During the first half of 2021, the Brazilian Development Bank (BNDES) was able to implement a series of innovative initiatives promoting the multiplication of investment sources for Brazil's long-term development, leveraging or replacing the need for public resources.
In the auction of the basic sanitation system in Rio de Janeiro, in April, there was a great deal of competition from the private sector for concessions that will mobilize billions in investments and provide universal access to water and sewerage for the people of Rio de Janeiro. When carrying out the first structuring of debentures, for example, the Bank invested only 30% of the total capital raised by the Gas Natural Açu thermal power plant, with a high market demand. In the wake of the Matchfunding Saving Lives, in which the BNDES doubled the resources donated to health, Rescuing History was launched, in favor of historical heritage, as well as the Socioenvironmental Fund, aimed at the environment, education, and employment. The year also saw the launch of energy auctions in Amapá and Rio Grande do Sul, the launch of funds to support businesses with a socioenvironmental impact, as well as Garagem - Negócios de Impacto [Garage - Impactful Business] to support startups.
Combining such initiatives with the sale of Vale's debentures to the market, held in the BNDES's portfolio for decades, the Bank has been attracting the private market to new forms of financing the infrastructure, production and socio-environmental segments.
In parallel with these efforts, the BNDES recorded net profit of BRL 15.1 billion in the first half of 2021, three times the same period in the previous year. The result was driven by the sale of Vale and Klabin shares, which contributed to a net profit of BRL 6.0 billion and BRL 1.0 billion, respectively, and by the positive result of BRL 1.4 billion with equity equivalence of JBS. These divestment operations follow the strategy of reducing the risk of exposure of the Bank's shareholding. In the second quarter of 2021, net profit was BRL 5.3 billion.
More than half of the credit portfolio of the Bank's nonautomatic direct and indirect operation (56.3%, equivalent to BRL 184 billion) is linked to projects that support the green economy and social development. In the second quarter of 2021, BRL 1.4 billion and BRL 1.1 billion were disbursed to these sectors, respectively. The results were presented on Thursday (12), by the president, Gustavo Montezano, and other members of the BNDES executive board.
In the 18-month total since the launch of the 2020-2022 Triennial Plan, deliveries to society include the creation or maintenance of 5.04 million jobs. The results of credit operations include support to 654 SUS units, investments in education benefiting 107,000 students and connection of 850,000 people via fixed broadband.
Financial result – Net profit of BRL 5.3 billion in the quarter was strongly influenced by the net result on the sale of Vale's debentures, totaling BRL 2.1 billion, and by revenue from dividends and interest on equity (JCP) of the investees, with an emphasis on Petrobras and Eletrobras. The financial brokerage product reached BRL 6.6 billion, an increase of 50% compared to the first quarter of 2021, impacted by the gross result on the sale of Vale's debentures (BRL 3.8 billion) in April.
The recurring result of BRL 2.4 billion in the second quarter of 2021 increased by 75.8% compared to the same period in 2020 (BRL 1.3 billion), reflecting the higher revenue from dividends/interest on equity. The indicator excludes divestment operations of the variable income portfolio and provisions for credit risk, among others.
The expanded credit portfolio, which includes operations through debentures and other credit assets, closed the quarter at BRL 438.4 billion, a decrease of 4.7% compared to March 31, 2021, impacted by the sale of Vale's securities in the amount of BRL 3.8 billion and the negative impact of the exchange rate appreciation on foreign currency contracts in the amount of BRL 7.7 billion.
Defaults above 90 days remained at a low level, ranging from 0.01% on December 31 to 0.19% on June 30, lower than the average of the National Financial System (2.30% at June 30, 2021). The good quality of the credit and on lending portfolio was maintained, as 92.1% of the operations were classified at the lowest risk levels (between AA and C) on June 30, 2021. This percentage remains higher than that registered by the National Financial System, which was 91.6% in March (latest information available).
The shareholding portfolio totaled BRL 69.3 billion in June. The position represents an increase of 12.7% in the second quarter, due to the portfolio’s appreciation of approximately BRL 6.6 billion.
In a managerial evaluation, the fair (market) value of the shareholdings was BRL 74.8 billion at the end of the quarter. Considering the value of the shares in investment funds (BRL 3.4 billion), BNDES's shareholdings total BRL 78.2 billion.
Sources of funds – In June, the FAT and the National Treasury represented 44.8% and 20.8% of the BNDES’s liabilities, respectively.
The amount due by the BNDES to the National Treasury reached BRL 151.3 billion, representing a reduction of 22.5% in relation to the position in December 2020. The decrease was due to early settlement, in the amount of BRL 38.0 billion, in addition to ordinary payments of BRL 7.4 billion.
In the half year, BRL 9.8 billion of FAT funds entered, reaching a total with the Bank of BRL 326.4 billion.
Liabilities from foreign funding totaled BRL 32.7 billion, a 13.7% decrease in the quarter, mainly due to amortizations of principal and exchange effect.
Shareholders' equity reached BRL 122.3 billion, an increase of 8.2% compared to December. Net profit of BRL 5.3 billion in the second quarter was influenced by a positive equity valuation adjustment of BRL 3.1 billion.
Prudential limits – The basis for calculating the prudential limits established by the Central Bank, the Reference Equity totaled BRL 185.5 in June, compared to 194.5 billion in December. The Basel Index remained comfortable, fluctuating from 41.2% at the end of December to 38.5% in June, above the 9.625% required by the Central Bank.
Subsequent Events – In July 2021, BNDES paid debt to the National Treasury in the amount of BRL 16.5 billion (BRL 13.5 billion of Instruments Eligible for Principal Capital – IECP and BRL 3 billion of debt instruments), according to the best effort schedule communicated in March. The current outstanding balance is approximately BRL 99.7 billion.
Considering advance payments (BRL 54.5 billion), ordinary payments (BRL 8.2 billion), dividends (BRL 4.9 billion) and taxes (BRL 8.3 billion), the BNDES had transferred BRL 75.9 billion to the National Treasury this year by July.
Sustainability – At the end of the first half of the year, 56.3% of the BNDES's loan portfolio (considering nonautomatic direct and indirect operations) were linked to projects that support the green economy and social development. In the second quarter, disbursements for initiatives of this nature totaled BRL 1.4 billion and BRL 1.1 billion, respectively.
About 32,000 operations in the second quarter were aligned with at least one of the UN's Sustainable Development Goals (SDGs). These account for 77% of disbursements in the period (equivalent to BRL 9.64 billion). The largest amounts contributed to industry, innovation and infrastructure; decent work and economic growth; and clean and affordable energy.
BNDES contracts in the first half of the year will enable the generation of 472 MW in wind energy and 701 MW in solar energy. This total is capable of serving 1.9 million households or 6.5 million people, which is approximately equivalent to the population of the city of Rio de Janeiro, or twice the inhabitants of Salvador.
Micro-, small- and medium-sized enterprises received 40% of the disbursements in the second quarter (BRL 5.1 billion). These companies were responsible for 34,377 operations, or 96% of all those carried out in the period. At the end of the first half year, the participation of micro-, small- and medium-sized enterprises reached 22% of the BNDES credit portfolio, totaling BRL 98 billion.
Project Factory – Highlighted due to the success of the sanitation auction in Rio, Project Factory now has 120 initiatives to structure privatizations, with a value of BRL 261 billion between grants and planned investments. Some of the highlights in the period were also the privatization of energy companies in Amapá (CEA) and Rio Grande do Sul (CEEE-T). Public consultations were also held for the concession of public lighting in Caruaru (PE) and road lighting in Minas Gerais and Rio Grande do Sul.
From January 2020 to June 2021, projects already structured by Project Factory will bring sanitation services to 8.3 million people currently not served, granted 2,124 km of highways and culminated in the privatization of four companies.
Triennial Plan – Considering BNDES’s credit operations since the launch of the Triennial Plan in January 2020, the generation or maintenance of around 5 million direct jobs was made possible by June, in addition to the expansion of the installed energy generation capacity by 2.6 GW and the expansion of the natural gas distribution network by 1.6 thousand km (equivalent to the distance between Brasília and Porto Alegre). Financing in the period also contributed to projects that will increase the water network, benefiting 258,000 people, and sewerage, with an impact on 62,000 people, in addition to support for the SUS, education and broadband expansion mentioned earlier. The Bank's credit operations also implemented the deployment, duplication or modernization of 958 km of highways.
The financial statements of the BNDES and its subsidiaries are available on the BNDES Investor Relations Portal.
About the BNDES — Founded in 1952 and currently linked to the Ministry of Economy, the BNDES is the main instrument of the Federal Government for promoting long-term investments in the Brazilian economy. Its actions focus on the socioenvironmental and economic impact in Brazil. The Bank offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed towards education and health, family farming, basic sanitation and urban transport. In crisis situations, the Bank acts in a countercyclical manner and assists in formulating solutions for the resumption of economic growth.