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BNDES' Q1 profit surges amid reversal in loan-loss provisions

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BNDES' Q1 profit surges amid reversal in loan-loss provisions

Banco Nacional de Desenvolvimento Econômico e Social posted a 453.4% year-over-year rise in its net income for the first quarter of 2018, driven by a reversal in provision for loan losses and higher income from equity investments.

The Brazilian state-owned lender booked net income of 2.06 billion reais for the quarter, up from 372.6 million reais recorded in the same quarter of 2017.

Gross income from financial intermediation jumped to 2.93 billion reais from 1.19 billion reais a year ago. Meanwhile, the bank's equity portfolio reached 96.04 billion reais, improving 17.6% from the previous year, due to the appreciation of 15.47 billion reais in the portfolio of investments in nonassociated companies, especially the investment in oil company Petrobras.

The company reversed 361.4 million reais in provisions for loan losses in the first quarter, after allotting 3.32 billion reais to those in the year-ago period. The bank's 90-day delinquency ratio declined to 1.62% in March from 2.08% in December 2017.

On the other hand, BNDES Participações SA, the investment unit better known as BNDESPAR, posted a net income of 570 million reais for the quarter from 1.24 billion reais, declining 46% year over year. This is mainly due to the provision for losses on the debentures portfolio worth 1.31 billion reais, the company said.

As of May 11, US$1 was equivalent to 3.60 Brazilian reais.