Financial and Institutional Aspects March, 2011
Financial and Institutional Aspects
March, 2011
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
BNDES Highlights
� Founded on June 20th, 1952
� 100% state-owned company under private law
� Key instrument for implementation of Federal Government’sindustrial and infrastructure policies
� Support to micro, small and medium-sized companies
� Main provider of long-term financing in Brazil
� Emphasis on financing investment projects
� Excellent funding
� Suitable profitability
BNDES Highlights
� Brazilian Export Bank
� Equity investor through BNDESPAR
� Excellent asset quality indicators
� 2,619 active employees (August 2010)
� Headquartered in Rio de Janeiro
� Offices in São Paulo, Brasília and Recife
� New office in Montevideo, Uruguay, since Aug 2009
� New subsidiary in London, England, since Nov 2009
Private Infrastructure and Exports Privatization: Management of Privatization Program Urban and Social Development
1990
Today Innovation - Sustainability
1950 Infrastructure (Energy and Transport) Steel
1960 Heavy Industry - Consumer Goods –Small and Medium-Sized Enterprises Technologic Development
1970 Imports Substitution Basic Inputs - Capital Goods
1980 Energy – Agribusiness - Competitive Integration
Time Line
2000 Infrastructure – Productive Structure – ExportsSocial Inclusion
Exports - To promote external sales and reduce imports. Technological investments to increase content value of consumer goods. Preferential trade relations with Mercosur and other South-American neighbours.
Social Inclusion - Conditions and stimulus to intensify social benefits are established for the concession of BNDES credit.
Innovation - To support investments promoting technological innovation and competitiveness.
Infrastructure - Access to electric energy, telecommunications, urban transport, water supply and sanitation, increasing the offer of services ahead of demand to avoid harm to economic growth.
Productive Structure - To increase industry production capacity. To make industry and service sectors more effective. Priority to small and medium-sized companies. Support to international businesses of Brazilian companies.
Areas of Activity
BNDES´s clients are:
� Private individuals, domiciled and residing in Brazil;
� Legal entities under Brazilian Law (national or foreign control), established with head office and administration in Brazil;
� Direct and Indirect Public Administration in the Federal, State, Municipal and Federal District areas.
The financial support lines and programs offered by the BNDES serve the investment needs of companies of any size and secto r that have been set up in the country. Partnerships with financial inst itutions that have agencies established around the country facilitate the disse mination of credit, enabling micro, small, medium-sized enterprises acc ess to the BNDES´sresources.
Clients
National MonetaryCouncil (CMN)
National MonetaryCouncil (CMN)
Central Bankof Brazil
Central Bankof Brazil
Securities andExchange Commission
Securities andExchange Commission
Private InsuranceSuperintendency
Private InsuranceSuperintendency
Commercial BanksInvestment BanksSavings BanksDevelopment BanksLeasing Companies
BCB
Stock ExchangeFuture ExchangeSecurity BrokersInvestment BanksInvestment ClubsForeign Investors
CVM
Private Open / ClosedPension FundsInsurance CompaniesCapitalization CompaniesHealth Insurance Cos.
SUSEP SPC
Brazilian Financial System
BNDESBNDES
Ministry of Development Industry and Foreign Trade (MDIC)
TCUFederal
AuditingOffice
Ministry of FinanceMinistry
of Finance
Central Bankof Brazil
NationalTreasury
SecuritiesExchange
Commission
NationalMonetaryCouncil
InternalRevenueSecretary
Relationship with other Governmental Entities
Consolidated Assets
R$ 549.0 billion
(US$ 329.5 billion)
As of Jun 30, 2010
Finances capital goods production and purchases
Finances long-term investments
BNDESPAR FINAME
Equity Participation
Exchange rate: R$ 1.6662/US$
Group Structure
BNDES Limited
Internationalization of Brazilian companies
BNDES
Organizational Chart
Director 1
João Carlos Ferraz
Director 2
Wagner B. Oliveira
Director 3
Maurício B. LemosDirector 5
Elvio Gaspar
Director 6
Luiz Linck Dorneles
Administration
Credit Human ResourcesIndirect
Operations
AGIR Project
Legal
President
Luciano Coutinho
Vice-President
Armando Mariante
Basic Inputs
Advisory Board
President’s Office
Marcos Verissimo
Auditing
Risk Management
EconomicResearch
ExecutiveSecretary
ProjectDevelopment
Director 4
Eduardo Rath Fingerl
VentureCapital
Industrial
Foreign Trade
International
Environmental
Agriculture PortfolioManagement
Planning FinancialInfrastructure Social InclusionInformationTechnology
CapitalMarkets
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
Financing of
� Complete business projects
� Machinery and equipment
� Export of goods and services
Equity Investment
� Stocks and debentures
� Venture Capital
� Seed Capital Funds
� Private Equity Funds
Main Credit Lines
� BNDES Automatic – indirect financing through a network of accredited financial institutions (onlending).
Under R$ 10 million (close to US$ 5 million)
� FINEM - Direct financing;
� FINEM - Indirect financing.
Over R$ 10 million
� FINAME – Machinery and equipment
Unlimited
Access to Credit
Who is eligible for funding?
• Federal
• StatePublic Administration
• Municipal
• Micro-entrepreneurs
• School bus drivers
• Independent cargo transportersIndividuals
• Rural producers
• NGOs, OSCIPs (Civil Society Organization for Public Interests) or Foundations
• Cooperatives or AssociationsCompanies (Legal Entities)
• Agricultural companies, industry, trade or services
Classification per size
MICROUp to R$ 2.4 million
Up to R$ 16 million
MEDIUMUp to R$ 90 million
LARGEAbove R$ 300 million
MM
PP
MM
EE
GROSS OPERATING REVENUEAnnual
GROSS OPERATING REVENUEGROSS OPERATING REVENUEAnnualAnnual
MEDIUM - LARGEUp to R$ 300 million
SMALL
Borrower’s Requirements
• Capacity to make repayment.
• Be commercially registered.
• Tax and social securities obligations paid up and in order.
• Not to be undergoing a credit-recovery process (bankruptcy and
composition of creditors).
• Have collateral to cover the operational risk.
• Comply with environmental legislation.
Types of Operations
Direct OperationsCompanies financed directly
by the BNDES
ENTERPRISE
AccreditedFinancial Institution
ENTERPRISE
Indirect OperationsCompanies financed through an accredited financial institution
Information and Relationship
Direct Operations
ENTERPRISE
Direct Operations
• BNDES FINEM - investment projects(minimum value of R$ 10 million ~= US$ 5 million)
• Project Finance - credit to a Specific Purpose Company created tosegregate project cash flow, equity and risk
• Internationalization of Enterprises - support to investments orprojects to be performed abroad
• Credit Limit - revolving credit for the BNDES clients 5 years or more with good record and credit risk ranking
• Subscription of Securities - underwriting of securities in publicly-listed companies
Direct Operations – Lines of Financing
Credit Risk RateBasic Spread+ +Financial Cost
Financial Cost = TJLP or TJLP-462 or Currency Basket or LIBOR
(Funding cost)
BNDES´Basic Spread = from 0% to 2.5% per year (*) (Margin to cover operational and administrative expenses)
Credit Risk Rate = from 0% to 3.57% per year
(Margin to cover non-performing loans).
BNDES Interest Rate – Direct Operations
(*) Up to 1.8% p.y. for machinery and equipment acquisition and for infrastructure, agribusiness, industry, trade and service investment projects. In some especial lines of financial, like machinery leasing or import, export of goods and working capital, the basic spread may reach 2.5% p.y.
Project Evaluation Flow
Consultation
Letter
Eligibility
Project
Completion
Project
AnalysisApproval Contracting Disbursement
ENTERPRISE
Follow up
30 days
60 days
30 days
30 days
60 days
ENTERPRISE
180days
Average Time
Project
Development
Operational policies eligibility and credit risk analysis
Formulation of Analysis Report and Board of Directors approval
Submission of collateral and environmental permits, contract signing and financial schedule
100%
Consultations
US$ 145.2 billion
US$ 131.9 billion
US$ 114.4 billion
Eligible
Approved
US$ 96.3 billion
Disbursements
Performance 2010
66%
91%
79%
Indirect OperationsCompanies financed through a network of financial institutions, accredited by the BNDES, which are responsible for the analysis and credit approval.
ENTERPRISE
AccreditedFinancial Institution
Indirect Operations
Indirect Operation – Lines of Financing
• BNDES Automatic(investment projects under R$ 10 million)
• BNDES Finame(capital goods production and trade)
• BNDES Agricultural Finame(agricultural machinery and equipment production and trade)
• BNDES Leasing Finame(leasing of capital goods)
• BNDES Export(production of goods and services made in Brazil to be exported)
• BNDES Card(revolving, pre-approved credit for the acquisition of products accredited by BNDES)
Competitive export
• to improve competitiveness of Brazilian products
Credit facilities
•various types of financing to facilitate exports
Support for small and medium-sized export companies
•growth of Brazilian exporters
Emphasis on products with higher-aggregated value
Operating in partnership with a network of accredited financial institutions in Brazil and over 100 foreign banks
Supporting integration within South America
Export Support - Purposes
• Pre-Shipment: financing for the production of goods
earmarked for export, linked to specific shipments, or to the
increase of the company’s total exports
• Post-Shipment (buyer or supplier credit): financing for the
commercialization of goods and services in foreign countries
Export Support – Credit Lines
• Financial Cost = TJLP or TJLP-462 or Currency Basket or LIBOR(funding cost)
• BNDES´Basic Spread = from 0% to 1.8% per year(0.9% p.y. for SMEs)
(margim to cover operationa expenses)
• Financial Intermediation Tax = up to 0.5% per year (exempted for micro, small and medium sized companies)(to cover the sistemic risk of the financial institutions)
• Financial Institution Spread = determined by the accredited financial institution
Basic Spread+ +Financial
IntermediationRate
Financial Cost
FinancialInstitution Spread+
BNDES Interest Rate – Indirect Operations
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
Capital Market
The BNDES plays a key role owing to:
• Its commitment to long-term projects.
• The size and quality of its portfolio.
• Its performance in moments of higher volatility in the market.
• Its capacity to attract other investors.
• Its focus on corporate governance.
• Its capacity to invest in all segments of the market.
Capital Market
The BNDES focuses on:
• Stimulating tender offer spreading.
• Consolidating national and international companies.
• Developing new products (PIBB, CRIATEC etc).
• Supporting the development of the funds industry.
• Fostering corporate governance practices.
• Stimulating fixed-income on the secondary market (issuing debentures).
• Supporting innovative Micro, Small and Medium-Sized companies.
• Supporting IBOVESPA (the Sao Paulo Stock Exchange Index).
BNDESPAR - Equity Investment Portfolio
Value Value ValueTotal 13.641 100,0% 13.827 100,0% 14.231 100,0%
Investments in Associated Companies
12/31/2010 09/30/2010 12/31/2009
Value Value ValueListed Companies 77,872 87.3% 77,259 88.0% 65,207 86.8%Petrobras 41,866 46.9% 42,234 48.1% 25,091 33.4%VALE 15,434 17.3% 14,556 16.6% 13,680 18.2%Eletrobras 4,743 5.3% 4,580 5.2% 7,525 10.0%CPFL Energia 1,686 1.9% 1,574 1.8% 1,430 1.9%ALL 1,270 1.4% 1,473 1.7% 1,949 2.6%Gerdau 924 1.0% 942 1.1% 1,206 1.6%Braskem 904 1.0% 754 0.9% 391 0.5%CSN 849 1.0% 932 1.1% 1,070 1.4%CEG 790 0.9% 790 0.9% 718 1.0%Light 780 0.9% 879 1.0% 1,341 1.8%Marfrig 739 0.8% 828 0.9% 911 1.2%Others 7,887 8.8% 7,717 8.8% 9,895 13.2%Not Listed Companies 11,377 12.7% 10,519 12.0% 9,914 13.2%
Total 89,249 100.0% 87,778 100.0% 75,121 113.2%
09/30/2010 12/31/2009R$ millions
Equity Investments at Fair Value
12/31/2010
BNDESPAR - Equity Investment by sector
Fair Value – December 31, 2010
Oil and Gas36%
Mining22%
Electricity12%
Food and beverage
9%
Telecom3%
Siderurgy2%
Metallurgy2%
Transportation2%
Private Equity Fund - PIQ
1%
Others7%
Pulp and Paper4%
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
Annual Disbursements(Includes secondary market investments)
35.1
11.7
40.0
13.8
47.1
19.6
52.3
24.1
64.9
34.0
92.2
49.8
137.4
71.6
168.4
96.3
2003 2004 2005 2006 2007 2008 2009 2010
R$ Billion
US$ Billion
Disbursements by Type of Operation (%)(Do not include secondary market investments)
46
54
46
54
58
42
46
54
45
55
47
53
43
57
41
59
47
53
57
43
44
56
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Direct Operation Indirect Operation
Disbursements by Business Sector (%)(Do not include secondary market investments)
52%
30%
11%
7%
46%
35%
12%
7%
48%
30%
14%
8%
40%
38%
17%
5%
50%
36%
9%
5%
53%
33%
7%
7%
40%
40%
8%
12%
43%
39%
6%
12%
46%
35%
5%
14%
47%
31%
6%
16%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Industry Infrastructure Farming and Cattle Raising Trade and Services
Exchanged to US dollar on disbursement date
US$ 96.3 billions
Number of Operations
609,894
Disbursements
micro and smallindividuals large othermedium
ObsObs . Last 12 months up to December 2010. Last 12 months up to December 2010
2010 Operations
4.8 5% 7.7
8%13.5 14%
70.3 73%
417,14868%
41,836 7%
104,05317%
46,857 8%
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
� FAT (Workers Assistance Fund)
� PIS-PASEP Fund
� National Treasury
� FI-FGTS
� FGTS
� Market Funding
� BNDESPAR Debentures
Domestic Funds
Foreign Funds
� Government Agencies and Multilateral Institutions (IDB, JBIC, World Bank, KfW, NIB, China DB, etc)
� Market Funding
� Bonds, Loans and Structured Notes (ABS)
BNDES Funding
� Government-established fund: contribution on net operating revenues
� Permanent financing or quasi-equity
� Independent of Federal Budget
� Remunerated at TJLP (Long Term Interest Rate), currently 6.00% p.a., or
US$ libor
� At least 40% of annual revenues are transferred to the BNDES
(Constitutional FAT)
FAT – Workers Assistance Fund
Main Features
Stable Source of funds to BNDES (article 239 of Federal Constitution).
Origin
40% of PIS-PASEP tax collections (1.65% of corporate revenues on a non cumulative basis; 1% of the payroll of non profit oriented institutions and 1% of net revenues of public administration entities).
Use of Funds
Programs promoting economic development through BNDES
Amortization Schedule
No predefined amortization schedule – quasi capital
Constitutional FAT
Cost of Funds : TJLP, in case of BRL credits, or US$ Libor, in case of US$ related financing (Law nº 9.635/1996).
Payments to the FAT: semiannual Interest payments, limited to 6% p.a for the TJLP liabilities. The excess yield is capitalized and added to the outstanding balance of FAT funds. BNDES´s US$ related liabilities pay US$ LIBOR flat.
Perfect currency and interest rate match for BNDES balance sheets
FATCAMBIAL
Res. Codefat n°320: up to 50% ofFAT Constitucional
US$ based financings: cost of funds = Libor flat
Financing of production or commercialization ofgoods in external markets
Constitutional FAT
Origin
Unused resources of FAT, contracted with the Labor Ministry and CODEFAT.
Use of Resources
Specific programs and economic sectors
Amortization Schedule
There is repayment of principal to the FAT
Cost of Funds
TJLP
Payments to FAT
BNDES is required to make monthly payments equivalent to 1% or 2%, depending on the program, of the outstanding balance.
FAT Special Deposits
• Resources from BNDES´ single shareholder.
• Each transaction has its specific conditions, like cost and amortization schedule.
• 2009 and 2010: In 2009 R$105 billion were received from Brazilian Union, while the amount in 2010 were R$ 107 billion. These resources aim to support investments of PAC (Growth Acceleration Program) and PSI (InvestmentMaintenance Program).
National Treasury
2010 2009 2008 2007
National Treasury 253,058 144,213 43,207 13,896
Others Borrowings/Onlendings 196,033 180,624 178,992 154,327
% 129.1 79.8 24.1 9.0
R$ million
Funding Dec, 31 2010 – Capital Structure
Others
6.4%
PIS/PASEP
5.6%
FI-FGTS
1.2%Shareholders´
Equity
12.0%
FGTS
1.0%
FAT
24.1%
Foreign Funding
3.6%
National Treasury
46.1%
Changes in Source of Funds
FAT BondsMultilateral Institutions
National Treasury
December 31, 2009 122.497 4.429 12.035 144.213
Inflows 12.230 3.417 1.896 107.052
Amortizations (2.232) (360) (993) (1.271)
Exchange Variation (480) (280) (407) (1.606)
Accrued Interest and Monetary Adjustment 7.139 406 292 13.621
Payment of Interest (6.891) (356) (300) (8.951)
December 31, 2010 132.263 7.256 12.523 253.058
R$ million
Funding Dec, 31 2010 – Cash Flow
Return on
Operations; 44,8%
Government
Funding; 46,8%
Assets
Monetization; 4,7% Foreign Funding;
2,1%FAT; 1,6%
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
Balance Sheet – BNDES System
R$ billion
2010 2009 2008 2007
Cash and Equivalents 10,1 2,0 6,9 0,0
Marketable Securities 145,9 54,3 22,9 13,8
Loans 361,6 283,7 216,0 164,5
Investments 11,6 33,9 25,3 19,0
Others 19,8 12,7 6,2 5,4
549,0 386,6 277,3 202,7
FAT 132,3 122,5 116,6 105,9
PIS/PASEP 30,8 30,0 - -
National Treasury 253,1 144,2 43,2 13,9
International Borrowings 19,8 16,5 17,5 12,1
FGTS 5,5 5,8 6,1 -
FI-FGTS 6,7 7,0 7,0 -
Money Market Funding - 13,7 8,4 -
Debentures 6,0 3,6 2,3 2,0
Others 29,0 15,8 50,9 43,8
Shareholders´Equity 65,9 27,6 25,3 24,9
549,0 386,6 277,3 202,7 TOTAL LIABILITIES
LIA
BIL
ITIE
S
TOTAL ASSETS
AS
SE
TS
R$ billion
Assets
Average increase between 2001 and 2010: 19,2% per year.
113
151 152164 175
187 203
277
387
549
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
R$ billions
Assets - Breakdown
Cash and Equivalents 10.1 1.8 2.0 0.5 6.9 2.5 0.0 0.0
Marketable Securities 145.9 26.6 54.3 14.0 22.9 8.3 13.8 6.8Government Securities 25.6 4.7 35.9 9.2 10.6 3.9 1.0 0.5Debentures 17.8 3.2 12.2 3.2 8.1 2.9 6.1 3.0Shares 95.9 17.5 0.1 0.0 0.0 0.0 0.0 0.0Others 6.6 1.2 6.1 1.6 4.2 1.5 6.7 3.3
Loans 361.6 65.9 283.7 73.4 216.0 77.9 164.5 81.2Interbank Onlendings 180.2 32.8 121.6 31.5 99.4 35.8 80.5 39.8Loans 181.4 33.0 162.1 41.9 116.6 42.0 84.0 41.4
Investments 11.6 2.1 33.9 8.8 25.3 9.1 19.0 9.4Investments in Associates 11.3 2.1 12.0 3.1 7.6 2.7 11.0 5.4Investments in Other Companies 0.2 0.0 21.9 5.7 17.6 6.3 7.9 3.9Others Investments 0.1 0.0 0.0 0.0 0.1 0.0 0.1 0.0
Others 19.8 3.6 12.7 3.3 6.2 2.2 5.4 2.6
Total Assets 549.0 100.0 386.6 100.0 277.3 100.0 202.7 100.0
2010 %Assets
R$ billion
% 2007 %2008 %2009
Loans and Interbanking Onlendings by Sector
Gross Portfolio by Sector
As of Dec, 31
73% 75%
27% 25%
2010 2009
Public Sector
Private Sector
Loans and Interbanking Onlendings –per Maturity
Gross Portfolio per Maturity – As of December 31,
R$ million R$ million
Past-due 551 Past-due 825
Current Current2011 59.955 2009 51.3892012 51.067 2010 41.7292013 37.794 2011 32.6642014 27.885 2012 23.1152015 19.663 2013 15.527After 2015 168.875 After 2013 123.073
Total 365.790 Total 288.322
2010 2009
Loans and Interbanking Onlendings
Portfolio Concentration
R$ million
2010 % 2009 %
10 largest customers 141.617 38,7% 100.251 34,8%
50 next largest customers 112.979 30,9% 96.223 33,4%
100 next largest customers 55.848 15,3% 47.301 16,4%
Other 55.346 15,1% 44.547 15,5%
Total 365.790 100,0% 288.322 100,0%
As of December 31,
Foreign Debt Securities – Outstanding International Bonds
Issue Year
MarketPrincipal
(currency - million)
Coupon (%) Maturity
1998 Eurodollar/144-A US$ 1,000 6,369% 06.16.2018 (a)
2001 Eurodollar US$ 300 9,625% 12.12.2011
2009 Eurodollar US$ 1,000 6,50% 06.10.2019
2010 Eurodollar US$ 1,000 5,50% 12.07.2020
2010 Euro MTF EUR 750 4,125% 09.15.2017(a) As amended on June, 2008
Foreign Debt Securities - Ratings
Rating Outlook Rating Outlook
Moody´s Baa2 Positive A3 Stable
S&P BBB- Stable BBB+ Stable
Global Foreign Currency Issuer Rating
Global Local Currency Issuer Rating
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
Ratios
R$ billion, except percentages
Ratios 2010 2009 2008 2007
Total Assets 549,0 386,6 277,3 202,7
Net Income 9,9 6,7 3,1 0,7
Shareholders' Equity 65,9 27,6 25,3 24,9
ROE (%)1/ 21,2 25,5 21,2 33,2
ROA (%)2/ 2,1 2,0 2,2 3,8
NIM (%)3/ 1,8 2,2 2,0 3,0
BIS Ratio (%)4/ 18,64 17,58 17,67 26,73 1/Average Shareholders' Equity = (Ecurrent year + Eprevious year)/2
2/Average Asset = (Acurrent year + Aprevious year)/2
4/ Central Bank of Brazil requires 11% as a minimum percentage.
3/ NIM is the net income interest (interest income minus interest expenses) divided by average interest-earning assets.
BNDES vs. Multilateral Agencies
US$ million
BNDES IADB World Bank 2/ CHINA DB2010 2010 (Jun, 30.10) 2009
Total Assets 1/ 329,504 87,217 282,842 665,168
Shareholders' Equity 1/ 39,551 20,960 37,401 55,471
Net Income 1/ 5,950 330 (870) 4,673
Disbursements 3/ 96,322 10,341 28,855 92,998
Capitalization (%) 4/ 12.0 24.0 13.22 8.34
ROA (%) 5/ 2.1 0.39 (0.31) 0.76
ROE (%) 6/ 21.2 1.6 (2.30) 8.761/ BNDES - Exchange rate US$ 1,66622/Unlike other institutions 12 months fiscal year ends June 30th
3/Based on the historical exchange rate - NET
4/Shareholders´Equity/Total Assets5/ Net Income/(Assets current year + Assets previous year)/2
6/ Net Income/(Shareholders' Equity current year + Shareholders´Equity previous year)/2
Asset Quality (%)
Source:1/BNDES System = Consolidated2/SFN - National Financial System (all financial institutions that operate in Brazil)3/Includes BNDES
As of Dec 31, 2010
BNDES System 1/ SFN2/ Private Fin
InstitutionsPublic Fin
Institutions 3/
93,7
D - G 1,0 4,4 4,8 3,6
AA - C 98,5 92,6 92,0
2,7
Total 100,0 100,0 100,0 100,0
H 0,5 3,0 3,2
Provision
Level (%)
Past Due
Period
Risk
Category
100.0> 180 daysH
70.0180 daysG
50.0150 daysF
30.0120 daysE
10.090 daysD
3.060 daysC
1.030 daysB
0.5-A
0.0-AA
Provision
Level (%)
Past Due
Period
Risk
Category
100.0> 180 daysH
70.0180 daysG
50.0150 daysF
30.0120 daysE
10.090 daysD
3.060 daysC
1.030 daysB
0.5-A
0.0-AA
Resolution CMN 2,682/99
Asset Quality (%)
2010 2009 2008 2007
Loans, net of allowance/Total Assets 65.86% 73.37% 77.89% 81.19%
Nonperforming loans/Total Loans 0.15% 0.20% 0.15% 0.11%
Allowance for losses/Total Loans 1.15% 1.61% 2.07% 2.51%
Allowance for losses/Nonperforming Loans 7.65 8.05 13.89 23.34
Total allowance as a percentage of non-performing loans as of December31, 2010
Brazilian Financial SystemAverage NPL ratio (Dec/10)
765%
3,23%
Non-performing loans/total loans
Asset Quality (%)
0,11%
0,15%
0,20%
0,15%
2007 2008 2009 2010
Income Statement
R$ million
2010 2009
+ Net Income from Loans 25,336 18,600
+ Income from Marketable Securities 8,377 5,209
(-) Interest Expenses (26,051) (17,721)
(+/-) Net of Effect Exchange Variation (623) (267)
(=) Net Interest Income, before allowance for loan losses7,039 5,821
(+/-) Allowance for Loan Losses 2,852 (6)
(=) Net Interest Income, after allowance for loan losses 9,891 5,815
+ Income from Equity Investments 6,159 3,990
(-) Administrative and Tax Expenses (1,877) (1,740)
(+/-) Other Net Revenues/Expenses 187 994
(=) Operating Income 14,360 9,059
(-) Taxes (4,287) (2,238)
(-) Employee´s Profit (159) (86)
= Net Income 9,914 6,735
•• Institutional AspectsInstitutional Aspects
•• Operations and PoliciesOperations and Policies
•• Capital MarketCapital Market
•• DisbursementsDisbursements
•• FundingFunding
•• Financial PositionFinancial Position
•• Ratio and ResultsRatio and Results
•• Adoption of International Accounting Standards Adoption of International Accounting Standards -- IFRSIFRS
Adoption of International Accounting Standards - IFRS
• Communication Nº. 14,259/2006, Resolution Nº. 3,786/09 and Circular Nº. 3,472/09 – Brazil’s Central Bank (Bacen).
• Year ended December 31, 2010, the BNDES will present Consolidated Financial Statements in BR GAAP and in IFRS.
• Statements in accordance with IFRSs are not used as a basis for paying dividends or collecting tax. They include additional information required by Brazil’s Central Bank.
27.628
6.735
386.633
BR GAAP
Dec./09
67.134
8.149
446.086
IFRSIFRSBR GAAP
Dec./10
69.79165.899Net Equity
8.8579.913Net Earnings
553.768549.020Total Assets
R$ billion
Adoption of IFRS Comparison of the Main Indicators
� Fair Value of Financial and Equity Instruments;
� Allowance for Loan Losses;
� Constitution of Deferred Tax Credits from adjustments;
� Associated Companies - Bargain Purchase (Negative Goodwill), Goodwill valuation, Adjustments on Convertible Securities and others;
Adoption of IFRS Main Adjustments
69,791
67,134
45,910
IFRS
(91)
85
(319)
Others
2,316
708
317
Associated
Companies
(750)
(18,967)
(8,892)
Deferred
Tax on
Adjust.
2,417
3,265
3,671
Allowance
for Loan
Losses
-
54,585
25,228
Fair Value of
Financial
Instruments
2010
2009
2008
BR GAAP
65,899
27,628
25,267
R$ million
Adoption of IFRSMain Adjustments – Net Equity
118(801)Deferred Tax on Adjustments
20102009
(848)(406)Allowance for Loan Losses
(224)2,953Associated Companies
-(894)Recognition of derivatives
9,9136,735BR GAAP
8,8578,149IFRS
(102)35Others
-527Fair Value of Financial Instruments
R$ million
Adoption of IFRS Main Adjustments - Earnings
Board of Directors
Comprised of:
I) eleven members appointed by the President of Brazil, with three-year terms, including the Chairman of the Board. Of this total, the Minister of Planning, Budget and Management, the Minister of Labor and Employment, the Minister of Treasury and the Minister of Foreign Affairs each appoint a member. The remaining members are appointed by the Minister of Development, Industry and Foreign Trade; and
II) one vice-chairman of the Board of Directors, a position filled by the President of the BNDES.
The current Members of the BNDES Board of Directors are the following:Fernando Damata Pimentel (Chairman)Luciano Galvão Coutinho (Vice-Chairman)Alessandro Golombiewski TeixeiraCarlos Roberto LupiEduardo Eugênio Gouvêa VieiraArtur Henrique da Silva Santos Roberto Atila Amaral VieiraMiriam BelchiorLuiz Eduardo Melin de Carvalho e SilvaPedro Luiz Carneiro de Mendonça
Board of Executive Officers
The BNDES´ Board of Executive Officers is comprised of eight members: the President, Vice-President and six Managing Directors, all appointed by President of Brazil.
President
Luciano Coutinho
Vice-President
Armando Mariante Carvalho
Managing Directors
i) João Carlos Ferraz
ii) Luiz Eduardo Melin de Carvalho e Silva
iii) Mauricio Borges Lemos
iv) Eduardo Rath Fingerl
v) Elvio Lima Gaspar
vi) Luiz Fernando Linck Dorneles
Fiscal Council and Audit Committee
Fiscal Council:
The Audit Committee is currently comprised of:
Current Members
Carlos Eduardo Esteves LimaAndré Luiz Barreto de Paiva Filho Reginaldo Braga Arcuri
Substitute Members
Clayton Campanhola Francisco Moreira da Cruz Filho Eduardo Coutinho Guerra
João Paulo dos Reis VellosoAttílio GuaspariPaulo Roberto Vales de Souza
Brazilian Development BankAvenida República do Chile nº 10021031-917 Rio de Janeiro – RJ - Brazil
Brazilian Brazilian DevelopmentDevelopment BankBankAvenida República do Chile nº 100Avenida República do Chile nº 1002103121031--917 917 Rio de Janeiro Rio de Janeiro –– RJ RJ -- BrazilBrazil
[email protected]@bndes.gov.br
Presentation edited by:
VaniaVania Maria da Costa BorgerthMaria da Costa BorgerthAccountantAccountant ChiefChief andand InvestorInvestor RelationsRelations
www.bndes.gov.br