Fall of the expense with provision positively influenced the result
Default (+90 days) decreased from 2.08% in December 2017 to 1.62% in March 2018, below the average of the National Financial System (3.43%)
The good quality of the portfolio has remained: 95.8% of operations are between levels AA and C, considered low-risk and above the average of the NFS (90.1%)
The Brazilian Development Bank (BNDES) registered net income of R$ 2.06 million in the first quarter of 2018, an increase of 453.4% compared with the same quarter in 2017. The result was marked by the positive effects of the expense reversal with provision for credit risk and the growth of the result with shares in other companies.
The need for the constitutional provision for credit risk observed in the previous year was not repeated in the first quarter of 2018 and culminated in the reduction of such expense by R$ 2.21 billion.
The positive performance with shares in another company in the first quarter of 2018 basically reflected: (1) the growth of R$ 322 million of the result with embedded derivatives in debentures; (2) the reduction of R$ 301 million of the expense with provision for losses on investments (impairment); (3) the growth of R$ 209 million of the result with disposals of shares in another company, in which the disposal of Petrobras shares stands out; and (4) growth of R$ 183 million on receipt with dividends and interest on equity, especially dividends paid by Vale.
The financial intermediation income went from R$ 4.51 billion in the first quarter of last year to R$ 2.57 billion in the same quarter of 2018, mainly due to the reduction in the profitability of the securities and real estate values portfolio and in the results with credit operations and transfers, due to the decline of the average portfolio during the period.
Assets – The assets of the BNDES System totaled R$ 860.11 billion, on March 31, which meant an adjustment of R$ 7.4 billion (0.9%) in the quarter. The credit and transfers portfolio, net of provision, totaled R$ 527.95 billion, a retraction of 3.7% in the quarter, due to the volume of liquidations, which overcame the disbursements made during the period by R$ 30.29 billion.
The good quality of the portfolio has remained in the quarter, with the concentration of 95.8% of operations between the risk levels AA and C, considered low-risk, higher percentage than the average of 90.1% of the National Financial System (NFS) on 12/31/17 (last date available).
Default – The default (+30 days) of the credit and transfers portfolio presented slight growth in the quarter, going from 2.12%, in December 2017, to 2.24% on March 31.
The default (+90 days), however, decreased in the quarter, going from 2.08% in December 2017 to 1.62% in March 2018. Those numbers remain below the default (+90 days) of NFS (3.25% on 12/31/17 and 3.43% on 03/31/18).
Disregarding the operations whose benefits are fully honored by the Union, the default rate of BNDES would be 0.98% (30 days) and 0.36% (90 days).
The index of renegotiation, which comprises the renegotiated credit operations in the last 12 months, increased from 3.62% on 12/31/17 to 5.18% on 03/31/18, especially by the renegotiation of debts of States under Complementary Law 156/2016.
The portfolio of shares in other companies (shares in affiliated and non-affiliated companies + variable income investment funds) amounted to R$ 96.04 billion in the quarter, an increase of R$ 14.36 billion (17.6%), due to the appreciation of R$ 15.47 billion of the portfolio of shares in non-affiliated companies, especially the investment in Petrobras. The percentage of BNDES participation in Petrobras total capital stood at 15.98% (16.54% in December 2017).
Funding Sources – On March 31, the National Treasury and the FAT/PIS-PASEP accounted for 45.6% and 29.2%, respectively, of BNDES funding sources.
Due to the advance payment of R$ 30.10 billion made to the Treasury in March 2018, the debt owed to the Treasury decreased 5.8% and ended the quarter at R$ 391.90 billion.
R$ 4.69 billion FAT resources entered in the quarter,, R$ 4.46 billion being of Constitutional FAT. The balance with FAT at the end of March 2018 was R$ 251.44 billion.
Shareholders’ Equity – BNDES shareholders’ equity totaled R$ 74.18 billion at the end of the quarter. The growth of R$ 11.35 billion (18.1%) reflects basically the effects of the appreciation of the stock portfolio, net of taxes, of R$ 9.62 billion, and net income of R$ 2.06 billion.
Prudent Limits – The Reference Equity, a basis for the calculation of prudent limits established by BACEN, reached R$ 163.13 billion on March 31. BNDES prudent limits remained above the minimum required by BACEN, an improvement compared with December 2017.
The Basel index rose from 27.5% on December 31 in 2017 to 30.1% on March 31, well above the 10.5% required by the Central Bank. This was caused mainly due to the increase of the reference equity, which rose from R$ 146.37 billion to R$ 163.13 billion, in the same period.
The Capital Level I and Main Capital indices also increased in the quarter, from 18.3% to 20.1%, above the minimum levels required by BACEN of 7.25% and 5.75%, respectively.
BNDESPAR – In the first quarter of 2018, the net profit of BNDESPAR, subsidiary of shareholdings of the BNDES System – here understood as the result of the period plus the net gain with disposals of shares recognized directly in Accumulated Profits – was R$ 570 million, a decline of 46% on the net profit of R$ 1.24 billion in the first quarter of 2017. This decline occurred because of the provision for losses of R$ 1.31 billion in the portfolio of debentures (or R$ 865 million, if considered the tax effects).
The net profit with disposals of shares in other companies was R$ 831 million. The main divestments produced by BNDESPAR was the disposal of Petrobras shares, responsible for more than 90% of the result with disposals.
Financial statements and performance – The Financial Statements of BNDES and BNDESPAR for the quarter that ended on March 31, 2018, are available from BNDES Investors Relations Portal. As an example of what occurs with this disclosure of financial results, the Bank will quarterly disclose its performance numbers. The calendar with the dates of disclosure each quarter will be updated on the Bank’s website on Monday, 14.
Slideshare – Access here for the presentation “BNDES System Financial Statements – 1st quarter of 2018.”
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