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SAO PAULO, Nov 13 (Reuters) - Profit at Brazil's state development bank BNDES rose 62 percent in the third quarter after a series of increases in benchmark borrowing costs this year propped up interest income and helped offset swelling investment portfolio losses.
Rio de Janeiro-based BNDES, the largest source of long-term corporate lending in Brazil, earned 3.214 billion reais ($822 million) in net income in the third quarter, compared with 1.928 billion reais a year earlier, according to a statement on Friday.
Details on quarterly revenue from lending transactions and investment income proceeds were not made available in the statement. Still, the bank said that trading-related income helped bolster results, despite a widespread slump in local equity markets.
This year, the government raised the TJLP benchmark interest rate, which BNDES uses as a peg for borrowing costs, as part of an effort to bolster public finances and cut the amount of subsidized credit flowing into Latin America's largest economy. The TJLP, currently at 7 percent, is less than half the overnight lending Selic rate, at which all market-based loans are pegged.
In the first nine months, profit fell about 10 percent to 6.639 billion reais as investment income slumped by 5.4 billion reais in the period.
Return on equity at BNDES was 15.5 percent in the first nine months, the statement said.
$1 = 3.8006 Brazilian reais Reporting by Guillermo Parra-Bernal; Editing by Meredith Mazzilli