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BNDES looks to ease strain on Brazil's public finances after H1 profit soars

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BNDES looks to ease strain on Brazil's public finances after H1 profit soars

Banco Nacional de Desenvolvimento Econômico e Social President Gustavo Montezano said the state-run development bank will look to make early dividend payments to Brazil's Treasury and will comfortably repay 126 billion reais of debt to the government in 2019, Reuters reported.

His comments come after the bank's first-half 2019 profit increased 190% from a year ago to 13.8 billion reais, driven by gains from the sale of stakes in companies such as state-owned oil firm Petrobras and miner Vale.

Sources told local newspaper O Estado de S.Paulo that BNDES was looking to approve an initial 1.8 billion reais dividend payment to the Treasury. That amount, however, might be lower than what the economy ministry is expecting, according to the report.

Montezano, meanwhile, added that BNDES will explore other ways of replenishing government coffers at a time when Brazil's public finances are under stress from slow economic growth and low tax revenues. He said the bank is open to additional opportunities for divestment in a wide range of companies.

Earlier in August, BNDES approved an early debt payment of more than 40 billion reais to the Treasury, saying that the payment "is in line with the goal of accelerating returns" to the government.

As of Aug. 28, US$1 was equivalent to 4.16 Brazilian reais.