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The Brazilian Development Bank
JULY 14 th, 2010
Denise Andrade Rodrigues
President’s Adviser
BNDES Highlights
Founded on June 20th, 1952
100% state-owned company under private law
Support to micro, small and medium-sized companies
Main provider of long-term financing in Brazil
Emphasis on financing investment projects
Brazilian Export Bank
Equity investor through BNDESPAR
Mission and Vision
Mission
To foster sustainable and competitive development in the Brazilian
economy, generating employment and reducing social and regional
inequalities.
Vision
To be the development bank of Brazil,
innovative, outstanding, and to proactively tackle the the current
and relevant challenges of our society.
Investment outlook: positive prospects
Forecast of Investment Ratio 2009-2012 (% of GDP)
22.0 21.2
21.0 20.2
Forecast
20.0 19.0
18.6
19.0
17.6
18.0
16.7
17.016.4
16.0
Source: BNDES Forecast
15.0
Investment – BNDES 2006 2007 2008 2009 2010 2011 2012
Forecast (R$ Billion)
Sector ’05-’08 ’10- Growth
’13
Oil and Gas 156 295 89%
Mining 53 52 - 3%
Siderurgy 28 44 59%
Automotive 23 32 41%
Electroelectronics 15 21 42%
13%
Paper and Pulp 17 19
BNDES
BNDES’ disbursements (US$ billion) 68,7
BNDES played an important role during the 49,6
crisis, increasing in almost 50% (R$) its annual
disbursement with resilience and 33,3
sustainability 23,6
19,3
10,9 13,6
2003 2004 2005 2006 2007 2008 2009
BNDES’ Net Income (US$ billion)
3.7 3.9
2.9 2.9 Excellent funding
Suitable profitability
1.3
Good asset quality indicators
0.5
2004 2005 2006 2007 2008 2009
Areas of Activity
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. To prioritize small and medium-sized companies. To support
international business of Brazilian companies.
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 neighbors.
Social inclusion
Conditions and stimuli to intensify social benefits are established for the
concession of BNDES credit.
BNDES Support
Disbursements by Business Sector (%)
8% 5% 5% 7%
9% 12% 12% 14%
17% 7%
14% 8% 6% 5%
36% 33%
30% 40% 39% 35%
38%
48% 50% 53%
40% 40% 43% 46%
2003 2004 2005 2006 2007 2008 2009
Indutry Infrastructure
Farming and Cattle Raising Trade and Services
BNDES vs. Multilateral Banks
US$ millon BNDES IDB IBRD CAF China DB
Dec 31, 2009 Dec 31, 2009 Jun 30, 2009* Dec 31, 2009 Dec 31, 2008
Total Assets 222,050 84,006 275,420 15,887 545,886
Shareholders' Equity 15,867 20,674 40,037 5,287 49,786
Net Income 3,868 794 3,114 235 2,971
Loan Disbursements 78,910 11,424 18,564 4,584 167,244
Total Loans 162,917 58,049 105,698 11,687 414,086
Capitalization 7.1% 24.6% 14.5% 31.9% 9.1%
ROA 2.3% 1.0% 2.4% 2.4% 0.6%
ROE 29.0% 4.0% 8.0% 4.7% 6.0%
Founded 1952 1959 1945 1968 1994
IDB = Inter-American Development Bank
IBRD = The International Bank for Reconstruction and Development (World Bank)
(*) Unlike other institutions, 12-month fiscal year ends June 30th
CAF = Corporación Andina de Fomento
CDB = China Development Bank
Capitalization = Shareholders’ Equity / Total Assets
ROA = Return On average Assets
ROE = Return On average Equity
Clients
The BNDES’ clients are:
1) Private individuals, domiciled and residing in Brazil;
2) Legal entities under Brazilian law (national or foreign control),
established with head office and administration in Brazil;
3) 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 sector that have been set up in
the country. Partnerships with financial institutions that have agencies
established around the country facilitate the dissemination of credit, enabling
micro, small, medium-sized enterprises to access the BNDES’ resources.
Main Credit Lines
Financing of:
• Complete business projects
• Export of goods and services
• Machinery and equipment
Equity Investment
• Stocks and debentures
• Venture Capital
• Seed Capital Funds
• Private Equity Funds
How we work
BNDES: Financing + Equity
Capital
Equity, Funds and Capitalization Market
Private
Equity
Venture Funds
Capital
Angel
Equity
Funds
Investors
Stocks and
Debentures
IPO
+
Lines, Products and Programs
Business Enterprise Machinery and Micro, Small and
Industrial Projects
Financing
Projects equipment Medium Enterprises
Environmental
Innovation Exports Social Inclusion
Responsibility
Industry Programs
FUNTEC … …
(e.g.: PROTVD)
How we work
Direct Operations Indirect Operations
Companies financed Companies financed through an
directly by BNDES accredited financial institution
ENTERPRISE
Information
& Relationship
Accredited
Financial Institution
ENTERPRISE
How we work – Direct Operations
Direct Operations
ENTERPRISE
BNDES’ Interest rate - Direct Operation
Funding Cost
• TJLP
Financial Cost • TJ-462
• Currency Basket
+ • LIBOR
Margin to cover
BNDES Basic Spread operational expenses
0.0 – 2.5% p.a.
+
Margin to cover
Credit Risk Rate non-performing loans
0.0 – 3.57% p.a.
=
Total Interest Rate
TJLP Long-Term Interest Rate*
9.75 9.75 TJLP % p. a.
9.00
IPCA (% annual inflation)
8.15
7.6 7.5
6.85
6.5 6.5
6.25 6.25
6.0 6.0
5.7
5.9
4.5 4.3
3.1
Jan Apr July Oct Jan Apr July Oct Jan Apr July Oct Jan Apr July Oct Jan Apr July Oct Jan Apr
2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010
TJLP is set each quarter by National Monetary Council
IPCA is a Consumer Price Index produced by IBGE
Direct Operations - Lines of Financing
• BNDES Finem- investment projects
(minimum value of R$ 10 million ~= US$ US$ 5 million)
• Credit Limit - revolving credit for BNDES clients 5 years or more with
good record and credit risk ranking
• Subscription of Securities - underwriting of securities in publicly-
listed companies
• Internationalization of Enterprises - support to investments or
projects to be performed abroad
• Project Finance - credit to a Specific Purpose Company created to
segregate project cash flow, equity and risk
Direct Operations - FINEM
Industries Stadiums
Power Plants Oil Rigs
How we work
Indirect Operations
Companies financed through a network of financial institutions, accredited
by the BNDES, which are responsible for the analysis and credit approval.
Accredited
Financial Institution
ENTERPRISE
BNDES’ Interest rate
(Indirect Operation)
Funding Cost
Financial Cost • TJLP
• TJ-462
• Currency Basket
+ • LIBOR
Margin to cover
BNDES Spread operational expenses
0.0 – 2.5% p.a.
+ Financial Institutions
Financial Intermediation Tax Systemic Risk
0.0 – 0.5% p.a.
+
(SMEs Exempt)
Determined by the
Financial Institution Spread accredited financial
institution
=
Total Interest Rate
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)
Export Support - Credit Lines
• 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
Disbursements
2009 Operations
Number of Operations Disbursements
390,729 US$ 71,590 millions
112,997 45,558
29% 64%
23,711 Petrobras
28,725 6% 13,026
7% 18%
225,296
58% 547 1%
2,632 6,055
4% 3,776
8%
5%
individuals micro and small medium large other
Exchanged to US dollar on disbursement date
Disbursements to Finance Exports
US$ million 8.309
6.376 6.595
5.862
3.948 4.007
3.083 4.190
3.861
2.603
2.100
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Converted to US dollar on the disbursement dates
BNDES ProCopa Programs
Arenas
Up to US$ 2.7 billion to build and remodel stadiums and
urbanization investments in surrounding areas.
Tourism
Up to US$ 556 million to build, remodel, expand and
modernize hotels.
US$/R$ = 1.80
Challenges for infrastructure
Belo Monte Hydroelectric Plant and, afterwards, Tapajós;
Railways, roads and ports;
2014 World Cup;
PAC - Urban Transport;
2016 World Olympics;
High-speed Train (TAV);
Environmentally sustainable projects and concern for
surrounding areas.
Thank you!
Brazilian Development Bank - BNDES
International Division
To contact us:
www.bndes.gov.br/english/
