Shareholders unanimously approve president’s annual report

(March 18, 1993).-- The annual report of CAF President & CEO Enrique García for 1992 was submitted for consideration and unanimously approved during the 77th meeting of the Board and the 24th Shareholders Meeting held in Caracas on March 15, 16 and 17.

The balance sheet and financial statements, audited by the firm Espiñeira Sheldon y Asociados, and the annual budget for 1993 also received unanimous approval.

The Peruvian Minister of Industry, Tourism, Integration and International Trade Negotiations, Alfonso Bustamente, was elected to chair the meetings of the Board and Shareholders for a one-year term. This appointment rotates in alphabetical order among the five Andean countries which hold series "A" shares.

Operations approved The Board authorized equity participation in the capital of Casa Bancaria de los Andes, financial institution which will be formed in Bolivia as an incentive to open the financial market through healthy competition in the system.

The funds to finance these shares -- US$200,000 -- will come from a trust fund to be managed by the Corporation and funded by GTZ, the international cooperation enterprise for sustainable development of the German government.

The Meeting also authorized the entry of Banco Interandino SAEMA as CAF shareholder through subscription to ten series "B" shares which are exclusively for the commercial banks of the subregion.

This institution, based in Peru, was the first Andean multilateral bank and has achieved an outstanding financial performance in the financial system of the country.

Finally, a global loan was granted to Banco Mercantil de Bolivia (BMB) for US$3 million to increase the volume of medium- and long-term deposits for investment projects in an effort to stimulate the setting up or modernization of companies in the private sector.

BMB will also issue bonds on the stock market for US$4 million with CAF guarantee.

Record figures In 1992, CAF achieved a considerable increase compared with the previous period in operations approved and funds disbursed, as well as general financial results, outperforming all targets.

The total amount approved for project execution, trade finance and technical cooperation operations in 1992 was US$1.77 billion, 36.4% above the previous period.

Of this total, 55% (US$970 million) was used to directly finance private-sector operations, figure which increases after adding funds granted to public financial institutions for use in the private area, specifically in favor of small- and medium-sized enterprises, plus technical assistance to support privatization processes. As a result, without neglecting the needs of the public sector, CAF has begun to increase its support for the private sector.

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In relation to loans for project execution, the energy sector received most financing with a strong increase for mining and transport.

In 1992, CAF gave priority to cofinancing investment, which -- based on a CAF contribution of US$401 million -- channeled external funds into the subregion for a total of US$1.16 billion from multilateral organizations (such as IDB and IFC) and international financing agencies from the United States, Canada, Japan and various European countries.

Financial results Assets and liabilities also increased in relation to 1991. Total assets were US$1.57 billion (up 37% from 1991) and liabilities were US$907 (up 60%).

Total loan portfolio, including financing of investment projects and commercial transactions of member countries, increased 47% from 1991. Paid-in capital plus reserves totaled US$660 million, a 15% increase over 1991.

Net income in 1992 was US$38.2 million, a 9.5% increase from the year before.

Support for CAF During the 1992 period, member countries and CAF shareholders showed a high spirit of cooperation.

Additionally, many governments of developed countries channeled funds to the Corporation to contribute to the development of the Andean nations. An example was the Corporation’s work as cooperating institution of the International Fund for Agricultural Development (IFAD), the OPEC Fund and the Dutch government.

During the period, generation of funds from extra-subregional funds increased, resulting in a 34% increase in relation to the year before. A large part was due to a substantial increase in advances under various credit agreements with international banks, mainly European, to finance export transactions in the countries.

Additionally, Chile became a shareholder of the Corporation, while relations with the Caribbean area were strengthened through the granting of lines of credit which have already resulted in productive commercial contacts.

These achievements, without doubt, position CAF among the most outstanding financial institutions of its type in Latin America, and reinforce its image of strength and efficiency at international level.