Mar 11, 2020

On Wednesday, March 11, the Brazilian Development Bank (BNDES) presented the financial and social results of its 2019 operations. The Bank recorded a yearly net income of R$ 17.72 billion, equivalent to an increase of 164% in comparison to 2018 (R$ 6.71 billion). The year of 2019 also saw the creation of BNDES’s “project factory” for concession and privatization projects. It will directly benefit the Brazilian population through improvements in sanitation, transportation, health, education and security, generating employment, income and tax revenues. BNDES reached the end of 2019 with a portfolio of 57 concession and privatization projects. These are expected to generate an investment of R$ 176 billion in the Brazilian economy.

During a press conference, the president of BNDES, Gustavo Montezano, explained that “our financial performance is relevant, but when it comes to BNDES, the important factor is how much social profit the Bank is generating, how it is contributing to developing Brazil or, rather, the lives of Brazilians.”

The financing projects approved by the bank last year alone will contribute to an increase of 1,773 MW in energy generation capacity (with 1,208 MW coming from renewable sources), enough to meet the demands of 14.6 million inhabitants. In the area of sanitation, the projects will also allow for the implementation of 13,304 new sewage connections and 1,434 new water connections. Moreover, the Bank’s seven concession projects – led by BNDES alongside the states of Alagoas, Acre, Amapá, Rio de Janeiro and Rio Grande do Sul, in addition to the cities of Cariacica (ES) and Porto Alegre (RS) – should bring water and sewage to 20.8 million people.

Fabio Abrahão, the Bank’s director of Infrastructure, Concessions and Public-private Partnerships, expects the expansion of several concession and privatization projects in the coming months, especially in the field of state and municipal enterprises. “The basic sanitation sector should be the highlight of the year. Our plan is to auction assets alongside the states of Alagoas, Acre, Amapá and Rio de Janeiro,” said Abrahão.

 These advances are in line with the goals set forth by the Bank’s Triennial Plan, which established its 15 main deliveries between 2020 and 2022 after mapping out the most important challenges faced by Brazilian economy and society. Through upcoming disclosures, BNDES will provide status updates on each of these deliveries.

 Financial performance in the year of 2019 is mainly attributed to the sale of shares, which garnered R$ 16.5 billion, with a gross profit of R$ 11.4 billion. One highlight was Suzano’s incorporation of Fibria, during the first half of 2019.

 Assets – By December 31, 2019, financial assets in the BNDES System had reached R$ 728.2 billion, a yearly decrease of R$ 74.3 billion (9.3%). This reduction was mostly the result of anticipated payments to the National Treasury, in the tune of R$ 100 billion.

 By December 31, 2019, our credit portfolio totaled R$ 441.8 billion. Year-over-year this amounts to a R$ 55.3 billion (11.1%) decline, due to received payments exceeding disbursements by R$ 90.2 billion.

 BNDES’s financial director Bianca Nasser showed that disbursements to small and medium-sized companies represented 46% of total loans. Resources destined for large companies were concentrated on infrastructure and exports.

 When disregarding operations honored by the Federation, defaulting (defined as arrears longer than 90 days) improved considerably, decreasing from 1.67% on December 31, 2018 to 0.84% on 31 December 2019, below the National Financial System benchmark (2.92% on December 31, 2019).

 By December 31, 2019, our equity interests’ portfolio (affiliated and nonaffiliated companies) sat at R$ 111.9 billion. This position went through a R$ 17.250 billion yearly growth (18.2%), despite significant equity sales (Petrobras, Vale and Fibria, for instance) during the first half of the year. Such an increase is attributed mainly to the significant appreciation of stocks of nonaffiliated companies, especially Petrobras and Eletrobras.

 Funding sources – As of December 31, 2019, FAT and PIS-Pasep funds represented 43% of BNDES funding sources (versus 36% in 2018). National Treasury funds, on the other hand, represented 27% of total funding (versus 38% in the previous year).

 Treasury payments – In 2019, BNDES contributed a total of R$ 142.2 billion to the Treasury, out of which R$ 123 billion corresponded to the payment of debts incurred from the Federal Government (R$ 100 billion in anticipated payments and R$ 23 billion in ordinary payments), R$ 9.5 billion corresponded to dividends, and R$ 9.7 billion corresponded to taxes. 

 Solidity – BNDES’s Basel Ratio rose from 29.0% in December 2018 to 36.8% in December 2019, well above the Central Bank of Brazil’s 10.5% requirement. This improvement resulted from both an increase in reference equity and a reduction in risk-weighted assets.

See our presentation of 2019 results in portuguese (PDF – 3.1 MB)