UPDATE 1-Brazil development bank BNDES to boost government coffers as profit soars

(Adds detail, comment from bank president)

RIO DE JANEIRO, Aug 28 (Reuters) - Brazil’s BNDES national development bank will return 126 billion reais ($30 billion) to the Treasury this year and look at other ways of replenishing government coffers, BNDES president Gustavo Montezano said on Wednesday, after the state bank announced a sharp rise in net profit.

Speaking after BNDES reported a 190% rise in profit to 13.8 billion reais ($3.3 bln) in the first half of the year, Montezano said the bank will comfortably return the 126 billion reais of loans requested earlier this year by the government.

In addition, BNDES will bring forward dividend payments to the Treasury and remain open to raising cash from selling stakes in a range of companies, wherever these opportunities arise, Montezano said.

That could involve a significant reduction of one of its many holdings this year, or several smaller sales in various companies, Montezano said.

Brazil’s public finances are being stretched to the limit by weak economic growth, low tax revenues and high spending commitments in areas such as pensions. Clawing back cash from BNDES is one of the many ways the government is trying to ease the strain.

Of BNDES’ 13.8 billion reais profit in the first six months of the year, 9.3 billion reais came from its stock portfolio. Of that, 7.3 billion reais was from the sale of stakes in oil giant Petroleo Brasileiro SA, miner Vale SA and pulpmaker Suzano SA.

BNDES director Andre Laloni said there was no resistance within the bank to further reducing its stakes in Petrobras and Vale, the bank’s largest shareholdings.

At the time of Montezano’s inauguration last month, he said BNDES would be looking to expedite the sale of nearly 100 billion reais in listed assets.

$1 = 4.1550 reais Reporting by Rodrigo Viga Writing by Jamie McGeever Editing by Rosalba O’Brien