Brazil state development bank posts loss of $691 million

The Brazilian Development Bank (BNDES) posted a net loss of $691 million in the second quarter. The result reversed profit of $1.12 billion a year earlier.

According to BNDES, the loss in first half reflected the burden of soaring loan-loss provision and equity interest. These expenses totaled $3 billion in the first half of 2016, an increase of $2.47 billion compared with a year earlier.

Due to adjustments in borrower's risk classification, which reflected the country's unfavorable economic scenario, the bank reported expenses of $1.42 billion to build up provisions for borrower's risks. 

According to the institution, the bank's bad loan rates stood at very low level. The 30-day reference index stood at 1.38% on June 30, 2016. Nevertheless, the index is higher than the one recorded in December 2015 (0.02%).

The BNDES net worth totaled $11.76 billion in first half, a rise of $1.87 billion (19%) compared with December 31, 2015.

Translated by Amarílis Anchieta