BRAZIL'S NATIONAL DEVELOPMENT BANK'S DISBURSEMENTS INCREASE BY 65 PERCENT, REACHING R$ 88.3 BILLION IN FIRST HALF OF 2013
BNDES' profits up 20.4 percent during the period, totaling R$ 3.3 billion
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BRASÍLIA, BRAZIL - August 16, 2013 (www.investorideas.com newswire) The National Bank for Social and Economic Development (BNDES), Brazil's main federal development bank for the public and private sectors, ended the first half of the 2013 fiscal year (January – June) with its best performance to date, disbursing R$ 88.3 billion for projects in all sectors, a 65 percent increase over the same period in 2012.
The performance was positive not only because of the unprecedented amount of resources involved, but also because of how these resources were used and distributed, with an emphasis on increased investment and wider regional distribution, and due to the size of the companies that received funds.
"We had a record disbursement in the first half of 2013. Historically, this was the strongest first half of a year at the Bank. The disbursements reflected the high rate of loan approvals we had in the second half of last year, and we are maintaining a very high level of consultations, which have risen sharply. We have noticed that investment plans remain at a high level," said the President of BNDES, Luciano Coutinho.
Of note were the disbursements made by the BNDES Investment Support Program (BNDES PSI), which primarily finances the production and acquisition of machinery and equipment. During the first half of 2013, disbursements grew by 230 percent, reaching R$42.6 billion. Of this total, R$ 21.9 billion was earmarked for micro, small and medium-sized enterprises.
The total of R$ 32.4 billion released for small companies represented 37 percent of the overall funds disbursed by BNDES during this period. Also of note was the regional distribution of disbursements which grew by 101 percent for the Southern region of Brazil and 93 percent for the country's Northeast region.
The funds released were distributed among different sectors supported by BNDES, with 33 percent of the total earmarked for industry and 31 percent for infrastructure.
Industry received R$ 29.5 billion in disbursements, representing 93 percent growth during this period. Notably, all industrial segments saw an increase, including the following sectors: chemical, petrochemical, mechanical and transport machinery. Infrastructure received R$ 27.3 billion in disbursements from BNDES, an increase of 36 percent comparing the first half of 2012 and 2013.
The trade and services sector continued to see increases in BNDES disbursements, totaling R$ 22.2 billion, with a 25 percent share in the overall amount released by the Bank and an increase of 62 percent over the same period in 2012.
The agricultural sector, which saw a record grain harvest this year, received R$ 9.3 billion in disbursements from BNDES during the first half of 2013, representing an increase of 111 percent.
The BNDES PSI, with disbursements totaling R$ 42.6 billion in the first half of the year, helped strengthen Brazil 's capital goods industry. The program includes both the acquisition of machinery and equipment related to investment projects and sales of stand-alone equipment through BNDES Finame, which is an important indicator of the business sectors' willingness to invest.
The operations of BNDES Finame reached R$ 34.8 billion, an increase of 84 percent compared with the R$ 18.9 billion released during the same period in 2012. The largest increases in Finame disbursements were for agriculture and the process manufacturing industry, with a growth of 142 percent for both sectors.
According to BNDES President Coutinho, the figures related to capital goods indicate the trend of recovery in investments in Brazil . "In the first half of the year, there was a strong recovery in the supply of capital goods, an increase of 13.8 percent over the previous six-month period. There are indications that the second quarter of the year was a good period for the economy - a quarter in which what is most precious, i.e., the recovery of investments, seems to have been confirmed."
Profit in the First Half of 2013
BNDES recorded a net income of R$ 3.261 billion between January and June 2013, a 20.4 percent increase over the R$ 2.709 billion recorded during the same period in 2012. The main factor that contributed to the positive performance of the first half of 2013 related to the financing of investment projects, which indicates that BNDES is successfully combining its reduced interest rates with consistent financial results.
Despite uncertainties in the financial and capital markets, defaults within the BNDES system fell even further, reflecting the robustness of its loan and transfer portfolio. The percentage recorded (0.02 percent) in the first half of 2013 was the lowest rate achieved over a five-year horizon. In December 2012, default on BNDES loans was 0.06 percent. By comparison, the average rate of default related to the National Financial System in June 2013 was 3.4 percent, according to data published by the Central Bank of Brazil.
Low default rates coupled with the credit profile reflect the consistency of the operational policies of BNDES. It stems mainly from the quality of the management of its loan portfolio, which seeks to reconcile reduced interest rates and compatible repayment periods with long maturity projects.
BNDES' net worth totaled R$ 55.172 billion, corresponding to a reference equity of R$ 96.021 billion, higher than the R$ 89.598 billion recorded on December 31, 2012. Reference equity growth is due mainly to the R$ 15 billion raised within the National Treasury of Brazil and classified as an instrument eligible for core capital.
The capital adequacy ratio (Basel Ratio) recorded by the BNDES system was 15.8 percent, higher than the 11 percent required by the Central Bank of Brazil and the 15.4 percent recorded on the December 2012 balance sheet . BNDES' assets totaled R$ 729.0 billion on June 30, 2013, an increase of R$ 13.5 billion (1.9 percent) as compared to December 31, 2012.
The balance of the loan and transfer portfolio net of credit loss provision totaled R$ 524.4 billion in the same period, of which 80.6 percent accounted for long-term loans.
The Secretariat for Social Communication (SECOM) of the Federative Republic of Brazil is responsible for coordinating the public relations activities for the government of Brazil . The official website of the Brazilian State is: www.brasil.gov.br. The official social media accounts for SECOM International are on Facebook and Twitter at http://www.facebook.com/BrazilGovNews/ and twitter.com/BrazilGovNews.
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