Brazilian Development Bank’s Profit Falls US$ 383 Million

    The Brazilian National Bank of Economic and Social Development (BNDES) posted a net profit of 702 million reais (US$ 383 million) in the first half this year, representing a decrease of 83% in comparison with the same period last year, according to information just disclosed by the BNDES.

    The reduction in results of share ownership, which went down from 4.8 billion reais (US$ 2.6 billion) in the first six months of 2008 to 1.3 billion reais (US$ 709 million) in the same period this year, was one of the main contributing factors to the reduction,

    Unfavorable market conditions have contributed to the interruption of the stock selling process. According to a release issued by the BNDES, another factor that contributed to the negative result was increased spending on provisions for credit risk, which totaled 1.1 billion reais (US$ 600 million) in June this year, as against 400 million reais (US$ 218 million) in the same month of 2008.

    Among the positive factors pointed out by the BNDES is the increase of 2.7 billion reais (US$ 1.4 billion) in gross revenues from financial intermediation in the first half, a figure that exceeded the 2.1 billion reais (US$ 1.1 billion) recorded from January to June last year.

    The release issued by the Bank also highlights that the financial crisis has not yet affected the quality of the BNDES' portfolio. In June, 97% of companies funded by the institution had credit risk ratings ranging from AA to C.

    In June, the Bank's net equity totaled 24.7 billion reais (US$ 13.4 billion), corresponding to 40.1 billion reais (US$ 21.8 billion) in reference equity, a result lower than the 42.5 billion reais (US$ 23.1 billion) recorded as of December 31st, 2008. The reduction took place as a consequence of the distribution of complementary dividends.



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