The Brazilian Social and Economic Development Bank (BNDES) registered a net income of R$ 3.202 billion in the 9-month period ended in September. Considering the third quarter of 2017 only, profit totaled R$ 1.857 billion. The main positive impact was the R$ 6.99 billion increase of the results of shares in other companies, originated mainly from BNDESPAR, a subsidiary of the Bank that acts in the capitals market, alongside the R$ 1.4 billion reduction in credit risk provision. 

 

The recovery of the result with shares in other companies was observed in practically all lines that compose it: (i) R$ 4.635 billion (88%) reduction of expenditure with investment losses; (ii) growth of the result with disposal of variable income assets, which rose from R$ 623 million in 2016 to R$ 1.663 billion in 2017; and (iii) recovery of the result with derivatives of variable income, which went from a R$ 513 million loss in 2016 to a R$ 137 million profit, due to the recovery of the fair value of the relevant assets. The decrease in the spending with credit risk provision reflected the reduced need to create additional reserves to withstand possible losses in the credits portfolio.

 

On the other hand, the financial intermediation product had a R$ 6.759 billion (35.3%) reduction, due mainly to the reduction of the credits portfolio, its resources having been partially used for the early settlement of the debt with the TN, and to lower average profitability of the treasury portfolio.

 

Growth of expenditure with taxes on profit was also observed due to the lower level of constitution of tax credits in the period. 

 

Net Equity – BNDES’s net equity increased R$ 4.4 billion compared to 12/31/2016, due to the R$ 3.2 billion net profit and R$ 3.3 billion growth of the balance of equity valuation adjustment (a reflection of the increase in value of the portfolio of securities available for sale). Such effects were mitigated by the payment to the Treasury of supplementary dividends related to the year of 2016, in the amount of R$ 2.2 billion. 

 

Prudential Limits – BNDES’s prudential limits improved compared to 31 December 2016 and remained above the minimum required by the Central Bank. The Basel index went from 21.7% in 12/31/2016 to 25.9% in 9/30/17, 10.5% above the rate required by the Central Bank.

 

Assets – The BNDES System’s assets totaled R$ 868.5 billion by September 30, a R$ 7.561 billion (0.9%) decrease compared to 31 December 2016, influenced mainly by the early settlement of R$ 33 billion in loans with the National Treasury (TN). 

In 2017 defaults over 30 days fell back from 2.45% in June to 1.83% in September. The credits and transfers portfolio maintained its good quality in September, concentrating 95.8% of operations between risk levels AA and C, considered to be low risk, a higher percentage than that of the National Financial System, of 89.6% measured in June 17 (latest data available).

 

Sources of Funds – In relation to the sources of funds, loans and transfers showed a R$ 14.509 billion (1.9%) reduction in 2017, due, above all, to the early settlement of R$ 33 billion in loans with the National Treasury, partially mitigated by the raising of funds in the amount of R$ 3.185 billion (US$ 1 billion), through the issuance of green bonds in the international market and of R$ 11.6 billion from the Workers Aid Fund (FAT).

 

BNDESPAR – BNDESPAR registered a net income of R$ 1.341 billion in the third quarter of 2017. In the nine-month period ended on September 30, net profit totaled R$ 2.590 billion. This result represents a 283% increase in comparison to the net loss of R$ 1.415 billion in the same period of 2016, and was propelled by the recovery of the result with shares in other companies, which went from a R$ 4.103 billion loss in 2016 to a R$ 2.889 billion profit in 2017.

 

More on the website – BNDES’s consolidated financial statements for the nine-month period ended on 30 September 2017 are available on BNDES’s Investor Relations Web Portal.