BNDES loan approvals increase by 44%, reaching R$ 218,5 billion.

247 - The National Bank for Economic and Social Development (BNDES), chaired by Aloizio Mercadante, increased its credit operations by 44% in 2023 (R$ 218,5 billion). According to the institution, approvals rose in all sectors, with particular emphasis on infrastructure, with R$ 78,5 billion (a 23% increase), agriculture, with R$ 42,5 billion (a 53% increase), and industry, with R$ 31,7 billion (a 41% increase). 

“The results reveal a renewed role for BNDES as a public development bank, focused on expanding credit under appropriate conditions to promote the country's economic growth,” Mercadante highlighted. “The Bank also contributed to alleviating adverse capital market conditions, having underwritten 26% of incentivized debenture issuances in 2023, and has been working to diversify its fundraising instruments to continue enabling support for strategic sectors,” he added.

BNDES stated that last year the bank recovered "its role in supporting national development." This included R$ 5,3 billion in approvals for innovation, R$ 13,5 billion for exports, R$ 25,3 billion to states and municipalities, and R$ 30,4 billion for agriculture under the Plano Safra (agricultural plan). In addition, the Amazon Fund – whose disbursements had been suspended since 2019 – was reinstated, with R$ 1,3 billion in approvals and public calls for proposals in 2023, and the Climate Fund was restructured.

During the year, BNDES also reinforced its support for cooperatives, with a 63% increase in disbursements compared to 2022, totaling R$ 23,8 billion. "Cooperatives are a relevant channel for diversifying the profile of supported clients and for reducing the concentration of the credit market in Brazil," explained Mercadante.

BNDES disbursements, considering direct and indirect credit operations, totaled R$ 114,4 billion in 2023 (1,1% of GDP), a 17% increase compared to 2022. Of the total disbursements, more than 80% were at market rates. The portion made with incentivized rates is largely concentrated in support of the Plano Safra (agricultural plan), in which BNDES is one of the executors of the Federal Government's public policy. 

In addition to a 100% increase in FGI guarantees, the Bank showed growth in all other phases of its operations compared to 2022, such as inquiries (R$ 270,8 billion, with an 88% increase) and approvals (a 32% increase, reaching R$ 174,5 billion), with the expanded loan portfolio reaching R$ 515 billion, the highest in the last five years. 

BNDES's recurring net profit registered an 83% growth in the last quarter of 2023, compared to the third quarter of the same year, ending the year with a total of R$ 11,9 billion. The result was influenced by the increase in revenues from credit operations, resulting from the expansion of the portfolio, and by the reduction in general expenses, offset by a lower treasury balance.

Total net income of R$ 21,9 billion in 2023 (and R$ 7,5 billion in the 4th quarter) was impacted by dividend and interest on equity (JCP) revenues of R$ 7,8 billion (mainly from Petrobras), net of taxes, in addition to the reversal of credit provisions, especially due to the recovery of credits provisioned in previous years.

Transparency, monitoring and evaluation 

In 2023, the Bank was recognized as the most transparent federal public institution in the country, in a survey conducted by the Association of Members of the Courts of Accounts of Brazil (Atricon), and as one of the public development institutions in the world with the greatest variety of methods to monitor and evaluate the effectiveness of its own performance by The Montreal Group. 

More credit for SMEs

Considering direct operations, indirect operations (via financial agents), and those guaranteed by the Investment Guarantee Fund (FGI), mainly through FGI-PEAC, approvals totaled R$ 218,5 billion throughout 2023 (of which R$ 44 billion were supported through guarantees, all for MSMEs), a 44% increase compared to the R$ 152 billion of 2022. Of this amount, R$ 107 billion were from operations approved with micro, small and medium-sized enterprises (MSMEs), a 53% increase compared to 2022, confirming BNDES's effort to expand credit to this segment of companies, which is fundamental for generating jobs and income in the country. 

Lower default rate in the financial system 

The delinquency rate (over 90 days) as of December 31, 2023, remained at 0,01%, the same percentage as on September 30 and lower than the 0,13% on December 31, 2022. This rate remains lower than the delinquency rate of the National Financial System (3,27% overall and 0,70% for large companies), proving that BNDES did not feel the effects of the worsening credit market in its own and indirect portfolio. 

The loan and loan portfolio maintained good quality, with 96,5% of operations classified in the lowest risk levels, ranging from AA to C, as of December 31, 2023. This percentage remains above that recorded by the National Financial System, which was 90,8% on June 30, 2023 (latest available information).

The Basel Index reached 31,5% on December 31, 2023, a comfortable position compared to the 10,5% required by the Central Bank. 

Largest loan portfolio since 2018

The total assets of the BNDES System amounted to R$ 732,5 billion on December 31, 2023, an increase of R$ 48,7 billion (7%) compared to December 2022, highlighting the increase of R$ 35,5 billion in the expanded loan portfolio and the increase of R$ 17,2 billion in the equity investment portfolio.

The expanded loan portfolio, which includes financing, debentures, and other credit assets, reached R$ 515 billion on December 31, 2023, representing 70% of total assets and the largest portfolio in the last five years. The increase was influenced by the growth in disbursements and the accrual of interest and monetary adjustments. Investments in public offerings of debentures in the infrastructure sector stand out among the disbursements.

The portfolio of equity investments totaled R$ 79,9 billion as of December 31, 2023. The 28% increase compared to December 2022 was mainly due to the appreciation of existing investments in non-affiliated companies. Petrobras, JBS, Eletrobras, and Copel remain the main companies invested in the total portfolio, as no significant divestments were made during the year.

funding sources 

In 2023, funding sources grew by 7,1%, influenced by a 15,2% increase in net worth and liabilities with the FAT (Workers' Assistance Fund). The FAT remained the Bank's main creditor on December 31, 2023, with a current balance of R$ 402,1 billion. The FAT and the National Treasury constitute a significant portion of the structure of... funding from BNDES, accounting for 64,4% of funding sources as of December 31, 2023 (64,6% in 2022). 

External borrowings totaled R$ 23,7 billion as of December 31, 2023. During the year, loans were contracted with the Inter-American Development Bank (IDB), China Development Bank (CDB), International Fund for Agricultural Development (IFAD), New Development Bank (NDB), and KfW (German development bank), totaling US$ 3,2 billion – the disbursement of these funds is expected to occur over the next two to three years. The approximately 14% reduction in the final balance of external liabilities in 2023 (from R$ 27,4 billion in 2022 to R$ 23,7 billion in 2023) is due to the maturity of R$ 5 billion in... bonds international factors and exchange rate fluctuations (devaluation of the US dollar).  

Net worth 

BNDES's net worth reached R$ 151,3 billion on December 31, 2023, an increase of 15% compared to the previous year. The increase is mainly due to net income of R$ 21,9 billion and the positive market value adjustment of assets (shares and government bonds) of R$ 7,3 billion, mitigated by the recording of mandatory minimum dividends on 2023 profits and supplementary dividends on 2022 profits.

* With information released by BNDES.