BNDES and the government fight a new arm wrestle around the return of irregular contributions

The BNDES (National Bank for Economic and Social Development) wants to negotiate a new calendar for the return of contributions made by the National Treasury during PT governments and that were considered irregular by the TCU (Union Court of Auditors).

The institution claims that it would have a loss of R$ 14 billion by accelerating payments and wants to set a slower pace for transfers than initially agreed with the Ministry of Economy, which triggered a new arm wrestling around the subject.

The measure compromises the economic team’s plans to speed up the use of the money to reduce the public debt, which closed the year 2021 at 80.3% of GDP (Gross Domestic Product).

Without the acceleration of the schedule, the Union calculates that the loss will fall on the treasury, with an invoice of R$ 13.4 billion (in current values) until 2040.

The value corresponds to implicit subsidies, which result from the difference between the interest paid by the Treasury to finance itself in the market and the lower rates charged on loans granted by the development bank.

The TCU’s determination for the institution to return the resources sought precisely to reduce the cost of these subsidies, paid with public resources.

The disagreement between the Ministry of Economy and BNDES has already motivated frustration in the amount returned by the bank in 2021. The government expected an advance transfer of R$100 billion, but the institution made a smaller payment, of R$63 billion.

For this year, the schedule —changed by the TCU— originally provided for a return of BRL 54.2 billion.

As the 2021 transfer was smaller, the Ministry of Economy expects a payment of around R$ 60 billion in 2022, but the amount is still open.

“We imagined that, at the end of the consultation [no TCU]we would have a little more empowerment [autoridade] to discuss, especially with the BNDES, so that it can return the funds it has a little more robustly,” said the special secretary for the Treasury and Budget, Esteves Colnago, at an event promoted by Credit Suisse on February 1.

“We are still discussing with the BNDES, but I think this number will not reach even close to R$ 100 billion, perhaps it will be around R$ 60 billion or so [para 2022]”, Colnago said at the time.

In November, the bank’s debt balance was R$90.1 billion. After that, only an additional transfer of R$3.5 billion to the Treasury was carried out.

Technicians involved in the discussions attribute the change in the BNDES’ stance to pressure from employees to preserve the payment of PLR (Profit Sharing). Historically, AFBNDES, which represents the institution’s employees, takes a critical position in relation to returns.

BNDES denies that this is the motivation. “There is no relationship between the two themes,” he said in a statement. According to the bank, the TCU’s understanding is that “loan amortizations should not penalize the institution transferring the funds”.

The president of AFBNDES, Arthur Koblitz, also says he doubts the connection between the two themes. “It looks like the federal government’s involvement with the profit sharing policy for employees of a state-owned company,” he said.

However, the TCU itself has investigations in progress to determine whether the Treasury’s contributions to the development bank supported the payment of significant portions of PLR to employees.

From 2008 to 2014, the federal government capitalized the BNDES with contributions that exceeded R$ 400 billion, in historical values. The measure enabled what became known as the policy of national champions, which financed large companies during PT governments.

In early 2021, the TCU considered the transfers irregular, as they were made outside the Budget, and determined the negotiation of a timetable for returns.

According to the court of accounts, advance payments should be made subject to two conditions: preserving the legal security of the loan contracts granted (to avoid harm to borrowers) and observing the minimum capital requirements for a bank to maintain its financial health.

Initially, the BNDES agreed with the return and approved transfers of R$100 billion in 2021 and R$54.2 billion this year. At the time, the bank’s president, Gustavo Montezano, told the Poder360 portal that the decision obliged “to return the money as soon as possible”.

In December of last year, following the TCU’s follow-up on the implementation of the measures, the BNDES argued that the anticipations (called “best efforts schedule”) would impose financial losses on the bank.

The loss, according to the institution, would mean “improper transfer to BNDES of the burden arising from the economic policy of subsidies adopted by the federal government”. The request was the inclusion of a third clause: that returns do not result in financial losses.

The TCU accepted the bank’s arguments and determined a new negotiation with the Ministry of Economy within 30 days. The deadline is suspended because the government asked for reconsideration of the decision.

With this third clause, government sources say that the refunds will be made according to the wishes of the bank, which will have the power to define the speed of transfers.

At the limit, the BNDES could make small payments until 2040, when the loans granted with this source of funds come to an end.

THE leaf the development bank stated that the early settlement of payments obliges the institution to assign a new cost of funding to the funds already lent.

As this cost is more expensive than the interest rate paid by the borrower, there is a loss of R$ 14 billion, “based on current market conditions”.

“If the conditions of the target schedule are not met, the BNDES follows its commitment to the Return Schedule, the one in which returns are conditioned to the return of credit operations financed with resources from the National Treasury”, said the institution.

“Other issues regarding the return schedule are still under discussion at the bank’s governance bodies,” he said.

Koblitz of AFBNDES said the TCU’s decision to charge a new schedule “confirms that the court was not comfortable” with the previous determination.

For the association of employees, the contributions should not be considered irregular, as they were provided for in laws passed in Congress, and the government could not guide the decision of a bank under its control to achieve desired fiscal results.

The National Treasury did not manifest itself until the publication of this text.