Annual Report 2007

In the bank’s Local Financial Statements, the
change resulted in a temporary decrease in
financial income, as commission income had
previously been recognised when the loan was
issued. However, in the Financial Statements
prepared in accordance with International Financial
Reporting Standards (IFRS), the commission
income had always been recorded on a deferred
basis. Under IFRS, the ratio of portfolio interest
income to the average loan portfolio remained
virtually unchanged, with 23.13% reported in
December 2007, compared to 23.04% in December
2006.
The cost-income ratio rose from 70.64% to
74.52%,primarily due to investments in expansion
and staff training. The ratio of operating
expenses to average assets fell from 10.78% in
2006 to 10.01% in 2007. This figure is very satisfactory
in comparison with that reported by other
financial institutions with similar characteristics
and given the bank’s focus on small and very
small businesses and small savers.
The increase in operating expenses reported in
2007 was due to investments made as part of the
bank’s programme to expand its geographical
coverage and to support the continued growth of
its business:
• Staff costs rose by USD 2.65 million (60%) due
to growth in the number of staff at head office
and in the branches.
• Administrative costs – covering leases for
premises, communication, office supplies,
transport, IT systems, security services, maintenance,insuranceandutilitiesandotherbasic
services – rose by USD 3.13 million (55.03 %),
due primarily to the opening of additional
branches.
• Marketing costs rose by USD 1.08 million
(176.71%), mainly due to implementation of
the savings campaign and the campaign to
increase the public’s awareness of the bank
and its range of services.
• Training costs increased by USD 488,000
(192.13%) due to the rise in staff numbers and
theneedforhighlytrainedpersonnelwhomeet
the standards set by the ProCredit group.
Outlook
M a n a g e m e n t B u s i n e s s R e v i e w
In view of the bank’s performance to date and its
growing reputation as a sound financial institution
that is worthy of people’s trust, we believe
it can continue to grow rapidly. Our vision is to
become the country’s leading bank in the provision
of financial services to very small, small and
medium-sized enterprises, and to private individuals
in the low and medium income ranges.
To make this vision a reality, our goals for Banco
ProCredit for the coming year are as follows:
• To extend our geographical coverage of the
country,openingbranchesbothincitieswhere
we already have a presence, such as Quito,
Guayaquil and Cuenca, and in places which we
donotcurrentlyserve,suchasPortoviejo,Milagro
and Quevedo.
• To promote saving among people in the low
and middle income ranges by developing new
products that are more closely attuned to the
requirements of each individual segment of
this target group.
• To make the bank more efficient, investing in
the latest technology to automate an increasing
share of our operations.
• To consistently provide high-quality, personalised
service to all of our customers, ensuring
that our service is both fast and friendly at
all times.