Annual Report 2007

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A n n u a l R e p o r t 2 0 0 7 Deposits from the General Public and Other Banking Services Banco ProCredit Honduras has operated as a fullservice bank from the beginning, offering most of the banking products and services required by ordinary citizens – including current (cheque) accounts, term deposits, savings accounts, domestic and international money transfers, and the sale and purchase of foreign currency – and ensuring that all customers receive high-quality, personal service. Customer Deposits – volume Volume (in USD ’000) 2,500 2,000 1,500 1,000 500 0 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 g g Savings Sight g g Term Total Fostering a “savings culture” is one of the primary goals of the ProCredit group. Banco ProCredit Honduras promotes savings by offering innovative deposit products such as the “Mi Cajita Fuerte”, a children’s savings account, and the Planned Savings Account, which rewards customers for regular deposits and loyalty to the bank. Banco ProCredit Honduras is the only bank in the country that does not charge excessive fees and which allows customers to open a savings account with only one lempira, or one US dollar, underscoring its commitment to bringing basic fi- Customer Deposits – number Number of deposits 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 g g Savings Sight g Term
nancial services to ordinary people. The bank has also successfully mobilised major institutional deposits, reflecting its great potential for growth in the Honduran deposit market. Indeed, demand for the bank’s savings products far outstripped initial forecasts. After less than seven months of operations, the bank had mobilised deposits covering 55% of its loan portfolio. As of December 31, 2007, the bank maintained a deposit portfolio of USD 2.4 million and 8,087 accounts; 67% of these accounts were denominated in lempiras, and 33% in foreign currency. An analysis of customer deposits shows that fixed-term deposits were the most popular product. The volume of funds held in term deposits stood at USD 1.7 million at the end of December 2007, representing 71% of total deposits. The volume held in savings accounts was USD 533,000, representing 20% of deposits. The remaining balance of USD 236,000 was held in current accounts, representing 9%. The standard account and the children’s account were the two most popular types of savings account. By the end of the year, the bank had opened 7,003 standard savings accounts with a total balance of USD 2,426,348, and 884 children’s accounts with a total balance of USD 9,803. Many customers have asked about other banking services, such as international transfers via SWIFT, debit cards, ATMs, remittances and online banking services. Banco ProCredit Honduras will introduce all of these services in 2008. In all aspects of its non-credit operations, Banco ProCredit has combined its focus on providing the right products and services to meet clients’ requirements with the individualised service and customer care which have characterised its approach to the banking business from the day it opened. Financial Results Banco ProCredit Honduras opened for business in June 2007. The launch of operations was preceded by a pre-operational period of five months, in which the project team rented branch premises, recruited staff, conducted training, and made the necessary investments in the bank’s techni- M a n a g e m e n t B u s i n e s s R e v i e w cal facilities. All of the costs incurred during this period were recognised by the National Commission for Banking and Insurance (CNBS) as organisational expenses when the assets and liabilities of the pre-operational entity merged with those of Banco ProCredit Honduras. The operating result reported as of December 31, 2007 was in line with projections for the initial months of operation (a loss of USD 1.4 million), and the bank’s expectation that it will recover the initial investment by 2010. In spite of the operating loss, financial income of USD 642,000 and financial expenses of USD 61,000 yielded a gross financial profit of USD 581,000. At USD 83,000, the bank had a lower-than-projected expenditure for loan-loss reserves because the portfolio at risk (PAR, i.e. loans in arrears by more than 30 days as a percentage of the total portfolio) came to 0.84%, less than the projected value of 2%. The gross operating result was also positive, at USD 131,000, due not least to the fact that a significant portion of the various operating expenses consisted of costs for training and staff development services delivered outside Honduras. Staff costs totalled USD 440,000, and other administrative expenses (e.g. IT equipment, renovation and furnishing of premises) amounted to USD 1.1 million, giving a year-end result of -USD 1.4 million, in accordance with the business plan. The bank’s most important assets as of December 2007 were liquid assets (USD 4.6 million) consisting of unused capital, and its loan portfolio, amounting to USD 4.4 million. Short-term and long-term investments comprised both mandatory deposits to meet the legal reserve requirements and investments of excess liquidity in BCH bonds or in term deposits with other banks. The “other assets” account reflects the organisational costs incurred during the bank’s pre-operational period and other assets which are to be amortised. Deposits held by the general public, provisions for employee entitlements, and other liabilities accounted for 80% of the bank’s total liabilities. Banco ProCredit does not have any liabilities to bilateral institutions, banks or similar organisations. The most important change in terms of the bank’s equity was the addition of the Inter-American Development Bank/Multilateral Investment
Page 1 and 2: Annual Report 2007
Page 3 and 4: Mission Statement 4 Letter from the
Page 5 and 6: Letter from the Board of Directors
Page 7 and 8: ProCredit Holding has an investment
Page 9 and 10: the group as a whole, expressed in
Page 11 and 12: ProCredit in Latin America Microfin
Page 13 and 14: Name Banco Los Andes ProCredit Boli
Page 15 and 16: • Students from the School of Fin
Page 17 and 18: Political and Macroeconomic Environ
Page 19 and 20: combined volume of over USD 83 mill
Page 21: Loan Portfolio Development (breakdo
Page 25 and 26: M a n a g e m e n t B u s i n e s s
Page 27 and 28: company they had submitted their ap
Page 29 and 30: minutes it flooded our temporary of
Page 31 and 32: dures and policies which the IRMU i
Page 33 and 34: anking system, Banco ProCredit focu
Page 35 and 36: of the bank, and the potential for
Page 37 and 38: Business Ethics and Environmental S
Page 39 and 40: Santos Odilio Corrales, Owner of a
Page 41 and 42: “If I had no savings, I would fee
Page 43 and 44: F i n a n c i a l S tat e m e n t s
Page 45 and 46: Income Statement For the six-month
Page 47 and 48: Statement of Cash Flows For the six
Page 49 and 50: Property, Furniture and Equipment T
Page 51 and 52: These assets and the movements reco
Page 53 and 54: Interest Rate Risk Investments in s
Page 55: Contact Addresses Head Office Col.

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