BDC releases its 2020 financial results
Montreal, July 24, 2020—BDC, Canada’s bank for entrepreneurs, today released its 2020 fiscal year financial results, highlighting the support it provided to more than 62,000 small- and medium-sized businesses for the period of April 1, 2019 to March 31, 2020. The year was punctuated with several events, ending with the start of an unprecedented lockdown as a result of the spread of COVID-19 across the globe.
“As we look back at fiscal 2020, we can say that it was quite a year, which started with ambitious goals to grow Canadian businesses, continued with BDC’s 75th anniversary celebrations and ended brusquely with the COVID-19 pandemic,” says Michael Denham, President and CEO of BDC. “In a very short period, we pivoted our operations to provide additional liquidity and advice to help entrepreneurs face economic challenges.”
In early March, BDC was among the first organizations to deploy additional measures to provide more access to capital including working capital loans, flexible terms and payment postponements, bridge financing for venture-backed companies and several tools deployed by the Advisory Services team to support entrepreneurs during the crisis. The investments BDC has been making over the past few years in digital solutions were a key factor in helping the Bank respond to a high volume of financing requests during that period.
Through the Government of Canada’s Business Credit Availability Program (BCAP), BDC later delivered several new programs, in particular a Co-Lending Program for small businesses and Mid-Market Financing Program for medium-sized businesses, both built to help businesses with term loans for their operational cash flow requirements.
Facilitating access to capital for entrepreneurs throughout fiscal 2020
Despite an abrupt change in priorities due to the pandemic, BDC continued to play its complementary role and supported entrepreneurs at all stages of development throughout the year.
Financial achievements in fiscal 2020 include:
- BDC’s clients accepted $7.4 billion in loans, an increase of 2.5% over the previous year. The Bank’s total portfolio now stands at $36.5 billion in capital committed to small and medium-sized businesses;
- Nearly $1.1 billion authorized in financing for majority women-owned companies, surpassing its lending target to date, with the goal set two years ago of providing $1.4 billion in financing by 2021;
- BDC’s Venture Capital division had a record year in terms of proceeds received from divestiture investments, with $431 million compared to $125 million in fiscal 2019;
- BDC’s Growth & Transition Capital achieved a 19% increase in accepted financing compared to last year, reflecting strong demand for customized financing solutions for high-growth companies;
- BDC Advisory Services achieved strong growth with a 14% increase in net contracts signed compared to last year.
Unexpectedly, like most other financial institutions, BDC had to considerably increase its provisions on expected credit losses for loans due to the COVID-19 pandemic. The provision for expected credit losses for loans was established at $772.5 million, compared to $179.9 million the previous year, an increase of $592.6 million. In addition, BDC reported higher net fair value depreciation on BDC Capital investments due to uncertainty and volatility in the markets. As a result, BDC incurred a consolidated net loss of $218 million for the 2020 fiscal year. Without the impact of COVID-19 in March, net income would have exceeded the objective the Bank had forecasted in its Corporate Plan. The Bank remains confident in its ability to navigate through the current economic environment considering its robust financial history and existing capital management framework.
“Looking back at fiscal 2020 and more specifically at the last few weeks of our fiscal year, I am really thankful to our 2,400 employees for their extraordinary effort and mobilization. The pandemic created an all-hands-on deck moment to support thousands of entrepreneurs. We have been impressed by the hard work and resilience they’ve shown and continue to show. BDC will continue to be there for them through the recovery, with the financing and advice they need to rebuild their businesses,” concluded Denham.
BDC is the bank for Canadian entrepreneurs. It provides access to financing, as well as advisory services to help Canadian businesses grow and succeed. Its investment arm, BDC Capital, offers a wide range of risk capital solutions. For more information, visit bdc.ca.