Feb 28, 2012

• Result is the second best in the Bank’s history

The BNDES posted a net profit of R$ 9 billion in 2011. Gross earnings (before taxes and administrative costs) were influenced by the good performance of the credit and variable-income portfolios, which contributed 94% to profit. The treasury portfolio also had a positive impact, accounting for 6% of the Bank’s result in the year.

The result for the credit portfolio and transfers from the BNDES, before the effects of reversal of provisions for credit risk, increased in 2011. The value went from R$ 5.8 billion in 2010 to R$ 6.1 billion in December 2011, thus reflecting the growth and quality of the Bank’s financing portfolio.

The good performance in the BNDES’ variable income operations enabled gross earnings to go from R$ 6.4 billion in 2010 to R$ 6.8 billion in 2011. The increase was mainly due to the extra R$ 1.9 billion in revenue from dividends and interest on equity, which amounted to R$ 4.2 billion in 2011.

The value obtained from divestments (share sale), an important component of gross earnings from corporate stakes, decreased from R$ 1.5 billion in 2011, influenced by unfavorable conditions in the capital market, especially from the second half of the year.

Gross earnings from the Bank's Treasury operations decreased R$ 700 million, going from a gain of R$ 1.6 billion in 2010 to R$ 900 million in 2011, mainly due to the monetization of resources for application in the Credit Portfolio and Transfers.

The small reduction in net profit in 2011, of 8.7% compared to 2010 (R$ 9.9 billion), was mainly due to the high amounts in credit recovery in 2010, of R$ 2.3 billion. This fact - non-recurring, or a one-off occurrence - contributed to income from reversal of provision for credit risk from that year surpassing the value obtained from the reversal of provisions in 2011 by R$ 2.1 billion.

Financial position - The BNDES’ net worth amounted to R$ 61 billion, corresponding to a Referential Equity (RE) of R$ 99 billion, higher than the R$ 83.1 billion achieved in December, 2010. The RE growth was the result of a R$ 6.4 billion increase in capital held in the first quarter, which leverages the RE up to R$ 12.8 billion.

The Referential Equity is the base used by the Central Bank to set prudential limits to be followed by all financial institutions. The higher the BNDES’ Referential Equity, the greater its ability to provide financing.

The capital adequacy index (Basel Index), recorded by the BNDES System, was 20.6%. This means that for every R$ 100 financed, the Bank holds 20.6% of the equity, a comfortable situation regarding the 11% required by the Central Bank.

The BNDES was able to achieve a financial performance consistent with its activities as a development bank, reaching a credit portfolio of approximately R$ 426 billion in December 2011, representing 20.8% of the total supply of credit from the National Financial System (SFN). On the same date, some 83.1% (88.5% on 12/31/10) of the balance of credit transactions was classified as long term.

The BNDES’ default represented 0.14% of the total portfolio in 2011, below the SFN average: 3.6% in the same period. The quality of the Bank's portfolio is made evident by its profile of credit risk: 98.7% of total credits granted were classified between the risk levels AA and C in December 2011, well above the average of the National Financial System.

The low default rates and credit profile reflects the consistency of the operational policies. The Bank seeks to harmonize lower interest rates with the preservation of public equity by continuously monitoring credits and guarantees that cover the debt position over the duration of the contracts.

The total assets of the BNDES System amounted to R$ 625 billion in December 2011, an increase of R$ 75.8 billion (13.8%) compared to December 2010.