Monday , January 24 2022

Delays in Venezuela and Cuba had an impact on defaults, not profits, says BNDES


RIO – Delays in Venezuelan and Cuban debt payments affected the BNDES default rate in the third quarter of 2018, but did not have a major impact on the outcomes of the period, 14 director of strategy and digital transformation of the institution of development, Ricardo Ramos.

On Tuesday night, View Forum Posts showed that delays in making payments to BNDES by Venezuela, Cuba and Mozambique totaled $ 1.8 billion. The BNDES financial statement, published in the third quarter, released on Wednesday, shows that the default rate of more than 90 days was 2.94%, against 1.45% in the second quarter. However, credit risk provisions had a negative result of ROL 1,6 billion in the third quarter, almost all negative amounts of R $ 1,681 billion of the total accumulated between January and September.

BNDES, Chief of Integrity, Control and Risk Management, Carlos Frederico Rangel, said the default rate rose from the second to third quarter, "due to the deterioration of ratings (third quarter)."

Asked whether delays in financing exports and exports of goods and services have affected the increase in delinquency and third-quarter provisions, Ramos said: "They have affected, but again the bank's result is a little affected." According to the executive, the arrears of the country's arrears were offset by reversing other provisions, because "the credits that were provisioned returned."

Ramos refused to quote the amounts provided, but stressed that country loans were guaranteed by the National Treasury through the Export Guarantee Fund (FGE) and reinforced the belief that debts would be honored in the future. "These countries, in a way very similar to the federation states, do not break apart. Countries are facing economic cycles," the BNDES director said.

Quarterly results

BNDES registered net income of R $ 1.603 billion in the third quarter, a decrease of 13.7% compared to the same period in 2017. With a strong result in the first half of the year, from January to September, net income was $ 6.363 billion, up 98.7% in the first nine months of last year.

"We have achieved the result of one year in nine months," said Ricardo Ramos, Director of BNDES Digital Strategy and Transformation, in a press conference to comment on the results of the third quarter at the Rio Bank headquarters.

In a note, BNDES explained that the result with capital interest and the decrease in provisioning expenses increased the profit accumulated during January-September. In the third quarter, the result was $ 1.661 billion, totaling R $ 5.762 billion from January to September. Expenditure on credit risk provisions amounted to USD 1,681 billion, compared with R $ 5,637 billion in the first nine months of 2017.

With the results, total BNDES assets were R $ 791.5 billion and shareholders equity was $ 80.6 billion. Thus, the Basel index was 29.1% at the end of the third quarter, down from 29% in the second quarter.

Ramos also expressed optimism about rising demand for BNDES credit by the end of the year. "We are following a slightly higher spending than in 2017," the director said. In 2017, the bank released R $ 70.8 billion, the executive said.

Sale of assets

BNDES maintained its third-quarter sales strategy. Between July and September, highlights were the share sales of Vale's mining company, which generated around 600 million R net of the bank. The BNDES shares closed the third quarter at R $ 99.7 billion.

With Vale shares sales, the BNDES total share was 7.35% – in December last year, it was 7.60%. The miner also contributed with dividend payments of R $ 594 million in the third quarter.

Petrobras paid $ 55 million in dividends. In the first half of the year, the sale of Petrobras shares was outstanding, but BNDES did not sell shares in the third quarter. The total share of the bank in the state-owned company was 15.24% of the capital, including 8.37% owned by BNDESPar.

Overall, the stock with equity capital was R $ 1,661 billion in the third quarter, totaling R $ 5,762 billion from January to September.

Ricardo Ramos, Director of BNDES Digital Strategy and Transformation, reaffirmed that the strategy is to sell shares at a profit. "If a mature stock is above the fair price, we can enter into a sales process," Ramos said in a press conference to discuss the results of the third quarter at the BNDES headquarters in Rio.

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