The Brazilian Development Bank (BNDES) took important steps as a project structurer in the third quarter of 2021, with the auctions of CEEE-T (RS), Sulgás (RS) and sanitation in Amapá, in addition to having started the processes of privatization of ES Gás, forest concessions in Rio Grande do Sul and public lighting PPPs in Canoas and Caxias do Sul, also in the state. Including the 15 projects already tendered, the Bank has 163 projects in its Project Factory, which totals BRL 287 billion between grants and planned investments.
From a financial point of view, BNDES's net profit in the first nine months of the year was 93% above the volume of the same period in 2020, reaching BRL 26.4 billion, driven by results with shareholdings. Considering only the third quarter, net profit was BRL 11.3 billion, 29% higher than that recorded between July and September last year. The results were presented on Thursday (11), by the Financial Director Bianca Nasser and other members of the BNDES executive board.
Sustainability – At the end of the third quarter of the year, 56.3% of the BNDES's loan portfolio (considering non-automatic direct and indirect operations) were linked to projects that support the green economy and social development. In the third quarter, disbursements for initiatives of this nature totaled BRL 3.0 billion and BRL 4.7 billion, respectively.
This week, the Bank announced important initiatives that will contribute to the decarbonization of the economy and the sustainable growth of the country. These include Living Forest Matchfunding, FGEnergia and more active participation in the carbon market with the purchase of securities and the coordination of shares between the government, companies and other actors to structure this market in Brazil.
The NDC BNDES Portal was also launched, which demonstrates how the Bank contributes to Brazil achieving the greenhouse gas emission reduction targets established in the Paris Agreement. It presents the contributions by the BNDES in three sectors of economic activity: renewable energy, forests and urban mobility. It is divided into three areas: the first indicates the emissions that are being avoided by the projects supported by the Bank in these sectors throughout their useful life; the second informs the amounts disbursed for the projects, georeferenced by states; and the third is a panel with the expected deliveries for BNDES operations that are associated with the energy, forest and urban mobility sectors.
Project Factory – The Project Factory has 163 initiatives to structure privatizations (also considering those already completed) with a value of BRL 287 billion between grants and planned investments. Some of the highlights from the beginning of the third quarter were the auctions of CEEE-T (RS), Sulgás (RS) and the concession of sanitation in Amapá. During the period, the announcement of two sanitation blocks was launched in Alagoas and public consultations were held for public lighting projects in Caruaru (PE), a sanitation block in Rio de Janeiro and road concessions in Pernambuco, Minas Gerais and Rio Grande do Sul. The structuring of ES Gás privatizations, forest concessions in Rio Grande do Sul and public lighting PPPs in Canoas and Caxias do Sul (RS) were also initiated.
From January 2020 to September 2021, projects already structured by Project Factory enabled access to sanitation services to 8.96 million people currently not served and granted 2,124 km of highways.
Financial result – BNDES's financial performance in the first nine months of the year was driven mainly by the disposals of Vale and Klabin shares, which contributed to a net profit of BRL 6.0 billion and BRL 1.0 billion, respectively, by the sale of Vale's debentures (BRL 2.1 billion), by dividend/JCP revenue of BRL 4.1 billion, highlighting Petrobras, Eletrobras and Copel, and by the positive result with equity equivalence of BRL 3.2 billion, notably JBS.
The performance in the third quarter was strongly influenced by the reversal of the provision for losses on investments in Petrobras, constituted between 2014 and 2016 (net effect of BRL 3.5 billion), revenue from dividends and interest on equity (BRL 2.1 billion) and positive result from equity equivalence (BRL 1.8 billion), basically from JBS.
The financial brokerage product reached BRL 15.4 billion, an increase of 41.1% compared to the first nine months of 2020, impacted by the result on the sale of debentures and the remuneration of the cash and cash equivalents generated by the partial sale of the shareholding portfolio (investment disposals). In the third quarter, it totaled BRL 4.4 billion, down 33.8% compared to the previous quarter, which was impacted by non-recurring factors. Disregarding the effect of the sale of Vale's participating debentures in the second quarter (BRL 3.8 billion), there was an increase in financial intermediation in this quarter.
The recurring result of BRL 10.0 billion between January and September 2021 increased by 55.1% compared to the same period in 2020, reflecting the higher revenue from dividends/interest on equity, increase in the product of financial intermediation and reduction in taxes on profit, due to the registration of interest on profit in the first half of 2021. The data excludes divestment operations of the variable income portfolio and provisions for credit risk, among others. In the third quarter, the recurring result reached BRL 5.22 billion, 121.2% above the previous quarter.
Credit portfolio – The expanded credit portfolio totaled BRL 446.3 billion on September 30, 2021, an increase of 1.8% compared to June 30. The growth of 74% in disbursements in the third quarter compared to the previous three months stands out. Of the total of BRL 21.8 billion recorded from July to September, 43.8% went to micro-, small- and medium-sized enterprises (MSMEs). The sector that received the most credit between July and September was infrastructure (BRL 9.3 billion), followed by agriculture (BRL 6.3 billion).
Defaults (+ 90 days) remained low, ranging from 0.19% on June 30, 2021 to 0.23% on September 30, 2021, lower than the index of the National Financial System (2.29%). The good quality of the credit portfolio was maintained, as 92.3% of the operations were classified at the lowest risk levels (between AA and C) on September 30, 2021. This percentage remains higher than that registered by the National Financial System, which was 91.7% on June 30, 2021 (latest information available).
The shareholding portfolio totaled BRL 67.8 billion on September 30. The position represents a 2% decrease compared to June 30, mainly due to portfolio devaluation. The fair value of the shareholding portfolio (management valuation) was BRL 80.7 billion on September 30.
Sources of funds – On September 30, 2021, the FAT and the National Treasury represented 50.7% and 20.4% of the BNDES's sources of funds, respectively.
The amount due by the BNDES to the National Treasury totaled BRL 134.1 billion on September 30, representing a reduction of 11.4% in relation to the position on June 30. The decrease was due to early settlements of BRL 16.5 billion in the third quarter, in addition to ordinary payments of BRL 2.8 billion.
The FAT remained the main creditor of BNDES. In the third quarter, BRL 5.8 billion of funds entered, with the Fund's balance with the Bank of BRL 333.1 billion on September 30.
Subsequent Events – On October 22, 2021, the BNDES made a new advance payment of a debt contract with the National Treasury in the amount of BRL 5.0 billion. The remaining balance of debts with the Treasury covered in the Plan sent to TCU in March 2021 is approximately BRL 90.1 billion.
The BNDES also approved the payment of BRL 8.6 billion as an interim dividend distribution to the Federal Government. The payment will take place on November 17. The amount to be paid corresponds to 60% of the adjusted net profit (after constitution of the legal reserve equivalent to 5%) in the first half of 2021, of BRL 14.4 billion.
Net equity – Net equity reached BRL 119.1 billion on September 30, a 2.6% reduction in the quarter. Net profit of BRL 11.3 billion was mitigated by the negative equity valuation adjustment of BRL 5.9 billion, net of taxes, in addition to the record of intermediate dividends/interest on equity of BRL 8.6 billion, referring to the distribution of 60% of the adjusted net profit for the first half of 2021 with an expected payment date for November 17, 2021.
Prudential limits – The basis for calculating the prudential limits established by the Central Bank, the Reference Equity totaled BRL 182.2 billion on September 30 (compared to BRL 185.5 billion on June 30).
The Basel Index remained comfortable, fluctuating from 41.2% at the end of December 2020 to 37.5% in September 2021 (at the end of the second quarter it was 38.5%), above the 9.625% required by the Central Bank. The decrease reflects the prepayment of Instruments Eligible for Principal Capital in the amount of BRL 13.5 billion, the negative equity valuation adjustment of BRL 11.7 billion and the registration of interim dividends/interest on equity of BRL 8.6 billion, mitigated by net profit of BRL 26.4 billion in the period.
Triennial Plan – Considering BNDES's credit operations since the launch of the Triennial Plan in January 2020, the generation or maintenance of around 5.3 million direct and indirect jobs was made possible by September, in addition to the expansion of the installed energy generation capacity by 2.7 GW and the expansion of the natural gas distribution network by 1.726 thousand km (equivalent to the distance between São Paulo and Aracaju). 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.