Nov 14, 2018

Gross income with shares in other companies reached R$ 5.76 billion and influenced the result positively

Good quality of the portfolio was maintained: 94.6% of operations are between levels AA and C, considered low-risk, and above the average of the NFS (90.4%) 

Expense with allowance for credit risk was 70.2% lower than the previous period

The Brazilian Development Bank (BNDES) registered a net income of R$ 6.36 million up to September 2018, an increase of 98.7% compared with the same month in 2017. The profit was influenced by the best result with shares in other companies (+ R$ 2.87 billion, an increase of 99.4%) and by the reduction of R$ 3.95 billion in expenditure with allowance for credit risk (70.2% lower than that established in the previous period). 

The performance of the shares in other companies of all the BNDES System (including BNDESPAR) between January and September this year reflected the growth of R$ 1.98 billion (119.5%) in the result of divestitures, especially the sale of shares of Petrobras, Eletropaulo and Vale. At the end of September, the participation of the BNDES System in Petrobras was 15.24%, compared with 16.54% in December 2017.

The reversal of R$ 467 million of impairment losses, held in the first semester, and the increase in the return with dividends and interest on equity of R$ 594 million (a variation of 94.59%) up to September were also relevant to the composition of the result with shares in other companies.

The portfolio value of shares in other companies (shares in affiliated and non-affiliated companies and in variable income investment funds) amounted to R$ 99.70 billion in September, an increase of R$ 14.20 billion (16.60%), due to the appreciation, in the amount of R$ 13.59 billion, of the portfolio of shares in non-affiliated companies, especially the investments in Petrobras, Vale and Eletrobras.

Provision – The need for allowance for credit risk decreased, unlike that observed in the first nine months of 2017, going from R$ 5.64 billion to R$ 1.68 billion between January and September 2018.

Intermediation – The gross income on financial intermediation showed reduction of R$ 2.26 billion (decrease of 18.25%) in the first nine months of 2018, when compared with the same period of the previous year. The decrease reflects the decline in the volume and in the profitability of the credit operations portfolio and the decrease in the profitability of the securities portfolio, following the reduction of the average market rates.

Assets – The assets of the BNDES System totaled R$ 791.48 billion in September 2018, a decrease of R$ 42.98 billion (5.2%) in the quarter, caused mainly by the advances of R$ 70 billion in debt with the National Treasury. 

The credit operations and transfers portfolio, net of provision, represented 63.9% of the total assets in September, and it registered a decline of R$ 12.87 billion (2.5%) in the quarter due to the volume of settlements, which surpassed the volume of disbursements by R$ 22.98 billion, attenuated by foreign exchange effect and allocation of interest and monetary adjustment in the period.

The good quality of the portfolio was maintained, with the concentration of 94.6% of operations between the risk levels AA and C, considered low-risk, percentage higher than the average of 90.4% of the National Financial System (NFS), released in June by BACEN.

Default – The default rate above 90 days also increased in the quarter, going from 1.45% in June to 2.94% in September, but it is still lower than the average of the NFS (3.04% in June and 3.03% in September).

Disregarding the operations whose benefits are fully honored by the Union, the default rate of BNDES would be 1.67% (90 days). The index of renegotiation, which comprises the renegotiated credit operations in the last 12 months, reduced from 4.80% in June to 4.75% in September.

Funding – On September 30, 2018, the National Treasury and FAT/PIS-PASEP accounted for 38.2% and 35.8%, respectively, of the BNDES funding sources. Due to the advance of R$ 70 billion made to the Treasury during the quarter, the debt with the NT reduced 17.7% and ended the period at R$ 302.52 billion. 

The balance of FAT totaled R$ 264.50 billion in September, an increase of 1.06% in the quarter. In the year, R$ 13.55 billion of resources from FAT entered, and BNDES returned R$ 15.45 billion to FAT through amortization and interest. 

The liability with the PIS-PASEP Fund totaled R$ 19.23 billion at the end of September, with 30.6% reduction in comparison with December 2017, due to early settlements of R$ 9.37 billion in the period.

Shareholders’ Equity – The Shareholders’ Equity of the BNDES System totaled R$ 80.6 billion at the end of September 2018, an increase of 12.8% (R$ 9.11 billion) compared with June. This result is explained by the net profit of R$ 1.60 billion and by the appreciation effect of the equity portfolio of R$ 7.51 billion, net of taxes.

Prudential Limits – The prudential limits of BNDES remained above the minimum required by BACEN, showing an improvement of the Basel Index compared with December 2017. Basis for the calculation of the prudential limits established by BACEN, the Reference Equity reached R$ 167.29 billion in September. 

The Basel Index went from 27.51% at the end of 2017 to 29.1% in September 2018, above the 10.5% required by the Central Bank of Brazil, mainly due to the increase in the reference equity (R$ 146.37 billion in December 2017 to R$ 167.29 billion in September 2018).

Tier 1 Capital and Core Capital also showed increase in the period, going from 18.34% in December 2017 to 19.93% in September 2018, above the 7.875% and the 6.375% required by BACEN, respectively. 

BNDESPAR – BNDESPAR, a wholly-owned subsidiary of BNDES, registered adjusted net profit for earnings of divestitures of shares in other companies in the amount of R$ 1.55 billion in the third quarter of 2018, accumulating R$ 5.36 billion in the nine-month period ended in September. 

This result is 106.9% higher than the net profit of R$ 2.59 billion for the same period of 2017. The increase is explained mainly by the result with divestitures, of R$ 4.78 billion, and by the result with dividends and interest on equity, of R$ 1.13 billion between January and September this year. In the same period in 2017, the result obtained with divestitures and with dividends and interest on equity was R$ 2.21 billion and R$ 0.60 billion, respectively. 

The main divestments made by BNDESPAR were the divestitures of shares of Petrobras, Vale and the completeness of the shares of Eletropaulo, which, together, accounted for 96% of the result with divestitures. Consequently, the percentage of participation of BNDESPAR in the total capital of Petrobras and Vale were 8.37% and 7.35%, compared with 9.67% and 7.60% on 12.31.17, respectively.

The result with dividends and interest on equity in the third quarter of 2018 was influenced by earnings received from Vale and Petrobras in the amount of R$ 594 million and R$ 55 million, respectively. Together, these companies account for 79% of the result with earnings of 2018.

The intermediate consolidated financial statements of BNDES for the period ended on 09.30.18 and the Quarterly Finance Report (QFR) of BNDESPAR concerning the quarter ended on 09.30.18 are available from BNDES Investors Relations Portal