The Brazilian Development Bank (BNDES) disbursed R$ 88.3 billion for investment projects in 2016. The highlight was the short-term performance in the funding of the working capital of Brazilian companies through the Support Program to Strengthen Capacity and Generate Employment and Income (BNDES Progeren). In the context of the downturn of the investment and maintenance of the recessionary scenario in the 2nd semester of 2016, the program disbursed R$ 2.7 billion, with an increase of 68% in relation to the previous year.
The industry sector led the disbursements with R$ 30.1 billion and a 34.2% share on the total released. Next was the infrastructure sector, for which R$ 25.9 billion (29.4%) was disbursed.
In comparison with the previous period, there was a 35% nominal downturn in the total disbursements from BNDES. Approvals, eligibilities and consultations had a nominal fall of 28%, 16% and 11%, respectively.
Working capital and MSMEs – the good performance of BNDES Progeren – with over 5,900 operations conducted (230% growth in relation to 2015) – contributed to the increase in the volume of the releases of BNDES for small-sized enterprises. Of the total disbursed by the program last year, 72% (R$ 1.94 billion) were destined for micro, small and medium-sized enterprises (MSME).
The participation of MSMEs in the disbursements of BNDES increased from 27.5% in 2015 to 30.8% of the total released in 2016, reaching the amount of R$ 27.2 billion. From January to December 2016, BNDES conducted more than half a million operations, and 571,445, or 95.6%, were with MSMEs.
Still according to enterprise size, the medium-large and large segments had the greatest downturns in 2016, in comparison with the previous year: a fall of 44% and 38% in the releases, respectively.
Exports – Another highlight relevant to BNDES disbursements last year was the funding of exports in the transport equipment sector (manufacturing and assembling of automobiles, boats, railway equipment and aircrafts). US$ 2.8 billion was disbursed for the sector – an increase of 123%, compared with the same previous period.
Perspective –A more favorable scenario is anticipated for 2017 with expectations of a gradual recovery of the economy and of the demand for BNDES resources throughout the year. Recent macroeconomic signals, such as the fall in the official inflation, family debt reduction, the prospect of a fall in interest rates and the improvement in the level of trust at the end of 2016 compose this scenario.
New operational policies of BNDES contribute for this trend to be consolidated in medium and long terms, with a focus on the impact of the projects and policies which are more favorable to MSMEs. BNDES also promotes simplification and expansion measures of access to credit and the release of new platforms for the relationship with the customer.
The BNDES Performance Bulletin is available here.
The Brazilian Development Bank (BNDES) registered net income of R$ 6.4 billion in 2016, an increase of 3.1% compared to the net income of R$ 6.199 billion in 2015. The main factors that leveraged the result were a reduction in provisions for losses on investments (impairment), the recognition of tax credits, and the result of the financial intermediation.
In the fourth quarter, the net income reached R$ 2.2 billion. In the same period of 2015 there was a loss of R$ 441 million.
The strong appreciation of the stock market (the Bovespa index increased 38.9% that year), especially in the second half, contributed to the increase of R$ 28.108 billion of the shares portfolio, being a positive factor for the evolution of the shareholders’ equity of the bank.
The adverse macroeconomic scenario during 2016, which led to the retraction of the demand for financing, had an increase of 28.2% in the financial intermediation result.
Credit risk – BNDES raised credit risk provision to R$ 9.156 billion in 2016 (it was R$ 1.468 billion in 2015). In addition to the minimum required by the Resolution of the National Monetary Council (CMN) 2,682/99, the bank has made a provision of R$ 1.306 billion. The increase in the volume of provisions in 2016, evaluated on the basis of the ratings assigned to debtors, reflects the alignment of the credit portfolio and of the transfers of the BNDES System with the economy of 2016, marked by the worsening of the sectoral exposure.
As a result of the increase in the credit risk provision, in its balance sheet BNDES also recognized the tax credits relating to those expenses. The measure generated a positive impact of R$ 4.829 billion in 2016.
Despite the scenario of credit deterioration in Brazil in 2016, BNDES has maintained the good quality of its portfolio, concentrating 96.4% of the scheduled operations between AA and C levels, considered of low-risk.
The default rate for 30 days reached 2.81% on 12.31.16 (0.06% on 12.31.15), reflecting the retraction of the Brazilian economy and the worsening of ratings assigned to some clients. In December 2016, the default rate of BNDES for 90 days was 2.43%.
The shareholders’ equity of the BNDES system closed at R$ 55.2 billion in December 2016, with 78% increase compared with the previous year, due to the aforementioned appreciation of the shares portfolio. The reference equity (which determines the financial ability) increased 42.8%, reaching R$ 135.620 billion, which contributed to the elevation of the Basel index, which was stable at 21.7%, above the 10.5% required by the Brazilian Central Bank and the index registered in 2015 (14.7%).
Liabilities of the BNDES System with the National Treasury closed 2016 at R$ 439.763 billion, a decrease of R$ 83.974 billion (16.0%) compared to 2015, due to early settlements of R$ 113.221 billion in 2016, R$ 13.221 billion being in January and R$ 100 billion in December 2016.