Net income: R$ 1.1 bn
Return on equity (ROE): 10.3%
The COVID-19 pandemic tested several aspects of banco BV’s strategy and culture, mainly the dimensions of digital transformation and business resilience. In retail, where BV is the national leader in used light vehicle financing, digital transactions were expanded to connect storeowners and consumers. Even though stores throughout Brazil remained closed during the height of the pandemic, BV continued to operate through digital platforms, which were enhanced by a new car delivery service to clients.
As seen in past economic crises, the market of used vehicle sales and financing proved to be resilient. Although impacted between March and May, with a drop of approximately 80% in demand, the segment recovered and, in July 2020, origination levels started to grow in comparison with the same period in 2019.
Also in retail, given the need to renegotiate debts resulting from unemployment and the interruption of economic activity, banco BV launched initiatives that benefited clients in two ways: i) a 60-day grace period without interest charges, allowing clients to defer two installments to the end of the contract period; and ii) lengthening of debt maturity, which lowered monthly installments. The two campaigns benefited more than 800,000 clients and helped maintain the portfolio’s default rate at levels below the historical average.
In the wholesale segment, BV benefited from a rise in demand caused by an increase in the acquisition of credit lines by companies, as a way of reinforcing their cash position, and by the temporary interruption in the capital market, the volatility of which did not have a significant effect on the company’s credit portfolio.
With regard to results, the bank prudently raised its provisioning level, which increased the cost of credit in 2020. This combination of factors led BV to end the year with net income of R$ 1.1 billion, 22% lower than in 2019, but with profitability similar to pre-pandemic levels; the return on equity during the year was 10.3%.
In the areas of management and culture, the principle of putting people first was demonstrated through activities to address the effects of the pandemic. The effort to preserve the health of employees and their family members was recognized in the annual organizational climate survey, carried out in May in the form of a questionnaire answered by the teams. It registered a satisfaction index of 89 points, placing BV among the best companies to work for in Brazil.
The bank acted in a timely manner to support its employees, clients and society during the pandemic. In addition to donations to support vulnerable families and provide medical equipment throughout Brazil, BV implemented an online donation campaign through which the company matched each real donated, doubling the amount collected, for a total of R$ 2.6 million. In addition, it offered subsidized credit lines to the amount of R$ 50 million to national manufacturers of hospital equipment, which led BV to be named one of the 30 most charitable companies in Brazil by Forbes magazine.
BV also continued 28 projects already supported by the company in the areas of culture, sports and protection of children and the elderly, among others. In 2020, investments in these projects totaled R$ 11.7 million.
Banco BV also reinforced its commitment to ESG standards by creating a Sustainability Committee and establishing a new sustainable performance strategy within its ecosystem. The new aspiration includes four goals: (i) neutralize environmental impact; (ii) accelerate social inclusion; (iii) multiply and humanize financial knowledge and; (iv) mobilize resources to promote sustainable businesses. In addition, BV, which already follows the Equator Principles and the Principles for Responsible Investment (PRI), became a signatory to the United Nations (UN) Global Compact.
BV also announced a pioneering initiative to neutralize 100% of CO2 emissions from cars financed in 2021 and beyond. Approximately 4 million tons of CO2 will be offset each year through the purchase of carbon credits.
The company also advanced its digital partnership strategy by connecting more than 180 companies to its Applications Programming Interface (APIs) library, which centralizes a series of standards for software development and integration. Twenty of the connected companies are BV’s strategic partners.
In the areas of revenue diversification and new product development, banco BV continued to make progress in residential solar panel financing, a segment in which it is already one of the leading national banks.