Banco Nacional de Desenvolvimento Econômico e Social posted a slight decrease in its full-year 2017 net profit compared to the previous year amid a decline in income from its financial intermediation business.
BNDES said it ended 2017 with a net profit of 6.18 billion Brazilian reais, down from 6.39 billion reais earned in 2016.
Results for the full year include 8.56 billion reais in gains from equity investments, representing an increase of 249.5% from 2016. Income from financial intermediation, however, fell 42.1% year over year to 14.97 billion reais.
The state-run bank attributed the decline in financial intermediation results to a reduction in the average return on the securities portfolio, as well as lower income from credit operations amid falling loan demand in Brazil.
The bank further noted that its provision expenses for credit risk decreased by 26.8% in 2017 as there was no need for supplementary provisions that were established in the previous year when there was a higher level of uncertainty regarding Brazil's economic situation.
BNDES' loan book shrank 10.3% in 2017, accompanied by an improvement in asset quality as its 90-day nonperforming loan ratio dropped to 2.08% as of December 2017 from 2.43% a year earlier. The company said its 90-day NPL ratio compares favorably with the 3.25% average for Brazil's financial system.
As of March 14, US$1 was equivalent to 3.26 Brazilian reais.
