using premiums net of coinsurance, including amounts ceded through reinsurance, and is comprised of the portion corresponding to the remaining period of coverage less initial contracting costs ( for contracts for the previous term to 2017), except for health and personal insurance. The portion of these reserves corresponding to the estimate for risks in effect but not yet contracted is designated ‘PPNG-RVNE’;

- The unearned premium or contribution reserve (PPCNG) is calculated on a daily pro-rata basis based on the portion of health insurance premiums corresponding to the remaining period of coverage, of the currently effective contracts;

- The mathematical reserve for unvested benefits (PMBaC) whose calculation methodology considers, in addition to the discount rate of 4% per year (4.5% in 2017), the difference between the current value of future benefits and the current value of future contributions, on obligations already assumed by Bradesco;

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Notes to the Consolidated Financial Statements

- Regarding individual health care plan portfolio, as to the remittance coverage of five years for dependents of the holder, in the event of death of the holder, the mathematical reserve is constituted for unvested benefits (PMBaC) which is calculated using a 4% annual discount rate (4.5% in 2017), the time holders are expected to remain in the plan up to their death, and the projected costs of the five-year-period cover, excluding payment of premiums;

- For health insurance, the mathematical reserve of benefits granted (PMBC) is constituted by the obligations arising from the contractual clauses of remittance of installments, regarding the coverage of health assistance and by the premiums paid by insured participating in the Bradesco Saúde Insurance Plan - "GBS Plan" considering a discount rate of 4% (4.5% in 2017) per annum;

- The reserve for events incurred but not reported (PEONA) is calculated from the final estimate of claims already incurred and still not reported, based on the run-off triangles, monthly that consider the historical development of claims advised in the last 12 months for health insurance and last 18 months for dental care to establish a future projection per period of occurrence;

- For non-life insurance, the reserve for ‘incurred but not reported’ (IBNR) claims is calculated based on incurred but not paid’ (IBNP) claims less the balance of the reserve for ‘unsettled’ claims (PSL) on the calculation date. A final estimate of IBNP is calculated using semi-annual run-off triangles. The run-off triangles consider the historical development of claims paid in the previous 10 semesters and in last 11 quarters to extended warranty segments to determine a future projection per occurrence period, and considers the estimated claims ‘incurred but not sufficient’ reported (IBNER), reflecting the changing expectation of the amount provisioned along the regulatory process;

- For life insurance, the provision of ‘incurred but not reported claims (IBNR) is calculated based on semi-annual run-off triangles, which consider the historical development of claims paid and outstanding in the prior 10 semesters, to establish a future projection per period of occurrence; A residual cause study is performed to forecast the claims reported after 10 semesters that the event occurred;

- The reserve for unsettled claims (PSL), for life and health insurance, considers all claim notifications received up to the end of the reporting period, updated monetarily and includes all claims in litigation;

- For non-life insurance, the reserve for unsettled claims (PSL) is determined based on the indemnity payment estimates, considering all administrative and judicial claims existing at the reporting date, restated monetarily and with interest in case of judicial claims, net of the expected payments to be received;

- The technical surplus reserve (PET) corresponds to the difference between the expected value and the observed value for events occurred in the period for insurance of policyholders with a clause of participation in the technical surplus;

- The reserve for related expenses (PDR) for insurance of persons is recognized to cover expenses related to estimated claims and benefits for products structured in self-funding and partially regimes, the reserve covers claims incurred. For plans structured under a capitalization regime, the reserve is made to cover the expected expenses related to incurred claims and also claims expected to be incurred in the future;

- For damage insurance, the reserve for related expenses is (PDR) calculated on a monthly basis to cover the expenses related to indemnity payment, and it covers the expenses allocated individually to each claim, as well as expenses related to claims that have not been itemized, that is, those at the level of the portfolio;

- The reserve for redemptions and other amounts to be settled (PVR) comprises figures related to redemptions to settle, premium refunds owed and portability (transfer-outs) requested but not yet transferred to the recipient insurer;

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Notes to the Consolidated Financial Statements

- The complementary reserve for coverage (PCC) for damage insurance shall be recorded when there is an insufficiency in the technical provisions, as calculated in the Liability Adequacy Test (LAT), pursuant to the determinations specified in the regulations in force. As of the base date, there is no need to record complementary reserve for coverage;

- The complementary reserve for coverage (PCC) for life insurance, refers to the amount necessary to complement technical provisions, as calculated in the LAT. The LAT, which is prepared using statistical and actuarial methods based on realistic assumptions, taking into account the biometric table BR-EMS of both genders, adjusted as per longevity development criteria in compliance with the last versions disclosed (improvement), and forward interest rate curves (ETTJ) free from risk as authorized by SUSEP. The improvement rate is calculated from automatic updates of the biometric table, considering the expected increase in future life expectancy;

- The other technical provisions for damage insurance correspond to the provision for administrative expenses (PDA) arising from Personal Injury Caused by Motor Vehicles (DPVAT) insurance operations;

- Other technical provisions are recognized for the individual health portfolio to address the differences between the expected present value of future premiums and the expected present value of indemnities and related expenses, using an annual discount rate of 4% (4.5% in 2017) per annum; and

- In 2018, the amount recorded in other technical provisions includes the transfer of the mathematical reserves of benefits to be granted and benefits granted, upon SUSEP’s authorization. The provision refers to the difference between the calculation of the mathematical provisions with realistic premises approved by authorities and the calculation with the technical bases defined on the technical notes of the product.

· Pension plans and life insurance with survival coverage (VGBL):

- The unearned premium reserve (PPNG) is calculated on a daily prorated basis using net contributions, and is comprised of the portion corresponding to the remaining period of coverage and includes an estimate for risks covered but not yet issued (RVNE);

- The mathematical reserve for unvested benefits (PMBaC) is recognized for participants who have not yet received any benefit. In defined benefit pension plans, the reserve represents the difference between the present value of future benefits and the present value of future contributions, corresponding to obligations in the form of retirement, disability, pension and annuity plans. The reserve is calculated using methodologies and assumptions set forth in the actuarial technical notes;

- The mathematical reserve for unvested benefits (PMBaC) related to pension plans and life insurance with survival coverage, as well as the defined contribution plans, shows the value of participant contributions, net of costs and other contractual charges, plus income from investment in specially constituted investment funds (FIEs);

- The reserve for redemptions and other amounts to be settled (PVR) comprises figures related to redemptions to settle, premium refunds owed and portability (transfer-outs) requested but not yet transferred to the recipient insurer;

- The mathematical reserve for vested benefits (PMBC) is recognized for participants already receiving benefits and corresponds to the present value of future obligations related to the payment of those on-going benefits;

- The complementary reserve for coverage (PCC) refers to the amount necessary to complement technical provisions, as calculated in the LAT. The LAT, which is prepared semi-annually using statistical and actuarial methods based on realistic assumptions, taking into account the biometric table BR-EMS of both genders, improvement and forward interest

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Notes to the Consolidated Financial Statements

rate curves (ETTJ) free from risk as authorized by SUSEP. The improvement rate is calculated from automatic updates of the biometric table, considering the expected increase in future life expectancy;

- The reserve for related expenses (PDR) is recognized to cover expenses related to estimated claims and benefits, for products structured in self-funding and partially regimes. For plans structured under a capitalization regime, the reserve is made to cover the expected expenses related to incurred claims and also claims expected to be incurred in the future. The projections are performed through the liability adequacy test (TAP);

- The reserve for financial surplus (PEF) corresponds to the financial income exceeding the minimum assured profitability, transferred to contracts with a financial surplus participation clause;

- The provision for claims incurred but not reported (IBNR) is calculated based on semi-annual run-off triangles, which consider the historical development of claims paid and outstanding in the last 16 semesters for the creation of a new future projection by period of occurrence. As to acquired portfolios, a history of 10 semesters is used;

- The reserve for unsettled claims (PSL) considers all loss notices received up to the end of the reporting period. The provision is updated for inflation and includes all claims in litigation; and

- The financial charges credited to technical provisions, and the recording and/or reversal of the financial surplus, are classified as financial expenses, and are presented under “Financial income from insurance, pension plans and capitalization bonds”.

· Capitalization bonds:

- The mathematical reserve for capitalization bond (PMC) is recognized for each active or suspended capitalization bond over the term set forth in the general conditions of the plan, and is calculated using the capitalization percentage, applicable to each of the payments made, plus the monthly accrual calculated using the inflation index and the interest rate established in the plan until the bond is redeemed or canceled;

- The reserve for redemption (PR) comprises the values of matured and early-terminated capitalization bonds and is calculated by updating the balance of bonds whose terms have expired or canceled using the inflation index until the holder receives the redemption payment;

- Reserve for ‘draws to be held’ (PSR) is recognized to cover premiums for future prize draws, and the balance represents the present value of the draws that have already been funded but have not yet been held. The calculation methodology consists of the accumulation of the prize draw percentage applicable to each payment, as established in the plan, less the amounts related to prize draws that have already occurred. The percentages of payments designated for the prize draws is defined in advance in the actuarial technical note, and is not modified during the term of the bond;

- Reserve for draws payable (PSP) consists of the value of unpaid prize draw amounts, adjusted for inflation for the period between the date of the drawing and its effective settlement; and

- Reserve for administrative expense (PDA) is recognized to cover the cost for maintaining capitalization bonds.

Technical provisions shown by account, product and segment, as well as amounts and details of plan assets covering these technical provisions, are shown in Note 20.

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Notes to the Consolidated Financial Statements

p) Provisions, contingent assets and liabilities and legal obligations – tax and social security

Provisions, contingent assets and liabilities, and legal obligations, as defined below, are recognized, measured and disclosed in accordance with the criteria set out in CPC 25, approved by CMN Resolution No. 3,823/09 and CVM Resolution No. 594/09:

· Contingent Assets: these are not recognized in the financial statements, except to the extent that there are real guarantees or favorable judicial decisions, to which no further appeals are applicable, and it is considered virtually certain that cash inflows will flow to Bradesco. Contingent assets with a chance of probable success are disclosed in the notes to the financial statements;

· Provisions: these are recognized taking into consideration the opinion of legal counsel, the nature of the lawsuits, similarity with previous lawsuits, complexity and positioning of the courts, whenever an the Organization has a present obligation (legal or constructive) as a result of a past even, it is probable that an outflow of resources will be required to settle the obligation and when the amount can be reliably measured;

· Contingent Liabilities: according to CPC 25, the term “contingent” is used for liabilities that are not recognized because their existence will only be confirmed by the occurrence of one or more uncertain future events beyond Management’s control. Contingent liabilities do not meet the criteria for recognition because they are considered as possible losses should only be disclosed in the notes when relevant. Obligations deemed remote are not recognized as a provision nor disclosed; and

· Legal Obligations: Provision for Tax Risks: results from judicial proceedings in which Bradesco is contesting the applicability of tax laws on the grounds of legality or constitutionality, which, regardless of the assessment of the probability of success, are fully provided for in the financial statements.

Details on lawsuits, as well as segregation and changes in amounts recognized, by type, are presented in Note 17.

q) Funding expenses

Expenses related to funding transactions involving the issuance of securities reduce the corresponding liability and are recognized in the profit or loss over the term of the transaction, according to Notes 15c and 18.

r) Other assets and liabilities

Assets are stated at their realizable amounts, including, when applicable, related income and inflation and exchange variations (on a daily prorated basis), less provision for losses, when deemed appropriate. Liabilities are stated at known or measurable amounts, including related charges and inflation and exchange variations (on a daily prorated basis).

s) Subsequent events

These refer to events occurring between the reporting date and the date the financial statements are authorized to be issued.

They comprise the following:

· Events resulting in adjustments: events relating to conditions already existing at the end of the reporting period; and

· Events not resulting in adjustments: events relating to conditions not existing at the end of the reporting period.

Subsequent events, if any, are described in Note 34.

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Notes to the Consolidated Financial Statements

4) MANAGERIAL STATEMENTS OF FINANCIAL POSITION AND STATEMENT OF INCOME BY OPERATING SEGMENT

a) Reconciliation of the Statement of Financial Position and Statement of Income – Accounting vs. Managerial

Management uses a variety of information, including those from financial statements, prepared in accordance with accounting practices adopted in Brazil applicable to institutions authorized to operate by the Central Bank, prepared by consolidation criteria that differ in part from the criteria of CPC 36, as described in Note 2.

The main differences of consolidation criteria are shown below, through the Reconciliation of the Statements of financial position and the Statements of Income – Accounting vs. Managerial:

| On March 31 - R$ thousand
2018 | 2017
Accounting Statement of Financial Position | Proportionately consolidated Companies (1) | Adjustments of Consolidation (2) | Managerial Statement of Financial Position | Accounting Statement of Financial Position | Proportionately consolidated Companies (1) | Adjustments of Consolidation (2) | Managerial Statement of Financial Position
Assets |  |  |  |  |  |  |  |
Current and long-term assets | 1,201,306,897 | 9,450,412 | 63,637,113 | 1,274,394,422 | 1,159,038,632 | 8,652,456 | 96,256,363 | 1,263,947,451
Cash and due from banks | 17,807,399 | 290,667 | - | 18,098,066 | 11,831,164 | 198,170 | - | 12,029,334
Interbank investments | 140,870,167 | (282,935) | (3,625) | 140,583,607 | 188,007,983 | 674,998 | (566,440) | 188,116,541
Securities and derivative financial instruments | 516,559,089 | 5,597,980 | 63,679,505 | 585,836,574 | 448,510,341 | 4,309,038 | 96,880,799 | 549,700,178
Interbank and interdepartmental accounts | 72,287,341 | - | - | 72,287,341 | 63,595,452 | - | - | 63,595,452
Loans and leasing | 325,300,203 | 462,093 | - | 325,762,296 | 338,809,899 | 459,157 | - | 339,269,056
Allowance for Loan Losses (ALL) | (35,669,215) | (93,303) | - | (35,762,518) | (39,086,730) | (94,266) | - | (39,180,996)
Other receivables and assets | 164,151,913 | 3,475,910 | (38,767) | 167,589,056 | 147,370,523 | 3,105,359 | (57,996) | 150,417,886
Permanent Assets | 30,102,191 | (654,494) | - | 29,447,697 | 30,342,236 | (150,436) | - | 30,191,800
Investments | 8,003,779 | (5,870,189) | - | 2,133,590 | 7,302,621 | (5,576,220) | - | 1,726,401
Premises and equipment | 7,811,648 | 182,780 | - | 7,994,428 | 7,567,273 | 235,156 | - | 7,802,429
Intangible assets | 14,286,764 | 5,032,915 | - | 19,319,679 | 15,472,342 | 5,190,628 | - | 20,662,970
Total | 1,231,409,088 | 8,795,918 | 63,637,113 | 1,303,842,119 | 1,189,380,868 | 8,502,020 | 96,256,363 | 1,294,139,251

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Notes to the Consolidated Financial Statements

| On March 31 - R$ thousand
2018 | 2017
Accounting Statement of Financial Position | Proportionately consolidated Companies (1) | Adjustments of Consolidation (2) | Managerial Statement of Financial Position | Accounting Statement of Financial Position | Proportionately consolidated Companies (1) | Adjustments of Consolidation (2) | Managerial Statement of Financial Position
Liabilities |  |  |  |  |  |  |  |
Current and long-term liabilities | 1,116,664,441 | 7,696,908 | 63,637,113 | 1,187,998,462 | 1,083,909,165 | 7,403,378 | 96,256,363 | 1,187,568,906
Deposits | 271,658,595 | (267,476) | - | 271,391,119 | 235,455,338 | (23,539) | - | 235,431,799
Securities sold under agreements to repurchase | 228,883,992 | (2,289) | 67,048,200 | 295,929,903 | 254,779,526 | - | 96,483,111 | 351,262,637
Funds from Issuance of Securities | 142,589,826 | - | - | 142,589,826 | 140,302,853 | - | 2,447,825 | 142,750,678
Interbank and interdepartmental accounts | 25,777,547 | 815,563 | - | 26,593,110 | 21,126,057 | - | - | 21,126,057
Borrowing and on-lending | 47,734,757 | 2,317,144 | - | 50,051,901 | 56,417,438 | - | - | 56,417,438
Derivative financial instruments | 18,277,419 | - | (1,213,470) | 17,063,949 | 15,705,212 | - | (1,769,438) | 13,935,774
Technical provisions for insurance, pension plans and capitalization bonds | 251,231,249 | - | - | 251,231,249 | 229,432,544 | - | - | 229,432,544
Other liabilities | 130,511,056 | 4,833,966 | (2,197,617) | 133,147,405 | 130,690,197 | 7,426,917 | (905,135) | 137,211,979
Deferred income | 369,743 | - | - | 369,743 | 426,172 | - | - | 426,172
Non-controlling interests in subsidiaries | 599,011 | 1,099,010 | - | 1,698,021 | 487,081 | 1,098,642 | - | 1,585,723
Shareholders’ equity | 113,775,893 | - | - | 113,775,893 | 104,558,450 | - | - | 104,558,450
Total | 1,231,409,088 | 8,795,918 | 63,637,113 | 1,303,842,119 | 1,189,380,868 | 8,502,020 | 96,256,363 | 1,294,139,251

| Accrued on March 31 - R$ thousand
2018 | 2017
Accounting Statement of Income | Proportionately consolidated Companies (1) | Adjustments of Consolidation (2) | Managerial Statement of Income | Accounting Statement of Income | Proportionately consolidated Companies (1) | Adjustments of Consolidation (2) | Managerial Statement of Income
Revenue from financial intermediation | 32,232,127 | 283,606 | (186,556) | 32,329,177 | 41,647,914 | 299,407 | 1,906,935 | 43,854,256
Expenses from financial intermediation | (14,405,372) | (27,329) | (613,402) | (15,046,103) | (22,700,458) | - | (2,595,982) | (25,296,440)
Financial margin | 17,826,755 | 256,277 | (799,958) | 17,283,074 | 18,947,456 | 299,407 | (689,047) | 18,557,816
Allowance for loan losses | (4,579,695) | (19,757) | - | (4,599,452) | (8,281,361) | (26,577) | - | (8,307,938)
Gross income from financial intermediation | 13,247,060 | 236,520 | (799,958) | 12,683,622 | 10,666,095 | 272,830 | (689,047) | 10,249,878
Income from insurance, pension plans and capitalization bonds | 1,515,262 | - | - | 1,515,262 | 1,625,780 | - | - | 1,625,780
Fee and commission income | 6,035,809 | 1,130,873 | 668,384 | 7,835,066 | 5,788,892 | 1,083,518 | 566,907 | 7,439,317
Personnel expenses | (4,635,373) | (193,837) | - | (4,829,210) | (4,635,886) | (186,517) | - | (4,822,403)
Other administrative expenses | (4,622,687) | (218,533) | 31,064 | (4,810,156) | (4,645,532) | (340,955) | 134,270 | (4,852,217)
Tax expenses | (1,510,122) | (160,607) | - | (1,670,729) | (1,650,878) | (120,064) | - | (1,770,942)
Equity in the earnings (losses) of unconsolidated and jointly controlled companies | 427,845 | (400,680) | - | 27,165 | 428,535 | (371,031) | - | 57,504
Other operating income / expenses | (2,696,964) | (192,866) | 100,510 | (2,789,320) | (520,785) | (158,760) | (12,130) | (691,675)
Operating income | 7,760,830 | 200,870 | - | 7,961,700 | 7,056,221 | 179,021 | - | 7,235,242
Non-operating income | (209,938) | (4,682) | - | (214,620) | (132,926) | (1,154) | - | (134,080)
IT/SC (Income Tax/Soc. Contrib.) and non-controlling interests | (3,084,171) | (196,188) | - | (3,280,359) | (2,852,608) | (177,867) | - | (3,030,475)
Net income | 4,466,721 | - | - | 4,466,721 | 4,070,687 | - | - | 4,070,687

(1) Refers to the effects of the consolidation adjustments arising from the undertakings consolidated proportionally (Grupo Cielo, Grupo Alelo, Crediare, etc.); and
(2) Refers primarily to the effects of the consolidation adjustments arising from the "non-consolidation" of the exclusive funds.

76 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

b) Statement of financial position and statements of income by segment – Managerial

In accordance with CPC 22, the managerial information, hereinafter, was prepared based on reports available to the Management to evaluate the performance and make decisions regarding the allocation of resources for investments and other purposes.

| On March 31 - R$ thousand
Financial (1) (2) | Insurance Group (2) (3) | Other Activities (2) | Eliminations (4) | Managerial Accounting Statement of Financial Position
Brazil | Overseas | Brazil | Overseas
Assets |  |  |  |  |  |  |
Current and long-term assets | 938,967,938 | 97,016,446 | 289,395,313 | 18,119 | 4,959,912 | (55,963,306) | 1,274,394,422
Cash and due from banks | 14,977,836 | 3,020,596 | 353,405 | 7,868 | 163,292 | (424,931) | 18,098,066
Interbank investments | 139,449,722 | 1,133,885 | - | - | - | - | 140,583,607
Securities and derivative financial instruments | 292,550,051 | 15,519,710 | 278,300,050 | 1,824 | 4,017,663 | (4,552,724) | 585,836,574
Interbank and interdepartmental accounts | 72,287,341 | - | - | - | - | - | 72,287,341
Loans and leasing | 296,424,644 | 77,685,197 | - | - | - | (48,347,545) | 325,762,296
Allowance for Loan Losses (ALL) | (34,152,971) | (1,609,547) | - | - | - | - | (35,762,518)
Other receivables and assets | 157,431,315 | 1,266,605 | 10,741,858 | 8,427 | 778,957 | (2,638,106) | 167,589,056
Permanent assets | 111,575,092 | 33,088 | 6,314,247 | 2,209 | 757,032 | (89,233,971) | 29,447,697
Investments | 88,743,035 | - | 2,566,260 | - | 58,266 | (89,233,971) | 2,133,590
Premises and equipment | 5,916,817 | 21,839 | 2,028,110 | 337 | 27,325 | - | 7,994,428
Intangible assets | 16,915,240 | 11,249 | 1,719,877 | 1,872 | 671,441 | - | 19,319,679
Total in 2018 | 1,050,543,030 | 97,049,534 | 295,709,560 | 20,328 | 5,716,944 | (145,197,277) | 1,303,842,119
Total in 2017 | 1,054,705,722 | 103,045,896 | 276,307,311 | 8,025 | 4,671,678 | (144,599,381) | 1,294,139,251
Liabilities |  |  |  |  |  |  |
Current and long-term liabilities | 934,811,819 | 46,978,261 | 261,061,210 | 8,810 | 1,101,668 | (55,963,306) | 1,187,998,462
Deposits | 259,982,836 | 12,080,048 | - | - | - | (671,765) | 271,391,119
Securities sold under agreements to repurchase | 286,613,082 | 9,318,337 | - | - | - | (1,516) | 295,929,903
Funds from issuance of securities | 144,036,140 | 2,869,816 | - | - | - | (4,316,130) | 142,589,826
Interbank and interdepartmental accounts | 26,593,110 | - | - | - | - | - | 26,593,110
Borrowing and on-lending | 88,171,295 | 10,228,151 | - | - | - | (48,347,545) | 50,051,901
Derivative financial instruments | 16,860,247 | 203,702 | - | - | - | - | 17,063,949
Technical provisions for insurance, pension plans and capitalization bonds | - | - | 251,225,713 | 5,536 | - | - | 251,231,249
Other liabilities | 112,555,109 | 12,278,207 | 9,835,497 | 3,274 | 1,101,668 | (2,626,350) | 133,147,405
Deferred income | 347,597 | - | 22,146 | - | - | - | 369,743
Non-controlling interests in subsidiaries | 1,607,721 | 50,071,273 | 34,626,204 | 11,518 | 4,615,276 | (89,233,971) | 1,698,021
Shareholders’ equity | 113,775,893 | - | - | - | - | - | 113,775,893
Total in 2018 | 1,050,543,030 | 97,049,534 | 295,709,560 | 20,328 | 5,716,944 | (145,197,277) | 1,303,842,119
Total in 2017 | 1,054,705,722 | 103,045,896 | 276,307,311 | 8,025 | 4,671,678 | (144,599,381) | 1,294,139,251

Bradesco 77

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Notes to the Consolidated Financial Statements

| Accrued on March 31 - R$ thousand
Financial (1) (2) | Insurance Group (2) (3) | Other Activities (2) | Eliminations (4) | Managerial Statement of Income
Brazil | Overseas | Brazil | Overseas
Revenue from financial intermediation | 26,062,708 | 1,147,928 | 5,379,603 | 1,100 | 64,233 | (326,395) | 32,329,177
Expenses from financial intermediation | (11,193,799) | (357,312) | (3,821,387) | - | - | 326,395 | (15,046,103)
Financial margin | 14,868,909 | 790,616 | 1,558,216 | 1,100 | 64,233 | - | 17,283,074
Allowance for loan losses | (4,285,754) | (313,698) | - | - | - | - | (4,599,452)
Gross income from financial intermediation | 10,583,155 | 476,918 | 1,558,216 | 1,100 | 64,233 | - | 12,683,622
Income from insurance, pension plans and capitalization bonds | - | - | 1,513,578 | 1,635 | - | 49 | 1,515,262
Fee and commission income | 7,147,066 | 94,575 | 538,393 | - | 87,769 | (32,737) | 7,835,066
Personnel expenses | (4,352,411) | (54,353) | (370,187) | (1,185) | (51,074) | - | (4,829,210)
Other administrative expenses | (4,510,190) | (49,029) | (344,655) | (1,220) | (49,962) | 144,900 | (4,810,156)
Tax expenses | (1,418,417) | (5,861) | (223,925) | (60) | (22,466) | - | (1,670,729)
Equity in the earnings (losses) of unconsolidated and jointly controlled companies | 3,253 | - | 24,089 | - | (177) | - | 27,165
Other operating income / expenses | (2,830,529) | (16,571) | 96,366 | (215) | 73,841 | (112,212) | (2,789,320)
Operating income | 4,621,927 | 445,679 | 2,791,875 | 55 | 102,164 | - | 7,961,700
Non-operating income | (192,271) | 3,786 | (25,782) | - | (353) | - | (214,620)
IT/SC (Income Tax/Soc. Contrib.) and non-controlling interests | (1,821,383) | (229,689) | (1,203,314) | 126 | (26,099) | - | (3,280,359)
Net Income in 2018 | 2,608,273 | 219,776 | 1,562,779 | 181 | 75,712 | - | 4,466,721
Net Income in 2017 | 2,583,189 | 35,968 | 1,374,759 | (397) | 77,168 | - | 4,070,687

(1) The financial segment is comprised of financial institutions, holding companies which are mainly responsible for managing financial resources, and credit card, consortium and asset management companies;
(2) The asset, liability, income and expense balances among companies from the same segment are eliminated;
(3) The Insurance Group segment comprises insurance, pension plan and capitalization bond companies; and
(4) Refers to amounts eliminated among companies from different segments, as well as among operations carried out in Brazil and overseas.

5) CASH AND CASH EQUIVALENTS

| On March 31 - R$ thousand
2018 | 2017
Cash and due from banks in domestic currency | 14,013,030 | 9,603,651
Cash and due from banks in foreign currency | 3,794,104 | 2,227,326
Investments in gold | 265 | 187
Total cash and due from banks | 17,807,399 | 11,831,164
Interbank investments (1) | 128,955,617 | 178,707,672
Total cash and cash equivalents | 146,763,016 | 190,538,836

(1) It refers to operations that mature in 90 days or less from the date they were effectively invested and with insignificant risk of change in fair value.

78 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

6) INTERBANK INVESTMENTS

a) Breakdown and maturity

| On March 31 - R$ thousand
1 to 30 | 31 to 180 | 181 to 360 | More than 360 | 2018 | 2017
days | days | days | days
Securities purchased under agreements to resell: |  |  |  |  |  |
Own portfolio position | 4,199,925 | 15,753,321 | - | - | 19,953,246 | 35,877,832
● National treasury notes | - | 15,753,321 | - | - | 15,753,321 | 13,750,299
● Financial treasury bills | - | - | - | - | - | 17,919,985
● National treasury bills | 4,146,925 | - | - | - | 4,146,925 | 3,915,204
● Debentures | - | - | - | - | - | 279,878
● Other | 53,000 | - | - | - | 53,000 | 12,466
Funded position | 48,436,179 | 61,579,939 | - | - | 110,016,118 | 144,390,611
● National treasury notes | 7,603,882 | 32,649,683 | - | - | 40,253,565 | 65,298,523
● Financial treasury bills | 34,704,107 | - | - | - | 34,704,107 | 48,071,054
● National treasury bills | 6,128,190 | 28,930,256 | - | - | 35,058,446 | 31,021,034
Short position | 766,799 | 2,803,990 | - | - | 3,570,789 | 1,760,134
● National treasury bills | 766,799 | 2,803,990 | - | - | 3,570,789 | 1,760,134
Subtotal | 53,402,903 | 80,137,250 | - | - | 133,540,153 | 182,028,577
Interest-earning deposits in other banks: |  |  |  |  |  |
● Interest-earning deposits in other banks: | 1,945,251 | 1,639,754 | 2,596,951 | 1,152,275 | 7,334,231 | 5,993,139
● Provision for losses | (34) | (1,825) | (2,358) | - | (4,217) | (13,733)
Subtotal | 1,945,217 | 1,637,929 | 2,594,593 | 1,152,275 | 7,330,014 | 5,979,406
Total in 2018 | 55,348,120 | 81,775,179 | 2,594,593 | 1,152,275 | 140,870,167 |
% | 39.3 | 58.1 | 1.8 | 0.8 | 100.0 |
Total in 2017 | 182,568,035 | 3,654,701 | 1,368,229 | 417,018 |  | 188,007,983
% | 97.1 | 2.0 | 0.7 | 0.2 |  | 100.0

b) Income from interbank investments

Classified in the statement of income as income from operations with securities.

| Accrued on March 31 - R$ thousand
2018 | 2017
Income from investments in purchase and sale commitments: |  |
• Own portfolio position | 88,310 | 144,112
• Funded position | 2,113,025 | 5,369,452
• Short position | 113,455 | 103,954
Subtotal | 2,314,790 | 5,617,518
Income from interest-earning deposits in other banks | 111,303 | 122,152
Total (Note 7g) | 2,426,093 | 5,739,670

Bradesco 79

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Notes to the Consolidated Financial Statements

7) SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS

Information on securities and derivative financial instruments is as follows:

a) Summary of the consolidated classification of securities by operating segment and issuer

| On March 31 - R$ thousand
Financial | Insurance Group | Other Activities | 2018 | % | 2017 | %
Insurance and Capitalization bonds | Pension plans
Trading securities | 50,327,131 | 14,523,570 | 175,698,582 | 121,690 | 240,670,973 | 46.6 | 228,706,161 | 51.0
- Government securities | 24,497,466 | 11,318,047 | 161,979,894 | 17,258 | 197,812,665 | 38.3 | 182,904,072 | 40.8
- Corporate securities | 8,456,630 | 3,177,034 | 12,752,060 | 104,432 | 24,490,156 | 4.7 | 26,910,521 | 6.0
- Derivative financial instruments (1) (5) | 17,373,035 | 28,489 | 966,628 | - | 18,368,152 | 3.6 | 18,891,568 | 4.2
Available-for-sale securities | 199,912,278 | 21,736,755 | 15,591,490 | 22,774 | 237,263,297 | 45.9 | 176,769,921 | 39.4
- Government securities | 144,036,557 | 19,698,725 | 13,927,095 | 15,493 | 177,677,870 | 34.4 | 112,212,600 | 25.0
- Corporate securities | 55,875,721 | 2,038,030 | 1,664,395 | 7,281 | 59,585,427 | 11.5 | 64,557,321 | 14.4
Held-to-maturity securities (2) | 11,684,221 | 5,150,519 | 21,790,079 | - | 38,624,819 | 7.5 | 43,034,259 | 9.6
- Government securities | 9,377 | 5,150,519 | 21,790,079 | - | 26,949,975 | 5.2 | 30,845,984 | 6.9
- Corporate securities | 11,674,844 | - | - | - | 11,674,844 | 2.3 | 12,188,275 | 2.7
Total | 261,923,630 | 41,410,844 | 213,080,151 | 144,464 | 516,559,089 | 100.0 | 448,510,341 | 100.0
- Government securities | 168,543,400 | 36,167,291 | 197,697,068 | 32,751 | 402,440,510 | 77.9 | 325,962,656 | 72.7
- Corporate securities | 93,380,230 | 5,243,553 | 15,383,083 | 111,713 | 114,118,579 | 22.1 | 122,547,685 | 27.3
Total | 261,923,630 | 41,410,844 | 213,080,151 | 144,464 | 516,559,089 | 100.0 | 448,510,341 | 100.0

80 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

b) Consolidated classification by category, maturity and operating segment

I) Trading securities

Securities | On March 31 - R$ thousand
2018 | 2017
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | Fair/book value (3) (4) | Amortized cost | Fair Value Adjustment | Fair/book value (3) (4) | Fair Value Adjustment
- Financial | 20,396,153 | 1,361,354 | 1,386,687 | 27,182,937 | 50,327,131 | 53,804,619 | (3,477,488) | 50,577,553 | (6,791,565)
Financial treasury bills | - | 546,570 | 240,824 | 13,605,218 | 14,392,612 | 14,391,388 | 1,224 | 13,266,622 | (19,677)
National treasury notes | - | 264,737 | 58,670 | 8,416,220 | 8,739,627 | 8,609,483 | 130,144 | 6,417,141 | 353,273
Financial bills | - | 47,826 | 200,639 | 504,244 | 752,709 | 752,145 | 564 | 2,822,256 | 9,943
Debentures | 46,929 | - | 89,014 | 1,468,297 | 1,604,240 | 1,841,319 | (237,079) | 1,863,017 | (259,508)
National treasury bills | 108,105 | 68,593 | 71,658 | 671,387 | 919,743 | 912,879 | 6,864 | 4,908,628 | 36,916
Brazilian foreign debt notes | 2,064 | - | - | 89,154 | 91,218 | 88,403 | 2,815 | 11,630 | 69
Derivative financial instruments (1) (5) | 16,181,497 | 164,526 | 476,151 | 550,861 | 17,373,035 | 20,711,741 | (3,338,706) | 18,011,836 | (6,836,080)
Other | 4,057,558 | 269,102 | 249,731 | 1,877,556 | 6,453,947 | 6,497,261 | (43,314) | 3,276,423 | (76,501)
- Insurance companies and capitalization bonds | 3,010,447 | 77,637 | 33,794 | 11,401,692 | 14,523,570 | 14,523,570 | - | 15,870,271 | 3,647
Financial treasury bills | - | 45,865 | 18,598 | 9,407,181 | 9,471,644 | 9,471,644 | - | 10,593,499 | -
Financial bills | - | 4,601 | 7,792 | 62,852 | 75,245 | 75,245 | - | 402,114 | -
Other | 3,010,447 | 27,171 | 7,404 | 1,931,659 | 4,976,681 | 4,976,681 | - | 4,874,658 | 3,647
- Pension plans | 5,034,404 | 4,493,086 | 2,143,918 | 164,027,174 | 175,698,582 | 175,698,582 | - | 162,238,277 | -
Financial treasury bills | - | 2,269,011 | 641,582 | 53,152,546 | 56,063,139 | 56,063,139 | - | 48,231,015 | -
National treasury notes | - | 89,926 | 42,883 | 43,188,892 | 43,321,701 | 43,321,701 | - | 55,073,329 | -
National treasury bills | - | 98,559 | 215,623 | 62,280,872 | 62,595,054 | 62,595,054 | - | 42,155,431 | -
Financial bills | 37,261 | 1,890,080 | 792,693 | 2,013,687 | 4,733,721 | 4,733,721 | - | 10,413,827 | -
Debentures | 74,342 | 96,091 | 449,864 | 3,109,440 | 3,729,737 | 3,729,737 | - | 3,511,533 | -
Other | 4,922,801 | 49,419 | 1,273 | 281,737 | 5,255,230 | 5,255,230 | - | 2,853,142 | -
- Other activities | 104,432 | - | 1,424 | 15,834 | 121,690 | 121,691 | (1) | 20,060 | (17)
Financial treasury bills | - | - | 1,424 | 15,834 | 17,258 | 17,259 | (1) | 20,060 | (17)
Other | 104,432 | - | - | - | 104,432 | 104,432 | - | - | -
Total | 28,545,436 | 5,932,077 | 3,565,823 | 202,627,637 | 240,670,973 | 244,148,462 | (3,477,489) | 228,706,161 | (6,787,935)
Derivative financial instruments (liabilities) (5) | (17,576,378) | (161,553) | (191,595) | (347,893) | (18,277,419) | (13,916,499) | (4,360,920) | (15,705,212) | (3,822,136)

Bradesco 81

Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report |

Notes to the Consolidated Financial Statements

II) Available-for-sale securities

Securities (6) | On March 31 - R$ thousand
2018 | 2017
1 to 30 | 31 to 180 | 181 to 360 | More than 360 | Fair/book value (3) (4) | Amortized cost | Fair Value Adjustment | Fair/book value (3) (4) | Fair Value Adjustment
days | days | days | days
- Financial | 22,038,240 | 9,130,462 | 49,797,987 | 118,945,589 | 199,912,278 | 198,587,965 | 1,324,313 | 148,785,289 | 186,957
National treasury bills | 11,886,037 | 2,546,604 | 43,202,127 | 65,758,253 | 123,393,021 | 120,884,394 | 2,508,627 | 70,590,220 | 1,670,765
Debentures | 314,580 | 1,051,120 | 3,633,581 | 30,787,031 | 35,786,312 | 36,632,982 | (846,670) | 39,459,990 | (1,223,966)
National treasury notes | 655 | 1,622,013 | - | 9,705,152 | 11,327,820 | 10,798,517 | 529,303 | 13,006,406 | 460,359
Foreign corporate securities | 47,704 | 624,095 | 552,234 | 8,358,853 | 9,582,886 | 9,540,398 | 42,488 | 10,864,548 | (155,207)
Shares | 7,303,397 | - | - | - | 7,303, | 8,224,528 | (921,131) | 6,875,802 | (565,623)
Foreign government bonds | 1,222,987 | 2,527,798 | 1,478,229 | - | 5,229,014 | 5,248,602 | (19,588) | 1,534,641 | (12,347)
Promissory Notes | - | 748,613 | 53,238 | - | 801,851 | 796,061 | 5,790 | 989,084 | 3,838
Certificates of real estate receivables | - | - | 14,425 | 1,014,275 | 1,028,700 | 1,043,800 | (15,100) | 1,080,986 | (51,066)
Other | 1,262,880 | 10,219 | 864,153 | 3,322,025 | 5,459,277 | 5,418,683 | 40,594 | 4,383,612 | 60,204
- Insurance companies and capitalization bonds | 2,090,875 | 17,487 | 415,498 | 19,212,895 | 21,736,755 | 20,664,214 | 1,072,541 | 15,503,608 | 470,474
National treasury notes | - | - | - | 13,242,112 | 13,242,112 | 12,860,646 | 381,466 | 11,943,585 | 83,350
Shares | 1,656,677 | - | - | - | 1,656,677 | 1,143,725 | 512,952 | 1,422,810 | 341,618
National treasury bills | 105,209 | - | 401,502 | 5,679,459 | 6,186,170 | 6,018,335 | 167,835 | 1,554,115 | 40,821
Other | 328,989 | 17,487 | 13,996 | 291,324 | 651,796 | 641,508 | 10,288 | 583,098 | 4,685
- Pension plans | 1,569,504 | 20,010 | 11,995 | 13,989,981 | 15,591,490 | 13,511,874 | 2,079,616 | 12,434,882 | 1,604,396
National treasury notes | - | 9,607 | - | 13,031,609 | 13,041,216 | 11,339,739 | 1,701,477 | 10,672,535 | 1,461,131
Shares | 1,569,504 | - | - | - | 1,569,504 | 1,221,107 | 348,397 | 1,623,330 | 140,933
Debentures | - | - | - | 94,890 | 94,890 | 84,834 | 10,056 | 93,624 | 2,348
Other | - | 10,403 | 11,995 | 863,482 | 885,880 | 866,194 | 19,686 | 45,393 | (16)
- Other activities | 7,094 | - | - | 15,680 | 22,774 | 15,653 | 7,121 | 46,142 | 5,157
Other | 7,094 | - | - | 15,680 | 22,774 | 15,653 | 7,121 | 46,142 | 5,157
Subtotal | 25,705,713 | 9,167,959 | 50,225,480 | 152,164,145 | 237,263,297 | 232,779,706 | 4,483,591 | 176,769,921 | 2,266,984
Accounting Hedge (Note 7f) | - | - | - | - | - | - | (236,504) | - | 115,805
Securities reclassified to “Held-to-maturity securities” | - | - | - | - | - | - | (378,859) | - | (264,240)
Total | 25,705,713 | 9,167,959 | 50,225,480 | 152,164,145 | 237,263,297 | 232,779,706 | 3,868,228 | 176,769,921 | 2,118,549

82 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

III) Held-to-maturity securities

Securities (2) (6) | On March 31 - R$ thousand
2018 | 2017
1 to 30 | 31 to 180 | 181 to 360 | More than 360 | Amortized cost (3) | Fair value (4) | Gain (loss) not accounted for | Amortized cost (3) | Gain (loss) not accounted for
days | days | days | days
- Financial | - | 1,336 | 1,109 | 11,681,776 | 11,684,221 | 11,686,089 | 1,868 | 12,212,551 | (707,534)
Certificates of real estate receivables | - | 82 | - | 11,674,762 | 11,674,844 | 11,676,712 | 1,868 | 12,188,274 | (706,166)
Other | - | 1,254 | 1,109 | 7,014 | 9,377 | 9,377 | - | 24,277 | (1,368)
- Insurance companies and capitalization bonds | - | - | - | 5,150,519 | 5,150,519 | 5,590,947 | 440,428 | 4,884,948 | 823,705
National treasury notes | - | - | - | 5,150,519 | 5,150,519 | 5,590,947 | 440,428 | 4,884,948 | 823,705
- Pension plans | - | 17,818 | - | 21,772,261 | 21,790,079 | 24,454,204 | 2,664,125 | 25,936,760 | 3,468,745
National treasury notes | - | 17,818 | - | 21,772,261 | 21,790,079 | 24,454,204 | 2,664,125 | 25,936,760 | 3,468,745
Total | - | 19,154 | 1,109 | 38,604,556 | 38,624,819 | 41,731,240 | 3,106,421 | 43,034,259 | 3,584,916

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Notes to the Consolidated Financial Statements

c) Breakdown of the portfolios by financial statement classification

Securities | On March 31 - R$ thousand
1 to 30 | 31 to 180 | 181 to 360 | More than 360 | Total in 2018 (3) (4) | Total in 2017 (3) (4)
days | days | days | days
Own portfolio | 35,694,982 | 11,071,486 | 15,891,872 | 324,578,326 | 387,236,666 | 377,943,897
Fixed income securities | 21,513,141 | 11,071,486 | 15,891,872 | 324,578,326 | 373,054,825 | 365,380,412
● National treasury notes | - | 394,874 | 92,024 | 93,687,390 | 94,174,288 | 118,793,619
● Financial treasury bills | - | 2,751,155 | 1,295,283 | 74,038,600 | 78,085,038 | 69,451,302
● National treasury bills | 10,850,967 | 1,239,588 | 7,514,882 | 100,119,197 | 119,724,634 | 92,958,463
● Debentures | 435,851 | 1,147,211 | 4,176,329 | 35,086,687 | 40,846,078 | 45,028,330
● Financial bills | 37,261 | 1,942,508 | 1,001,124 | 2,580,899 | 5,561,792 | 13,937,885
● Certificates of real estate receivables | - | 82 | 14,425 | 12,925,358 | 12,939,865 | 13,471,833
● Foreign government bonds | 1,224,490 | 2,527,798 | 1,478,229 | 352,760 | 5,583,277 | 1,889,791
● Foreign corporate securities | 2,010,056 | 103,581 | 180,673 | 4,049,600 | 6,343,910 | 1,907,947
● Brazilian foreign debt securities | 9,491 | - | - | 967,662 | 977,153 | 516,530
● Promissory Notes | - | 748,614 | 54,510 | 173,663 | 976,787 | 1,122,625
● Bank deposit certificates | 241,554 | 215,609 | 3,534 | 52,570 | 513,267 | 593,699
● Other | 6,703,471 | 466 | 80,859 | 543,940 | 7,328,736 | 5,708,388
Equity securities | 14,181,841 | - | - | - | 14,181,841 | 12,563,485
● Shares of listed companies | 1,572,527 | - | - | - | 1,572,527 | 1,625,708
● Shares of other companies | 12,609,314 | - | - | - | 12,609,314 | 10,937,777
Restricted securities | 1,379,553 | 3,582,659 | 32,030,899 | 67,314,819 | 104,307,930 | 44,403,483
Subject to repurchase agreements | 1,157,755 | 3,395,991 | 31,548,816 | 48,892,734 | 84,995,296 | 28,240,240
● National treasury bills | 1,155,462 | 1,150,674 | 30,951,789 | 33,208,842 | 66,466,767 | 18,547,070
● Foreign corporate securities | - | 622,961 | 540,433 | 5,331,852 | 6,495,246 | 9,271,382
● National treasury notes | - | 1,622,344 | 264 | 7,941,711 | 9,564,319 | 181,573
● Brazilian foreign debt securities | 2,293 | - | - | 902,902 | 905,195 | -
● Financial treasury bills | - | 12 | 56,330 | 1,507,427 | 1,563,769 | 240,215
Brazilian Central Bank | - | - | - | - | - | 77,083
● National treasury bills | - | - | - | - | - | 77,083
Privatization rights | - | - | - | 42,913 | 42,913 | 47,667
Guarantees provided | 221,798 | 186,668 | 482,083 | 18,379,172 | 19,269,721 | 16,038,493
● National treasury notes | 655 | 15,307 | 10,375 | 12,220,987 | 12,247,324 | 9,654,228
● National treasury bills | 92,922 | 22,974 | 30,749 | 3,346,417 | 3,493,062 | 3,093,122
● Financial treasury bills | 245 | 148,387 | 440,959 | 2,364,566 | 2,954,157 | 3,226,954
● Other | 127,976 | - | - | 447,202 | 575,178 | 64,189
Derivative financial instruments (1) (5) | 17,176,614 | 164,526 | 476,151 | 550,861 | 18,368,152 | 18,891,568
Securities subject to unrestricted repurchase agreements | - | 300,519 | 5,393,490 | 952,332 | 6,646,341 | 7,271,393

84 Economic and Financial Analysis Report – March 201

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Notes to the Consolidated Financial Statements

Securities | On March 31 - R$ thousand
1 to 30 | 31 to 180 | 181 to 360 | More than 360 | Total in 2018 (3) (4) | Total in 2017 (3) (4)
days | days | days | days
● National treasury bills | - | 300,519 | 5,393,490 | - | 5,694,009 | 5,716,701
● National treasury notes | - | - | - | 945,731 | 945,731 | 1,293
● Financial treasury bills | - | - | - | 6,601 | 6,601 | 1,553,399
Total | 54,251,149 | 15,119,190 | 53,792,412 | 393,396,338 | 516,559,089 | 448,510,341
% | 10.5 | 2.9 | 10.4 | 76.2 | 100.0 | 100.0

(1) Consistent with the criteria in Bacen Circular Letter No. 3,068/01 and due to the characteristics of the securities, we are classifying the derivative financial instruments, except those considered as accounting hedges in the category Trading Securities;
(2) In compliance with Article 8 of Bacen Circular Letter No. 3,068/01, Bradesco declares that it has the financial capacity and intention to maintain held-to-maturity securities until their maturity dates. In the first quarter of 2018 and 2017, there were no sales or reclassifications of securities classified in such category;
(3) The number of days to maturity was based on the contractual maturity of the instruments, regardless of their accounting classification;
(4) The fair value of securities is determined based on the market price available at the end of the reporting period. If no market price quotation is available at the end of the reporting period, amounts are estimated based on the prices quoted by dealers, pricing models, quotation models or price quotations for instruments with similar characteristics. For investment funds, the original amortized cost reflects the fair value of the respective quotas;
(5) Includes hedge for protection of assets and liabilities, denominated in or indexed to foreign currency, primarily, arising from foreign investments, eliminating the effects of exchange variation of these assets and liabilities. For a better analysis of these items, consider the net exposure (Note 7d II); and

(6) In the first quarter of 2018, there were impairment losses on financial assets (mostly debentures), net of reversals, related to securities classified as “Available-for-Sale” and “Held-to-Maturity” in the amount of R$192,122 thousand (R$419,693 thousand in 2017).

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Notes to the Consolidated Financial Statements

d) Derivative financial instruments

Bradesco carries out transactions involving derivative financial instruments, which are recognized in the statement of financial position or in off-balance-sheet accounts, to meet its own needs in managing its global exposure, as well as to meet its customer’s requests, in order to manage their exposure. These operations involve a range of derivatives, including interest rate swaps, currency swaps, futures and options. Bradesco’s risk management policy is based on the utilization of derivative financial instruments mainly to mitigate the risks from operations carried out by the Bank and its subsidiaries.

Securities classified as trading and available-for-sale, as well as derivative financial instruments, are recognized in the consolidated statement of financial position at their fair value. Fair value is generally based on quoted market prices or quotations for assets or liabilities with similar characteristics. Should market prices not be available, fair values are based on dealer quotations, pricing models, discounted cash flows or similar techniques for which the determination of fair value may require judgment or significant estimates by Management.

Quoted market prices are used to determine the fair value of derivative financial instruments. The fair value of swaps is determined by using discounted cash flow modeling techniques that use yield curves, reflecting adequate risk factors. The information to build yield curves is mainly obtained from Securities, Commodities and Futures Exchange (B3), and the domestic and international secondary market. These yield curves are used to determine the fair value of currency swaps, interest rate and other risk factor swaps. The fair value of forward and futures contracts is also determined based on market price quotations for derivatives traded on an exchange or using methodologies similar to those outlined for swaps. The fair values of credit derivative instruments are determined based on market price quotation or prices received from specialized entities. The fair value of options is determined based on mathematical models, such as Black & Scholes, using yield curves, implied volatilities and the fair value of corresponding assets. Current market prices are used to calculate volatility.

Derivative financial instruments in Brazil primarily consist of swaps and futures and are registered at B3.

Operations involving forward contracts of interest rates, indexes and currencies are contracted by Management to hedge Bradesco’s overall exposures and to meet customer needs.

Foreign derivative financial instruments refer to swap, forward, options, credit and futures operations and primarily out at the stock exchanges in Chicago and New York, as well as the over-the-counter (OTC) markets.

86 Economic and Financial Analysis Report – March 201

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

I) Amount of derivative financial instruments recognized in off-balance-sheet accounts

| On March 31 - R$ thousand
2018 | 2017
Reference value | Net amount | Reference value | Net amount
Futures contracts |  |  |  |
Purchase commitments: | 117,904,368 | - | 84,036,194 | -
- Interbank market | 60,412,071 | - | 28,119,407 | -
- Foreign currency | 57,068,344 | - | 55,907,687 | 4,308,061
- Other | 423,953 | - | 9,100 | -
Sale commitments: | 181,737,217 | - | 181,621,985 | -
- Interbank market (1) | 122,310,985 | 61,898,914 | 129,962,770 | 101,843,363
- Foreign currency (2) | 58,757,867 | 1,689,523 | 51,599,626 | -
- Other | 668,365 | 244,412 | 59,589 | 50,489
Option contracts |  |  |  |
Purchase commitments: | 65,037,325 | - | 16,905,386 | -
- Interbank market | 55,944,776 | - | 5,243,229 | 347,792
- Foreign currency | 8,899,340 | - | 10,735,206 | -
- Other | 193,209 | 106,593 | 926,951 | 157,935
Sale commitments: | 105,911,937 | - | 17,727,767 | -
- Interbank market | 94,938,559 | 38,993,783 | 4,895,437 | -
- Foreign currency | 10,886,762 | 1,987,422 | 12,063,314 | 1,328,108
- Other | 86,616 | - | 769,016 | -
Forward contracts |  |  |  |
Purchase commitments: | 13,616,513 | - | 14,732,356 | -
- Foreign currency | 12,164,239 | - | 14,205,670 | -
- Other | 1,452,274 | 440,015 | 526,686 | -
Sale commitments: | 18,421,371 | - | 18,826,676 | -
- Foreign currency (2) | 17,409,112 | 5,244,873 | 18,053,430 | 3,847,760
- Other | 1,012,259 | - | 773,246 | 246,560
Swap contracts |  |  |  |
Assets (long position): | 68,675,683 | - | 78,242,623 | -
- Interbank market | 6,957,213 | 4,396,707 | 13,160,554 | 9,861,749
- Fixed rate | 52,450,142 | 25,532,921 | 52,784,176 | 21,496,880
- Foreign currency | 7,375,673 | - | 10,213,478 | 329,414
- IGPM | 712,450 | - | 832,450 | -
- Other | 1,180,205 | - | 1,251,965 | -
Liabilities (short position): | 48,950,888 | - | 47,606,325 | -
- Interbank market | 2,560,506 | - | 3,298,805 | -
- Fixed rate | 26,917,221 | - | 31,287,296 | -
- Foreign currency | 16,216,254 | 8,840,581 | 9,884,064 | -
- IGPM | 726,000 | 13,550 | 981,000 | 148,550
- Other | 2,530,907 | 1,350,702 | 2,155,160 | 903,195

Derivatives include operations maturing in D+1.
(1) Includes: (i) accounting hedges to protect CDI-related funding totaling R$4,733,963 thousand (R$2,056,240 in 2017); and (ii) accounting hedges to protect interbank investments, in the amount of R$10,358,828 thousand (R$15,946,347 thousand in 2017) (note 7f); and

(2) Includes specific hedges to protect assets and liabilities, arising from foreign investments, totaling R$50,043,473 thousand (R$46,022,507 thousand in 2017).

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Notes to the Consolidated Financial Statements

II) Breakdown of derivative financial instruments (assets and liabilities) shown at original amortized cost and fair value

| On March 31 - R$ thousand
2018 | 2017
Original amortized cost | Mark-to-market adjustment | Fair value | Original amortized cost | Mark-to-market adjustment | Fair value
Adjustment receivable - swaps | 17,187,138 | (3,311,378) | 13,875,760 | 22,302,304 | (6,778,728) | 15,523,576
Adjustment receivable - future | 23,190 | - | 23,190 | 18,193 | - | 18,193
Receivable forward purchases | 1,555,088 | - | 1,555,088 | 1,405,369 | - | 1,405,369
Receivable forward sales (1) | 1,770,585 | - | 1,770,585 | 1,546,906 | - | 1,546,906
Premiums on exercisable options | 1,170,857 | (27,328) | 1,143,529 | 454,876 | (57,352) | 397,524
Total assets (A) | 21,706,858 | (3,338,706) | 18,368,152 | 25,727,648 | (6,836,080) | 18,891,568
Adjustment payables - swaps | (9,643,657) | (4,449,160) | (14,092,817) | (8,966,342) | (3,806,095) | (12,772,437)
Adjustment payables - future | (106,395) | - | (106,395) | (11,011) | - | (11,011)
Payable forward purchases | (2,710,752) | - | (2,710,752) | (1,433,945) | - | (1,433,945)
Payable forward sales/other | (486,384) | - | (486,384) | (1,208,796) | - | (1,208,796)
Premiums on written options | (969,311) | 88,240 | (881,071) | (262,982) | (16,041) | (279,023)
Total liabilities (B) | (13,916,499) | (4,360,920) | (18,277,419) | (11,883,076) | (3,822,136) | (15,705,212)
|  |  |  | - |  |
Net Effect (A-B) | 7,790,359 | (7,699,626) | 90,733 | 13,844,572 | (10,658,216) | 3,186,356

(1) Includes receivable adjustments relating to hedge of assets and liabilities, designated and/or indexed in foreign currency, primarily, arising from foreign investments, eliminating the effects of exchange variation of these assets and liabilities.

III) Futures, options, forward and swap contracts – (Nominal Value)

| On March 31 - R$ thousand
1 to 90 | 91 to 180 | 181 to 360 | More than 360 | 2018 | 2017
days | days | days | days
Futures contracts (1) | 92,998,452 | 12,224,786 | 44,530,177 | 149,888,170 | 299,641,585 | 265,658,179
Option contracts | 8,879,333 | 3,094,097 | 147,310,627 | 11,665,205 | 170,949,262 | 34,633,153
Forward contracts (1) | 20,832,076 | 5,359,826 | 3,114,797 | 2,731,185 | 32,037,884 | 33,559,032
Swap contracts | 6,416,283 | 10,101,580 | 9,869,345 | 91,239,363 | 117,626,571 | 125,848,948
Total in 2018 | 129,126,144 | 30,780,289 | 204,824,946 | 255,523,923 | 620,255,302 |
Total in 2017 | 107,282,442 | 33,726,232 | 87,528,502 | 231,162,136 |  | 459,699,312

(1) Includes contracts relating to hedges for the protection of assets and liabilities, designated and/or indexed in foreign currency, primarily, arising from foreign investments, eliminating the effects of exchange variation of these assets and liabilities.

88 Economic and Financial Analysis Report – March 2018

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Notes to the Consolidated Financial Statements

IV) Types of margin offered in guarantee of derivative financial instruments, primarily futures contracts

| On March 31 - R$ thousand
2018 | 2017
Government securities |  |
National treasury bills | 1,707,413 | 996,301
National treasury notes | 4,496,860 | 4,389,017
Total | 6,204,273 | 5,385,318

V) Revenues and expenses, net

| Accrued on March 31 - R$ thousand
2018 | 2017
Swap contracts | 282,139 | 699,749
Forward contracts (1) | (167,533) | 89,670
Option contracts | 101,858 | 39,777
Futures contracts (1) | (2,026,606) | (1,300,824)
Foreign exchange variation of assets and liabilities overseas | 120,721 | (531,684)
Total (Note 7g) | (1,689,421) | (1,003,312)

(1) Includes the gain (loss) and the respective adjustment to the market capitalization of the hedge for protection of the assets and liabilities, designated and/or indexed in foreign currency, primarily, arising from foreign investments.

VI) Reference values of derivative financial instruments, by trading location and counterparty

| On March 31 - R$ thousand
2018 | 2017
B3 (stock exchange) | 404,376,605 | 227,502,265
B3 (over-the-counter) | 157,935,249 | 168,364,073
Overseas (stock exchange) (1) | 49,632,494 | 56,523,629
Overseas (over-the-counter) (1) | 8,310,954 | 7,309,345
Total | 620,255,302 | 459,699,312

(1) Comprised of operations carried out on the Chicago and New York Stock Exchanges and over-the-counter markets.

e) Credit Default Swaps (CDS)

On March 31, 2018, Bradesco had credit default swaps (CDS) with the following characteristics: the risk received in credit swaps whose underlying assets are “debt securities issued by companies" in the amount of R$503,689 thousand (2017 - R$145,477 thousand) and “bonds of the Brazilian public debt” in the amount of R$964,899 thousand (2017 - R$554,470 thousand), and in 2017 the risk transferred in credit swaps whose underlying assets are Brazilian public debt”, was R$(15,842) thousand amounting to a total net credit risk value of R$1,468,588 thousand (2017 - R$684,105 thousand), with an effect on the calculation of required shareholders’ equity of R$52,887 thousand (2017 - R$15,275 thousand). The contracts related to credit derivatives transactions described above are due in 2023. The mark-to-market of the protection rates that remunerates the counterparty that received the risk totaled R$1,152 thousand (2017 - R$(481) thousand). There were no credit events, as defined in the agreements, during the period.

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Notes to the Consolidated Financial Statements

f) Hedge Accounting

On March 31, 2018, Bradesco maintained hedge, in accordance with Bacen's Circular No. 3,082 / 02, composed by:

I) Cash Flow Hedge - the financial instruments classified in this category, aims to reduce exposure to future changes in interest rates, which impact the outcome of the organization. The effective portion of the valuations or devaluations of these instruments is recognized in a separate account of shareholders' equity, net of tax effects and is only transferred to income in two situations: (i) in case of ineffectiveness of the hedge; or (ii) the realization of the hedge object. The ineffective portion of the respective hedge is recognized directly in the income statement.

Strategy | On March 31 - R$ thousand
Hedge instrument nominal value | Hedge object accounting value | Adjustment to market recorded in shareholders' equity (gross of tax effects) | Adjustment to market recorded in shareholders' equity (net of tax effects)
Hedge of interest receipts from investments in securities (1) | 10,358,828 | 9,726,704 | 73,584 | 44,150
Hedge of interest payments on funding (2) | 4,733,963 | 4,561,735 | (153,069) | (91,841)
Total in 2018 | 15,092,791 | 14,288,439 | (79,485) | (47,691)
* |  |  |  |
Hedge of interest receipts from investments in securities (1) | 15,946,347 | 16,002,283 | 205,709 | 123,425
Hedge of interest payments on funding (2) | 2,056,240 | 2,042,724 | (20,679) | (12,407)
Total in 2017 | 18,002,587 | 18,045,007 | 185,030 | 111,018

(1) Referring to the DI interest rate risk, using DI Futures contracts in B3, with the maturity in 2019, making the cash flow prefixed; and
(2) Referring to the DI interest rate risk, using DI Futures contracts in B3, with maturity dates in 2020, making the cash flow prefixed.

The effectiveness of the hedge portfolio is in accordance with Bacen's Circular No. 3,082 / 02.

For the next 12 months, the gains/(losses) related to the cash flow hedge, which we expect to recognize in the income statement, amount to R$ 5,684 thousand.

The gains/(losses) related to the cash flow hedge recorded in the income statements in during the first quarter of 2018 were R$ 3,568 thousand.

II) Hedge of investments abroad - the financial instruments classified in this category, have the objective of reducing the exposure to foreign exchange variation of investments abroad, whose functional currency is different from the national currency, which impacts the result of the organization. The effective portion of the valuations or devaluations of these instruments is recognized in a separate account of shareholders' equity, net of tax effects and is only transferred to income in two situations: (i) hedge ineffectiveness; or (ii) in the disposal or partial sale of the foreign operation. The ineffective portion of the respective hedge is recognized directly in the income statement.

Strategy | On March 31 - R$ thousand
Hedge instrument nominal value | Hedge object accounting value | Adjustment to market recorded in shareholders' equity (gross of tax effects) | Adjustment to market recorded in shareholders' equity (net of tax effects)
Hedge of exchange variation on future cash flows (1) | 1,271,022 | 698,844 | (157,019) | (94,211)
Total in 2018 | 1,271,022 | 698,844 | (157,019) | (94,211)
* |  |  |  |
Hedge of exchange variation on future cash flows (1) | 1,060,485 | 595,732 | (69,225) | (41,535)
Total in 2017 | 1,060,485 | 595,732 | (69,225) | (41,535)

(1) Whose functional currency is different from the real, using Forward contracts, with the object of hedging the foreign investment referenced to MXN (Mexican Peso).

The effectiveness of the hedge portfolio is in accordance with Bacen's Circular No. 3,082 / 02.

For the next 12 months, the gains/(losses) related to the hedge of investments abroad, which we expect to recognize in the result, amount to R$ (546) thousand.

Gains/(losses) related to the hedge of investments abroad recorded in income accounts in during the first quarter of 2018 were R$ (342) thousand.

90 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

g) Income from securities, insurance, pension plans and capitalization bonds, and derivative financial instruments

| Accrued on March 31 - R$ thousand
2018 | 2017
Fixed income securities (1) | 5,028,560 | 6,128,886
Interbank investments (Note 6b) | 2,426,093 | 5,739,670
Equity securities | (122,971) | 198,524
Subtotal | 7,331,682 | 12,067,080
Income from insurance, pension plans and capitalization bonds | 9,074,226 | 10,026,655
Income from derivative financial instruments (Note 7d V) | (1,689,421) | (1,003,312)
Total | 14,716,487 | 21,090,423

(1) In the first quarter of 2018, there were losses due to impairment of financial assets (mostly debentures), net of reversals, in the amount of R$192,122 thousand (R$419,693 thousand in 2017).

8) INTERBANK ACCOUNTS – RESERVE REQUIREMENT

a) Reserve requirement

| On March 31 - R$ thousand
Remuneration | 2018 | 2017
Compulsory deposit – demand deposits | not remunerated | 6,832,025 | 6,034,964
Compulsory deposit – savings deposits | savings index | 24,762,604 | 18,937,967
Compulsory deposit – time deposits | Selic rate | 39,173,049 | 20,391,653
Requirement rural loans funds | not remunerated | 46,225 | -
Additional compulsory deposit – savings deposits | Selic rate | - | 5,175,153
Additional compulsory deposit – time deposits | Selic rate | - | 11,097,285
Reserve requirement – SFH | TR + interest rate | 1,238,177 | 809,363
Total |  | 72,052,080 | 62,446,385

For more information on compulsory deposits see Note 34.

b) Revenue from reserve requirement

| Accrued on March 31 - R$ thousand
2018 | 2017
Reserve requirement – Bacen (Compulsory deposit) | 903,333 | 1,343,443
Reserve requirement – SFH | 12,228 | 16,579
Total | 915,561 | 1,360,022

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Notes to the Consolidated Financial Statements

9) LOANS

Information relating to loans, including advances on foreign exchange contracts, leases and other receivables with credit characteristics is shown below:

a) By type and maturity

| On March 31 - R$ thousand
Performing loans
1 to 30 | 31 to 60 | 61 to 90 | 91 to 180 | 181 to 360 | More than 360 | Total in 2018 (A) | % (5) | Total in 2017 (A) | % (5)
days | days | days | days | days | days
Discounted trade receivables and loans (1) | 18,803,615 | 13,014,206 | 9,710,730 | 17,981,623 | 22,237,156 | 68,329,681 | 150,077,011 | 35.8 | 151,988,747 | 35.9
Financing | 6,526,725 | 3,400,065 | 4,171,385 | 9,439,466 | 16,419,660 | 83,979,362 | 123,936,663 | 29.6 | 129,111,414 | 30.4
Agricultural and agribusiness loans | 727,290 | 664,884 | 1,188,189 | 5,034,352 | 5,369,926 | 7,741,083 | 20,725,724 | 5.0 | 21,548,632 | 5.1
Subtotal | 26,057,630 | 17,079,155 | 15,070,304 | 32,455,441 | 44,026,742 | 160,050,126 | 294,739,398 | 70.4 | 302,648,793 | 71.4
Leasing | 127,242 | 93,427 | 90,676 | 244,402 | 401,555 | 1,052,952 | 2,010,254 | 0.5 | 2,328,906 | 0.5
Advances on foreign exchange contracts (2) | 2,461,801 | 1,951,196 | 2,000,279 | 3,763,287 | 1,636,033 | 65,079 | 11,877,675 | 2.8 | 10,042,593 | 2.4
Subtotal | 28,646,673 | 19,123,778 | 17,161,259 | 36,463,130 | 46,064,330 | 161,168,157 | 308,627,327 | 73.7 | 315,020,292 | 74.3
Other receivables (3) | 11,338,554 | 7,275,512 | 2,517,343 | 5,090,421 | 4,637,595 | 2,114,718 | 32,974,143 | 7.9 | 30,980,396 | 7.3
Total loans | 39,985,227 | 26,399,290 | 19,678,602 | 41,553,551 | 50,701,925 | 163,282,875 | 341,601,470 | 81.6 | 346,000,688 | 81.6
Sureties and guarantees (4) | 2,854,920 | 894,901 | 1,678,340 | 6,321,169 | 8,087,856 | 52,838,611 | 72,675,797 | 17.4 | 75,950,737 | 17.9
Loan assignment - real estate receivables certificate | 35,477 | 35,476 | 35,474 | 102,095 | 152,366 | 512,267 | 873,155 | 0.2 | 1,001,636 | 0.2
Acquisition of credit card receivables | 1,000,609 | 366,004 | 357,357 | 617,873 | 422,792 | - | 2,764,635 | 0.7 | 1,021,364 | 0.2
Loans available for import (4) | 52,885 | 125,493 | 84,348 | 101,868 | 51,139 | - | 415,733 | 0.1 | 238,835 | 0.1
Confirmed exports loans (4) | 370 | 113 | 266 | 22,180 | 40,000 | 40,000 | 102,929 | - | 76,956 | -
Co-obligation from assignment of rural loan (4) | - | - | - | - | - | 77,062 | 77,062 | - | 88,896 | -
Total in 2018 | 43,929,488 | 27,821,277 | 21,834,387 | 48,718,736 | 59,456,078 | 216,750,815 | 418,510,781 | 100.0 |  |
Total in 2017 | 42,440,641 | 29,413,254 | 22,230,625 | 47,120,514 | 68,803,882 | 214,370,196 |  |  | 424,379,112 | 100.0

92 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

| On March 31 - R$ thousand
Non-performing loans
Past-due installments
1 to 30 | 31 to 60 | 61 to 90 | 91 to 180 | 181 to 540 | Total in 2018 (B) | % (5) | Total in 2017 (B) | % (5)
days | days | days | days | days
Discounted trade receivables and loans (1) | 1,179,811 | 1,470,923 | 971,461 | 2,634,619 | 3,748,002 | 10,004,816 | 82.9 | 13,147,597 | 79.7
Financing | 316,536 | 245,625 | 139,981 | 302,450 | 223,937 | 1,228,529 | 10.2 | 1,453,233 | 8.8
Agricultural and agribusiness loans | 24,500 | 32,571 | 18,188 | 105,665 | 80,885 | 261,809 | 2.2 | 359,695 | 2.2
Subtotal | 1,520,847 | 1,749,119 | 1,129,630 | 3,042,734 | 4,052,824 | 11,495,154 | 95.3 | 14,960,525 | 90.7
Leasing | 5,775 | 4,241 | 3,377 | 7,553 | 7,134 | 28,080 | 0.2 | 50,233 | 0.3
Advances on foreign exchange contracts (2) | 17,804 | 46,279 | 8,724 | 4,125 | 25 | 76,957 | 0.6 | 118,946 | 0.7
Subtotal | 1,544,426 | 1,799,639 | 1,141,731 | 3,054,412 | 4,059,983 | 11,600,191 | 96.1 | 15,129,704 | 91.7
Other receivables (3) | 55,906 | 7,202 | 4,950 | 289,611 | 117,215 | 474,884 | 3.9 | 1,370,182 | 8.3
Total in 2018 | 1,600,332 | 1,806,841 | 1,146,681 | 3,344,023 | 4,177,198 | 12,075,075 | 100.0 |  |
Total in 2017 | 2,244,416 | 1,906,739 | 1,539,175 | 5,093,875 | 5,715,681 |  |  | 16,499,886 | 100.0

| On March 31 - R$ thousand
Non-performing loans
Installments not yet due
1 to 30 | 31 to 60 | 61 to 90 | 91 to 180 | 181 to 360 | More than 360 | Total in 2018 (C) | % (5) | Total in 2017 (C) | % (5)
days | days | days | days | days | days
Discounted trade receivables and loans (1) | 715,086 | 592,020 | 563,054 | 1,256,018 | 2,062,532 | 5,229,094 | 10,417,804 | 61.0 | 12,678,111 | 67.2
Financing | 271,689 | 238,613 | 203,434 | 592,843 | 965,886 | 3,998,851 | 6,271,316 | 36.7 | 5,707,810 | 30.3
Agricultural and agribusiness loans | 1,071 | 2,538 | 3,765 | 55,859 | 75,770 | 123,058 | 262,061 | 1.5 | 281,955 | 1.5
Subtotal | 987,846 | 833,171 | 770,253 | 1,904,720 | 3,104,188 | 9,351,003 | 16,951,181 | 99.2 | 18,667,876 | 99.0
Leasing | 4,315 | 3,993 | 3,800 | 10,605 | 20,986 | 32,437 | 76,136 | 0.4 | 153,566 | 0.8
Subtotal | 992,161 | 837,164 | 774,053 | 1,915,325 | 3,125,174 | 9,383,440 | 17,027,317 | 99.6 | 18,821,442 | 99.8
Other receivables (3) | 5,191 | 4,178 | 3,754 | 9,956 | 13,316 | 23,413 | 59,808 | 0.4 | 45,522 | 0.2
Total in 2018 | 997,352 | 841,342 | 777,807 | 1,925,281 | 3,138,490 | 9,406,853 | 17,087,125 | 100.0 |  |
Total in 2017 | 1,183,049 | 1,015,446 | 871,496 | 2,282,963 | 3,648,384 | 9,865,626 |  |  | 18,866,964 | 100.0

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Notes to the Consolidated Financial Statements

| On March 31 - R$ thousand
Total
Total in 2018 (A+B+C) | % (5) | Total in 2017 (A+B+C) | % (5)
Discounted trade receivables and loans (1) | 170,499,631 | 38.1 | 177,814,455 | 38.8
Financing | 131,436,508 | 29.4 | 136,272,457 | 29.6
Agricultural and agribusiness loans | 21,249,594 | 4.7 | 22,190,282 | 4.8
Subtotal | 323,185,733 | 72.2 | 336,277,194 | 73.2
Leasing | 2,114,470 | 0.5 | 2,532,705 | 0.6
Advances on foreign exchange contracts (2) (Note 10a) | 11,954,632 | 2.7 | 10,161,539 | 2.2
Subtotal | 337,254,835 | 75.4 | 348,971,438 | 76.0
Other receivables (3) | 33,508,835 | 7.5 | 32,396,100 | 7.0
Total loans | 370,763,670 | 82.9 | 381,367,538 | 83.0
Sureties and guarantees (4) | 72,675,797 | 16.2 | 75,950,737 | 16.5
Loan assignment - real estate receivables certificate | 873,155 | 0.2 | 1,001,636 | 0.2
Acquisition of credit card receivables | 2,764,635 | 0.6 | 1,021,364 | 0.2
Loans available for import (4) | 415,733 | 0.1 | 238,835 | 0.1
Confirmed exports loans (4) | 102,929 | - | 76,956 | -
Co-obligation from assignment of rural loan (4) | 77,062 | - | 88,896 | -
Total in 2018 | 447,672,981 | 100.0 |  |
Total in 2017 |  |  | 459,745,962 | 100.0

(1) Including credit card loans and advances on credit card receivables of R$14,340,737 thousand (R$16,393,457 thousand in 2017);
(2) Advances on foreign exchange contracts are classified as a deduction from “Other Liabilities”;
(3) The item “Other Receivables” comprises receivables on sureties and guarantees honored, receivables on sale of assets, securities and credits receivable, income receivable from foreign exchange contracts and export contracts and credit card receivables (cash and installment purchases at merchants) totaling R$25,125,584 thousand (R$24,480,516 thousand in 2017);
(4) Recognized in off-balance sheet accounts; and
(5) Percentage of each type in relation to the total loan portfolio, including sureties and guarantee, loan assignment and acquisition of receivables.

94 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

b) By type and levels of risk

| On March 31 - R$ thousand
Levels of risk
AA | A | B | C | D | E | F | G | H | Total in 2018 | % (1) | Total in 2017 | % (1)
Discounted trade receivables and loans | 19,688,183 | 77,786,802 | 13,880,679 | 25,166,591 | 7,935,413 | 5,522,533 | 3,855,820 | 2,285,351 | 14,378,259 | 170,499,631 | 46.0 | 177,814,455 | 46.6
Financing | 78,731,302 | 19,481,606 | 14,868,202 | 9,493,506 | 2,462,421 | 2,314,175 | 1,142,623 | 293,386 | 2,649,287 | 131,436,508 | 35.5 | 136,272,457 | 35.7
Agricultural and agribusiness loans | 7,095,741 | 4,254,028 | 7,074,282 | 1,902,146 | 393,742 | 238,571 | 40,236 | 36,770 | 214,078 | 21,249,594 | 5.7 | 22,190,282 | 5.8
Subtotal | 105,515,226 | 101,522,436 | 35,823,163 | 36,562,243 | 10,791,576 | 8,075,279 | 5,038,679 | 2,615,507 | 17,241,624 | 323,185,733 | 87.2 | 336,277,194 | 88.1
Leasing | 281,365 | 419,877 | 1,200,498 | 50,194 | 30,658 | 25,286 | 10,314 | 11,879 | 84,399 | 2,114,470 | 0.6 | 2,532,705 | 0.7
Advances on foreign exchange contracts (2) | 4,949,987 | 2,637,588 | 1,824,832 | 1,994,682 | 67,234 | 331,488 | 1,320 | 16,881 | 130,620 | 11,954,632 | 3.2 | 10,161,539 | 2.7
Subtotal | 110,746,578 | 104,579,901 | 38,848,493 | 38,607,119 | 10,889,468 | 8,432,053 | 5,050,313 | 2,644,267 | 17,456,643 | 337,254,835 | 91.0 | 348,971,438 | 91.5
Other receivables | 4,568,387 | 21,110,068 | 2,874,874 | 3,591,071 | 237,162 | 135,108 | 50,831 | 37,560 | 903,774 | 33,508,835 | 9.0 | 32,396,100 | 8.5
Total in 2018 | 115,314,965 | 125,689,969 | 41,723,367 | 42,198,190 | 11,126,630 | 8,567,161 | 5,101,144 | 2,681,827 | 18,360,417 | 370,763,670 | 100.0 |  |
% | 31.1 | 33.9 | 11.2 | 11.4 | 3.0 | 2.3 | 1.4 | 0.7 | 5.0 | 100.0 |  |  |
Total in 2017 | 112,909,617 | 131,241,475 | 48,723,671 | 38,415,188 | 13,119,638 | 7,414,549 | 3,723,314 | 2,927,354 | 22,892,732 |  |  | 381,367,538 | 100.0
% | 29.6 | 34.4 | 12.8 | 10.1 | 3.4 | 1.9 | 1.0 | 0.8 | 6.0 |  |  | 100.0 |

(1) Percentage of each type in relation to the total loan portfolio, excluding sureties and guarantees, loan assignments, acquisition of receivables and co-obligation in rural loan assignments; and
(2) Note 10a.

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Notes to the Consolidated Financial Statements

c) Maturity ranges and levels of risk

| On March 31 - R$ thousand
Levels of risk
Non-performing loans
AA | A | B | C | D | E | F | G | H | Total in 2018 | % (1) | Total in 2017 | % (1)
Installments not yet due | - | - | 1,292,367 | 3,275,669 | 2,089,086 | 1,713,915 | 2,210,017 | 893,527 | 5,612,544 | 17,087,125 | 100.0 | 18,866,964 | 100.0
1 to 30 | - | - | 146,599 | 192,282 | 112,853 | 74,911 | 72,369 | 50,432 | 347,906 | 997,352 | 5.8 | 1,183,049 | 6.3
31 to 60 | - | - | 118,841 | 157,742 | 99,106 | 64,920 | 86,746 | 42,976 | 271,011 | 841,342 | 4.9 | 1,015,446 | 5.4
61 to 90 | - | - | 95,596 | 141,085 | 83,769 | 61,805 | 121,852 | 38,550 | 235,150 | 777,807 | 4.6 | 871,496 | 4.6
91 to 180 | - | - | 181,868 | 385,132 | 264,415 | 173,634 | 164,190 | 105,794 | 650,248 | 1,925,281 | 11.3 | 2,282,963 | 12.1
181 to 360 | - | - | 257,045 | 531,986 | 414,842 | 307,733 | 355,321 | 172,038 | 1,099,525 | 3,138,490 | 18.4 | 3,648,384 | 19.3
More than 360 | - | - | 492,418 | 1,867,442 | 1,114,101 | 1,030,912 | 1,409,539 | 483,737 | 3,008,704 | 9,406,853 | 55.0 | 9,865,626 | 52.3
Past-due installments (2) | - | - | 453,276 | 973,263 | 940,351 | 906,363 | 1,388,083 | 819,813 | 6,593,926 | 12,075,075 | 100.0 | 16,499,886 | 100.0
1 to 14 | - | - | 7,389 | 93,326 | 49,729 | 123,805 | 29,437 | 13,940 | 177,226 | 494,852 | 4.1 | 726,073 | 4.4
15 to 30 | - | - | 436,555 | 219,578 | 100,131 | 51,014 | 41,760 | 28,317 | 228,125 | 1,105,480 | 9.2 | 1,518,343 | 9.2
31 to 60 | - | - | 9,332 | 630,063 | 239,303 | 121,652 | 310,880 | 48,791 | 446,820 | 1,806,841 | 15.0 | 1,906,739 | 11.6
61 to 90 | - | - | - | 14,511 | 525,529 | 136,081 | 94,964 | 80,355 | 295,241 | 1,146,681 | 9.5 | 1,539,175 | 9.3
91 to 180 | - | - | - | 15,785 | 25,659 | 461,801 | 777,526 | 624,300 | 1,438,952 | 3,344,023 | 27.7 | 5,093,875 | 30.9
181 to 360 | - | - | - | - | - | 12,010 | 133,516 | 24,110 | 3,877,133 | 4,046,769 | 33.4 | 5,522,627 | 33.4
More than 360 | - | - | - | - | - | - | - | - | 130,429 | 130,429 | 1.1 | 193,054 | 1.2
Subtotal | - | - | 1,745,643 | 4,248,932 | 3,029,437 | 2,620,278 | 3,598,100 | 1,713,340 | 12,206,470 | 29,162,200 |  | 35,366,850 |
Specific provision | - | - | 17,456 | 127,468 | 302,944 | 786,084 | 1,799,050 | 1,199,338 | 12,206,470 | 16,438,810 |  | 21,500,402 |

(1) Percentage of maturities by installment; and
(2) For transactions with terms of more than 36 months, past-due periods are doubled, as permitted by Resolution No. 2,682/99.

96 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

| On March 31 - R$ thousand
Levels of risk
Performing loans
AA | A | B | C | D | E | F | G | H | Total in 2018 | % (1) | Total in 2017 | % (1)
Installments not yet due | 115,314,965 | 125,689,969 | 39,977,724 | 37,949,258 | 8,097,193 | 5,946,883 | 1,503,044 | 968,487 | 6,153,947 | 341,601,470 | 100.0 | 346,000,688 | 100.0
1 to 30 | 8,580,939 | 20,440,637 | 3,240,805 | 5,546,741 | 635,783 | 614,824 | 125,274 | 80,629 | 719,595 | 39,985,227 | 11.7 | 38,089,483 | 11.0
31 to 60 | 4,914,005 | 11,927,867 | 2,780,383 | 4,247,193 | 936,930 | 1,142,783 | 53,229 | 70,043 | 326,857 | 26,399,290 | 7.7 | 27,821,296 | 8.0
61 to 90 | 5,632,022 | 7,847,327 | 2,251,680 | 3,303,167 | 261,477 | 129,575 | 37,702 | 29,323 | 186,329 | 19,678,602 | 5.8 | 20,002,807 | 5.8
91 to 180 | 12,166,978 | 15,905,396 | 4,991,414 | 5,796,063 | 663,416 | 1,144,461 | 145,209 | 87,391 | 653,223 | 41,553,551 | 12.2 | 39,517,923 | 11.4
181 to 360 | 16,038,865 | 19,538,699 | 6,540,641 | 5,864,284 | 1,098,476 | 412,535 | 166,530 | 369,800 | 672,095 | 50,701,925 | 14.8 | 53,885,965 | 15.6
More than 360 | 67,982,156 | 50,030,043 | 20,172,801 | 13,191,810 | 4,501,111 | 2,502,705 | 975,100 | 331,301 | 3,595,848 | 163,282,875 | 47.8 | 166,683,214 | 48.2
Generic provision | - | 628,450 | 399,778 | 1,138,478 | 809,720 | 1,784,065 | 751,522 | 677,941 | 6,153,947 | 12,343,901 |  | 10,679,397 |
Total in 2018 (2) | 115,314,965 | 125,689,969 | 41,723,367 | 42,198,190 | 11,126,630 | 8,567,161 | 5,101,144 | 2,681,827 | 18,360,417 | 370,763,670 |  |  |
Existing provision | - | 710,158 | 451,003 | 1,411,204 | 1,708,812 | 5,391,181 | 4,975,430 | 2,661,010 | 18,360,417 | 35,669,215 |  |  |
Minimum required provision | - | 628,450 | 417,234 | 1,265,946 | 1,112,664 | 2,570,149 | 2,550,572 | 1,877,279 | 18,360,417 | 28,782,711 |  |  |
Excess provision | - | 81,708 | 33,769 | 145,258 | 596,148 | 2,821,032 | 2,424,858 | 783,731 | - | 6,886,504 |  |  |
Total in 2017 (2) | 112,909,617 | 131,241,475 | 48,723,671 | 38,415,188 | 13,119,638 | 7,414,549 | 3,723,314 | 2,927,354 | 22,892,732 |  |  | 381,367,538 |
Existing provision | - | 736,662 | 534,473 | 1,328,092 | 2,020,565 | 5,151,727 | 3,510,595 | 2,911,884 | 22,892,732 |  |  | 39,086,730 |
Minimum required provision | - | 640,820 | 448,150 | 1,072,450 | 1,159,854 | 2,091,416 | 1,839,722 | 2,034,655 | 22,892,732 |  |  | 32,179,799 |
Excess provision | - | 95,842 | 86,323 | 255,642 | 860,711 | 3,060,311 | 1,670,873 | 877,229 | - |  |  | 6,906,931 |

(1) Percentage of maturities by installment; and
(2) The total includes performing loans of R$341,601,470 thousand (R$346,000,688 thousand in 2017) and non-performing loans of R$29,162,200 thousand (R$35,366,850 thousand in 2017).

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Notes to the Consolidated Financial Statements

d) Concentration of loans

| On March 31 - R$ thousand
2018 | % (1) | 2017 | % (1)
Largest borrower | 8,905,999 | 2.4 | 8,328,068 | 2.2
10 largest borrowers | 29,579,665 | 8.0 | 32,249,584 | 8.5
20 largest borrowers | 43,792,696 | 11.8 | 48,440,752 | 12.7
50 largest borrowers | 65,790,253 | 17.7 | 71,128,705 | 18.7
100 largest borrowers | 82,332,371 | 22.2 | 88,904,388 | 23.3

(1) Percentage on total portfolio (as defined by Bacen).

e) By economic sector

| On March 31 - R$ thousand
2018 | % | 2017 | %
Public sector | 9,178,099 | 2.5 | 8,328,075 | 2.2
Oil, derivatives and aggregate activities | 8,905,999 | 2.4 | 8,328,068 | 2.2
Production and distribution of electricity | 2,589 | - | 7 | -
Other industries | 269,511 | 0.1 | - | -
Private sector | 361,585,571 | 97.5 | 373,039,463 | 97.8
Companies | 185,239,543 | 50.0 | 202,879,865 | 53.2
Real estate and construction activities | 28,407,869 | 7.7 | 33,523,368 | 8.8
Retail | 23,441,178 | 6.3 | 22,605,796 | 5.9
Services | 17,872,147 | 4.8 | 18,646,469 | 4.9
Transportation and concession | 14,993,680 | 4.0 | 15,907,408 | 4.2
Automotive | 9,512,839 | 2.6 | 13,959,690 | 3.7
Food products | 9,156,100 | 2.5 | 10,793,423 | 2.8
Wholesale | 8,923,004 | 2.4 | 9,805,544 | 2.6
Production and distribution of electricity | 6,661,671 | 1.8 | 7,795,612 | 2.0
Iron and steel industry | 7,029,045 | 1.9 | 7,418,235 | 1.9
Sugar and alcohol | 7,025,419 | 1.9 | 6,847,660 | 1.8
Holding | 3,673,288 | 1.0 | 6,052,812 | 1.6
Capital goods | 3,123,320 | 0.8 | 4,730,412 | 1.2
Pulp and paper | 2,743,598 | 0.7 | 3,867,612 | 1.0
Chemical | 3,408,867 | 0.9 | 3,636,988 | 1.0
Cooperative | 3,390,135 | 0.9 | 3,570,089 | 0.9
Financial | 2,655,094 | 0.7 | 3,201,363 | 0.8
Leisure and tourism | 2,557,819 | 0.7 | 2,967,400 | 0.8
Textiles | 1,788,534 | 0.5 | 2,436,061 | 0.6
Agriculture | 1,807,053 | 0.5 | 2,463,316 | 0.6
Oil, derivatives and aggregate activities | 2,048,175 | 0.6 | 2,466,452 | 0.6
Other industries | 25,020,708 | 6.7 | 20,184,155 | 5.3
Individuals | 176,346,028 | 47.6 | 170,159,598 | 44.6
Total | 370,763,670 | 100.0 | 381,367,538 | 100.0

98 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Notes to the Consolidated Financial Statements

f) Breakdown of loans and allowance for loan losses

Level of risk | On March 31 - R$ thousand
Portfolio balance
Non-performing loans | Performing loans | Total | % (1) | % 2018 YTD (2) | % 2017 YTD (2)
Installments past due | Installments not yet due | Total - non-performing loans
AA | - | - | - | 115,314,965 | 115,314,965 | 31.1 | 31.1 | 29.6
A | - | - | - | 125,689,969 | 125,689,969 | 33.9 | 65.0 | 64.0
B | 453,276 | 1,292,367 | 1,745,643 | 39,977,724 | 41,723,367 | 11.2 | 76.2 | 76.8
C | 973,263 | 3,275,669 | 4,248,932 | 37,949,258 | 42,198,190 | 11.4 | 87.6 | 86.9
Subtotal | 1,426,539 | 4,568,036 | 5,994,575 | 318,931,916 | 324,926,491 | 87.6 |  |
D | 940,351 | 2,089,086 | 3,029,437 | 8,097,193 | 11,126,630 | 3.0 | 90.6 | 90.3
E | 906,363 | 1,713,915 | 2,620,278 | 5,946,883 | 8,567,161 | 2.3 | 92.9 | 92.2
F | 1,388,083 | 2,210,017 | 3,598,100 | 1,503,044 | 5,101,144 | 1.4 | 94.3 | 93.2
G | 819,813 | 893,527 | 1,713,340 | 968,487 | 2,681,827 | 0.7 | 95.0 | 94.0
H | 6,593,926 | 5,612,544 | 12,206,470 | 6,153,947 | 18,360,417 | 5.0 | 100.0 | 100.0
Subtotal | 10,648,536 | 12,519,089 | 23,167,625 | 22,669,554 | 45,837,179 | 12.4 |  |
Total in 2018 | 12,075,075 | 17,087,125 | 29,162,200 | 341,601,470 | 370,763,670 | 100.0 |  |
% | 3.3 | 4.6 | 7.9 | 92.1 | 100.0 |  |  |
Total in 2017 | 16,499,886 | 18,866,964 | 35,366,850 | 346,000,688 | 381,367,538 |  |  |
% | 4.3 | 5.0 | 9.3 | 90.7 | 100.0 |  |  |

(1) Percentage of level of risk in relation to the total portfolio; and
(2) Cumulative percentage of level of risk on total portfolio.

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Notes to the Consolidated Financial Statements

Level of risk | On March 31 - R$ thousand
Provision
% Minimum provisioning required | Minimum required | Excess | Existing | % 2018 YTD (1) | % 2017 YTD (1)
Specific | Generic | Total
Installments past due | Installments not yet due | Total specific
AA | - | - | - | - | - | - | - | - | - | -
A | 0.5 | - | - | - | 628,450 | 628,450 | 81,708 | 710,158 | 0.6 | 0.6
B | 1.0 | 4,533 | 12,923 | 17,456 | 399,778 | 417,234 | 33,769 | 451,003 | 1.1 | 1.1
C | 3.0 | 29,198 | 98,270 | 127,468 | 1,138,478 | 1,265,946 | 145,258 | 1,411,204 | 3.3 | 3.5
Subtotal |  | 33,731 | 111,193 | 144,924 | 2,166,706 | 2,311,630 | 260,735 | 2,572,365 | 0.8 | 0.8
D | 10.0 | 94,035 | 208,909 | 302,944 | 809,720 | 1,112,664 | 596,148 | 1,708,812 | 15.4 | 15.4
E | 30.0 | 271,909 | 514,175 | 786,084 | 1,784,065 | 2,570,149 | 2,821,032 | 5,391,181 | 62.9 | 69.5
F | 50.0 | 694,041 | 1,105,009 | 1,799,050 | 751,522 | 2,550,572 | 2,424,858 | 4,975,430 | 97.5 | 94.3
G | 70.0 | 573,869 | 625,469 | 1,199,338 | 677,941 | 1,877,279 | 783,731 | 2,661,010 | 99.2 | 99.5
H | 100.0 | 6,593,926 | 5,612,544 | 12,206,470 | 6,153,947 | 18,360,417 | - | 18,360,417 | 100.0 | 100.0
Subtotal |  | 8,227,780 | 8,066,106 | 16,293,886 | 10,177,195 | 26,471,081 | 6,625,769 | 33,096,850 | 72.2 | 72.9
Total in 2018 |  | 8,261,511 | 8,177,299 | 16,438,810 | 12,343,901 | 28,782,711 | 6,886,504 | 35,669,215 | 9.6 |
% |  | 23.2 | 22.9 | 46.1 | 34.6 | 80.7 | 19.3 | 100.0 |  |
Total in 2017 |  | 11,996,266 | 9,504,136 | 21,500,402 | 10,679,397 | 32,179,799 | 6,906,931 | 39,086,730 |  | 10.2
% |  | 30.7 | 24.3 | 55.0 | 27.3 | 82.3 | 17.7 | 100.0 |  |

(1) Percentage of existing provision in relation to total portfolio, by level of risk.

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Notes to the Consolidated Financial Statements

g) Changes in allowance for loan losses

| R$ thousand
2018 | 2017
- Specific provision (1) | 16,828,454 | 22,386,423
- Generic provision (2) | 12,699,936 | 10,737,580
- Excess provision (3) (4) | 6,895,477 | 7,490,351
- Loans | 6,895,477 | 4,429,361
- Guarantees provided (4) | - | 3,060,990
Opening balance on December 31 | 36,423,867 | 40,614,354
Accounting for allowance for loan losses (Note 9h-1) (5) | 4,579,695 | 8,281,361
Accounting for/reversal of provisions for guarantees provided (4) | - | (3,060,990)
Net write-offs/other | (5,334,347) | (6,747,995)
Closing balance on March 31 | 35,669,215 | 39,086,730
- Specific provision (1) | 16,438,810 | 21,500,402
- Generic provision (2) | 12,343,901 | 10,679,397
- Excess provision (3) | 6,886,504 | 6,906,931

(1) For contracts with installments past due for more than 14 days;
(2) Recognized based on the customer/transaction classification and therefore not included in the preceding item;
(3) The excess provision is recognized based on Management’s experience and the expectation in relation to the loan portfolio, to determine the total provision deemed sufficient to cover specific and general credit risk, when considered together with the provision calculated based on levels of risk and the corresponding minimum percentage in the provision established by Resolution No. 2,682/99. The excess provision per customer was classified according to the level of risk (Note 9f);
(4) Up to December 31, 2016, included the constitution of provision for guarantees provided, encompassing sureties, guarantees, credit letters, and standby letter of credit, which comprises the concept of “excess” provision that totaled R$3,060,990 thousand. In accordance with Resolution No. 4,512/16, in the first quarter of 2018, part of this balance (R$604,623 thousand) was allocated to a specific account under "Other Liabilities - Sundry" (Note 20b), and the remaining balance (R$2,456,367 thousand) was allocated to “Excess Provision - Loans”; and
(5) Includes, in the first quarter of 2018, the formation of allowance for loan losses, in the amount of R$2,456,367 thousand, as a result of the adequacy of the provision for guarantees provided, already mentioned in the previous item.

h) Allowance for Loan Losses expense net of amounts recovered

Expenses with the allowance for loan losses, net of credit write-offs recovered, are as follows.

| Accrued on March 31 - R$ thousand
2018 | 2017
Amount recognized (1) | 4,579,695 | 5,824,994
Amount recovered (2) (3) | (1,436,599) | (1,536,975)
Allowance for Loan Losses expense net of amounts recovered | 3,143,096 | 4,288,019

(1) In the first quarter of 2017, it refers to the formation of allowance for loan losses, in the amount of R$8,281,361 thousand, excluding the portion related to the adequacy of the provision for guarantees provided, in the amount of R$2,456,367 thousand (Note 9g);

(2) Classified in income from loans (Note 9j); and
(3) In the first quarter of 2018, credit was granted for operations already written-off for losses, without the retention of risks and benefits, in the amount of R$5,323,120 thousand (2017 – R$1,955,173 thousand), whose sale value was R$110,189 thousand (2017 – R$9,789 thousand).

i) Changes in the renegotiated portfolio

| On March 31 - R$ thousand
2018 | 2017
Opening balance on December 31 | 17,183,869 | 17,501,423
Amount renegotiated | 3,016,875 | 4,235,457
Amount received | (2,196,324) | (2,532,743)
Write-offs | (1,527,163) | (1,305,113)
Closing balance on March 31 | 16,477,257 | 17,899,024
Allowance for loan losses | 12,595,196 | 13,482,952
Percentage on renegotiated portfolio | 76.4% | 75.3%

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Notes to the Consolidated Financial Statements

j) Income from loans and leases

| Accrued on March 31 - R$ thousand
2018 | 2017
Discounted trade receivables and loans | 11,025,283 | 12,729,619
Financing | 3,775,530 | 4,356,223
Agricultural and agribusiness loans | 432,306 | 466,603
Subtotal | 15,233,119 | 17,552,445
Recovery of credits charged-off as losses | 1,436,599 | 1,536,975
Subtotal | 16,669,718 | 19,089,420
Leasing, net of expenses | 72,851 | 74,384
Total | 16,742,569 | 19,163,804

10) OTHER RECEIVABLES

a) Foreign exchange portfolio

Balances

| On March 31 - R$ thousand
2018 | 2017
Assets – other receivables |  |
Exchange purchases pending settlement | 19,288,564 | 15,849,423
Foreign exchange and forward documents in foreign currencies | 42,717 | -
Exchange sale receivables | 7,861,940 | 5,076,161
(-) Advances in domestic currency received | (431,493) | (828,579)
Income receivable on advances granted | 157,929 | 147,446
Total | 26,919,657 | 20,244,451
Liabilities – other liabilities |  |
Exchange sales pending settlement | 8,298,649 | 4,991,315
Exchange purchase payables | 18,907,511 | 16,128,123
(-) Advances on foreign exchange contracts | (11,954,632) | (10,161,539)
Other | 3,610 | 5,671
Total | 15,255,138 | 10,963,570
Net foreign exchange portfolio | 11,664,519 | 9,280,881
Off-balance-sheet accounts: |  |
- Loans available for import | 415,733 | 238,835
- Confirmed exports loans | 102,929 | 76,956

Foreign exchange results

Adjusted foreign exchange results for presentation purposes

| Accrued on March 31 - R$ thousand
2018 | 2017
Foreign exchange income | (98,572) | 39,554
Adjustments: |  |
- Income on foreign currency financing (1) | 35,552 | 37,788
- Income on export financing (1) | 360,592 | 592,168
- Income on foreign investments (2) | 7,146 | 2,367
- Expenses of liabilities with foreign bankers (3) (Note 16c) | (145,446) | (8,591)
- Funding expenses (4) | (370,896) | (470,747)
- Other (5) | 501,736 | 235,451
Total adjustments | 388,684 | 388,436
Adjusted foreign exchange income | 290,112 | 427,990

(1) Recognized in “Income from loans”;
(2) Recognized in “Income from operations with securities”;
(3) Related to funds for financing of advances on foreign exchange contracts and import financing, recognized in “Borrowing and on-lending expenses”;
(4) Refers to funding expenses of investments in foreign exchange; and
(5) Primarily includes the exchange rate variations of resources invested in foreign currency.

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Notes to the Consolidated Financial Statements

b) Sundry

| On March 31 - R$ thousand
2018 | 2017
Deferred tax assets (Note 33c) | 52,397,447 | 51,406,389
Credit card operations | 27,890,219 | 25,501,880
Debtors for escrow deposits | 17,944,848 | 16,708,663
Trade and credit receivables | 8,160,961 | 7,285,871
Prepaid taxes | 10,668,016 | 6,940,118
Other debtors | 4,933,673 | 3,315,014
Payments to be reimbursed | 792,134 | 724,717
Receivables from sale of assets | 215,199 | 132,221
Other | 726,864 | 561,126
Total | 123,729,361 | 112,575,999

11) OTHER ASSETS

a) Foreclosed assets/other

| On March 31 - R$ thousand
Cost | Provision for losses | Cost net of provision
2018 | 2017
Real estate | 1,579,784 | (348,941) | 1,230,843 | 1,359,302
Vehicles and similar | 641,557 | (361,903) | 279,654 | 326,734
Goods subject to special conditions | 690,742 | (690,742) | - | -
Inventories/warehouse | 28,299 | - | 28,299 | 29,860
Machinery and equipment | 13,251 | (11,885) | 1,366 | 4,553
Other | 23,223 | (22,010) | 1,213 | 2,952
Total in 2018 | 2,976,856 | (1,435,481) | 1,541,375 |
Total in 2017 | 3,015,711 | (1,292,310) |  | 1,723,401

b) Prepaid expenses

| On March 31 - R$ thousand
2018 | 2017
Deferred insurance acquisition costs (1) | 1,032,506 | 1,717,568
Commission on the placement of loans and financing (2) | 413,277 | 558,204
Advertising and marketing expenses (3) | 110,302 | 127,039
Other (4) | 1,094,601 | 1,146,635
Total | 2,650,686 | 3,549,446

(1) Commissions paid to brokers and representatives on sale of insurance, pension plans and capitalization bond products;
(2) Commissions paid to storeowners, car dealers and correspondent banks – payroll-deductible loans;
(3) Prepaid expenses of future advertising and marketing campaigns on media; and
(4) It includes, primarily: (i) anticipation of commissions concerning the operational agreement to offer credit cards and other products; and (ii) card issue costs.

12) INVESTMENTS

a) Composition of investments in the consolidated financial statements

Associates and Jointly Controlled Companies | On March 31 - R$ thousand
2018 | 2017
- Cielo S.A. | 4,299,960 | 4,141,794
- Elo Participações S.A. | 1,112,249 | 967,798
- Fleury S.A. | 687,796 | 614,398
- IRB-Brasil Resseguros S.A. | 498,769 | 650,133
- Swiss Re Corporate Solutions Brasil | 459,742 | -
- Aquarius Participações S.A. | 290,897 | 285,560
- Haitong Banco de Investimento do Brasil S.A. | 107,174 | 124,189
- Others | 399,070 | 368,093
Total investment in Associates and Jointly Controlled Companies – in Brazil and Overseas | 7,855,657 | 7,151,965
- Tax incentives | 234,717 | 234,717
- Other investments | 168,140 | 170,692
Provision for: |  |
- Tax incentives | (207,933) | (207,933)
- Other investments | (46,802) | (46,820)
Total investments | 8,003,779 | 7,302,621

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Notes to the Consolidated Financial Statements

b) The income/expense from the equity method accounting of investments was recognized in the statement of income, under “Share of profit (loss) of unconsolidated and jointly controlled companies”, and are demonstrated below:

Companies | Accrued on March 31 - R$ thousand
Capital | Shareholders’ equity adjusted | Number of shares/quotas held (in thousands) | Equity interest consolidated on capital stock | Adjusted income | Equity accounting adjustments (1)
Ordinary (ON) | Preferential (PN) Preferential (PN) | 2018 | 2017
- Elo Participações S.A. (2) | 930,000 | 2,224,053 | 372 | - | 50.01% | 135,191 | 67,609 | 48,093
- Aquarius Participações S.A. | 518,592 | 593,667 | 254,110 | - | 49.00% | 55,649 | 27,268 | 21,928
- Haitong Banco de Investimento do Brasil S.A. | 420,000 | 535,870 | 12,734 | 12,734 | 20.00% | 4,760 | 952 | (3,636)
- Others (3) |  |  |  |  |  |  | 332,016 | 362,150
Share of profit (loss) of unconsolidated and jointly controlled companies |  |  |  |  |  |  | 427,845 | 428,535

(1) The adjustment considers income calculated periodically by the companies and includes equity variations recognized by the investees not recognized in profit or loss, as well as alignment of accounting practice adjustments, where applicable;
(2) Investment in jointly controlled companies; and
(3) Includes, primarily, the adjustments resulting from the assessment by the equity method in public companies (Cielo S.A., Fleury S.A. and IRB-Brasil Resseguros S.A.).

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Notes to the Consolidated Financial Statements

13) PREMISES AND EQUIPMENT

| On March 31 - R$ thousand
Annual rate | Cost | Depreciation | Cost net of depreciation
2018 | 2017
Property and equipment: |  |  |  |  |
- Buildings | 4% | 2,284,355 | (657,195) | 1,627,160 | 1,188,977
- Land | - | 825,445 | - | 825,445 | 854,331
Facilities, furniture and premises and equipment | 10% | 5,140,659 | (2,764,356) | 2,376,303 | 2,595,214
Security and communication systems | 10% | 354,229 | (218,232) | 135,997 | 134,133
Data processing systems | 20 to 40% | 7,516,771 | (4,755,833) | 2,760,938 | 2,599,505
Transportation systems | 10 to 20% | 88,198 | (51,306) | 36,892 | 44,030
Fixed Assets in course | - | 48,913 | - | 48,913 | 151,083
Total in 2018 |  | 16,258,570 | (8,446,922) | 7,811,648 |
Total in 2017 |  | 14,966,721 | (7,399,448) |  | 7,567,273

The fixed assets to shareholders’ equity ratio is 43.1% when considering only the companies and payment institutions within the economic group (the “Prudential Conglomerate”), where the maximum limit is 50.0%.

14) INTANGIBLE ASSETS

a) Goodwill

The goodwill recognized from investment acquisitions totaled R$8,571,257 thousand, net of accumulated amortization, as applicable, of which: (i) R$1,835,345 thousand recognized in ‘Permanent Assets – Investments’ arose from the acquisition of shares of associates and jointly controlled companies (Cielo/Fleury/Swiss Re), which will be amortized as realized; and (ii) R$6,735,912 thousand arose from the acquisition of shares of subsidiaries/shared control, relating to the future profitability/client portfolio/fair value, which is amortized in up to twenty years, net of accrued amortizations, if applicable, recognized in Fixed Assets – Intangible Assets.

During the first quarter of 2018, goodwill was amortized totaling R$611,513 thousand (R$586,206 thousand in 2017) (Note 28).

b) Intangible assets

Acquired intangible assets consist of:

| On March 31 - R$ thousand
Rate of Amortization (1) | Cost | Amortization | Cost net of amortization
2018 | 2017
Acquisition of financial services rights | Contract | 5,913,051 | (2,000,105) | 3,912,946 | 2,310,456
Software (2) | 20% | 11,615,405 | (8,011,187) | 3,604,218 | 3,851,980
Goodwill (3) | Up to 20% | 11,492,576 | (4,756,664) | 6,735,912 | 9,257,821
Other | Contract | 77,280 | (43,592) | 33,688 | 52,085
Total in 2018 |  | 29,098,312 | (14,811,548) | 14,286,764 |
Total in 2017 |  | 26,690,889 | (11,218,547) |  | 15,472,342

(1) Intangible assets are amortized over an estimated period of economic benefit and recognized in “other administrative expenses” and “other operating expenses”, where applicable;
(2) Software acquired and/or developed by specialized companies; and
(3) On March 31, 2018, primarily composed of goodwill on the acquisition of equity interest in Bradescard - R$587,442 thousand, Odontoprev - R$74,909 thousand, Bradescard Mexico - R$16,500 thousand, Europ Assistance - R$2,642 thousand, Bradesco BBI S.A. - R$108,674 thousand; and Kirton Bank - R$5,934,546 thousand.

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Notes to the Consolidated Financial Statements

c) Changes in intangible assets by type

| On March 31 - R$ thousand
Opening balance | Additions / (reductions) | Amortization for the period | Closing balance
Acquisition of financial services rights | 4,051,898 | 128,977 | (267,929) | 3,912,946
Software | 3,790,418 | 143,414 | (329,614) | 3,604,218
Goodwill – Future profitability | 3,761,412 | - | (215,884) | 3,545,528
Goodwill – Based on intangible assets and other reasons | 2,548,412 | - | (233,389) | 2,315,023
Goodwill – Difference in fair value of assets/liabilities | 1,048,717 | (11,116) | (162,240) | 875,361
Other | 32,993 | 1,989 | (1,294) | 33,688
Total in 2018 | 15,233,850 | 263,264 | (1,210,350) | 14,286,764
Total in 2017 | 16,338,785 | 305,830 | (1,172,273) | 15,472,342

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Notes to the Consolidated Financial Statements

15) DEPOSITS, SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND FUNDS FROM ISSUANCE OF SECURITIES

a) Deposits

| On March 31 - R$ thousand
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | 2018 | 2017
● Demand deposits (1) | 33,186,022 | - | - | - | 33,186,022 | 30,564,866
● Savings deposits (1) | 101,777,091 | - | - | - | 101,777,091 | 94,352,635
● Interbank deposits | 67,872 | 1,325,288 | 214,623 | 40,116 | 1,647,899 | 570,915
● Time deposits (2) | 8,618,060 | 9,846,618 | 11,464,295 | 105,118,610 | 135,047,583 | 109,966,922
Total in 2018 | 143,649,045 | 11,171,906 | 11,678,918 | 105,158,726 | 271,658,595 |
% | 52.9 | 4.1 | 4.3 | 38.7 | 100.0 |
Total in 2017 | 133,704,439 | 16,489,220 | 8,489,672 | 76,772,007 |  | 235,455,338
% | 56.8 | 7.0 | 3.6 | 32.6 |  | 100.0

(1) Classified as 1 to 30 days, not considering average historical turnover; and
(2) Considers the actual maturities of the investments.

b) Securities sold under agreements to repurchase

| On March 31 - R$ thousand
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | 2018 | 2017
Own portfolio | 89,979,782 | 3,598,329 | 10,572,118 | 4,098,070 | 108,248,299 | 100,381,732
● Government securities | 76,459,565 | 187,898 | 87,787 | - | 76,735,250 | 18,192,558
● Debentures of own issuance | 5,386,748 | 2,764,516 | 10,451,436 | 3,592,012 | 22,194,712 | 74,120,189
● Foreign | 8,133,469 | 645,915 | 32,895 | 506,058 | 9,318,337 | 8,068,985
Third-party portfolio (1) | 109,937,122 | 481,890 | - | - | 110,419,012 | 145,111,284
Unrestricted portfolio (1) | 7,259,864 | 2,956,817 | - | - | 10,216,681 | 9,286,510
Total in 2018 | 207,176,768 | 7,037,036 | 10,572,118 | 4,098,070 | 228,883,992 |
% | 90.5 | 3.1 | 4.6 | 1.8 | 100.0 |
Total in 2017 | 191,534,391 | 28,219,635 | 17,868,381 | 17,157,119 |  | 254,779,526
% | 75.2 | 11.1 | 7.0 | 6.7 |  | 100.0

(1) Represented by government securities.

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Notes to the Consolidated Financial Statements

c) Funds from issuance of securities

| On March 31 - R$ thousand
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | 2018 | 2017
Securities – Brazil: |  |  |  |  |  |
- Financial bills | 4,031,063 | 19,725,808 | 22,010,319 | 55,860,774 | 101,627,964 | 102,262,039
- Letters of credit for real estate | 1,805,597 | 12,170,774 | 6,441,674 | 5,937,330 | 26,355,375 | 25,622,902
- Letters of credit for agribusiness | 627,720 | 6,067,506 | 2,861,542 | 1,735,255 | 11,292,023 | 9,100,798
Subtotal | 6,464,380 | 37,964,088 | 31,313,535 | 63,533,359 | 139,275,362 | 136,985,739
Securities – Overseas: |  |  |  |  |  |
- Securitization of future flow of money orders received from overseas | 9,473 | 504,901 | 496,592 | 1,201,901 | 2,212,867 | 2,748,743
- MTN Program Issues (1) | 8,322 | 63,067 | - | 604,334 | 675,723 | 243,529
- Issuance costs | - | - | - | (18,774) | (18,774) | (25,673)
Subtotal | 17,795 | 567,968 | 496,592 | 1,787,461 | 2,869,816 | 2,966,599
Structured Operations Certificates | 9,366 | 63,597 | 209,347 | 162,338 | 444,648 | 350,515
Total in 2018 | 6,491,541 | 38,595,653 | 32,019,474 | 65,483,158 | 142,589,826 |
% | 4.5 | 27.1 | 22.5 | 45.9 | 100.0 |
Total in 2017 | 8,834,992 | 45,087,078 | 36,547,494 | 49,833,289 |  | 140,302,853
% | 6.3 | 32.1 | 26.0 | 35.6 |  | 100.0

(1) Issuance of securities on the international market to invest in foreign exchange transactions, pre-export financing, import financing and working capital financing, predominately in the medium and long-term.

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Notes to the Consolidated Financial Statements

d) Net movement of funds from issuance of securities

| R$ thousand
2018 | 2017
Opening balance on December 31 | 135,011,308 | 150,807,358
Issuance | 23,551,222 | 6,848,053
Interest | 2,182,416 | 4,166,466
Settlement and interest payments | (18,169,821) | (21,357,191)
Exchange variation | 14,701 | (161,833)
Closing balance on March 31 | 142,589,826 | 140,302,853

e) Cost for market funding and inflation and interest adjustments of technical provisions for insurance, pension plans and capitalization bonds

| Accrued on March 31 - R$ thousand
2018 | 2017
Savings deposits | 1,170,820 | 1,603,830
Time deposits | 1,188,934 | 2,355,177
Securities sold under agreements to repurchase | 4,147,952 | 6,828,979
Funds from issuance of securities | 2,182,416 | 4,166,466
Subordinated debts (Note 18) | 887,749 | 1,515,183
Other funding expenses | 156,248 | 150,184
Subtotal | 9,734,119 | 16,619,819
Cost for inflation and interest adjustment of technical provisions of insurance, pension plans and capitalization bonds | 3,821,387 | 5,972,523
Total | 13,555,506 | 22,592,342

16) BORROWING AND ON-LENDING

a) Borrowing

| On March 31 - R$ thousand
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | 2018 | 2017
In Brazil - Other Institutions | 338 | - | - | 1,894 | 2,232 | 11,780
Overseas | 1,839,741 | 11,684,166 | 4,477,807 | 1,447,881 | 19,449,595 | 22,077,344
Total in 2018 | 1,840,079 | 11,684,166 | 4,477,807 | 1,449,775 | 19,451,827 |
% | 9.5 | 60.1 | 23.0 | 7.4 | 100.0 |
Total in 2017 | 2,221,626 | 11,242,105 | 5,869,553 | 2,755,840 |  | 22,089,124
% | 10.1 | 50.8 | 26.6 | 12.5 |  | 100.0

b) On-lending

| On March 31 - R$ thousand
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | 2018 | 2017
In Brazil | 813,295 | 4,900,168 | 3,920,417 | 18,649,050 | 28,282,930 | 34,328,314
- FINAME | 539,429 | 2,559,300 | 2,512,536 | 10,305,278 | 15,916,543 | 19,934,541
- BNDES | 273,674 | 2,340,868 | 1,333,683 | 8,343,772 | 12,291,997 | 14,273,869
- National Treasury | - | - | 72,879 | - | 72,879 | 118,317
- Other institutions | 192 | - | 1,319 | - | 1,511 | 1,587
Total in 2018 | 813,295 | 4,900,168 | 3,920,417 | 18,649,050 | 28,282,930 |
% | 2.9 | 17.3 | 13.9 | 65.9 | 100.0 |
Total in 2017 | 997,761 | 5,043,169 | 4,801,059 | 23,486,325 |  | 34,328,314
% | 2.9 | 14.7 | 14.0 | 68.4 |  | 100.0

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Notes to the Consolidated Financial Statements

c) Borrowing and on-lending expenses

| Accrued on March 31 - R$ thousand
2018 | 2017
Borrowing: |  |
- In Brazil | 91,094 | 294,021
- Overseas | 308,756 | (1,424,174)
- Exchange variation from assets and liabilities overseas | (105,943) | 763,524
Subtotal borrowing | 293,907 | (366,629)
On-lending in Brazil: |  |
- BNDES | 237,628 | 304,418
- FINAME | 171,619 | 159,744
- National Treasury | 1,265 | 1,981
- Other institutions | 1 | 11
On-lending overseas: |  |
- Payables to foreign bankers (Note 10a) | 145,446 | 8,591
Subtotal on-lending | 555,959 | 474,745
Total | 849,866 | 108,116

17) PROVISIONS, CONTINGENT ASSETS AND LIABILITIES AND LEGAL OBLIGATIONS – TAX AND SOCIAL SECURITY

a) Contingent assets

Contingent assets are not recognized in the financial statements. However, there are ongoing proceedings where the chance of success is considered probable, but the amounts are not material, such as: a) Social Integration Program (PIS), Bradesco has made a claim to offset PIS against Gross Operating Income, paid under Decree-Laws No. 2,445/88 and No. 2,449/88, regarding the payment that exceeded the amount due under Supplementary Law No. 07/70 (PIS Repique); and b) other taxes, the legality and/or constitutionality of which is being challenged, where the decision may lead to reimbursement of amounts paid.

b) Provisions classified as probable losses and legal obligations – tax and social security

The Organization is a party to a number of labor, civil and tax lawsuits, arising from the normal course of business.

Management recognized provisions where, based on their opinion and that of their legal counsel, the nature of the lawsuit, similarity to previous lawsuits, complexity and the courts standing, the loss is deemed probable.

Management considers that the provision is sufficient to cover the future losses generated by the respective lawsuits.

Provisions related to legal obligations are maintained until the conclusion of the lawsuit, represented by judicial decisions with no further appeals or due to the statute of limitation.

I - Labor claims

These are claims brought by former employees and outsourced employees seeking indemnifications, most significantly for unpaid “overtime”, pursuant to Article 224 of the Consolidation of Labor Laws (CLT). In proceedings in which a judicial deposit is used to guarantee the execution of the judgment, the labor provision is made considering the estimated loss of these deposits. For proceedings with similar characteristics and for which there has been no official court decision, the provision is recognized based on the average calculated value of payments made for labor complaints settled in the past 12 months; and for proceedings originating from acquired banks, with unique characteristics, the calculation and assessment of the required balance is conducted periodically, based on the updated recent loss history.

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Overtime is monitored by using electronic time cards and paid regularly during the employment contract and, accordingly, the claims filed by former employees do not represent significant amounts.

II - Civil claims

These are claims for pain and suffering and property damages, mainly relating to protests, returned checks, the inclusion of information about debtors in the credit restriction registry and the replacement of inflation adjustments excluded as a result of government economic plans. These lawsuits are individually controlled using a computer-based system and provisioned whenever the loss is deemed as probable, considering the opinion of Management and their legal counsel, the nature of the lawsuits, similarity with previous lawsuits, complexity and positioning of the courts.

Most of these lawsuits are brought to the Special Civil Court (JEC), in which the claims are limited to 40 times the minimum wage and do not have a significant impact on the Organization’s financial position.

There are a significant number of legal claims pleading alleged differences in adjustment for inflation on savings account balances due to the implementation of economic plans that were part of the federal government’s economic policy to reduce inflation in the ‘80s and ‘90s.

Although Bradesco complied with the law and regulation in force at the time, these lawsuits have been recognized in provisions, taking into consideration the claims where Bradesco is the defendant and the perspective of loss, which is considered after the analysis of each demand, based on the current decision of the Superior Court of Justice (STJ).

In December 2017, with the mediation of the Attorney’s General Office (AGU), the entities representing the bank and the savings accounts, entered into an agreement related to litigation of economic plans, with the purpose of closing these claims, in which conditions and schedule were established for savings accounts holders may to accede the agreement. This agreement was approved by the Federal Supreme Court (STF) on March 1, 2018, pending final decision of the approval decision. As this is a voluntary agreement, Bradesco is unable to predict how many savings account holders will choose to accept the settlement offer.

Note that, regarding disputes relating to economic plans, the Federal Supreme Court (STF) suspended the prosecution of all lawsuits at the cognizance stage, until the Court issues a final decision on the right under litigation.

III - Legal obligations – provision for tax risks

The Organization is disputing the legality and constitutionality of certain taxes and contributions in court, for which provisions have been recognized in full, although there is a good chance of a favorable outcome, based on the opinion of Management and their legal counsel. The processing of these provisions for cases for which the risk of loss is deemed as probable and legal obligations is regularly monitored in the legal court. During or after the conclusion of each case, a favorable outcome may arise for the Organization, resulting in the reversal of the related provisions.

The main cases are:

- PIS and COFINS – R$2,514,742 thousand (R$2,368,203 thousand in 2017): a request for authorization to calculate and pay PIS and COFINS based on effective billing, as set forth in Article 2 of Supplementary Law No. 70/91, removing from the calculation base the unconstitutional inclusion of other revenues other than those billed;

- IRPJ/CSLL on losses of credits – R$1,628,319 thousand (R$1,790,415 thousand in 2017): we are requesting to deduct from income tax and social contributions payable (IRPJ and CSLL, respectively) amounts of actual and definite loan losses related to unconditional

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discounts granted during collections, regardless of compliance with the terms and conditions provided for in Articles 9 to 14 of Law No. 9,430/96 that only apply to temporary losses;

- Pension Contributions – R$1,511,346 thousand (R$1,409,990 thousand in 2017): official notifications related to the pension contributions on financial contributions in private pension plans, considered by the authorities to be compensatory sums subject to the incidence of pension contributions and to an isolated fine for not withholding IRRF on the financial contributions;

- INSS Autonomous Brokers – R$652,723 thousand (R$935,589 thousand in 2017): The Bradesco Organization is questioning the charging of social security contribution on remunerations paid to third-party service providers, established by Supplementary Law No. 84/96 and subsequent regulations/amendments, at 20.0% with an additional 2.5%, on the grounds that services are not provided to insurance companies but to policyholders, thus being outside the scope of such a contribution as provided for in item I, Article 22 of Law No. 8,212/91, as new wording in Law No. 9,876/99; and

- INSS – Contribution to SAT – R$405,170 thousand (R$382,662 thousand in 2017): in an ordinary lawsuit filed by the Brazilian Federation of Banks – Febraban, since April 2007, on behalf of its members, is questioned the classification of banks at the highest level of risk, with respect to Work Accident Risk – RAT, which eventually raised the rate of the respective contribution from 1% to 3%, in accordance with Decree No. 6,042/07.

In general, the provisions relating to lawsuits are classified as non-current, due to the unpredictability of the duration of the proceedings in the Brazilian justice system. For this reason, the estimate has not been disclosed with relation to the specific year in which these lawsuits will be finalized.

IV - Provisions by nature

| On March 31 - R$ thousand
2018 | 2017
Labor claims | 5,760,051 | 5,229,181
Civil claims | 5,381,613 | 5,109,218
Provision for tax risks | 7,700,999 | 7,997,964
Total (Note 19b) | 18,842,663 | 18,336,363

V - Changes in provisions

| R$ thousand
2018
Labor | Civil | Tax (1)
Balance on December 31, 2017 | 5,554,796 | 5,346,563 | 7,589,368
Adjustment for inflation | 176,862 | 124,799 | 68,542
Provisions, net of (reversals and write-offs) | 403,484 | 256,299 | 50,388
Payments | (375,091) | (346,048) | (7,299)
Balance on March 31, 2018 | 5,760,051 | 5,381,613 | 7,700,999

(1) Mainly include legal obligations.

c) Contingent liabilities classified as possible losses

The Organization maintains a system to monitor all administrative and judicial proceedings in which the institution is plaintiff or defendant and, based on the opinion of legal counsel, classifies the lawsuits according to the expectation of loss. Case law trends are periodically analyzed and, if necessary, the related risk is reclassified. In this respect, contingent lawsuits deemed to have a possible risk of loss are not recognized as a liability in the financial statements. The main proceedings in this category are the following: a) 2006 to 2013 income tax and social contribution,

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relating to goodwill amortization being disallowed on the acquisition of investments, for the amount of R$6,323,649 thousand (R$5,966,078 thousand in 2017); b) Fines and disallowances of Cofins loan compensations, released after a favorable decision in a judicial proceeding, where the unconstitutionality of the expansion of the intended calculation base was discussed for revenues other than those from billing (Law No. 9,718/98), in the amount of R$4,944,665 thousand (R$4,714,179 thousand in 2017); c) Leasing companies’ Tax on Services of any Nature (ISSQN), total lawsuits correspond to R$2,413,331 thousand (R$2,440,746 thousand in 2017) which relates to the municipal tax demands from municipalities other than those in which the company is located and where, under law, tax is collected; d) IRPJ and CSLL deficiency note relating to disallowance of exclusions of revenues from the mark-to-market of securities from 2007 to 2013, differences in depreciation expenses, insufficient depreciation expenses, expenses with depreciation of leased assets, operating expenses and income and disallowance of tax loss compensation, in the amount of R$2,459,455 thousand (R$1,620,104 thousand in 2017); e) Notifications and disallowances of compensations of PIS and Cofins related to the unconstitutional extension of the basis of calculation intended for other income other than the billing (Law No 9,718/98), from acquired companies, amounting to R$1,410,874 thousand (R$1,339,003 thousand in 2017); f) IRPJ and CSLL deficiency notice relating to the disallowance of loan loss deductions, for the amount of R$569,956 thousand (R$774,768 thousand in 2017); and g) IRPJ and CSLL deficiency note, amounting to R$494,361 thousand (R$469,018 thousand in 2017) relating to profit of subsidiaries based overseas, for the calendar years of 2008 and 2009.

d) Other matters

On May 31, 2016, criminal proceedings have been opened against three members of Bradesco’s Board of Executive Officers was carried out by the Brazilian Federal Police under the so-called “Operation Zelotes.”, which investigates the alleged improper performance of members of CARF - Administrative Council of Tax Appeals. On July 28, 2016, the Public Prosecutor's Office filed charges against three members of the Board of Executive Officers and a former member of its Board of Directors that was received by the Judge of the 10th Federal Court of the Federal District Judiciary Section. Currently, only two of the members of Bradesco's Board of Directors remain in the process at that time. They presented their responses in the criminal case, pointing out the facts and evidence demonstrating their innocence. The investigation phase of the process was already completed, and is currently waiting for final allegations and the decision of the first degree court.

The Company's management conducted a careful internal evaluation of records and documents related to the matter and found no evidence of any illegal conduct practiced by its representatives. Bradesco provided all the information to the competent regulatory bodies, in Brazil and abroad.

On account of the news of Operation Zealots, a class action was filed in the District Court of New York, on June 3, 2016, based on Section 10 (b) and 20 (a) of the Securities Exchange Act of 1934. On October 21, 2016, the plaintiff leader appointed by the court presented the addendum of the (Action Complaint) pointing us as defendants, as well as three members of its Board of Executive Officers. The demand, is based on the allegation that investors who purchased preferred American Depositary Shares (“ADS”) of Bradesco between April 30, 2012 and July 27, 2016 suffered losses caused by alleged violation regarding the American laws of capital markets. On September 29, 2017, the Court limited the proposed class to investors who purchased ADS Bradesco between August 8, 2014 and July 27, 2016. Demand has passed to the discovery phase, so the limitation of the aforementioned class would be maintained. Considering the stage that the demand is, it is not possible, to gauge the exposure and there are insufficient elements to carry out a risk assessment.

Bradesco was also summoned by the Corregedoria Geral do Ministério da Fazenda on the opening of an Administrative Accountability Process ("PAR"). This process may imply the application of a fine and / or mention in public lists that may eventually bring restrictions on business with public entities.

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18) SUBORDINATED DEBT

a) Composition by maturity

| On March 31 - R$ thousand
Original term in years | Nominal amount | 2018 | 2017
In Brazil: |  |  |  |
Subordinated CDB: |  |  |  |
2019 | 10 | 20,000 | 64,090 | 57,813
Financial bills: |  |  |  |
2017 (1) | 6 | 6,688,653 | - | 8,665,729
2018 (2) | 6 | 5,095,196 | 6,211,215 | 10,019,197
2019 | 6 | 21,858 | 36,879 | 34,195
2017 (1) | 7 | 40,100 | - | 98,714
2018 (2) | 7 | 140,650 | 325,581 | 301,346
2019 | 7 | 3,172,835 | 3,502,163 | 3,530,536
2020 | 7 | 1,700 | 2,858 | 2,665
2022 | 7 | 4,305,011 | 5,705,481 | 5,227,888
2023 | 7 | 1,359,452 | 1,731,662 | 1,575,036
2024 | 7 | 67,450 | 75,463 | 69,010
2018 (2) | 8 | 50,000 | - | 114,849
2019 | 8 | 12,735 | 29,016 | 25,950
2020 | 8 | 28,556 | 55,590 | 50,881
2021 | 8 | 1,236 | 2,067 | 1,933
2023 | 8 | 1,706,846 | 2,314,235 | 2,087,680
2024 | 8 | 136,695 | 162,466 | 148,031
2025 | 8 | 6,193,653 | 6,316,994 | 197,355
2021 | 9 | 7,000 | 13,357 | 12,212
2024 | 9 | 4,924 | 6,808 | 6,016
2025 | 9 | 400,944 | 464,773 | 431,567
2021 | 10 | 19,200 | 41,475 | 38,134
2022 | 10 | 54,143 | 101,525 | 93,543
2023 | 10 | 688,064 | 1,083,795 | 1,023,933
2025 | 10 | 284,137 | 406,128 | 355,206
2026 | 10 | 361,196 | 448,898 | 406,109
2027 | 10 | 258,743 | 279,293 | 34,952
2026 | 11 | 3,400 | 4,163 | 3,881
2027 | 11 | 47,046 | 55,061 | 50,169
2028 (3) | 11 | 74,764 | 78,821 | -
Perpetual |  | 5,000,000 | 5,104,783 | 5,207,121
Subtotal in Brazil |  |  | 34,624,640 | 39,871,651
Overseas: |  |  |  |
2019 | 10 | 1,333,575 | 2,493,785 | 2,377,191
2021 | 11 | 2,766,650 | 5,374,841 | 5,119,784
2022 | 11 | 1,886,720 | 3,666,825 | 3,493,159
Issuance costs on funding |  |  | (11,829) | (16,157)
Subtotal overseas |  |  | 11,523,622 | 10,973,977
Total (4) (5) |  |  | 46,148,262 | 50,845,628

(1) Subordinated debt transactions that matured in 2017;
(2) Transactions of subordinated debt due in the first quarter of 2018;

(3) New issues of financial letters, in 2017, referring to subordinate debts were recognized under the heading “Eligible Debt Capital Instruments”;
(4) It includes the amount of R$23,155,027 thousand (R$15,500,022 thousand in 2017), referring to subordinated debts recognized in “Eligible Debt Capital Instruments”; and
(5) The information on results are presented on Note 15d, cost for market funding and inflation and interest adjustments of technical provisions for insurance, pension plans and capitalization bonds.

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b) Net movement of subordinated debts

| R$ thousand
2018 | 2017
Opening balance on December 31 | 50,179,401 | 52,611,063
Issuance | - | 294,646
Interest | 887,749 | 1,515,183
Settlement and interest payments | (4,974,473) | (3,256,468)
Exchange variation | 55,585 | (318,796)
Closing balance on March 31 | 46,148,262 | 50,845,628

19) OTHER LIABILITIES

a) Tax and social security

| On March 31 - R$ thousand
2018 | 2017
Provision for deferred income tax (Note 33f) | 5,265,594 | 3,878,233
Taxes and contributions on profit payable | 1,303,213 | 2,233,276
Taxes and contributions payable | 1,105,568 | 1,258,758
Total | 7,674,375 | 7,370,267

b) Sundry

| On March 31 - R$ thousand
2018 | 2017
Credit card operations (1) | 5,460,915 | 7,007,682
Civil, tax and labor provisions (Note 17b) (2) | 18,842,663 | 18,336,363
Loan assignment obligations | 7,894,081 | 8,202,522
Provision for payments | 7,506,586 | 7,239,581
Sundry creditors | 4,191,922 | 5,981,920
Liabilities for acquisition of assets and rights | 1,362,537 | 1,411,411
Obligations by quotas of investment funds | 1,662,013 | 602,143
Other (3) | 4,574,206 | 3,188,252
Total | 51,494,923 | 51,969,874

(1) According to Bacen Circular Letter No. 3,828/17, which changes the accounting in payment arrangements (Credit Card Transactions), in March 2018, part of these transactions were classified under "Interbank accounts" in the amount of R$19,461,159 thousand. For comparison purposes, the balances of prior periods were also reclassified in the amount of R$15,371,436 thousand;

(2) According to Bacen Circular Letter No. 3,782/16, “Provisions for tax risks” were reclassified from “Other liabilities - Tax and social security” to “Other liabilities - Sundry"; and
(3) On March 31, 2018, it includes a specific provision for financial guarantees provided, pursuant to Resolution No. 4,512/16 (Note 9g).

c) Financial guarantees

Financial guarantees provided are contracts requiring the Organization to make specific payments to the holder of the financial guarantee for a loss it will incur when a specific debtor fails to make the payment under the terms of the debt instrument. The provision for financial guarantees provided is formed based on the best estimate of the non-recoverable amount of the guarantee, if such disbursement is likely. The provisioning parameters are established based on the internal credit risk management models. In case of retail operations, these models use historical information, while in wholesale operations, in addition to historical information, we adopted simulation processes to capture unobserved events. Any increase in liabilities related to financial guarantees is recognized in the statement of income under “Other operating income/expenses”.

The amounts guaranteed as of March 31, 2018 were as follows: (i) R$341,671 thousand, referring to guarantees related to international trade of goods, with a provision of R$2,217 thousand; (ii) R$254,794 thousand, referring to guarantees related to bidding, auctions, service rendering or execution of works, with a provision of R$7,882 thousand; (iii) R$537,974 thousand, referring to guarantees related to the supply of goods, with a provision of R$47,474 thousand; (iv) R$38,300,793 thousand, referring to sureties or guarantees in judicial and administrative proceedings of tax nature, with a provision of R$315,188 thousand; and (v) R$33,240,565 thousand, referring to other bank guarantees, with a provision of R$426,482 thousand (Note 19b).

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20) INSURANCE, PENSION PLANS AND CAPITALIZATION BONDS

a) Technical provisions by account

| On March 31 - R$ thousand
Insurance (1) | Life and pension plans (2) | Capitalization bonds | Total
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017
Current and long-term liabilities |  |  |  |  |  |  |  |
Mathematical reserve for unvested benefits | 1,188,185 | 923,274 | 210,927,204 | 190,595,683 | - | - | 212,115,389 | 191,518,957
Mathematical reserve for vested benefits | 326,790 | 219,715 | 8,090,020 | 9,120,975 | - | - | 8,416,810 | 9,340,690
Mathematical reserve for capitalization bonds | - | - | - | - | 6,679,396 | 6,403,767 | 6,679,396 | 6,403,767
Reserve for claims incurred but not reported (IBNR) | 3,348,554 | 2,960,356 | 1,029,586 | 1,279,671 | - | - | 4,378,140 | 4,240,027
Unearned premium reserve | 3,975,460 | 4,167,185 | 661,244 | 544,118 | - | - | 4,636,704 | 4,711,303
Complementary reserve for coverage | - | - | 847,593 | 899,117 | - | - | 847,593 | 899,117
Reserve for unsettled claims | 4,261,582 | 4,623,457 | 1,637,005 | 1,649,506 | - | - | 5,898,587 | 6,272,963
Reserve for financial surplus | - | - | 524,314 | 533,169 | - | - | 524,314 | 533,169
Reserve for draws and redemptions | - | - | - | - | 915,037 | 923,405 | 915,037 | 923,405
Other reserves (4) | 2,159,600 | 2,055,115 | 4,552,216 | 2,430,167 | 107,465 | 103,864 | 6,819,281 | 4,589,146
Total technical provisions | 15,260,171 | 14,949,102 | 228,269,182 | 207,052,406 | 7,701,898 | 7,431,036 | 251,231,251 | 229,432,544

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b) Guarantees for technical provisions

| On March 31 - R$ thousand
Insurance | Life and pension plans | Capitalization bonds | Total
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017
Total technical provisions | 15,260,171 | 14,949,102 | 228,269,182 | 207,052,406 | 7,701,898 | 7,431,036 | 251,231,251 | 229,432,544
(-) Commercialization surcharge – extended warranty | (116,101) | (207,653) | - | - | - | - | (116,101) | (207,653)
(-) Portion corresponding to contracted reinsurance | (156,832) | (831,490) | (21,948) | (38,771) | - | - | (178,780) | (870,261)
(-) Receivables | (865,259) | (963,629) | - | - | - | - | (865,259) | (963,629)
(-) Unearned premium reserve – Health and dental insurance (3) | (1,260,404) | (1,190,172) | - | - | - | - | (1,260,404) | (1,190,172)
(-) Reserves from DPVAT agreements | (543,659) | (498,662) | - | - | - | - | (543,659) | (498,662)
To be insured | 12,317,916 | 11,257,496 | 228,247,234 | 207,013,635 | 7,701,898 | 7,431,036 | 248,267,048 | 225,702,167
Investment fund quotas (VGBL and PGBL) | - | - | 193,861,861 | 174,002,444 | - | - | 193,861,861 | 174,002,444
Investment fund quotas (excluding VGBL and PGBL) | 4,947,883 | 7,130,019 | 22,631,805 | 24,620,629 | 1,185,602 | 2,568,345 | 28,765,290 | 34,318,993
Government securities | 9,260,169 | 5,827,030 | 19,267,104 | 16,087,059 | 7,462,085 | 5,731,106 | 35,989,358 | 27,645,195
Shares | 3,023 | 2,378 | 1,569,504 | 1,623,330 | - | - | 1,572,527 | 1,625,708
Private securities | 14,668 | 108,078 | 154,799 | 161,595 | 38,904 | 39,707 | 208,371 | 309,380
Total technical provision guarantees | 14,225,743 | 13,067,505 | 237,485,073 | 216,495,057 | 8,686,591 | 8,339,158 | 260,397,407 | 237,901,720

(1) “Other reserves” - Insurance primarily refers to technical provisions of the “individual health plans” portfolio;
(2) “Other reserves” - Life and Pension Plan mainly includes the “Reserve for redemption and other amounts to be settled”, “Reserve for related expenses” and “Other reserves”;
(3) Deduction set forth in Article 4 of ANS Normative Resolution No. 392/15; and

(4) In other technical provisions, of Life and Pension Plans, R$2,007,136 thousand is being considered in mathematical reserves of benefits to be granted and benefits granted, upon SUSEP’s authorization.

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c) Insurance, pension plan contribution and capitalization bond retained premiums

| Accrued on March 31 - R$ thousand
2018 | 2017
Written premiums | 9,199,035 | 8,982,595
Pension plan contributions (including VGBL) | 7,056,032 | 7,602,184
Capitalization bond income | 1,425,529 | 1,446,268
Granted coinsurance premiums | (9,054) | (14,770)
Refunded premiums | (101,456) | (68,575)
Net written premiums earned | 17,570,086 | 17,947,702
Reinsurance premiums paid | (18,164) | (53,150)
Insurance, pension plan and capitalization bond retained premiums | 17,551,922 | 17,894,552

21) NON-CONTROLLING INTERESTS IN SUBSIDIARIES

| On March 31 - R$ thousand
2018 | 2017
Banco Bradesco BBI S.A. | 18,201 | 16,670
Other (1) | 580,810 | 470,411
Total | 599,011 | 487,081

(1) Primarily relates to the non-controlling interest in the subsidiary “Odontoprev”.

22) SHAREHOLDERS’ EQUITY (PARENT COMPANY)

a) Capital stock in number of shares

Fully subscribed and paid-in capital stock comprises non-par, registered, book-entry shares.

| On March 31
2018 (1) | 2017
Common | 3,359,929,223 | 3,054,481,112
Preferred | 3,359,928,872 | 3,054,480,793
Subtotal | 6,719,858,095 | 6,108,961,905
Treasury (common shares) | (5,535,803) | (5,032,549)
Treasury (preferred shares) | (20,741,320) | (18,855,746)
Total outstanding shares | 6,693,580,972 | 6,085,073,610

(1) Includes effect of bonus of shares of 10%.

b) Transactions of capital stock involving quantities of shares

| Common | Preferred | Total
Number of outstanding shares as at December 31, 2017 | 3,049,448,563 | 3,035,625,047 | 6,085,073,610
Increase of capital stock with issuing of shares – bonus of 10% (1) | 305,448,111 | 305,448,079 | 610,896,190
Increase of shares in treasury – bonus of 10% | (503,254) | (1,885,574) | (2,388,828)
Number of outstanding shares as at March 31, 2018 | 3,354,393,420 | 3,339,187,552 | 6,693,580,972

(1) It benefited the shareholders registered in the records of Bradesco on March 29, 2018.

In the Extraordinary General Meeting of March 12, 2018, the approval was proposed by the Board of Directors to increase the capital stock by R$8,000,000 thousand, increasing it from R$59,100,000 thousand to R$67,100,000 thousand, with a bonus in shares, through the capitalization of part of the balance of the account “Profit Reserves - Statutory Reserve”, in compliance with the provisions in Article 169 of Law No. 6,404/76, by issuing 610,896,190 new nominative-book entry shares, with no nominal value, whereby 305,448,111 are common and 305,448,079 are preferred shares, attributed

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free-of-charge to the shareholders as bonus, to the ratio of 1 new share for every 10 shares of the same type that they own on the base date, and was approved by the Bacen on March 16, 2018.

c) Interest on Shareholders’ Equity

Bradesco’s capital remuneration policy aims to distribute interest on shareholders’ equity at the maximum amount calculated under current legislation, and this is included, net of Withholding Income Tax (IRRF), in the calculation for mandatory dividends for the year under the Company’s Bylaws.

Interest on shareholders’ equity for the year ended March 31, 2018 is calculated as follows:

| R$ thousand | % (1)
Net income for the period | 4,466,721 |
(-) Legal reserve | 223,336 |
Adjusted calculation basis | 4,243,385 |
Monthly, intermediaries and supplementary interest on shareholders’ equity (gross), paid and/or provisioned | 1,787,537 |
Withholding income tax on interest on shareholders' equity | (268,131) |
Interest on own capital (net) accumulated in March 2018 | 1,519,406 | 35.81
Interest on own capital (net) accumulated in March 2017 | 1,568,153 | 40.55

(1) Percentage of interest on shareholders’ equity after adjustments.

Interest on shareholders’ equity were paid or recognized in provisions, as follows:

Description | R$ thousand
Per share (gross) | Gross amount paid/ recognized in provision | Withholding Income Tax (IRRF) (15%) | Net amount paid/recognized in provision
Common | Preferred
Monthly interest on shareholders’ equity paid | 0.051749 | 0.056924 | 300,551 | 45,083 | 255,468
Supplementary interest paid on shareholders´ equity | 0.265905 | 0.292495 | 1,544,335 | 231,650 | 1,312,685
Total accrued on March 31, 2017 | 0.317654 | 0.349419 | 1,844,886 | 276,733 | 1,568,153
Monthly interest on shareholders’ equity paid | 0.051749 | 0.056924 | 330,604 | 49,591 | 281,013
Supplementary interest on shareholders’ equity provisioned | 0.207319 | 0.228051 | 1,456,933 | 218,540 | 1,238,393
Total accrued on March 31, 2018 | 0.259068 | 0.284975 | 1,787,537 | 268,131 | 1,519,406

d) Treasury shares

A total of 5,535,803 common shares and 20,741,320 preferred shares, with the share bonus effect of 10%, had been acquired, totaling R$440,514 thousand until March 31, 2018, and remain in treasury. The minimum, average and maximum cost per common share is R$19.34965, R$24.55863 and R$27.14350, and per preferred share is R$19.37456, R$26.98306 and R$33.12855, respectively. The fair value was R$38.47 per common share and R$39.50 per preferred share on March 31, 2018.

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23) FEE AND COMMISSION INCOME

| Accrued on March 31 - R$ thousand
2018 | 2017
Credit card income | 1,691,320 | 1,647,921
Checking account | 1,746,519 | 1,599,786
Loans | 724,134 | 730,995
Collections | 499,533 | 478,303
Consortium management | 383,067 | 369,496
Asset management | 410,311 | 341,717
Underwriting/ Financial Advisory Services | 153,512 | 180,260
Custody and brokerage services | 149,068 | 184,627
Payments | 111,715 | 107,939
Other | 166,630 | 147,848
Total | 6,035,809 | 5,788,892

24) PAYROLL AND RELATED BENEFITS

| Accrued on March 31 - R$ thousand
2018 | 2017
Salaries | 2,045,003 | 2,177,118
Benefits | 1,094,353 | 1,097,214
Social security charges | 700,673 | 793,735
Employee profit sharing | 372,994 | 374,095
Provision for labor claims | 403,484 | 163,673
Training | 18,866 | 30,051
Total | 4,635,373 | 4,635,886

25) OTHER ADMINISTRATIVE EXPENSES

| Accrued on March 31 - R$ thousand
2018 | 2017
Outsourced services | 1,171,905 | 1,225,014
Depreciation and amortization | 684,360 | 653,748
Data processing | 511,878 | 493,609
Communication | 392,501 | 434,663
Asset maintenance | 272,070 | 269,760
Rental | 286,568 | 287,286
Financial system services | 241,084 | 259,489
Advertising and marketing | 228,117 | 140,453
Security and surveillance | 193,925 | 209,986
Transport | 185,474 | 185,591
Water, electricity and gas | 104,967 | 112,475
Supplies | 53,299 | 71,952
Travel | 57,765 | 49,288
Other | 238,774 | 252,218
Total | 4,622,687 | 4,645,532

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Notes to the Consolidated Financial Statements

26) TAX EXPENSES

| Accrued on March 31 - R$ thousand
2018 | 2017
Contribution for Social Security Financing (COFINS) | 962,668 | 1,123,355
Social Integration Program (PIS) contribution | 159,271 | 185,013
Tax on Services (ISSQN) | 239,560 | 168,373
Municipal Real Estate Tax (IPTU) expenses | 61,741 | 61,260
Other | 86,882 | 112,877
Total | 1,510,122 | 1,650,878

27) OTHER OPERATING INCOME

| Accrued on March 31 - R$ thousand
2018 | 2017
Other interest income | 505,449 | 506,132
Reversal of other operating provisions (1) | 501,078 | 3,453,437
Revenues from recovery of charges and expenses | 103,323 | 95,189
Gains on sale of goods | 4,298 | 662
Other | 569,780 | 547,849
Total | 1,683,928 | 4,603,269

(1) In the first quarter of 2018, it includes: (i) reversal of generic provision for guarantees provided, encompassing sureties, guarantees, credit letters, and standby letter of credit, pursuant to Resolution No. 4,512/16; and (ii) reversals of: (a) provision for tax risks regarding the PIS process, to offset overpaid amounts; and (b) provision for tax risks related to IRPJ/CSLL on credit losses.

28) OTHER OPERATING EXPENSES

| Accrued on March 31 - R$ thousand
2018 | 2017
Other finance costs | 1,020,588 | 1,417,081
Sundry losses | 368,790 | 428,338
Discount granted | 309,778 | 355,926
Commissions on loans and financing | 162,640 | 253,436
Intangible assets amortization | 267,929 | 249,941
Goodwill amortization (Note 14a) | 611,513 | 586,206
Other (1) | 1,639,654 | 1,833,126
Total | 4,380,892 | 5,124,054

(1) In the first quarter of 2017, it includes a specific provision for guarantees provided, encompassing sureties, guarantees and credit letters, pursuant to Resolution No. 4,512/16.

29) NON-OPERATING INCOME (LOSS)

| Accrued on March 31 - R$ thousand
2018 | 2017
Gain/loss on sale and write-off of assets and investments | (181,032) | (116,070)
Recording/reversal of non-operating provisions (1) | (31,214) | (46,238)
Other | 2,308 | 29,382
Total | (209,938) | (132,926)

(1) Includes primarily allowance for non-use assets (BNDU).

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30) RELATED-PARTY TRANSACTIONS

a) Related-party transactions (direct and indirect) are carried out under conditions and at rates consistent with those entered into with third parties, when applicable, and effective on the dates of the operations. The transactions are as follows:

| On March 31 - R$ thousand
Controllers (1) | Associates and Jointly controlled companies (2) | Key Management Personnel (3) | Total
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017
Assets |  |  |  |  |  |  |  |
Interbank investments | - | - | 655,936 | 564,496 | - | - | 655,936 | 564,496
Receivable from associates companies | - | - | 2,752 | 2,292 | - | - | 2,752 | 2,292
Other assets | - | - | 7,703 | 5,764 | - | - | 7,703 | 5,764
Liabilities |  |  |  |  |  |  |  |
Demand deposits/Savings accounts | 25 | 26 | 12,843 | 5,670 | 16,251 | 15,811 | 29,119 | 21,507
Time deposits | 922,430 | 1,379,643 | 324,107 | 45,143 | 89,164 | 146,635 | 1,335,701 | 1,571,421
Securities sold under agreements to repurchase | - | 735,234 | 5,009 | 414,772 | 6,528 | 14,613 | 11,537 | 1,164,619
Funds from issuance of securities | 7,580,187 | 5,966,822 | - | - | 857,494 | 866,208 | 8,437,681 | 6,833,030
Derivative financial instruments | 27,800 | 27,540 | - | - | - | - | 27,800 | 27,540
Interest on own capital and dividends payable | 603,235 | 591,351 | - | - | - | - | 603,235 | 591,351
Other liabilities | - | - | 7,981,401 | 8,759 | - | - | 7,981,401 | 8,759

| Accrued on March 31 - R$ thousand
Controllers (1) | Associates and Jointly controlled companies (2) | Key Management Personnel (3) | Total
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017
Income from financial intermediation | - | - | 10,365 | 16,118 | - | - | 10,365 | 16,118
Financial intermediation expenses | (141,228) | (254,062) | (5,265) | (13,582) | (13,834) | (26,455) | (160,327) | (294,099)
Income from services provided | - | - | 72,309 | 100,383 | - | - | 72,309 | 100,383
Expenses in operations with derivatives | (249) | (6,859) | - | - | - | - | (249) | (6,859)
Other expenses net of other operating revenues | (315) | (640) | (46,983) | (56,413) | - | - | (47,298) | (57,053)

(1) Cidade de Deus Cia. Coml. de Participações, Fundação Bradesco, NCF Participações S.A., Titanium Holdings S.A., BBD Participações S.A. and Nova Cidade de Deus Participações S.A.;
(2) Companies listed in Note 12; and
(3) Members of the Board of Directors and the Board of Executive Officers.

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b) Remuneration of key management personnel

Each year, the Annual Shareholders’ Meeting approves:

· The annual total amount of Management compensation, set forth at the Board of Directors Meetings, to be paid to board members and members of the Board of Executive Officers, as determined by the Company’s Bylaws; and

· The amount allocated to finance Management pension plans, within the Employee and Management pension plan of the Bradesco Organization.

For 2018, the maximum amount of R$479,820 thousand was set for Management compensation and R$491,530 thousand to finance defined contribution pension plans.

The current policy on Management compensation sets forth that 50% of net variable compensation, if any, must be allocated to the acquisition of preferred class b shares issued by BBD Participações S.A. and / or preferred shares issued by Banco Bradesco S.A., which vest in three equal, annual and successive installments, the first of which is in the year following the payment date. This procedure complies with Resolution No. 3,921/10, which sets forth a management compensation policy for financial institutions.

Short-term Management benefits

| Accrued on March 31 - R$ thousand
2018 | 2017
Salaries | 105,937 | 110,370
Total | 105,937 | 110,370

Post-employment benefits

| Accrued on March 31 - R$ thousand
2018 | 2017
Defined contribution supplementary pension plans | 114,402 | 101,339
Total | 114,402 | 101,339

Bradesco does not offer its Key Management Personnel long-term benefits related to severance pay or share-based compensation, pursuant to CPC 10 – Share-Based Payment, approved by Resolution No. 3,989/11.

Shareholding

Together, members of the Board of Directors and Board of Executive Officers had the following shareholding in Bradesco:

| On March 31
2018 | 2017
● Common shares | 0.45% | 0.68%
● Preferred shares | 1.02% | 1.13%
● Total shares (1) | 0.73% | 0.91%

(1) On March 31, 2018, direct and indirect shareholding of the members of Bradesco’s Board of Directors and Board of Executive Officers amounted to 2.27% of common shares, 1.05% of preferred shares and 1.67% of all shares (3.13% of common shares, 1.17% of preferred shares and 2.15% of all shares in 2017).

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31) RISK AND CAPITAL MANAGEMENT

a) Risk Management

Bradesco carries out a corporate risk control in an integrated and independent manner, preserving and giving value to a collective decision-making environment, developing and implementing methodologies, models and tools for measurement and control. Within Bradesco the dissemination of knowledge amongst employees at all hierarchical levels is stimulated, from the b usiness a reas to the Board of Directors.

Risk and capital management structures have established policies, standards and procedures, ensuring that the Bradesco Organization maintains a control process consistent with the nature of its operations, complexity of its products and services, activities, processes, systems and the extent of its exposure to risks. These structures are also composed by a number of committees, commissions and departments that provide support to the Senior Management and the Board of Directors in decision-making. The most notable amongst these are the Integrated Risk Management and Capital Allocation Committee (COGIRAC) and Risk Committee, whose purpose is to advise the Board of Directors in the performance of its duties in the management and control of risks and capital.

Detailed information on risk management process, reference equity and also Bradesco's risk exposures may be found in Investors Relations website at bradescori.com.br – Market Information.

b) Capital Management

The Basel Ratio is part of the set of indicators that are monitored and evaluated in the process of Capital Management, and is intended to measure the sufficiency of capital in relation to the exposure to risks. The table below shows the composition of the Reference Equity and of the Risk Weighted Assets, according to the standards of Bacen. During the period, Bradesco has fulfilled all the minimum regulatory requirements.

Below is the Basel Ratio:

Calculation basis - Basel Ratio | On March 31 - R$ thousand
Prudential Conglomerate
2018 | 2017
Tier I capital | 78,206,022 | 73,122,571
Common equity | 73,101,239 | 67,915,450
Shareholders’ equity | 113,775,893 | 104,558,450
Non-controlling interest / Other | 186,400 | 33,639
Prudential adjustments (1) | (40,861,054) | (36,676,639)
Additional capital | 5,104,783 | 5,207,121
Tier II capital | 21,963,699 | 19,797,079
Subordinated debts (Resolution No. 4,192/13) | 16,312,783 | 10,146,950
Subordinated debts (previous to CMN Resolution No. 4,192/13) | 5,650,916 | 9,650,129
Reference Equity (a) | 100,169,721 | 92,919,650
- Credit risk | 567,007,118 | 546,209,857
- Market risk | 10,641,832 | 13,097,005
- Operational risk | 53,509,834 | 48,156,699
Risk-weighted assets – RWA (b) | 631,158,784 | 607,463,561
Basel ratio (a/b) | 15.9% | 15.3%
Tier I capital | 12.4% | 12.0%
- Principal capital | 11.6% | 11.2%
- Additional capital | 0.8% | 0.8%
Tier II capital | 3.5% | 3.3%

(1) As from January 2018, the factor applied to prudential adjustments went from 80% to 100%, according to the timeline for application of deductions of prudential adjustments, defined in Article 11 of Resolution No. 4,192/13.

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c) Indicator of Global Systemic Importance (IASG)

According to Bacen Circular Letter No 3,751/15, Bradesco calculated the indicators for the evaluation of global systemic importance (IASG), disclosed in Investor Relations website (bradesco.com.br/ri - Market Information - Reports and Spreadsheets - Reports - Risk Management Report – Pillar 3).

d) VaR Internal Model – Trading Portfolio

The Trading Portfolio is composed of all the operations made with financial instruments, including derivatives, retained for negotiation or destined to hedge other instruments of the portfolio itself, and that are not subject to the limitation of their negotiability. The operations detained for negotiation are those destined for resale, to obtain benefits based on the variation of effective or expected prices, or for arbitrage.

Below is the 1-day VaR:

Risk factors | On March 31 - R$ thousand
2018 | 2017
Fixed rates | 2,837 | 12,563
IGPM/IPCA | 4,153 | 976
Exchange coupon | 98 | 1,007
Foreign currency | 4,881 | 977
Equities | 205 | 572
Sovereign/Eurobonds and Treasuries | 4,743 | 4,072
Other | 2 | 2
Correlation/diversification effect | (1,324) | (4,908)
VaR (Value at Risk) | 15,595 | 15,261

Amounts net of tax.

e) Sensitivity analysis

The Trading Portfolio is also monitored through daily sensitivity analyses that measure the effect of market movements of market and price curves on our positions. Furthermore, a sensitivity analysis of the Organization’s financial exposures (Trading and Banking Portfolio) is performed on a quarterly basis, in compliance with CVM Rule No. 475/08.

Sensitivity analyses were carried out based on scenarios prepared at the respective dates, always considering market data at the time and scenarios that would adversely affect our positions, according to the examples below:

Scenario 1: Based on market information (B3, Anbima, etc.), stresses were applied for 1 basis point on the interest rate and 1.0% variation on prices. For example: for a Real/US dollar exchange rate of R$3.34 a scenario of R$3.37 was used, while for a 1-year fixed interest rate of 6.33%, a 6.34% scenario was applied;

Scenario 2: 25.0% stresses were determined based on market information. For example: for a Real/US dollar exchange rate of R$3.34 a scenario of R$4.17 was used, while for a 1-year fixed interest rate of 6.33%, a 7.91% scenario was applied. The scenarios for other risk factors also accounted for 25.0% stresses in the respective curves or prices; and

Scenario 3: 50.0% stresses were determined based on market information. For example: for a Real/US dollar exchange rate of R$3.34 a scenario of R$5.01 was used, while for a 1-year fixed interest rate of 6.33%, a 9.49% scenario was applied. The scenarios for other risk factors also account for 50.0% stresses in the respective curves or prices.

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Notes to the Consolidated Financial Statements

The results presented reveal the impacts for each scenario in a static position of the portfolio. The dynamism of the market and portfolios means that these positions change continuously and do not necessarily reflect the position demonstrated here. In addition, the Organization has a continuous market risk management process, which is always searching for ways to mitigate the associated risks, according to the strategy determined by Top Management. Therefore, where there are indicators of deterioration in certain positions, proactive measures are taken to minimize any potential negative impact and maximize the risk/return ratio for the Organization.

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Notes to the Consolidated Financial Statements

I - Sensitivity Analysis – Trading Portfolio

| On March 31 - R$ thousand
Trading Portfolio (1)
2018 | 2017
Scenarios | Scenarios
1 | 2 | 3 | 1 | 2 | 3
Interest rate in Reais | Exposure subject to variations in fixed interest rates and interest rate coupons | (95) | (14,225) | (28,389) | (801) | (190,706) | (374,174)
Price indexes | Exposure subject to variations in price index coupon rates | (208) | (22,775) | (42,804) | (52) | (6,637) | (12,743)
Exchange coupon | Exposure subject to variations in foreign currency coupon rates | (5) | (414) | (823) | (14) | (749) | (1,467)
Foreign currency | Exposure subject to exchange rate variations | (2,776) | (69,898) | (139,796) | (460) | (11,489) | (22,979)
Equities | Exposure subject to variation in stock prices | (54) | (1,359) | (2,719) | (167) | (6,566) | (4,572)
Sovereign/Eurobonds and Treasuries | Exposure subject to variations in the interest rate of securities traded on the international market | (134) | (19,447) | (38,611) | (284) | (12,261) | (24,432)
Other | Exposure not classified in other definitions | - | (2) | (5) | - | (30) | (60)
Total excluding correlation of risk factors | (3,272) | (128,120) | (253,147) | (1,778) | (228,438) | (440,427)
Total including correlation of risk factors | (2,464) | (45,682) | (91,426) | (1,010) | (197,939) | (390,333)

(1) Amounts net of tax.

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Presented below are the impacts of the financial exposures also considering the Banking Portfolio (composed of operations not classified in the Trading Portfolio, originating from other business of the Organization and their respective hedges).

II - Sensitivity Analysis – Trading and Banking Portfolios

| On March 31 - R$ thousand
Trading and Banking Portfolios (1)
2018 | 2017
Scenarios | Scenarios
1 | 2 | 3 | 1 | 2 | 3
Interest rate in Reais | Exposure subject to variations in fixed interest rates and interest rate coupons | (15,039) | (2,687,713) | (5,217,110) | (9,861) | (2,588,771) | (5,026,570)
Price indexes | Exposure subject to variations in price index coupon rates | (5,017) | (586,674) | (1,063,304) | (6,152) | (714,043) | (1,288,198)
Exchange coupon | Exposure subject to variations in foreign currency coupon rates | (815) | (71,431) | (138,596) | (533) | (40,481) | (78,230)
Foreign currency | Exposure subject to exchange rate variations | (3,697) | (86,715) | (173,429) | (3,099) | (77,450) | (154,900)
Equities | Exposure subject to variation in stock prices | (16,648) | (416,206) | (832,412) | (16,016) | (398,125) | (805,384)
Sovereign/Eurobonds and Treasuries | Exposure subject to variations in the interest rate of securities traded on the international market | (2,550) | (66,941) | (133,427) | (1,772) | (47,070) | (94,672)
Other | Exposure not classified in other definitions | (31) | (764) | (1,527) | (16) | (406) | (812)
Total excluding correlation of risk factors | (43,797) | (3,916,444) | (7,559,805) | (37,449) | (3,866,346) | (7,448,766)
Total including correlation of risk factors | (29,681) | (3,402,425) | (6,565,404) | (23,737) | (3,221,829) | (6,222,763)

(1) Amounts net of tax effects.

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f) Social and environmental risk

The social and environmental risk is represented by potential damages that an economic activity can cause to society and to the environment. The social and environmental risks associated with financial institutions are mostly indirect and stem from business relationships, including those with the supply chain and with customers, through financing and investment activities.

The social and environmental risk management process has a robust governance structure, comprised of committees, policies, standards and procedures, allowing the risk to be properly identified, measured, mitigated, monitored and reported. This process complies with Resolution No. 4,327/14 of the Central Bank and observes the principles of relevance and proportionality, which is necessary in view of the complexity of the financial products and the profile of Organization’s activities.

The Organization seeks to constantly incorporate and improve the criteria for managing the social and environmental risk arising from business relations with customers, through loan and financing operations, guarantees, suppliers and investments, which comprise the scope of analysis reflected in the Organization Social and Environmental Risk Standard (available at www.bradescosustentabilidade.com.br/site/).

The Organization has made several commitments related to environmental and social aspects, such as the Carbon Disclosure Project (CDP), the Principles for Responsible Investment (PRI), the Business Charter for Human Rights and Promotion of Decent Work (Ethos), the United Nations Environment Program (UNEP-FI), the Global Compact, among others.

Moreover, the Organization has been a signatory of the Equator Principles since 2004, and among the requirements evaluated are as follows the working conditions, impacts to the community and the environment of projects financed by the Organization, pursuant to the Brazilian legislation and the standards and guidelines of the International Finance Corporation (IFC), besides the World Bank Group's Health, Safety and Environment Guidelines. During the credit granting process, transactions under Equator Principles undergo a social and environmental risk analysis.

The following table sets forth the credit operation framed in the Equator Principles contracted in the last 12 months (from April 2017 to March 2018):

| Number of operation by category (Equator Principles)
A (High risk) | B (Medium risk) | C (Low risk)
Sector |  |  |
Electricity | - | - | -
Infrastructure | - | 1 | -
Region |  |  |
Northeast | - | - | -
Southeast | - | 1 | -

| R$ thousand
Total project value | 826,200
Bradesco's participation (loan) | 301,795

In the first quarter of 2018 there was no hiring Advisory Service and Financing Project Finance and Corporate Loan to projects classified under the criteria of the Equator Principles III.

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g) Below is the statement of financial position by currency and maturity

I – The statement of financial position by currency

| On March 31 - R$ thousand
2018 | 2017
Balance | Local | Foreign (1) (2) | Foreign (1) (2)
Assets |  |  |  |
Current and long-term assets | 1,201,306,897 | 1,123,963,328 | 77,343,569 | 69,629,494
Cash and due from banks | 17,807,399 | 14,013,295 | 3,794,104 | 2,227,326
Interbank investments | 140,870,167 | 139,677,932 | 1,192,235 | 1,825,654
Securities and derivative financial instruments | 516,559,089 | 493,580,903 | 22,978,186 | 14,380,950
Interbank and interdepartmental accounts | 72,287,341 | 72,287,341 | - | -
Loans and leasing | 291,476,158 | 262,660,652 | 28,815,506 | 34,082,287
Other receivables and assets | 162,306,743 | 141,743,205 | 20,563,538 | 17,113,277
Permanent assets | 30,102,191 | 30,066,894 | 35,297 | 38,452
Investments | 8,003,779 | 8,003,779 | - | -
Premises and equipment and leased assets | 7,811,648 | 7,789,472 | 22,176 | 24,153
Intangible assets | 14,286,764 | 14,273,643 | 13,121 | 14,299
Total | 1,231,409,088 | 1,154,030,222 | 77,378,866 | 69,667,946
Liabilities |  |  |  |
Current and long-term liabilities | 1,116,664,441 | 1,048,115,726 | 68,548,715 | 73,041,159
Deposits | 271,658,595 | 259,513,669 | 12,144,926 | 19,293,794
Securities sold under agreements to repurchase | 228,883,992 | 219,565,655 | 9,318,337 | 8,068,986
Funds from issuance of securities | 142,589,826 | 139,720,010 | 2,869,816 | 2,966,599
Interbank and interdepartmental accounts | 25,777,547 | 22,360,484 | 3,417,063 | 3,106,922
Borrowing and on-lending | 47,734,757 | 27,962,670 | 19,772,087 | 21,808,571
Derivative financial instruments | 18,277,419 | 17,642,457 | 634,962 | 315,884
Technical provision for insurance, pension plans and capitalization bonds | 251,231,249 | 251,225,713 | 5,536 | 689
Other liabilities: |  |  |  |
- Subordinated debts | 46,148,262 | 34,624,640 | 11,523,622 | 10,973,977
- Others | 84,362,794 | 75,500,428 | 8,862,366 | 6,505,737
Deferred income | 369,743 | 369,743 | - | -
Non-controlling interests in subsidiaries | 599,011 | 599,011 | - | -
Shareholders’ equity | 113,775,893 | 113,775,893 | - | -
Total | 1,231,409,088 | 1,162,860,373 | 68,548,715 | 73,041,159
Net position of assets and liabilities |  |  | 8,830,151 | (3,373,213)
Net position of derivatives (2) |  |  | (57,232,695) | (44,306,742)
Other net off-balance-sheet accounts (3) |  |  | (563,970) | 380,378
Net exchange position (liability) |  |  | (48,966,514) | (47,299,577)

(1) Amounts originally recognized and/or indexed mainly in USD;
(2) Excluding operations maturing in D+1, to be settled at the rate on the last day of the month; and
(3) Other commitments recognized in off-balance-sheet accounts.

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Notes to the Consolidated Financial Statements

II - The statement of financial position by maturity

| On March 31 - R$ thousand
1 to 30 days | 31 to 180 days | 181 to 360 days | More than 360 days | Maturity not stated | Total
Assets |  |  |  |  |  |
Current and long-term assets | 671,172,378 | 114,225,676 | 71,032,032 | 344,876,811 | - | 1,201,306,897
Cash and due from banks | 17,807,399 | - | - | - |  | 17,807,399
Interbank investments (1) | 116,450,430 | 20,672,869 | 2,594,593 | 1,152,275 |  | 140,870,167
Securities and derivative financial instruments (1) (2) | 373,533,272 | 6,701,933 | 14,143,201 | 122,180,683 |  | 516,559,089
Interbank and interdepartmental accounts | 71,024,684 | 54,878 | - | 1,207,779 |  | 72,287,341
Loans and leasing | 27,656,193 | 63,618,413 | 43,348,999 | 156,852,553 |  | 291,476,158
Other receivables and assets | 64,700,400 | 23,177,583 | 10,945,239 | 63,483,521 |  | 162,306,743
Permanent assets | 361,629 | 1,803,518 | 2,131,636 | 16,976,184 | 8,829,224 | 30,102,191
Investments |  |  |  |  | 8,003,779 | 8,003,779
Premises and equipment | 107,910 | 539,548 | 647,457 | 5,691,288 | 825,445 | 7,811,648
Intangible assets | 253,719 | 1,263,970 | 1,484,179 | 11,284,896 | - | 14,286,764
Total in March 31, 2018 | 671,534,007 | 116,029,194 | 73,163,668 | 361,852,995 | 8,829,224 | 1,231,409,088
Total in March 31, 2017 | 664,902,925 | 96,227,105 | 63,817,721 | 356,276,165 | 8,156,952 | 1,189,380,868
Liabilities |  |  |  |  |  |
Current and long-term liabilities | 670,300,722 | 83,577,245 | 66,651,597 | 296,134,877 | - | 1,116,664,441
Deposits (3) | 143,649,045 | 11,171,906 | 11,678,918 | 105,158,726 |  | 271,658,595
Securities sold under agreements to repurchase (1) | 207,176,768 | 7,037,036 | 10,572,118 | 4,098,070 |  | 228,883,992
Funds from issuance of securities | 6,491,541 | 38,595,653 | 32,019,474 | 65,483,158 |  | 142,589,826
Interbank and interdepartmental accounts | 25,777,547 | - | - | - |  | 25,777,547
Borrowing and on-lending | 2,653,374 | 16,584,334 | 8,398,224 | 20,098,825 |  | 47,734,757
Derivative financial instruments | 17,576,378 | 161,553 | 191,595 | 347,893 |  | 18,277,419
Technical provisions for insurance, pension plans and capitalization bonds (3) | 215,311,227 | 4,149,838 | 1,548,697 | 30,221,487 |  | 251,231,249
Other liabilities: |  |  |  |  |  |
- Subordinated debts | 1,762,556 | 4,571,947 | 355,285 | 39,458,474 |  | 46,148,262
- Others | 49,902,286 | 1,304,978 | 1,887,286 | 31,268,244 |  | 84,362,794
Deferred income | 369,743 | - | - | - |  | 369,743
Non-controlling interests in subsidiaries | - | - | - | - | 599,011 | 599,011
Shareholders’ equity | - | - | - | - | 113,775,893 | 113,775,893
Total in March 31, 2018 | 670,670,465 | 83,577,245 | 66,651,597 | 296,134,877 | 114,374,904 | 1,231,409,088
Total in March 31, 2017 | 611,390,633 | 121,801,849 | 84,138,839 | 267,004,016 | 105,045,531 | 1,189,380,868
Net assets accumulated on March 31, 2018 | 863,542 | 33,315,491 | 39,827,562 | 105,545,680 |  |
Net assets accumulated on March 31, 2017 | 53,512,292 | 27,937,548 | 7,616,430 | 96,888,579 |  |

(1) Repurchase agreements are classified according to the maturity of the transactions;
(2) Investments in investment funds are classified as 1 to 30 days; and

(3) Demand and savings deposits and technical provisions for insurance, pension plans and capitalization bonds comprising “VGBL” and “PGBL” products are classified as 1 to 30 days, without considering average historical turnover.

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Notes to the Consolidated Financial Statements

32) EMPLOYEE BENEFITS

Bradesco and its subsidiaries sponsor a private defined contribution pension for employees and directors, that allows financial resources to be accumulated by participants throughout their careers by means of employee and employer contributions and invested in an Exclusive Investment Fund (FIE). The Plan is managed by Bradesco Vida e Previdência S.A. and BRAM – Bradesco Asset Management S.A. DTVM is responsible for the financial management of the FIEs funds.

The Supplementary Pension Plan counts on contributions from employees and administrators of Bradesco and its subsidiaries equivalent to at least 4% of the salary by employees and, 5% of the salary, plus the percentage allocated to covers of risk benefits (invalidity and death) by the company. Actuarial obligations of the defined contribution plan are fully covered by the plan assets of the corresponding FIE. In addition to the plan, in 2001, participants who chose to migrate from the defined benefit plan are guaranteed a proportional deferred benefit, corresponding to their accumulated rights in that plan. For the active participants, retirees and pensioners of the defined benefit plan, now closed to new members, the present value of the actuarial obligations of the plan is fully covered by guarantee assets.

Banco Alvorada S.A. (successor from the spin-off of Banco Baneb S.A.) maintains defined contribution and defined benefit retirement plans, through Fundação Baneb de Seguridade Social – Bases related to the former employees of Baneb.

Bradesco sponsors both defined benefit and defined contribution retirement plans, through Caixa de Assistência e Aposentadoria dos Funcionários do Banco do Estado do Maranhão (Capof), to employees originating from Banco BEM S.A.

Bradesco sponsors a defined benefit plan through Caixa de Previdência Privada Bec – Cabec for employees of Banco do Estado do Ceará S.A.

Kirton Bank Brasil S.A., Kirton Capitalização S.A., Kirton Corretora de Seguros S.A., Bradesco Kirton Corretora de Títulos e Valores Mobiliários S.A. and Kirton Seguros S.A. sponsor a defined benefit plan called APABA for employees originating from Banco Bamerindus do Brasil S.A., and Kirton Administração de Serviços para Fundos de Pensão Ltda. sponsors for its employees a defined contribution plan, known as the Kirton Prev Benefits Plan (Plano de Benefícios Kirton Prev), both managed by MultiBRA – Pension Fund.

Banco Losango S.A., Kirton Bank Brasil S.A. and Credival – Participações, Administração e Assessoria Ltda. sponsor three pension plans for its employees, which are: Losango I Benefits Plan – Basic Part, in the defined benefit mode, Losango I – Supplementary Part and PREVMAIS Losango Plan, the last two in the form of contribution variable, all managed by MultiBRA – Settlor – Multiple Fund.

Bradesco also took on the obligations of Kirton Bank Brasil S.A. with regard to Life Insurance, Health Insurance Plans, and Retirement Compensation for employees coming from Banco Bamerindus do Brasil S.A.

Bradesco, in its offices abroad, provides pension plans for its employees and administrators, in accordance with the standards established by the local authorities, which allows the accrual of financial resources during the professional career of the participant.

Expenses related to contributions made during the first quarter of 2018 totaled R$260,337 thousand (R$223,803 thousand in 2017).

In addition to this benefit, Bradesco and its subsidiaries offer other benefits to their employees and administrators, including health insurance, dental care, life and personal accident insurance, and professional training. These expenses, including the aforementioned contributions, totaled R$ 1,113,219 thousand during the first quarter of 2018 (R$1,127,265 thousand in 2017).

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Notes to the Consolidated Financial Statements

33) INCOME TAX AND SOCIAL CONTRIBUTION

a) Calculation of income tax and social contribution charges

| Accrued on March 31 - R$ thousand
2018 | 2017
Income before income tax and social contribution | 7,550,892 | 6,923,295
Total burden of income tax and social contribution at the current rates (1) | (3,397,901) | (3,115,483)
Effect on the tax calculation: |  |
Equity investment in unconsolidated and jointly controlled companies | 192,530 | 192,841
Net non-deductible expenses of nontaxable income | 11,112 | (22,370)
Interest on shareholders’ equity (paid and payable) | 804,392 | 830,199
Other amounts (2) | (633,579) | (701,982)
Income tax and social contribution for the period | (3,023,446) | (2,816,795)

(1) Current rates: (i) 25% for income tax; (ii) 20% for the social contribution to financial and companies treated as such, including the insurance segment, and of 9% for the other companies (Note 3h); and

(2) Primarily, includes: (i) the exchange rate variation of assets and liabilities, derived from investments abroad; (ii) the equalization of the effective rate in relation to the rate 45% shown; and (iii) the deduction incentives.

b) Breakdown of income tax and social contribution in the statement of income

| Accrued on March 31 - R$ thousand
2018 | 2017
Current taxes: |  |
Income tax and social contribution payable | (3,103,977) | (4,055,415)
Deferred taxes: |  |
Amount recorded/realized in the period on temporary differences | 382,538 | 2,134,850
Use of opening balances of: |  |
Social contribution loss | (204,537) | (430,200)
Income tax loss | (195,356) | (528,233)
Constitution in the period on: |  |
Social contribution loss | 66,544 | 26,485
Income tax loss | 31,342 | 35,718
Total deferred tax assets | 80,531 | 1,238,620
Income tax and social contribution for the period | (3,023,446) | (2,816,795)

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Notes to the Consolidated Financial Statements

c) Deferred income tax and social contribution

| R$ thousand
Balance on 12/31/2017 | Amount recorded | Realized / Decrease | Balance on 03/31/2018
Allowance for loan losses | 29,789,386 | 2,021,665 | 1,469,621 | 30,341,430
Civil provisions | 2,191,002 | 201,471 | 188,200 | 2,204,273
Tax provisions | 2,874,482 | 50,945 | 20,049 | 2,905,378
Labor provisions | 2,160,997 | 255,588 | 163,108 | 2,253,477
Provision for devaluation of securities and investments | 239,482 | 22,062 | 4,151 | 257,393
Provision for devaluation of foreclosed assets | 607,613 | 88,025 | 79,583 | 616,055
Adjustment to fair value of trading securities | 3,704,394 | 267,771 | 716,162 | 3,256,003
Amortization of goodwill | 346,069 | 9,973 | 6,274 | 349,768
Provision for interest on own capital (1) | - | 655,628 |  | 655,628
Other | 4,921,716 | 768,736 | 1,312,178 | 4,378,274
Total deductible taxes on temporary differences | 46,835,141 | 4,341,864 | 3,959,326 | 47,217,679
Income tax and social contribution losses in Brazil and overseas | 5,003,872 | 97,886 | 399,893 | 4,701,865
Subtotal (2) | 51,839,013 | 4,439,750 | 4,359,219 | 51,919,544
Adjustment to fair value of available-for-sale securities | 557,807 | 24,368 | 104,272 | 477,903
Total deferred tax assets (Note 10b) | 52,396,820 | 4,464,118 | 4,463,491 | 52,397,447
Deferred tax liabilities (Note 33f) | 4,562,687 | 2,380,956 | 1,678,049 | 5,265,594
Deferred tax assets, net of deferred tax liabilities | 47,834,133 | 2,083,162 | 2,785,442 | 47,131,853
- Percentage of net deferred tax assets on capital (Note 31) | 45.7% |  |  | 47.1%
- Percentage of net deferred tax assets over total assets | 3.9% |  |  | 3.8%

(1) The tax credit on interest on capital is accounted for up to the permitted tax limit; and

(2) Deferred tax assets from financial companies and similar companies, and insurance companies were calculated considering the increase in the social contribution rate, determined by Law No. 11,727/08 and Law No. 13,169/15 (Note 3h). With regard to the temporary effects produced by the adoption of Law No. 13,169/15, which raised the rate of the social contribution to 20%, the deferred tax assets, are calculated based on the expected implementation.

d) Expected realization of deferred tax assets on temporary differences, tax loss and negative basis of social contribution

| R$ thousand
Temporary differences | Income tax and social contribution losses | Total
Income tax | Social contribution | Income tax | Social contribution
2018 | 5,737,922 | 3,958,888 | 91,150 | 109,045 | 9,897,005
2019 | 6,780,270 | 4,088,829 | 94,608 | 82,348 | 11,046,055
2020 | 6,250,924 | 3,728,777 | 93,883 | 79,426 | 10,153,010
2021 | 5,089,639 | 3,043,954 | 600,744 | 377,059 | 9,111,396
2022 | 2,946,845 | 1,748,577 | 740,103 | 491,650 | 5,927,175
After 2022 | 2,406,186 | 1,436,868 | 833,506 | 1,108,343 | 5,784,903
Total | 29,211,786 | 18,005,893 | 2,453,994 | 2,247,871 | 51,919,544

The projected realization of deferred tax assets is an estimate and it is not directly related to the expected accounting income.

On March 31, 2018, the present value of d eferred tax assets, calculated based on the average funding rate, net of tax effects, amounts to R$48,955,974 thousand (R$47,626,390 thousand in 2017), of which: R$44,731,319 thousand (2017 - R$43,357,124 thousand) of temporary differences; and R$4,224,655 thousand (R$4,269,266 thousand in 2017) to tax losses and negative basis of social contribution.

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Notes to the Consolidated Financial Statements

e) Unrecognized deferred tax assets

On March 31, 2018, deferred tax assets of R$17,477 thousand (R$20,672 thousand in 2017) were not recognized, and will only be registered when they meet the regulatory requirements and/or present prospects of realization according to technical studies and analyses prepared by the Management and in accordance with Bacen regulations.

f) Deferred tax liabilities

| On March 31 - R$ thousand
2018 | 2017
Fair value adjustment to securities and derivative financial instruments | 2,290,085 | 1,399,384
Difference in depreciation | 272,625 | 348,870
Judicial deposit and others | 2,702,884 | 2,129,979
Total | 5,265,594 | 3,878,233

The deferred tax liabilities of companies in the financial and insurance sectors were established considering the increased social contribution rate, established by Law No. 11,727/08 and Law No. 13,169/15 (Note 3h).

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Notes to the Consolidated Financial Statements

34) OTHER INFORMATION

a) Fair value

The book value, net of loss provisions of the principal financial instruments is shown below:

Portfolio | On March 31 - R$ thousand
Unrealized gain/(loss) without tax effects
Book value | Fair value | In income statement | In shareholders’ equity
2018 | 2018 | 2017 | 2018 | 2017
Securities and derivative financial instruments (Notes 3e, 3f and 7) | 516,559,089 | 519,049,899 | 6,359,038 | 5,703,465 | 2,490,810 | 3,584,916
- Adjustment of available-for-sale securities (Note 7bII) |  |  | 3,868,228 | 2,118,549 |  |
- Adjustment of held-to-maturity securities (Note 7c item 4) |  |  | 2,490,810 | 3,584,916 | 2,490,810 | 3,584,916
Loan and leases (Notes 2, 3g and 9) (1) | 370,763,670 | 371,264,030 | 500,360 | (4,936,278) | 500,360 | (4,936,278)
Investments (Notes 3j and 12) (2) | 8,003,779 | 30,578,216 | 22,574,437 | 22,980,419 | 22,574,437 | 22,980,419
Treasury shares (Note 22d) | 440,514 | 1,032,244 | - | - | 591,730 | 261,161
Time deposits (Notes 3n and 15a) | 135,047,583 | 134,825,815 | 221,768 | 337,298 | 221,768 | 337,298
Funds from issuance of securities (Note 15c) | 142,589,826 | 142,289,135 | 300,691 | 62,205 | 300,691 | 62,205
Borrowing and on-lending (Notes 16a and 16b) | 47,734,757 | 47,894,549 | (159,792) | (265,307) | (159,792) | (265,307)
Subordinated debts (Note 18) | 46,148,262 | 46,688,713 | (540,451) | (560,372) | (540,451) | (560,372)
Unrealized gains excluding tax |  |  | 29,256,051 | 23,321,430 | 25,979,553 | 21,464,042

(1) Includes advances on foreign exchange contracts, leases and other receivables with lending characteristics; and
(2) Primarily includes the surplus of interest in subsidiaries, associates and jointly controlled companies (Cielo, Odontoprev and Fleury).

Determination of the fair value of financial instruments:

· Securities and derivative financial instruments, investments, subordinated debts and treasury shares are based on the market price at the reporting date. If no quoted market price is available, amounts are estimated based on the dealer quotations, pricing models, quotation models or quotations for instruments with similar characteristics;

· Fixed rate loans were determined by discounting estimated cash flows, using interest rates applied by the Organization for new contracts with similar features. These rates are consistent with the market at the reporting date; and

· Time deposits, funds from issuance of securities, borrowing and on-lending were calculated by discounting the difference between the cash flows under the contract terms and our prevailing market rates for the same product at the reporting date.

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Notes to the Consolidated Financial Statements

b) The Organization manages investment funds and portfolios with net assets which, on March 31, 2018, amounted to R$841,982,640 thousand (R$786,139,579 thousand in 2017).

c) Consortium funds

| On March 31 - R$ thousand
2018 | 2017
Monthly estimate of funds receivable from consortium members | 641,083 | 596,419
Contributions payable by the group | 30,574,087 | 29,952,349
Consortium members - assets to be included | 26,576,688 | 26,301,008
Credits available to consortium members | 6,059,983 | 5,673,320

b)

| On March 31 - In units
2018 | 2017
Number of groups managed | 3,448 | 3,684
Number of active consortium members | 1,422,020 | 1,375,356
Number of assets to be included | 623,461 | 642,464

d) As part of the convergence process with international accounting standards, the Brazilian Accounting Pronouncements Committee (CPC) has issued several accounting pronouncements, as well as their interpretations and guidelines, which are applicable to financial institutions only after approval by CMN. Until March 31, 2018, the accounting pronouncements approved by CMN and adopted by Bradesco in prior periods were as follows:

· Resolution No. 3,566/08 – Impairment of Assets (CPC 01);

· Resolution No. 3,604/08 – Statement of Cash Flows (CPC 03);

· Resolution No. 3,750/09 – Related Party Disclosures (CPC 05);

· Resolution No. 3,823/09 – Provisions, Contingent Liabilities and Contingent Assets (CPC 25);

· Resolution No. 3,973/11 – Subsequent Event (CPC 24);

· Resolution No. 3,989/11 – Share-based Payment (CPC 10 - R1);

· Resolution No. 4,007/11 – Accounting Policies, Changes in Estimates and Error Correction (CPC 23);

· Resolution No. 4,144/12 – Basic Conceptual Pronouncement (R1); and

· Resolution No. 4,424/15 – Employee Benefits (CPC 33 – R1).

Presently, it is not possible to estimate when the CMN will approve the other CPC pronouncements or if they will be applied prospectively or retrospectively.

CMN Resolution No. 3,786/09 and Circular Letters No. 3,472/09 and No. 3,516/10 establish that financial institutions and other entities authorized by Bacen to operate, which are publicly-held companies or which are required to establish an Audit Committee shall, since December 31, 2010, annually prepare and publish in up to 90 days after the reference date of December 31 their consolidated financial statements, prepared under the International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). As required by Resolution, on March 8, 2018, Bradesco published its consolidated financial statements for December 31, 2017 and 2016 on its website, in accordance with IFRS.

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Notes to the Consolidated Financial Statements

e) In the first quarter of 2018, in order to adjust the structural levels of compulsory deposits, simplify and improve the rules and induce a reduction in the cost of credit, the Central Bank changed its rules for the collection of compulsory deposits, according to the table below:

Description | Standard before amendment | Amended standard
Savings deposits | The compulsory savings reserve was 24.5% on the calculation basis defined in regulation. | As from May 5, 2018, the compulsory savings savings will be reduced to 20% on the calculation basis defined in regulation.
Savings deposits (Rural) | The reserve requirements on rural savings was 21% on the basis of calculation defined in regulation. | As from May 5, 2018, the compulsory payment on rural savings will be reduced to 20% on the calculation basis defined in regulation.
Demand deposits | The daily verification of compliance with the requirement to pay cash deposits was made in accordance with the sum of the daily closing balance of the Bank Reserves account, the arithmetic mean of the financial institution's deposits recorded under "1.1.1.10.00-6 Cash "of Cosif at the close of each business day of the respective calculation period up to the limit of 40% (forty percent) of the chargeable charge to the institution and of the balance of operations valid for deduction of the compulsory payment on demand, verified in the respective calculation period, considering their respective regulatory limits. | As from May 5, 2018, the daily verification of the fulfillment of demand for payment of demand deposits shall be made according to the sum of the daily closing balance of the Bank Reserves account and the base value-sight, valid for deduction of the withdrawal on demand resources.
The deductibility value of the base calculation of the reserve requirement on demand resources corresponding to the arithmetic average of the RSVs calculated in the calculation period, was R$ 70,000,000.00. | From May 7, 2018, the deductible value of the compulsory reserve on demand resources corresponding to the arithmetic average of the RSVs calculated in the calculation period will be R$ 200,000,000.00.
The compulsory reserve on demand was 40%, based on the calculation basis defined in regulations. | As of May 7, 2018, the compulsory reserve on cash resources will be 25%, based on the calculation defined in regulations.

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Management Bodies

Reference date: April 25, 2018 Board of Directors Chairman Luiz Carlos Trabuco Cappi Vice-Chairman Carlos Alberto Rodrigues Guilherme Members Denise Aguiar Alvarez João Aguiar Alvarez Milton Matsumoto Alexandre da Silva Glüher Josué Augusto Pancini Maurício Machado de Minas Board Executive Officers Chief Executive Officer Octavio de Lazari Junior Executive Vice-Presidents Josué Augusto Pancini Maurício Machado de Minas Marcelo de Araújo Noronha André Rodrigues Cano Cassiano Ricardo Scarpelli Eurico Ramos Fabri Managing Directors Denise Pauli Pavarina Moacir Nachbar Junior Renato Ejnisman Walkiria Schirrmeister Marchetti Deputy Directors Aurélio Guido Pagani Guilherme Muller Leal Luiz Carlos Brandão Cavalcanti Junior Rogério Pedro Câmara João Carlos Gomes da Silva Bruno D´Avila Melo Boetger Glaucimar Peticov José Ramos Rocha Neto Department Directors Amilton Nieto André Bernardino da Cruz Filho André Ferreira Gomes Antonio Carlos Melhado Antonio Daissuke Tokuriki Antonio Gualberto Diniz Antonio José da Barbara Carlos Wagner Firetti Clayton Camacho Edilson Wiggers Edson Marcelo Moreto Fernando Antônio Tenório Frederico William Wolf Hiroshi Obuchi João Albino Winkelmann José Sérgio Bordin Layette Lamartine Azevedo Júnior Leandro José Diniz Lucio Rideki Takahama Marcelo Frontini Marcelo Santos Dall’Occo Marcio Henrique Araujo Parizotto Marcos Aparecido Galende Marlos Francisco de Souza Araujo Mauricio Gomes Maciel Paulo Aparecido dos Santos Paulo Manuel Taveira de Oliveira Ferreira Roberto de Jesus Paris Waldemar Ruggiero Júnior Directors Albert Adell Roso Alexandre Cesar Pinheiro Quercia Antranik Haroutiounian Carlos Henrique Villela Pedras Carlos Leibowicz Edilson Dias dos Reis Edmir José Domingues Fernando Freiberger Fernando Honorato Barbosa Gilvandro Matos Silva | Jefferson Ricardo Romon José Augusto Ramalho Miranda José Gomes Fernandes Klayton Tomaz dos Santos Manoel Guedes de Araujo Neto Marcos Antônio Martins Nairo José Martinelli Vidal Júnior Oswaldo Tadeu Fernandes Paulo Eduardo Waack Roberto França Roberto Medeiros Paula Victor Rosa Marinho de Queiroz Regional Officers Ademir Aparecido Correa Junior Alberto do Nascimento Lemos Almir Rocha Altair Luiz Guarda * Altair Naumann Amadeu Emilio Suter Neto Antonio Piovesan Carlos Alberto Alástico César Cabús Berenguer Silvany Delvair Fidêncio de Lima Francisco Assis da Silveira Junior Francisco Henrique França Fernandes Geraldo Dias Pacheco João Alexandre Silva João Pedro da Silva Villela Joel Queiroz de Lima José Flávio Ferreira Clemente José Roberto Guzela Nelson Veiga Neto Osmar Sanches Biscuola Paulo Roberto Andrade de Aguiar Committees Subordinated to the Board of Directors Statutory Committees Audit Committee Milton Matsumoto - Coordinator Paulo Roberto Simões da Cunha – Financial Expert Wilson Antonio Salmeron Gutierrez Compensation Committee Luiz Carlos Trabuco Cappi - Coordinator Carlos Alberto Rodrigues Guilherme Milton Matsumoto Valdirene Soares Secato (non-Manager) Non-Statutory Committees Compliance and Internal Control Committee Carlos Alberto Rodrigues Guilherme - Coordinator Milton Matsumoto Alexandre da Silva Glüher Josué Augusto Pancini Maurício Machado de Minas Marcelo de Araújo Noronha André Rodrigues Cano Moacir Nachbar Junior Clayton Camacho Edilson Wiggers Frederico William Wolf Marlos Francisco de Souza Araujo Ethical Conduct Committee Carlos Alberto Rodrigues Guilherme - Coordinator Milton Matsumoto Alexandre da Silva Glüher Josué Augusto Pancini Maurício Machado de Minas Octavio de Lazari Junior Marcelo de Araújo Noronha André Rodrigues Cano Clayton Camacho Edilson Wiggers Frederico William Wolf Glaucimar Peticov Nairo José Martinelli Vidal Júnior * Process is being ratified by Bacen. | Integrated Risk Management Committee and Capital Allocation André Rodrigues Cano - Coordinator Alexandre da Silva Glüher Josué Augusto Pancini Maurício Machado de Minas Marcelo de Araújo Noronha Moacir Nachbar Junior Cassiano Ricardo Scarpelli Eurico Ramos Fabri Marlos Francisco de Souza Araujo Risk Committee José Alcides Munhoz - Coordinator Carlos Alberto Rodrigues Guilherme André Rodrigues Cano Succession Planning and Nomination Committee Luiz Carlos Trabuco Cappi - Coordinator Carlos Alberto Rodrigues Guilherme Milton Matsumoto Octavio de Lazari Junior André Rodrigues Cano Glaucimar Peticov Sustainability Committee Luiz Carlos Trabuco Cappi - Coordinator Carlos Alberto Rodrigues Guilherme Milton Matsumoto Alexandre da Silva Glüher Josué Augusto Pancini Maurício Machado de Minas Octavio de Lazari Junior Marcelo de Araújo Noronha André Rodrigues Cano Denise Pauli Pavarina Moacir Nachbar Junior Eurico Ramos Fabri Glaucimar Peticov Marcos Aparecido Galende Committee to the Chief Executive Officer Executive Disclosure Committee Denise Pauli Pavarina - Coordinator Josué Augusto Pancini Maurício Machado de Minas Octavio de Lazari Junior Marcelo de Araújo Noronha André Rodrigues Cano Moacir Nachbar Junior Antonio José da Barbara Carlos Wagner Firetti Marcelo Santos Dall’Occo Marcos Aparecido Galende Oswaldo Tadeu Fernandes Haydewaldo Roberto Chamberlain da Costa Fiscal Consil Sitting Members Ariovaldo Pereira - Coordinator Domingos Aparecido Maia José Maria Soares Nunes João Carlos de Oliveira Walter Luis Bernardes Albertoni Deputy Members Jorge Tadeu Pinto de Figueiredo Nilson Pinhal Renaud Roberto Teixeira José Luiz Rodrigues Bueno Reginaldo Ferreira Alexandre Ombudsman Department Nairo José Martinelli Vidal Júnior - Ombudsman General Accounting Department Oswaldo Tadeu Fernandes Accountant– CRC 1SP271968/O-5

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Independent Auditor’s Report on the Consolidated Financial Statements

To

Shareholders and the Board of Directors of

Banco Bradesco S.A.

Osasco – SP

Introduction

We have reviewed the interim consolidated financial information of Banco Bradesco S.A. ("Bradesco" or "Bank"), which comprise the consolidated balance sheet as of March 31, 2018 and the related consolidated statements of income, changes in shareholders' equity and cash flows for the three-month period then ended, including the explanatory notes.

Management of Bradesco is responsible for the preparation and fair presentation of this interim consolidated financial information in accordance with accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by the Central Bank of Brazil. Our responsibility is to express a conclusion on this interim consolidated financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Review of Interim Financial Information (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The scope of a review is substantially less than an audit conducted in accordance with auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Therefore, we do not express an audit opinion.

Conclusion

Based on our review, we are not aware of any facts that would lead us to believe that the consolidated interim financial information mentioned above were not prepared, in all material aspects, in accordance with accounting practices adopted in Brazil applicable to financial institutions authorized to operate by the Central Bank of Brazil.

Other matters

Statement of Added Value

The consolidated interim accounting information related to the Statement of Added Value for the three-month period ended March 31, 2018 prepared under the responsibility of Bradesco's management, whose presentation is not required by the accounting practices adopted in Brazil applicable to institutions authorized to operate by the Central Bank of Brazil, were subject to review procedures performed in conjunction with the review of Bradesco's interim consolidated financial information. For our conclusion, we assess whether this statement is reconciled with the interim accounting information and with the accounting records, as applicable, and whether its form and content comply with the criteria set forth in Technical Pronouncement CPC 09 - Statement of Added Value. Based on our review, we are not aware of any fact that would lead us to believe that the Statement of Added Value was not prepared, in all material respects, in a manner consistent with the interim consolidated accounting information taken as a whole.

Osasco, April 25, 2018

KPMG Auditores Independentes

CRC 2SP028567/O-1 F SP

Original report in Portuguese signed by

Rodrigo de Mattos Lia

Accountant CRC 1SP252418/O-3

140 Economic and Financial Analysis Report – March 2018

| Consolidated Financial Statements, Independent Auditors' Report and Fiscal Council’s Report

Fiscal Council Report

The members of the Audit Committee, in the exercise of their legal and statutory attributes, have examined the Management Report and the Financial Statements of Banco Bradesco S.A. , for the first quarter of 2018, and the technical feasibility study of generation of taxable profits, restated at present value, in order to establish the Deferred Tax Asset according to CVM Instruction No. 371/02, Resolution No. 3.059/02, of the National Monetary Council and Circular No. 3.171/02, of the Brazilian Central Bank, and in view of the report of KPMG Independent Auditors, presented without reservations, are of the opinion that the stated documents, examined in light of the accounting practices adopted in Brazil, applicable to the institutions authorized to operate by the Brazilian Central Bank, appropriately reflect the assets and liabilities and financial status of the Company.

Cidade de Deus, Osasco, SP, April 25, 2018.

Ariovaldo Pereira

Domingos Aparecido Maia

José Maria Soares Nunes

João Carlos de Oliveira

Walter Luis Bernardes Albertoni

Bradesco 141

For further information, please contact:

Board of Executive Officers

Denise Pauli Pavar q qina

Executive Managing Officer and Investor Relations Officer

Phone: (11) 3684-4011

Fax: (11) 3684-4630

diretoria.executiva@bradesco.com.br

Market Relations Department

Carlos Wagner Firetti

Phone: (11) 2194-0922

Cidade de Deus, s/nº - Prédio Vermelho - 3º andar

Osasco - SP

Brazil

banco.bradesco/ri

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 2, 2017

BANCO BRADESCO S.A.
By: |  | /S/Denise Pauli Pavarina
|  | Denise Pauli Pavarina Executive Director Manager and Investor Relations Officer.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.