The National Economic and Social Development Bank (BNDES) registered net income of R $6.363 billion up to the third quarter of this year, an increase of 98.7% over the same period of 2017, which totaled R $3.202 billion. “We made the result of one year in nine months. The profit presented by BNDES in the last three years was of that order, “Ricardo Ramos, director of Planning and Automatic Operations of the bank, celebrated on Wednesday, Nov. 14 in Rio de Janeiro. In the third quarter, net income reached R $1.603 billion.
Return – The return of equity holdings played a significant role in profit, with a gross result of R $5.76 billion, a 99.4% increase compared to the first nine months of last year (R $2.88 billion). “It was nine very good months for the bank, overall,“ said the director.
Alienation – Carlos Frederico Rangel, superintendent of the Integrity, Controllership and Risk Management Area, highlighted the sale of mining company Vale in the third quarter of this year, amounting to R $600 million. He also recalled that in the first half of the year, Petrobras (R $1.8 billion) and, in the second quarter, Eletropaulo (R $1 billion) were sold.
Percentages – The three companies together accounted for 96% of the sale result. BNDES Participações (Bndespar) ‘s ownership interest in the total capital of Petrobras and Vale fell from 9.67% and 7.60% on December 31 of last year to 8.37% and 7.35% respectively, on September 30, 2018.
Provision – The reduction of the provision for credit risk from R $5.63 billion in the first nine months of 2017 to R $1.68 billion until September 2018 contributed to the Bank’s profit. This is explained, according to Carlos Rangel, due to the lower need for the constitution of new provisions.
Credit operations – In the balance sheet referring to credit operations, Carlos Rangel explained that the increase in total provisions for credit risk, from R $12.9 billion up to June, to R $19.3 billion up to September, is due to the recovery of past losses. “It was a loss in the past, and we were able to reverse the credit back to the balance sheet due to regulation,“ he said. He believes that the trend now is for bank clients to begin to regain their non-performing status at the institution. The BNDES reference equity up to September this year is R $167.296 billion.
Shareholders ‘equity – BNDES‘ net equity totaled R $80.6 billion at the end of the third quarter, an increase of 12.8% compared to June. The result is explained by net income of R $1.6 billion in the third quarter, among other factors.
Bndespar – The BNDES Participações subsidiary (Bndespar) reported net income in the nine months of 2018, up to September, of R $ 5.35 billion. This profit was adjusted by gains from disposals of equity interests. “It’s one of the biggest profits of the last six years,“ said Carlos Rangel.
Quality – Director Ricardo Ramos highlighted the quality of the BNDES credit portfolio, with a concentration of 94.6% between risk levels AA and C, surpassing the average of 90.4% of the National Financial System. Expenses with provision for credit risk fell 70% in relation to the accumulated January / September 2017.
Total assets – Carlos Rangel explained that the fall in BNDES ‘total assets (R $791.480 billion) in September, compared to June of this year (R $834.461 billion), resulted from two main factors. The first is that the volume of disbursements has been occurring at a slower rate than the return on operations. Added to this is the issue of the return of securities to the shareholder, which is the National Treasury, which reduces the availability of the bank. “We have been, since last year, constantly reducing total assets.“ On the other hand, the bank’s net worth rose from R $71.487 billion in June 2018 to R $80.604 billion in the third quarter, mainly due to profit, the superintendent said.
Default – Delinquency over 90 days also increased in the period, from 1.45% in June to 2.94% in September. According to the Director of Planning, the main debtor of BNDES is the state of Rio de Janeiro. Without this state, the default falls to R $1.67%, said Ricardo Ramos.
Debts – According to the director, the result of the bank is little impacted by the debts of Venezuela and Cuba in financing the export of engineering because the bank is guaranteed by the Export Guarantee Fund (FGE), which will cover this loss.