Monday , July 26 2021

Delays in Venezuela and Cuba have an impact on defaults, not profits, BNDES said

RIO – Delayed payments of debt to Venezuela and Cuba have had an impact on the BNDES default rate in the third quarter of 2018 but did not have much impact on the outcome of the period, 14, director of the Strategy and Digital Transformation of the development agency Ricardo Ramos.

On Tuesday night, See Forum Posts revealed that the postponement of debt payments with BNDES by Venezuela, Cuba and Mozambique reached R $ 1.8 billion. The BNDES financial report released in the third quarter, released on Wednesday, showed that the default rate of more than 90 days was 2.94%, compared to 1.45% in the second quarter. Provisions for credit risk, however, had a negative result of R $ 1.6 billion in the third quarter, almost all of the R 1.681 billion negative in total accumulation from January to September.

BNDES Superintendent of Integrity, Control and Risk Management Area, Carlos Frederico Rangel, said that the default rate increased from the second quarter to the third quarter, "due to deteriorating ratings, (third quarter)."

Asked whether the delay in exports and financing of exports of goods and services had an impact on increasing levels of delinquency and third-quarter provisions, Ramos said: "They have had an impact, but again, the bank's results have had little impact." According to the executive, the provisions of the arrears of those countries were offset by reversal of other provisions, because "credit is provided again".

Ramos declined to mention the amount provided, but stressed that loans to the state were guaranteed by the National Treasury through the Export Guarantee Fund (FGE) and strengthened the belief that, in the future, debt would be respected. "These countries, in a way that is very similar to federated countries, are not destroyed. Countries will go through an economic cycle," said the director of the BNDES.

Quarterly results

BNDES registered net income of R $ 1,603 billion in the third quarter, a 13.7% decrease compared to the same period in 2017. With strong results in the first half of this year from January to September, net income was R $ 6.363 billion, up 98.7% over the first nine months of last year.

"We are making results a year in nine months," Ricardo Ramos, director of BNDES's Digital Strategy and Transformation, said at a press conference to comment on third-quarter results at the bank's headquarters in Rio.

In a note, BNDES explains that yields with equity interests and a decrease in supply costs drive accumulated profits from January to September. In the third quarter, the yield with equity was R $ 1.661 billion, with a total of R $ 5.762 billion from January to September. Costs with provisions for credit risk are R $ 1.681 billion, against R $ 5.637 billion in the first nine months of 2017.

With these results, BNDES's total assets reached R $ 791.5 billion and shareholder equity at R $ 80.6 billion. Accordingly, the Basel Index stood at 29.1% at the end of the third quarter, down from 29% in the second quarter.

Ramos also expressed optimism regarding the growth of BNDES loan demand until the end of the year. "We are chasing spending a little higher than in 2017," said the director. In 2017, the bank released R $ 70.8 billion, the executive said.

Asset sale

BNDES maintains in the third quarter its stock sales strategy. Between July and September, the spotlight was the sale of shares of the mining company Vale, which generated around R $ 600 million net from the bank. BNDES's stock portfolio closed the third quarter at R $ 99.7 billion.

With the sale of Vale's shares, BNDES's total shares from the company are 7.35% – in December last year, amounting to 7.60%. Miners also contributed to the payment of dividends, in the amount of R $ 594 million in the third quarter.

Petrobras paid R $ 55 million in dividends. In the first semester, the sale of Petrobras shares was outstanding, but in the third quarter BNDES did not sell shares expressively. The total bank shares in state-owned companies are 15.24% of capital, including 8.37% owned through BNDESPar.

In total, the yield with equity interests was R $ 1.661 billion in the third quarter, with a total of R $ 5.762 billion from January to September.

Ricardo Ramos, director of Digital Strategy and Transformation at BNDES, reiterated that his strategy was to sell shares profitably. "If a mature stock is above its fair price, we can enter the sales process," Ramos said at a press conference to discuss third-quarter results at the BNDES headquarters in Rio.

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