Aug 22, 2014

• Performance was boosted by high return on corporate stakes

The Brazilian Development Bank (BNDES) recorded net earnings of R$ 5.471 billion in the first half of 2014. The result is the highest ever presented for the period and 67.8% higher than the R$ 3.261 billion posted in the same period in 2013. Earnings were influenced by the excellent performance of BNDESPAR, a BNDES subsidiary, which recorded net earnings of R$ 2.148 billion, which is some 236.4% higher than that in the first half of last year.

Other indicators for the period were also positive. Return on average net equity for the BNDES System reached 8.53%, higher than the 6.73% registered in the same period in 2013; and the Basel index reached 18.4%, a comfortable situation compared to the 11.0% required by the Central Bank and some 17.1% higher than in March this year, and the 15.8% recorded in June 2013.

In addition to BNDESPAR’s performance, the BNDES System’s earnings include the results of both the Bank and Finame, respectively, R$ 2.994 billion (R$ 1.969 billion in June 2013) and R$ 330.9 million (R$ 443.9 million in June 2013).

The main positive impact on earnings in the BNDES System resulted from the 108.2% increase in income from corporate stakes, rising from R$ 1.779 billion in the first half of 2013 to R$ 3.703 billion in the same period this year. Historically, performance achieved through good management of operations in the BNDESPAR portfolio has allowed the BNDES to dramatically reduce costs of its credit in fixed income.

The increase in consolidated net earnings for the BNDES was due primarily to three factors: a high of 31.8% in revenue from dividends and interest on the Bank’s capital, which went from R$ 1.999 billion in 2013 to R$ 2.634 billion in 2014; improvement in earnings from derivatives, which increased from R$ 187 million in the first half of 2013 to R$ 657 million in the same period of 2014; and a 57.7% fall in expenditure on allowances for losses in investments to the tune of R$ 795 million, compared to R$ 336 million in the current semester.

Another factor that positively influenced earnings in June was the 19.3% increase in income from financial intermediation, rising from R$ 5.025 billion in the first half of 2013 to R$ 5.994 billion in the same period of 2014. The expansion was due to the growth of the loan and onlending portfolio, cash resource management, and improvement in earnings with allowances for credit risk.

The equity reference (PR), which determines the Bank’s financing capacity,
reached R$ 110.458 billion in June 2014, higher than the R$ 108.669 billion recorded in December 2013 and the R$ 96.021 billion in June last year.