BNDES Says It Will Halt Concessions Without Dilution of Payments to the Treasury.

Written by Paulo Nogueira

Published on 26/11/2023 at 15:48

O banco de fomento ainda tem de retornar R$ 22,6 bilhões à União, e pelo prazo original, teria de fazer o pagamento integral neste mês

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but the deadline was extended and there is now more time to settle the debt with the government, totaling a significant amount of R$ 22.6 billion to be returned to the national treasury. Furthermore, the financial institution will have to make the full payment on a date later than the current month, thereby fulfilling its obligations.

The minister Mercadante was awaiting the approval of the review of the schedule for the return of the final resources by the TCU on Wednesday, 22, but the matter was not analyzed.

“We were informed that they will vote on the following Wednesday,” Mercadante replied regarding the new deadline, emphasizing that the relationship between the bank and the TCU has been “very collaborative.” “They have full sovereignty and autonomy, but we are very confident that we will have a positive decision.”

Mercadante hopes that the TCU will approve the review of the schedule for the return of the final resources next Wednesday.

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BNDES Will Expand Its Role in the Financial Market

The Minister of Economy, Mercadante, declared that the banking institution plans to advance and provide financial consulting for initial public offerings (IPOs). This practice is extremely lucrative for investment banks due to the high commissions involved; however, it has been quite uncommon. The last IPO on B3 occurred in August 2021.

Despite this, the BNDES reaffirmed its conviction that there is no conflict of interest between its operations and those of private agents. “We are increasing competition in the issuance market. The BNDES contributes to the development of the market and to obtaining more competitive rates for companies”, said Barbosa.

The collaboration also involves the participation of the BNDES in the financial market. A significant part of this role consists of organizing corporate issuances, in which it has negotiated a total of R$ 15.5 billion this year so far, more than double the value observed in 2022. In the third quarter, it earned R$ 500 million in commissions for this service.

In June, the bank acquired R$ 1.8 billion of the R$ 3.8 billion in bonds issued by the sanitation concessionaire Iguá Rio, which helped to make the offering viable during a period of unfavorable market conditions. In August, it acquired R$ 1.9 billion of the R$ 5.5 billion in securities from another company in the sector, Águas do Rio. In total, this year, it recorded R$ 10.9 billion in debentures on its balance sheet.

The bank reported a net accounting profit of R$ 4.9 billion in the third quarter, driven by R$ 1.2 billion in dividends from Petrobras. Recurring profit reached R$ 2.9 billion, representing a 21.3% increase compared to the previous year.

The Financial and Digital Credit Director for MPMEs, Alexandre Abreu, highlighted the occurrence of an unusual combination of factors throughout the year: the increase in the credit portfolio and profit while the delinquency rate fell to just 0.01%. **This result shows growth in loans, profits, and a reduction in delinquency**, said the executive.

In a traditional view, the development bank will grant loans corresponding to 1.1% of Gross Domestic Product in the next three years. Considering the main scenario, the expectation is that this figure will reach 1.4% in 2026 and, in the most positive scenario, reach 2% of GDP by the end of that period.

Delaying payments to the Treasury may be beneficial, but the BNDES is confident that its balance sheet is sufficiently solid to grow in the medium term. The bank’s Basel ratio, which measures liquidity reserve, reached 34.4% at the end of September, more than 20 percentage points above the minimum required by the Central Bank and considerably higher than the major commercial banks.

Expansion of the Credit Portfolio of BNDES

For the incentive financial institution, increasing returns is essential to maintain the growth rate of the loan portfolio, which in September reached its highest value in over four years, totaling R$ 495.2 billion. In the third quarter, the BNDES released R$ 34.8 billion, an increase of 18.4% compared to the same period last year.

Strategic Planning

The Director of Planning and Project Structuring at the bank, Nelson Barbosa, stated that the BNDES does not intend to exceed its current relative size, which is equivalent to 7% of GDP, well below the 16% recorded in 2015. However, the institution wishes to expand the amount of credit it provides. “We expect to end the year with R$ 119 billion in released loans”, he stated. For next year, the optimistic forecast is to reach R$ 137 billion.

The National Bank for Economic and Social Development (BNDES) needs to return to the government the resources that were injected into the bank during the period from 2008 to 2014. The total sum of the contributions reached R$ 440.8 billion. Since 2015, the bank has already reimbursed a total of R$ 689 billion, considering interest and correction. Additionally, if annual dividends are taken into account, the Union has received a total of R$ 798.1 billion from the BNDES in the last 14 years.

In October, the BNDES proposed to the government the possibility of dividing the remaining balance over a period of eight years, in annual installments. The Ministry of Finance agreed with the proposal; however, the implementation of this schedule is still subject to the approval of the Federal Court of Accounts (TCU).

When announcing the financial results for the third quarter on Friday, the 17th, the National Bank for Economic and Social Development (BNDES) reiterated the importance of reassessing the deadline for the return of resources to the National Treasury. The bank still has the obligation to return R$ 22.6 billion to the Union, and according to its executives, full payment this month, as initially planned, would result in a significant reduction in credit availability.

“If we pay R$ 22.6 billion now, it will decisively impact liquidity. We would have to delay approvals and stop disbursement”, said the institution’s president, Aloizio Mercadante, during a press conference. He emphasized that this pause would affect all sectors, from agribusiness to state governments.

Source: InfoMoney

BNDES Says It Will Halt Concessions Without Dilution of Payments to the Treasury.

BNDES Will Expand Its Role in the Financial Market

Expansion of the Credit Portfolio of BNDES

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