Performance was influenced by recovery of the result of equity interest
Default rate fell to 2.08% and remained below the SFN’s index (3.25%)
Throughout the period, BNDES raised funds from foreign markets in the amount of R$ 5.2 billion, through the bank’s first green bonds issuance, in addition to fundraising coming from multilateral institutions
The Brazilian Development Bank (BNDES) recorded net income of R$ 6.2 billion in 2017, which is at the same level of R$ 6.4 billion net income in 2016.
The performance was strongly influenced by the result of equity interest, which increased 249.5% in 2017, an equivalent to R$ 8.6 billion. The improvement was mainly due to the growth of R$ 2.8 billion (210.15%) of the result with disposal of investments and to the decrease of R$ 4.7 billion in expenses with impairment.
Also in 2017, there was reduction of R$ 2.5 billion (26.8%) in the expenses with allowance for loan losses. In 2016, aimed at covering additional risks derived from the uncertainties of the economic environment, there was need of constitution of complementary provision in the amount of R$ 1.4 billion, which did not occur in 2017.
The product of financial intermediation, on the other hand, reached R$ 15 billion in 2017, and the 42.1% decrease in relation to 2016 came from the reduction in the average return on securities portfolio, and from the decreased result of loans and onlendings operations, on account of continuity of reduction in demand for credit directed to investments in the economy.
Assets – The BNDES Group’s assets totaled R$ 867.5 billion on 12/31/2017, representing a decrease of R$ 8.6 billion (1.0%) in relation to 2016.
Loan Portfolio - In 2017, BNDES presented retraction of 10.3% regarding the loan and onlending portfolio. The good quality of the portfolio was maintained, concentrating 95.8% of operations between levels AA and C, considered of low risk. The percentage is superior to the 89.9% average index of the National Financial System (SFN) on September 30, 2017 (last data available).
In turn, the default rate fell, and in December 2017 the default rate for a period of more than 30 days was 2.12%, compared to 2.81% in December 2016. Regarding default rate for more than 90 days, BNDES left the 2.43% in December 2016 to reach 2.08% in December 2017, remaining below the average of the banks that compound the SFN (3.25% in December 2017). The renegotiation index, which encompasses loan operations performed in the last 12 months, also decreased from 6.34% to 3.62%.
Equity Investments portfolio - the equity investments portfolio reached R$ 81.7 billion in December 2017, growth of R$ 3.4 billion (4.4%) in the year, mainly by virtue of the appreciation of R$ 9.2 billion of the equity portfolio in non- associated companies, especially of investments in Vale and Petrobras.
Fundraising and fund sources - On 12/31/2017, the National Treasury and FAT/PIS-PASEP accounted for 48% and 32% of BNDES’ sources of funds, respectively. The debt with the Treasury decreased 5.4% (R$ 23.8 billion), as a result of early payment of R$ 50 billion. Still in 2017, R$ 9.3 billion of funds of PIS/PASEP Funds were settled in advance, in compliance with Provisional Measure 797/2017.
On the other hand, R$ 16.3 billion was raised from FAT in the year, representing a 4.8% increase compared with 2016. The total amount of funds raised is from constitutional source. In foreign markets, the fundraising corresponded to R$ 3.2 billion (US$ 1 billion), through issuance of green bonds - the first issuance of a bank in this market -, and R$ 2 billion from multilateral institutions.
Shareholders’ equity - BNDES Shareholders’ equity totaled R$ 62.8 billion at the end of 2017. The increase of R$ 7.7 billion (13.9%) in relation to 2016 reflects the appreciation effects of the aforementioned Equity Investments Portfolio, which reached R$ 5 billion, net of taxes, in addition to the R$ 6.2 billion net income.
These effects were partially mitigated by the payment of complementary dividends and interest on shareholders’ equity, related to the net income of 2016 (R$ 2.1 billion), and by the provisioning of minimal mandatory dividends related to the net income of 2017 (R$ 1.5 billion).
Prudential limits - The Regulatory Capital, basis for the calculation of prudential limits established by the Brazilian Central Bank (BCB), was R$ 146.4 billion on 12/31/2017. BNDES’ prudential limits remained above the minimal requirements demanded by BCB, and even presented improvement in relation to 2016.
The Basel Index went from 21.7% in 2016 to 27.5% on December 31, 2017, above the 10.5% demanded by BCB, because of decrease in Risk-Weighted Assets and increase in shareholders’ equity.
More on the Internet - BNDES’ financial consolidated statements referring to the year ended on December 31, 2017 are available on the Bank’s website .