Minas Gerais Agency | BDMG records the highest recurring net profit in history and the lowest default in ten years

The Development Bank of Minas Gerais (BDMG) recorded recurring net profit of R$163.7 million in 2023, the highest in the bank’s history, 15% higher than in 2022. The data is in the 2023 financial statements released this Tuesday- fair (26/3).

In addition to the historic total disbursement of R$2.98 billion to the public and private sectors, 23% higher than the previous year, financing allocated to investment projects reached R$1.6 billion, a performance that has a positive impact on stimulating employment and income in the State.

“The numbers show that the bank remains efficient, combining financial results with a commitment to the social, economic and sustainable development of Minas Gerais. We have evolved in the State’s competitiveness for long-term projects, which is always an important signal because it has an impact on production chains”, assesses President Gabriel Viégas Neto.

Disbursements grew among micro, small, medium and large companies and also among city halls.

112 thousand jobs were stimulated, 85% more than in 2022, and R$158 million in Tax on Circulation of Goods and Services (ICMS) was generated, according to the Input-Output Matrix produced by the bank.

More city halls served

In 2023, through the Municipal Notice and other lines destined for the public sector, there were almost half a billion reais in new contracts with 83 municipalities in Minas Gerais.

The volume of credit released to the public sector was unprecedented, reaching R$328.5 million, 89% higher than in 2022, to 305 city halls, a number 26% higher than in the same previous period.

“We increased support for projects and also began working to train public managers in relation to important projects, such as land regularization, basic sanitation, energy efficiency. In this way, the bank contributes to making projects viable that help improve the infrastructure of municipalities and, as a consequence, the population”, adds the president of BDMG.

Lowest default of the decade

Another positive highlight is the 18% drop in the default rate, which closed 2023 at 0.9%, the lowest rate in the last ten years.

Furthermore, it exceeded R$6 billion in average credit portfolio balance, as well as achieving a portfolio quality index of 5.13. The results demonstrate solidity in the capital structure.

The numbers, combined with funding diversification, had an impact on raising BDMG’s risk rating by two of the world’s main risk rating agencies: Moody’s changed the rating from BBB+ to A with a positive outlook while Standard & Poor’s changed its rating from A- to A, with a stable outlook, on a national scale.

BDMG ended 2023 with 55.2% of the balance of its funding contracted in the domestic market and 44.8% in the external market.

Net Equity closed the year at R$2.13 billion.

The full report can be accessed at this link.