Nov 23, 2011

The BNDES registered a net profit of R$ 7.9 billion from January to September 2011. The result represents an increase of R$ 1.8 billion (29.5%) compared to the R$ 6.1 billion obtained in the same period in 2010.

The main factors that contributed to the BNDES’ performance in 2011 were the revenue from the reversal of provisions for credit risk, R$ 1.6 billion, and the growth of R$ 1.3 billion in the result from corporate shares (stakes), 32.1% higher than in September 2010

Revenue from reversal of provisions for credit risk in 2011 was due to improvement in the quality of the Bank's portfolio and loan recoveries, considered as losses in previous years, amounting to R$ 710 million.

Increased earnings from corporate shares (stakes) in 2011 were due primarily to: (i) an increase of R$ 1.4 billion (growth of 88.2%) in revenue from dividends and interest on equity capital, which amounted to R$ 3 billion in the accumulated nine months of 2011; and (ii) an increase of R$ 1.4 billion from equity income, which rose from a loss of R$ 190 million in 2010 to a gain of R$ 1.22 billion in 2011.

The BNDES’ financial performance is now consistent with its activities as a development bank, reaching a loan portfolio of approximately R$ 403 billion in September 30, 2011. Gross product of financial intermediation in the first nine months of 2011 amounted to R$ 4.1 billion, a slight decrease (5.9%) over the same period in 2010.

This result is due to both the decrease in interest rates the BNDES charges on loans and the increase of investments in variable income.

Financial position - The BNDES’ net equity amounted to R$ 56.4 billion, corresponding to equity reference (PR) of R$ 94.1 billion, superior to the R$ 83.1 billion achieved in December 31, 2010. The growth in PR resulted from a capital increase of R$ 6.4 billion from the first quarter.

The equity reference is the base used by the Central Bank to set prudential limits that must be followed by all financial institutions. The higher the BNDES’ equity reference, the greater its ability to grant funding.

The capital adequacy ratio (CAR - Brazil’s Basel Index) recorded by the BNDES system was 20.5%, a comfortable situation in relation to the 11% required by the Central Bank. The CAR is the indicator that measures the relation between the institution's capital and the amount of borrowed funds, thus reflecting the level of a bank’s solvency.

The BNDES’ default rate represented 0.12% of the total portfolio. The quality of the Bank's portfolio is evident in its credit risk profile: 99.2% of total loans were classified between the AA and C risk levels on September 30, 2011, well below the average in the Brazilian Financial System.

Credit quality is a result of the consistency in the BNDES’ operational policy, in which loans granted are subject to continuous monitoring, and they require guarantees to cover the debt position throughout the estimated term of the contracts.

The BNDES System’s total assets totaled R$ 586 billion on September 30, 2011, an increase of R$ 37.3 billion (6.8% compared to December 31, 2010).