Ontwerp/layout: i.d. graphics - Hakrinbank

Ontwerp/layout: I.D. Graphics 

Foto’s: Hubert Hermelijn, I.D. Graphics 

CTP en druk: Leo Victor N.V.

ANNUAL REPORT 2006 

HAKRINBANK N.V. 

MISSION 

Hakrinbank is a dynamic, innovative bank that provides its clients 

with a comprehensive range of high-quality, customised financial services. 

Our highly skilled employees work together as a team 

to maximise client satisfaction.

The staff party held in Hotel Torarica to celebrate the 70th anniversary of Hakrinbank.

28 JUNE 1936 28 JUNE 2006 

70 YEARS OF HAKRINBANK N.V. 

On 28 June 2006 it was exactly 70 years since 

Hakrinbank started providing services to the 

community of Suriname. The bank began as a 

family business under the name of O.R.G.Vervuurts 

Banking Corporation and grew steadily over the 

subsequent years. In 1943, it amended its Articles of 

Association and changed its name to Vervuurtsbank 

N.V. 

The bank’s healthy growth over the years meant that 

the original head office on Keizerstraat had become 

too small by 1971. It was consequently decided to 

move the head office to Dr. Sophie Redmondstraat 

11-13. This office building, which is majestic by the 

standards of Suriname, is still the highest in 

Paramaribo. In the same year, the bank decided to 

restructure. This restructuring included a number of 

well-known foreign banks and the government of 

Suriname acquiring shares in the bank, as well as the 

bank’s name being changed to Handels- Krediet- en 

Industriebank N.V. or Hakrinbank for short. At the 

same time, the bank installed its first computer 

and was at that time the only bank in the country to 

have an automated administration system. 

In the first half of the 1980s, all the bank’s shares 

once again came into Surinamese ownership. 

Thanks to the efforts of all its employees, both now 

and in the past, and the support and trust of all its 

clients and relationships, Hakrinbank has been able 

to establish a solid and lasting place for itself in our 

society. The services we provide as a leading banking 

institution comprise a wide range of financial 

products.We are rightly proud of the prominent role 

we play in product innovation, as witnessed, for 

example, by the fact that we were the first bank, in 

early 2004, to introduce internet banking to 

Suriname. 

It is now 2007 and our bank is facing a series of 

major challenges as a result of the rapid and 

far-reaching changes in both the national and 

international arenas. These changes include the 

increasing competition resulting from developments 

in the Surinamese banking market and the 

country’s continuing economic integration into 

Caricom and other economic alliances, as well as 

tighter regulations and the increasing compliance 

requirements. Clients are also becoming more 

critical and expect high-quality services and 

modern banking products. These developments are 

making it increasingly difficult for smaller banks to 

fund the rising level of hardware and software 

investments that are needed. Such banks are consequently 

increasingly seeking to merge or acquire 

other organisations in order to achieve the required 

critical mass. The efforts and commitment of our 

employees will ensure that we respond effectively to 

these challenges and continue providing services to 

the community of Suriname so that our bank 

develops and flourishes, our employees’ welfare 

remains assured and we achieve a return for our 

shareholders and thus also help to promote the 

further development of Suriname. 

We are proud that Hakrinbank has been able 

to celebrate its seventieth anniversary in such 

good economic health, with various growth and 

profitability records being achieved in this 

anniversary year. 

The celebrations of this anniversary are very much a 

dominant theme of this annual report. Our head 

office in illuminations can be seen on the front 

cover, while various aerial photographs of the 

celebrations can also be found on the inside pages. 

Hakrinbank owes a great debt of gratitude to all 

those who have helped and supported it over the 

years.

MANAGEMENTTEAM 

From left to right: Harold Liu Hung Chung (Assistant Managing Director Operations), 

Jim Bousaid (Chief Executive Officer), Mariette Tjon A Ten (Chief Operations Officer) and 

Gerard Raghoenathsingh (Assistant Managing Director Commercial).

CONTENTS 

Mission 1 

Hakrinbank N.V. - 70 years in action 3 

Organogram 6 

Key consolidated figures 2002 – 2006 8 

Report of the Supervisory Board 10 

Report of the Executive Board 13 

Looking back at the year under review 13 

Economic developments in 2006 15 

Business of the bank 29 

Nationale Trust- en Financierings Maatschappij N.V. 41 

Financial developments of the bank 42 

Auditors’ report 49 

Financial statements 2006 51 

Consolidated balance sheet 52 

Consolidated profit and loss account 53 

Company balance sheet 54 

Company profit and loss account 55 

Notes to the financial statements 56 

Other information 62 

Curricula vitae and details of ancillary positions of members of the 

Supervisory Board and Executive Board of Hakrinbank 62 

Addresses 65 

Appendix I: Suriname: Key macro-economic data 66 

5

Organogram 

as at 31 December 2006 

C.E.O. 

C.O.O. 

Assistant Managing 

Director Operations 

Assistant Managing 

Director Commercial 

Human Resources & 

General Affairs 

Information & 

Communication 

Technology 

Internal Audit 

Credits 

Insurance 

Domestic 

Administration 

& Management 

Information 

(Accounting) 

Nationale Trust & 

Financierings Mij. N.V. 

Credit Administration 

Cash 

Administration 

& Management 

Information (Financial 

Controlling) 

Affiliates (Credits) 

Foreign Transfers 

Affiliates (Operations) 

Treasury & Securities 

Compliance & Legal 

Maintenance 

& Technical Support 

Risk Management 

6

As at 31 December 2006 

SUPERVISORY BOARD 

A.K.R. Shyamnarain - Chairman 

R.A. Mac Donald - Deputy Chairman 

H.B. Abrahams 

Ms G. Lie Sem-Nawikromo 

H.R. Ramdhani 

M.M. Sandvliet 

J.J.F. Tjang-A-Sjin 

EXECUTIVE BOARD 

J.D. Bousaid 

Ms M.M. Tjon A Ten 

- Chief Executive Officer 

- Chief Operations Officer 

DEPUTY DIRECTORS 

H.S.K. Liu Hung Chung - Assistant Managing Director 

Operations 

G.M. Raghoenathsingh - Assistant Managing Director 

Commercial 

Ms M.M. Tjon A Ten 

Human Resources & 

General Affairs 

M. Naarendorp, Head of Department 

N. Samoedj 

Insurance 

R. Tjon A Kon, Head of Department 

Credit Administration 

I. Loenersloot, Head of Department 

Compliance & Legal 

M. Schaap 

Maintenance & Technical 

Support 

R. Tjokro, Head of Department 

Foreign Transfers 

M. Lie A Njoek, Head of Department 

(until 31-12-2006) 

A. Hagens, Interim Head of Department 

(from 1-1-2007) 

L. Karg, Deputy Head of Department 

Information & Communication 

Technolog y 

T. Sanches, Head of Department 

R. Mahabier 

A. Semoedi 

T. Csaba 

Domestic 

M. Tjon, Head of Department 

J. Legiman 

Cash 

A. Budel-Samiran, Head of Department 

Affiliates 

Branchmanagers 

- Tourtonne 

V. Ramtahalsing 

- Nieuwe Haven 

N. Elshot-Chelius 

- Latour 

R. Wimpel 

- Flora 

R. Mohamatsaid 

J.D. Bousaid 

Credits 

Account Managers 

C. Halfhide-Chou 

S. Kisoensingh-Jhauw 

S. Jadoenathmisier 

L. Venloo 

P. Quintius 

E. Frangie 

Treasury & Securities 

P. Tjon Kiem Sang, Head of Department 

R. Amirkhan 

Nationale Trust & 

Financierings Mij. N.V. 

H. Vijzelman, Head of Department 

R. Sitaram, Deputy Head of Department 

G. Jong 

Administration & Management 

Information 

R. Liesdek, Accounting 

R. Sheorajpanday, Financial controlling 

Internal Audit 

B. Jewbali, Head of Department 

Risk Management 

S. Shair-Ali, Head of Department 

Affiliates 

Branchmanagers 

- Nickerie 

R. Mangala, Head of Department 

A. Anandbahadoer, Deputy Head of 

Department 

- Tamanredjo 

S. Resomardono 

Assets & Liabilities Management 

Committee 

7

KEY CONSOLIDATED FIGURES 2002 – 2006 

(in thousands of SRD) 

2006 2005 2004 2003 2002 

Balance sheet 

Cash and cash equivalents 104,159.4 97,240.7 104,589.0 68,977.0 64,498.2 

Clients 306,449.0 229,730.0 161,942.5 95,350.4 60,123.8 

Other assets 195,854.6 144,708.6 133,074.3 87,195.8 56,401.5 

Total assets 606,463.0 471,679.3 399,605.8 251,523.2 181,123.5 

Savings 239,200.9 185,265.1 121,691.3 81,220.0 61,063.3 

Other funds 334,024.4 265,183.5 262,371.4 158,331.4 13,689.0 

Shareholders’ equity 33,237.7 21,230.7 15,543.1 11,971.8 6,271.2 

Total liabilities 606,463.0 471,679.3 399,605.8 251,523.2 181,123.5 

Results 

Operating income 49,096.1 36,659.5 27,500.6 22,012.8 15,664.4 

Operating expenses 27,708.4 21,690.5 17,405.2 13,989.0 12,120.1 

Provision for credit risks 1,439.3 1,725.9 1,515.9 1,240.7 1,196.8 

Operating profit 

before tax 19,948.4 13,243.1 8,579.5 6,783.1 2,347.5 

Taxes 7,181.4 4,767.5 3,088.5 3,120.2 845.1 

Net result 12,767.0 8,475.6 5,491.0 3,662.9 1,502.4 

Cash dividend 4,657.0 2,731.8 1,862.8 1,076.9 317.5 

Stock dividend - - - 11.6 5.3 

Ratios (%) 

Efficiency ratio 56 59 63 64 77 

Return on average equity 46.90 46.10 39.91 40.16 26.41 

Return on average assets 2.37 1.95 1.69 1.69 1.01 

Capital ratio 5.48 4.50 3.89 4.76 3.46 

BIS ratio 11.31 10.01 10.19 11.68 9.74 

Share information*) 

Number of shares issued 465,696 465,696 465,696 

1) 

465,696 388,080 

Net earnings per share 27.41 18.20 11.79 

4) 

9.431 4.261 

Dividend per share 10.00 6.07 4.00 

2) 

2.804 0.913 

Dividend percentage 6,666.67 3,910.67 2,666.68 

2) 

1,850.002 600.002 

Payout ratio 36.48 32.23 33.92 29.402 21.132 

Net asset value (tangible) 71.37 45.59 33.38 25.71 16.16 

Market price of share 136.00 124.00 106.00 79.20 61.00 

Market capitalisation (x SRD 1,000) 63,335 57,746 49,364 36,883 23,673 

Number of employees 254 247 238 235 216 

Number of branches 7 7 7 7 7 

1) 

3) 

2) 

2) 

*) x SRD 1. The amounts have been adjusted for the purposes of comparison and are based on a nominal value of SRD 0.15 per share. 

1) Calculated on the number of shares before the stock dividend 3) Including shares in share premium reserve of SRD 0.00075 

2) Excluding shares in share premium reserve 4) Including shares in share premium reserve of SRD 0.0015 

8

SUPERVISORY BOARD 

From left to right: Harold Ramdhani, Roy Shyamnarain (Chairman), Johan Tjang-A-Sjin, Milton Sandvliet, 

Ghamie Lie Sem-Nawikromo, Richard Mac Donald (Deputy Chairman) and Enrico Abrahams. 

9

REPORT OF THE SUPERVISORY BOARD 

To the shareholders 

General 

We are pleased to present our report on our 

activities in the 2006 financial year, in which the 

celebrations of the bank’s seventieth anniversary 

played an important part. In this report we also discuss 

the activities of the Audit Committee and the 

Remuneration and Nomination Committee. We 

have also included our recommendation that the 

financial statements for the year and the proposed 

appropriation of profit be adopted. 

Activities of the Supervisory Board 

The Supervisory Board held eleven ordinary 

meetings and fifteen extraordinary meetings during 

2006. Ordinary meetings are held monthly in the 

presence of the Executive Board, while extraordinary 

meetings depend on the subjects to be 

discussed and are normally attended only by 

members of the Supervisory Board. Our supervision 

focused primarily on the company’s results 

and strategy, and included regular discussions of the 

figures showing the results achieved to date, as 

presented by the Executive Board, and approval of 

the 2007 Policy Memorandum, together with the 

accompanying Operational and Investment Budget 

for 2007. Other subjects on the meeting agendas 

included corporate governance, risk management, 

the possibility of introducing a system of 

performance management for the Executive Board, 

adopting a new pension scheme for the Executive 

Board, a proposal to amend the pension scheme for 

some former members of the Executive Board, 

details of the working relationship between the 

Audit Committee and key officers in the bank’s 

internal control organisation, devising a proposal for 

reviewing the remuneration of members of the 

Supervisory Board and various other subjects. Some 

of these issues are discussed in greater detail below. 

Corporate governance 

In June 2006, the chairman of the board and those of 

the Audit Committee attended the launch and inaugural 

meeting of the Caribbean Association of 

Audit Committee Members (CAACM) on behalf of 

the Supervisory Board. This Committee was set up 

by the Caribbean Association of Indigenous Banks 

(CAIB), an alliance of regional banks of which our 

Chief Executive Officer, Jim Bousaid, is a Board 

member. Being a member of CAACM enables us to 

share in the knowledge and experience gained by 

other regional banks in the area of corporate governance 

and in devising strategies benefiting the work 

of our Audit Committee. The Supervisory Board 

intends to play an active role in the activities of both 

CAIB and CAACM wherever it considers such 

involvement to be necessary and effective. The chairman 

of the Supervisory Board and the Executive 

Board consequently attended CAIB’s annual meeting 

in Port of Spain in November 2006, at which various 

issues relating to corporate governance, risk management 

and the implementation of the Basel II guidelines 

for banks in the region were discussed. 

Activities relating to the Executive Board 

The Supervisory Board asked an external consultant 

for advice in 2006 on devising and implementing a 

system of performance management for the 

Executive Board and on an accompanying bonus 

scheme for the individual members of the Board.We 

have since received the consultants’ advice and are 

considering how best to implement the proposed 

performance management system. By introducing a 

related bonus system, the Supervisory Board is 

seeking to establish an effective and efficient link 

between the appraisal of performance and 

remuneration of the individual Executive Board 

members. Our primary goal in this respect is to 

encourage and inspire the Executive Board to make 

even more efforts to achieve the organisation’s 

objectives. 

The Supervisory Board also gave further consideration 

to the existing pension arrangements for the 

Executive Board and concluded that these arrangements 

needed to be amended in order to bring them 

into line with the changed circumstances in the 

market. We have since adopted a new pension 

scheme, following advice from external specialists. 

We reported last year that the Executive Board 

would be expanded to include a Finance Director 

(Chief Financial Officer) within the foreseeable 

future. We duly started the appointment process in 

this respect on January 1 st , 2007. 

10

Activities of the Audit Committee 

In June 2006, the chairman of the Supervisory Board 

together with the chairman of the Audit Committee 

attended the launch and inaugural meeting of the 

CAACM. More information on this meeting can be 

found in the section on corporate governance above. 

In October 2006, the Audit Committee held a 

plenary meeting with all key officers in the bank’s 

internal control organisation. The meeting included 

detailed discussions of existing relationships at 

work, relationships with the Executive Board, job 

descriptions and authorisations and staffing. A 

meeting, which was also attended by the Executive 

Board, was held in November 2006 with the external 

auditors to discuss the management letter for 2005. 

Agreements were reached for more intensive contact 

between the Executive Board, the Audit Committee 

and the internal and external auditors to discuss 

issues such as the management letters, the audited 

annual figures and other relevant financial reporting. 

In February 2007, the external auditors discussed 

ways of managing the risk of fraud with the Audit 

Committee, the Executive Board and the relevant 

bank officers. The Audit Committee reported on its 

activities at the ordinary meetings of the Supervisory 

Board throughout the year. 

Activities of the Remuneration and 

Nomination Committee 

The Remuneration and Nomination Committee 

focused in 2006 on formulating proposals for 

amending the pension schemes of the Executive 

Board and certain former members of the Executive 

Board. After advice on this subject had been 

obtained from external specialists, proposals were 

submitted to the Supervisory Board and have since 

been approved. 

The Committee was also advised by external 

consultants on proposals for introducing a system of 

performance management for the Executive Board 

and a linked bonus scheme. More information on 

this can be found in ‘Activities relating to the 

Executive Board’ above. 

The Committee also contributed to the discussions 

within the Board on finalising the position of the 

CFO. More information on this is also provided above. 

The Committee reported on its activities at the 

ordinary meetings of the Supervisory Board 

throughout the year. 

Independence and composition of the 

Supervisory Board 

The Supervisory Board believes that all its members 

comply with the requirements for independence as 

referred to in the Hakrinbank N.V. corporate 

governance code. Information on the individual 

Board members and their ancillary positions can be 

found elsewhere in this report. 

There were no changes in the Supervisory Board 

during the year under review, and the Board 

continues to have seven members. Mr. J.J.F. Tjang- 

A-Sjin and Mr. H.B. Abrahams are the next supervisory 

board members scheduled to resign by 

rotation. Both have confirmed that they wish to be 

considered for reappointment, and we recommend 

that they be reappointed. 

Remuneration of Supervisory Board members 

The Supervisory Board has for some time been 

considering how best to formulate a proposal for 

reviewing the remuneration paid to members of the 

Supervisory Board. The general principle in these 

discussions has been that members of the Board 

should be properly remunerated for their work. 

Account also has to be taken of the bank’s corporate 

governance policy as proper performance of the 

Board’s supervisory activities requires individual 

members of the Board to be closely involved in these 

activities of the bank. This inherently requires the 

members’ responsibility for their work to be more 

clearly defined.And this in turn will ultimately result 

in a higher quality of supervision. The efforts to 

establish an appropriate level of remuneration take 

account in the first instance of the individual 

member’s relevant expertise and the amount of time 

required to perform the activities pertaining to his 

or her position on the Board. The fees set should 

also take account of any representative tasks 

performed and any logistic and support facilities 

provided. 

Financial statements and proposed appropriation 

of profit 

The Supervisory Board is pleased to present the 

bank’s financial statements for the 2006 financial 

year. These financial statements comprise the 

|company balance sheet as at 31 December, the 

company profit and loss account, the consolidated 

balance sheet as at 31 December, the consolidated 

profit and loss account and the accompanying notes. 

The financial statements have been audited by the 

external auditors, as provided for in the bank’s 

11

Articles of Association. This report includes the 

auditors’ report and unqualified approval of the 

financial statements. 

The operating result is essentially the outcome of the 

realization of the policy objectives defined in the 

2006 Policy Memorandum which were conscientiously 

implemented by the Executive Board. This 

year,too,the operating result was boosted to some 

degree by the continuing positive developments in 

Suriname’s macro-economic environment. Prudent 

financial management by the government, together 

with the favourable prices on the world market for 

commodities such as oil, gold and alumina, has also 

undoubtedly played a role in this. It is interesting to 

note in this respect that much of 2006 was dominated 

by public discussions of whether we as a country are 

earning enough from our natural resources, which 

are largely owned by foreign multinationals. These 

discussions high-lighted the community’s deep 

sense of involvement in and commitment to this 

subject and the need for the government’s policy on 

developing our natural resources, to be transparent. 

This transparency is particularly important in 

respect of the revenues that we as a community 

generate from our natural resources and the way in 

which these revenues are used. There also seems to 

be public consensus on the need for reviewing the 

way in which we as a country have to date dealt with 

our natural resources. This may provide support for 

the government in its forthcoming negotiations on 

the bauxite operations in Western Suriname and the 

goldmining activities in the Nassau mountain area. 

Profit before tax amounted to SRD 19.95 million, 

with a net profit after tax of SRD 12.77 million. 

We propose appropriating SRD 4.66 million of 

this for dividend pay-out to the shareholders and 

transferring SRD 8.11 million to the general reserve. 

This means a dividend of SRD 10 per share of 

SRD 0.15 nominal value in our anniversary year of 

2006. This dividend will be paid in cash. An amount 

of SRD 1.40 per share was previously distributed as 

an interim dividend in October 2006, which means a 

final dividend of SRD 8.60 per share of SRD 0.15 

nominal value. 

Vote of thanks for the good results 

The Supervisory Board would like to express its 

gratitude for the way in which the Executive Board 

represented the company’s interests during the year 

under review and specifically its efforts and the 

strategic choices that produced the good operating 

result for the year. We would also like to thank the 

management and other employees for the way 

in which they have individually contributed to a 

successful year for the bank and to express our 

recognition of the vital role that they have played in 

achieving the objectives set. We would also like to 

thank our clients and all the other parties who 

demonstrated their trust and confidence in Hakrinbank 

N.V. during the year and provided such a good 

basis for a mutually beneficial relationship. Last 

but not least, we would like to thank you, our shareholders, 

for the support that you provide us in our 

work. This inspires us as an organisation to continue 

striving for excellence in everything we do. 

Paramaribo, 10 April 2007 


A.K.R. Shyamnarain - Chairman 

R.A. Mac Donald - Deputy Chairman 

H.B. Abrahams 


H.R. Ramdhani 



We recommend that you, our shareholders, adopt 

these financial statements and thus ratify the 

Executive Board’s management and the Supervisory 

Board’s supervision of the bank in the year under 

review. We also recommend that you approve the 

proposed distribution of the profit for the year. 

12

REPORT OF THE EXECUTIVE BOARD 

Looking back at the year under review 

Our bank recorded an excellent performance in 

2006, the year in which it also celebrated its 

seventieth anniversary. Total assets in the 

consolidated balance sheet rose by almost 29% to 

SRD 606.5 million, while the profit before tax 

increased by over 50% to close to SRD 20 million.All 

the key performance ratios improved, with the 

return on assets rising from 1.95% to 2.37% and the 

return on equity increasing from 46.1% to 46.9%. 

The efficiency ratio improved from 59% to 56%, 

while the non-performing loans ratio decreased 

from 3% to 2%. 

The healthy development in the bank’s operations is 

the result of a combination of factors, including the 

benefits that have accrued from the favourable 

macro-economic environment of low inflation, 

stable exchange rates and higher levels of economic 

growth. This also meant a good level of lending, 

with total lending increased with 33.4% which was 

higher than budgeted. An element of saturation was 

seen in the consumer credit market, while the 

foreign currency market was calm as a result of 

supply and demand essentially being in equilibrium 

at the prevailing exchange rates. 

The Minister of Finance stated in his Financial 

Memorandum for 2007 that the favourable 

economic developments were primarily a result of 

the “strict and disciplined implementation of the 

budgetary policy, underpinned by the favourable 

international economy and prudent monetary 

policies.” Government finances improved 

considerably, with a small cash budget surplus being 

achieved for the first time in years. The budget 

policy and consistently strict monetary policy 

pursued by the Central Bank of Suriname resulted in 

the rate of inflation falling, while the Surinamese 

dollar remained stable against the US dollar, our 

most important trading currency. 

The favourable prices on the world markets for our 

mineral exports had a positive effect on the government’s 

finances, the balance of payments and the 

monetary reserve. For the first time in years, there 

was a surplus on the current account, while the 

monetary reserve rose substantially to reach an 

internationally acceptable level of import coverage 

of close to three months. 

Positive trends were also seen in the mining sector, 

as well as in the building and construction sector, the 

banana industry, aquaculture and the dairy and the 

water and soft drinks industries. Significant 

developments were also seen in the services sector, 

specifically in tourism and telecommunications. 

Suriname’s National Planning Office is forecasting 

real growth of 5.8% in the country’s GDP, and we 

regard this as realistic. 

The national debt also decreased during the year. 

The improved management of state debt and 

improved international debt servicing were two of 

the main reasons why the international rating 

agency Standard and Poor’s decided towards the end 

of the year to increase Suriname’s sovereign credit 

rating by one notch. This is the first upgrade in the 

country’s rating since Suriname started working 

with the renowned rating agencies in 1999. The 

rating outlook also changed for the better, from 

stable to positive and this is often a precursor of 

an upgrade. Suriname is seeking to achieve an 

investment-grade rating in the medium term, and 

we also regard this as feasible. 

The IMF’s Article IV consultation mission, which 

conducted its annual examination in early 2007, 

commented very favourably on the Surinamese 

policymakers’ performance, which exceeded 

expectations. It was disappointing on the other hand 

to see the limited extent of progress achieved in 

Public Sector Reform, which is of such importance 

for the sustainable and balanced development of the 

country. The current favourable developments in the 

macro-economy mean this PSR programme can, 

however, succeed. The benefits of the economic 

growth are also not yet sufficiently visible in society 

as a whole. 

Our bank has benefited from the favourable economic 

environment of the year under review. The 

company policies pursued by the Executive Board 

have also proved successful and translated into good 

results for the year. The main business objectives in 

13

2006 were to achieve sustainable growth, improve 

our profitability and balance sheet, increase our 

efficiency and reinforce our risk management 

policies and customer relationships. Other objectives 

included increasing the level of job satisfaction 

and social corporate citizenship. These objectives 

were largely achieved. 

A multi-disciplinary working group was set up 

during the year to develop a Balanced Score Card 

(BSC) for the bank as a whole. This card will also be 

extended in due course to departmental and 

individual levels, and will be an important tool for 

monitoring our operational performance. 

The Hakrinbank corporate governance code was 

introduced during the year under review and will 

serve as a basis for the bank’s activities. The Supervisory 

Board also decided to set up an Audit 

Committee and a Remuneration and Nomination 

Committee during the year. In order to 

improve corporate governance, we established an 

independent Risk Management department during 

2006. The primary aim of this department is to assess 

and manage risks within the limits set by the bank 

management and to optimise the balance between 

risk and return. 

Our subsidiary, Nationale Trust- en Financierings 

Maatschappij N.V., also had a reasonable financial 

year. Its total assets increased by 28%, while its 

profit rose by 16%. These growth rates were slightly 

below budget as a result of a certain element of 

saturation in some categories of the consumer 

credit market and also the increased levels of 

competition. 

The price of Hakrinbank N.V. shares rose by 10% to 

reach SRD 136 at the 2006 year-end. The cash 

dividend proposed for the 2006 financial year 

amounts to SRD 10 per share of SRD 0.15 nominal 

value. This comprises the normal dividend of SRD 9 

per share mark the bank’s seventieth anniversary. 

An interim plus an additional amount of SRD 1 per 

share to dividend of SRD 1.40 per share was 

previously paid in October 2006, which means a 

final dividend of SRD 8.60 per share. This 

corresponds to a dividend percentage of 6,667% and 

a dividend pay-out ratio of 36.5%. In our view, this 

represents an attractive return for shareholders and 

translates into a favourable price/earnings ratio. 

More information on the economic developments in 

the year under review that are relevant to our bank’s 

performance can be found elsewhere in this report. 

This report is more detailed than is customary in the 

banking sector because we decided that the limited 

availability of and access to up-to-date statistical 

information for large parts of the society justified 

our devoting extra attention to these aspects in our 

report. We also discuss various developments within 

Hakrinbank and Nationale Trust- en Financierings 

Maatschappij in this report, as well as the 

bank’s financial development and the proposed 

appropriation of profit. 

14

Economic developments in 2006 

This section of the annual report discusses various 

economic developments in 2006 and includes a 

description and analysis of the government’s 

finances,the national debt,monetary and exchange 

rate policies, the balance of payments and the 

monetary reserve, as well as information on 

developments in the real sector. 

Government finances 

The National Assembly approved the amended draft 

government budget for the financial year in 

September 2006. This was later than originally 

planned because the government, which took office 

in September 2005, first had to complete the handling 

of its Multi-Annual Development Programme, of 

which the budget of 2006 forms a part. The budget 

approved for the year was as follows: 

Expenditure on the current account totalled 

SRD 1,342.8 million, which was SRD 48.2 million, or 

3.5%, lower than initially budgeted. This was 

primarily the result of lower spending on goods and 

services. 

Actual current expenditure was as follows (in 

millions of SRD): 

Wages and salaries 652.9 

Goods and services 280.3 

Subsidies/Government grants 307.9 

Interest on state debt 101.7 

Total current expenditure 1,342.8 

Budget for 2006 financial year (in millions of SRD)* 

Description Expenditure Income Difference As % of GDP 

Current account 1,391.0 1,283.5 (107.5) (2) 

Capital account 445.9 221.2 (224.7) (4) 

Total current and capital account 1,836.9 1,504.7 (332.2) (6) 

* Source: Financial Memorandum 2007 

As the Flash Report for 2006 shows, the actual 

figures on a cash basis were – as in the previous three 

years – significantly better than initially budgeted. 

Thanks primarily to higher than forecast direct tax 

revenues and dividend payments by state-owned 

companies (mainly State Oil Company), together 

with lower than budgeted capital expenditure, the 

country actually recorded a small surplus of 

SRD 49.2 million. This can be regarded as quite an 

achievement. 

Income on the current account totalled SRD 1,523 

million, which was SRD 239.5 million, or 18.7%, 

higher than budgeted. The total amount can be 

broken down as follows (in millions of SRD): 

Direct taxes 563.5 

Indirect taxes 610.8 

Non-tax revenues 348.7 

Total income 1,523.0 

Wages and salaries in 2006 rose by around 30%, 

which was higher than budgeted. Expenditure on 

purchases of goods and services fell from the peak 

seen around the time of the parliamentary elections 

in 2005, while interest payments and subsidies rose 

by around 5%. Capital expenditure came out 

substantially lower than budgeted at around 

SRD 160 million because of the limited capacity 

available for the execution of projects. The deficit on 

the capital account totalled SRD 131 million. 

Net unforeseen income and expenditure resulted in 

an overall budget surplus of SRD 49.2 million 

instead of the deficit of SRD 332.2 million that had 

been budgeted. This surplus was used to repay 

foreign loans and some of the advances granted by 

the Central Bank of Suriname. Previous annual 

reports consistently referred to the weak structure of 

the government’s finances and the threat that this 

represented for monetary and financial stability and, 

15

therefore, for the economy as a whole. Calls were 

made for a properly planned Public Sector Reform 

Programme. It is regrettable therefore that, despite 

the good intentions expressed in this respect, no 

meaningful steps have yet been taken. And this in an 

environment in which the conditions for success are 

certainly present. In other words, the economy 

is growing and the outlook is favourable. The 

government’s financial position has clearly 

improved, and there is consequently more scope for 

funding restructuring programmes. More attention 

needs therefore to be devoted to programmes of this 

nature, which are of such importance for the 

sustainable development of Suriname. 

Developments in state debt 

The extent and nature of Suriname’s domestic and 

foreign state debt are shown below. It should be 

noted that the definition of state debt used in the 

State Debt Act differs from the definition widely 

used in international circles. According to the 

Surinamese definition, state debt includes undrawn 

amounts under committed loan facilities and also 

state guarantees that have not been called, whereas 

the international markets do not normally include 

these items. It would be sensible, therefore, to 

consider revising the definition used in the State 

Debt Act. Consideration should also be given as to 

whether the statutory debt ceiling of 60% of GDP 

is perhaps rather high, given the government’s 

repayment capacity. 

Type of lender 31 Dec. 2006*) 31 Dec. 2005 31 Dec. 2004 

Domestic debt by lender (x SRD 1000) 

Owed to the Central Bank of Suriname 326,007 412,760 324,962 

Owed to banks 206,395 198,710 158,009 

Owed to private individuals 118,366 82,823 56,219 

Total domestic debt 650,768 694,293 539,190 

State guarantees 19,540 18,379 16,549 

Committed loans and guarantees 63,551 89,943 120,411 

Total domestic debt including committed loans 

and guarantees 733,859 802,615 676,150 

Foreign debt by lender (x USD 1000) 

Multilateral lenders 63,672 54,768 55,629 

Bilateral lenders 319,804 317,052 313,348 

Commercial lenders 5,077 15,744 13,077 

Total foreign debt 388,553 387,564 382,054 

State guarantees 922 3,208 9,601 

Committed loans 101,934 96,557 125,268 

Total foreign debt including committed loans 491,409 487,329 516,923 

* Provisional figures 

Source: Government Debt Management Office 

16

The state debt developed well in 2006, with 

domestic debt falling by slightly over 6% to 

SRD 650.8 million, while foreign debt remained 

essentially unchanged. The rise in the value of the 

euro resulted in an increase in euro-denominated 

debt when converted into US dollars. 

The foreign debt ratio (i.e. foreign debt as a 

percentage of GDP) decreased to around 20%, 

which compares very well to other countries in the 

region. The reduction in domestic debt is the result 

of repayments of floating-rate loans provided by the 

Central Bank of Suriname. There was little change in 

the amounts owed to banks because no new treasury 

paper was issued. Some of this short-term paper is 

expected to be repaid in 2007 because of the state’s 

improved financial position. 

In recent years Suriname has generally complied 

with its repayments commitments to multilateral 

and commercial lending institutions, and this was 

also the case in 2006. During the year, the bilateral 

loans from Japan, Germany and Italy were either 

repaid in full or restructured. Some repayments of 

amounts owed to Brazil and the United States are, 

however, overdue, and these loans need to be 

restructured as soon as possible. There are some 

indications that Suriname will be able to count on an 

element of debt-forgiveness. 

The improved management of state debt and 

the country’s improved compliance with its 

international debt repayment commitments were 

two of the main reasons why the international rating 

agency Standard and Poor’s decided to increase 

Suriname’s creditworthiness by one notch to ‘B’ for 

international creditworthiness and ‘B+’ for domestic 

loans. Another important aspect is the “positive outlook” 

in the rating as this is often a precursor of a 

rating upgrade. Assuming the current policies 

continue, we expect to see a further improvement in 

Suriname’s credit rating during 2007. 

Monetary developments 

The Central Bank of Suriname relaxed its tight 

monetary policy to some extent in 2006. At the start 

of the year, for example, the cash reserve requirement 

that has to be held in Surinamese dollars was 

reduced from 30% to 27% of the reserve base. The 

latter comprise all the balances held by third parties 

in SRD at the country’s banks. This was one of the 

reasons prompting the commercial banks to cut 

their lending rates by an average of two percentage 

points. The percentage of the compulsory cash 

reserve that may be used for long-term, low-interest 

housing loans was increased from 8% to 9% of the 

reserve base. 

The following table shows the changes in the money supply in the Surinamese economy 

(M2, in millions of SRD): 

2006*) 2005 2004 

1. Liquidity created for the state (31.5) 25.4 103.3 

2. Lending to the private sector 58.8 71.5 23.2 

3. Other liquidity created (88.2) (59.9) (64.5) 

Total domestic liquidity created (60.9) 37.0 62.0 

4. Liquidity from abroad 262.7 57.4 109.5 

Total increase in M2 201.8 94.4 171.5 

1) 

Liquidity ratio (M2 : Nominal GNP market prices) 21.1 18.8 20.1 

*) Provisional figures 1) Own estimates 

Source: Central Bank of Suriname 

17

Domestic M2 liquidity, which is an important 

measure of the effects of monetary policy, rose in 

2006 by SRD 201,8 million to SRD 1,082 million. 

This increase of 22.9% was wholly attributable to 

inflows from abroad as the net effect of various 

domestic factors was a reduction in the money 

supply. Gross lending to the real sector added 

SRD 58.8 million to the money supply, while 

the government cash surplus reduced it by 

SRD 31.5 million. 

The growth in the money supply resulted in a rise in 

the liquidity ratio, which is the domestic M2 

measure of liquidity as a percentage of GNP. This 

measure currently remains just below the long-term 

average of around 25%, which suggests that the 

monetary and real sectors of the economy are 

reasonably in equilibrium.It should,however,be 

noted that the ratio takes no account of the effect of 

the dollarisation of the economy. 

The reserve requirements for foreign currencies 

remained unchanged in 2006 at 33.3% of the 

relevant reserve base. Banks are permitted to hold 

part of their compulsory cash reserves in highquality, 

liquid assets that are likely to generate a 

reasonable return on investment. 

On 2 January 2007, the domestic currency reserve 

requirement was further reduced from 27% to 25% 

of the reserve base. This was a responsible move, 

given the stable macro-economic and monetary 

environment. The percentage of the reserve base 

allowed to be used for low-interest housing loans 

was increased at the same time from 9% to 10%. 

The reduction in the SRD cash reserve was one of 

the reasons why the commercial banks were able to 

reduce their SRD annual lending rates further to 

around 12% - 13%. Rates have fallen considerably in 

recent years as a result of the falling inflation rate. On 

1 January 2007, the interest on 6-month Republic of 

Suriname treasury paper was also reduced further 

from 10% to 8% a year, while the rate charged on 

advances by the Central Bank fell to 10% a year. 

The monetary policy pursued in 2006 is expected to 

continue in 2007. We are once again, however, 

forecasting fairly substantial inflows from abroad, 

and it is important to ensure that these do not result 

in inflationary pressure within the country’s 

domestic economy. 

Exchange rate 

It was calm on the exchange rate front throughout 

2006 thanks to the prudent budgetary and monetary 

policies pursued. The inflows of foreign currency 

(primarily from the mining sector) also contributed 

to this calmness. Supply and demand on the 

currency market were clearly in equilibrium at the 

prevailing pricing levels. 

The following chart shows the movements in the 

US dollar in 2006. 

USD buying and selling rates in 2006 

2.82 

2.80 

2.78 

2.76 

2.74 

2.72 

2.70 

Jan 

Feb Mar Apr May June July Aug Sept Okt Nov Dec 

Buying 

2.746 

2.750 

2.746 

2.742 

2.747 

2.747 

2.747 

2.747 

2.753 

2.753 

2.750 

2.753 

Selling 

2.800 

2.805 

2.800 

2.800 

2.800 

2.800 

2.800 

2.800 

2.800 

2.800 

2.800 

2.800 

18

As the chart shows, the average USD selling rate in 

2006 was SRD 2.80, which was less than 1% above 

the Central Bank of Suriname’s target rate and within 

the agreed bands. On 3 April 2006, the Central 

Bank increased its USD selling rate from SRD 2.77 

to SRD 2.78. 

The euro strengthened significantly against the 

US dollar during the year in response to various 

international economic and political developments. 

Given that the SRD is linked to the USD and 

consequently floats against the euro, the latter currency 

became considerably more expensive during 

the year. The Central Bank of Suriname’s selling rate 

rose from SRD 3,298 to the euro at the 2005 yearend 

to SRD 3,672 at the end of 2006. In other words, 

an increase of almost 12%. 

In view of the policies that the monetary authorities 

will continue to apply and the continuing favorable 

developments on relevant international markets, we 

expect the exchange rate to remain stable in 2007. 

Balance of payments on cash basis (in millions of 

US dollars) 

2006*) 2005*) 2004 

Goods 140.7 (91.2) 40.5 

Services (30.7) (147.7) (129.7) 

Primary incomes (51.6) (40.4) (62.9) 

Income transfers 35.9 22.1 13.7 

Current account 94.3 (257.2) (138.4) 

Capital account (239.9) 42.3 (13.1) 

Items still to be classified 1) 232.3 231.8 188.6 

Net non-monetary sectors 86.7 16.9 37.1 


1) Movements in residents’ foreign currency accounts. 


Balance of payments 

The favorable prices in the world markets for our 

most important mineral exports in 2006 resulted in 

a significant increase of 28% to USD 931.1 million in 

the value of our exports. The completion of various 

large projects in 2005 meant that the mining sector 

required lower levels of imports in the year under 

review, and overall imports consequently rose less 

rapidly. This in turn resulted in a trade surplus of 

USD 140.7 million. 

The deficit on the services account was substantially 

lower than in 2005. The various developments 

referred to above had a beneficial impact on 

the current account, with a positive balance of 

USD 94.3 million being achieved for the first time in 

years. The movements on the various sub-accounts 

that make up the balance of payments resulted in the 

monetary reserve increasing to USD 258.9 million. 

The outlook for 2007 is good, which means that the 

trend seen in 2006 can be expected to continue. 

One of the winners of the colouring competition arranged 

to mark the launch of the Anansi savings account comes 

to collect her prize. 

19

Monetary reserve 

Net foreign currency assets rose in 2006 by USD 96.3 

million, or 59.2%, to USD 258.9 million. This 

translates into around 2.8 months’ coverage of 

imports of goods and services. 

Development of the monetary reserve (in millions of USD) 

Year-end 

Description 2006*) 2005*) 2004 

1. Monetary authorities 

a. Gold reserves 23.0 16.0 8.9 

b. IMF special drawing rights 1.3 2.0 2.1 

c. IMF reserve position 9.2 8.8 9.5 

d. Foreign exchange receivables 235.5 138.4 118.0 

e. Foreign exchange owed to residents (28.8) (22.5) (22.1) 

f. Secured foreign exchange obligations (0.6) (0.6) (1.2) 

Total 1 239.6 142.1 115.2 

2. Currency banks 

a. Foreign exchange receivables 303.5 242.9 202.5 

b. Foreign exchange owed to residents (253.7) (211.2) (165.7) 

c. Foreign exchange owed to non-residents (24.3) (5.3) (4.2) 

Total 2 25.5 26.4 32.6 

Total 1 +2 265.1 168.5 147.8 

3. Amounts owed in SRD to non-residents (6.2) (5.9) (5.6) 

Net foreign exchange assets 258.9 162.6 142.2 



Despite the significant increase, the monetary 

reserve is still slightly below the internationally 

accepted standard of at least three months’ import 

coverage. It is also, therefore, below the more 

conservative norm that includes foreign currency 

liabilities repayable within one year. It should, 

however, be noted that the mining companies 

operating in Suriname do not use our currency 

reserves for their imports. In recent years, importers 

have also been looking to the exchange bureau in 

Suriname to meet their needs for foreign currency. 

The monetary reserve is expected to continue 

growing in 2007, and this will help reinforce public 

confidence in the external value of the Surinamese 

dollar. 

20

Surinamese Stock Exchange 

The following table provides an overview of trade on the Surinamese Stock Exchange in 2006 

Stocks Nom. value Turnover Effective Opening Closing 

per share (number of turnover price price 

shares) Jan. 2006 Dec. 2006 

Assuria 0.10 151,604 404,760.40 6.25 11.60 

C.I.C. 0.01 16,575 110,467.00 6.10 6.80 

De Surinaamsche Bank 0.025 11,845 99,498.00 7.68 9.00 

Elgawa 0.01 - - 1.60 1.80 

Hakrinbank 0.15 3,995 76,409.65 124.00 136.00 

Margarine & Vettenfabriek 0.01 - - 5.20 5.20 

Self Reliance 0.01 1,574 13,625.90 9.30 8.60 

Surinaamse Brouwerij 5.00 - - 51.00 73.00 

Torarica 0.10 862 33,187.00 27.00 39.00 

Varossieau 0.10 100 950.00 9.00 9.00 

VSH-United 0.01 10,333 217,793.00 21.00 21.50 

Total shares 196,888 958,690.95 

Torarica rights issue 272,856 811,275.50 

Total general 469,744 1,769,966.45 

Stock market index as at 31 December 2006: 1,480.6 

Source: Securities Trading Association of Suriname 

For the Surinamese Stock Exchange, the year 2006 

was another year of considerable growth, with 

effective turnover increasing by over 114% to 

SRD 1.77 million. The highest trading volumes 

were in Assuria, VSH-United and Consolidated 

Industries Corporation (C.I.C.) shares, which 

accounted for 42.4%, 22.7% and 11.5% respectively 

of the total equities turnover on the exchange. The 

Torarica Hotel’s rights issue also contributed 

significantly to overall turnover levels, with most of 

this trading resulting from the government’s 

decision not to exercise its rights. 

The most active brokers were DSB Bank, Assuria 

Beleggingsmaatschappij and Hakrinbank. 

The stock exchange index rose in the year under 

review by 296.9 points to 1,480.6. In other words, an 

increase of 25%. This rise was well above the rate of 

inflation for 2006, which means that the average 

investment in shares generated a good return in real 

terms during the year. 

Various companies, including Assuria and 

Hakrinbank, converted their shares during the year 

and set a new nominal value for them in Surinamese 

dollars. This exercise resulted in changes in the share 

prices. 

On 1 January 2006, VSH-United Holding Co. was 

launched on the stock exchange and opened at an 

initial price of SRD 21.00 per share of SRD 0.01 

nominal value. 

Fatum Investments was officially admitted to the 

exchange as a broker in 2006, but did not pursue any 

activities during the year. 

21

Banking sector in Suriname 

The Surinamese banking sector had a good year in 

2006. This can be seen in the following table, 

which provides information on various recent 

developments in the country’s commercial banking 

sector. Total consolidated assets rose by 26%, while 

lending increased by around 23%. Funds available 

for lending were 29% higher than in 2005, which 

meant an increase in the credit availability. The 

capital ratio I fell slightly, while the capital ratio II 

improved. 

Key figures of the general banking sector in Suriname (in millions of SRD) 

Year-end 2006*) 2005 2004 

Total assets 2,871.0 2,276.6 2,004.5 

Funds available for lending and cash/cash equivalents 

Funds on current accounts 539.7 443.4 412.4 

(Compulsory cash reserve) (179.4)6 (179.0)4 171.62 

6) 4) 2) 

360.3 264.4 240.8 

Savings 311.8 252.3 207.8 

Term deposits 126.5 94.3 76.5 

Capital and reserves 157.3 131.0 105.7 

Total funds available for lending and cash/cash equivalents 955.9 742.0 630.8 

Lending and investments 765.55 661.33 496.11 

5) 3) 1) 

Key ratios 

Capital ratio I 

(capital and reserves as % of total assets) 5.48 5.75 5.27 

Capital ratio II 

(capital and reserves as % of lending) 20.55 19.81 21.31 

1. Excluding provision for bad and doubtful debts of SRD 25.7 million. 

2. Excluding cash reserve of SRD 21.5 million for housing loans. 

3. Excluding provision for bad and doubtful debts of SRD 26.5 million. 


5. Excluding provisions for bad and doubtful debts of SRD 36.1 million. 




22

Previous annual reports discussed the increasing 

US dollarisation of bank balance sheets and the 

implications of this in detail. The Central Bank of 

Suriname and the commercial banks’ executive 

boards have pursued policies aimed at reversing this 

trend. The following chart shows the development of 

US dollarisation within the banking sector and the 

fact that this increased during 2006. 

US dollarisation in 1996 – 2006 as a percentage of total deposits and lending 

60 

50 

40 

30 

20 

10 

0 

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 

Foreign currency deposits as % of total deposits held by commercial banks 

Foreign currency lending as % of total lending by commercial banks to the private sector 

As the chart shows, the share of total deposits 

denominated in foreign currencies increased only 

marginally, while the extent to which lending was in 

dollars rose substantially. This development is 

remarkable, given that the difference between 

interest rates in SRD and those in foreign currencies 

actually decreased during the year under review. 

Low inflation and the stable exchange rate may, 

however, have prompted clients to opt for loans in 

foreign currencies that had lower rates of interest in 

absolute terms. In early 2007, the SRD lending rates 

fell further, and this could result in the extent of 

dollarisation slowing down. 

During its Article IV consultation mission in early 

2007, the IMF concluded that “bank soundness 

indicators improved in 2006, but non-performing 

loans and financial (US) dollarisation remain high.” 

Consumer price index 

The following table shows the inflation figures for 

2002 - 2006 compiled by the General Office of 

Statistics. These reflect the changes in the price of a 

fixed, representative basket of 240 consumer goods 

and services. 

Year Average Year-end 

inflation (%) inflation (%) 

2002 15.5 28.4 

1) 

2003 23.0 13.1 

2) 

2004 9.1 9.1 

2005 9.5 15.8 

3) 

2006 11.3 4.7 

1) Extrapolated from figures for January – June 2003 

2) Estimated on the basis of figures for March – December 2004 

3) Provisional figures 

As the above table shows, consumer prices rose 

by an average of 11.3% in 2006, while inflation 

calculated using the year-end method (i.e. 31 December 

2006 compared with 31 December 2005) was 

4.7%. Price changes are recognised more quickly in 

the latter method, which means that the rate of 

inflation has slowed down. In 2005, it was the rises in 

energy and oil prices that pushed inflation up. In 

2006, however, inflation was driven more by ‘cost 

push’ (i.e. increases in costs) than ‘demand pull’ (i.e. 

increases in spending), given the reasonable degree 

of equilibrium in the government’s finances and 

the limited extent of monetary financing. It is 

23

interesting to note that inflation has had no effect on 

the external value of the Surinamese dollar in recent 

years. It consequently remains important to keep 

control of macro-economic spending and to ensure 

that wage and salary increases remain moderate. We 

therefore fully support the public appeal by the 

Governor of the Central Bank of Suriname for the 

trade unions to adopt a moderate stance on their 

wage negotiations so as not to endanger the 

country’s economic stability. 

Under the current system of payroll and income tax, 

inflation has an impact on tax revenues. In an environment 

in which the value of money is declining 

and with a resultant rise in the nominal tax base, 

progressive rates of tax lead to an unintentional 

increase in the tax burden. This in turn has 

implications for the purchasing power of salaried 

employees and in results in businesses being 

subjected to taxes on illusory profits. These 

consequences can fully justify corrective measures 

by the legislator. 

Average inflation is expected to fall in 2007, while 

year-end inflation will be slightly lower. 

Developments in important production sectors 

The vast majority of developments in the real sector 

of the economy in 2006 were positive, specifically 

the stable macro-economic environment and the 

favourable international climate, which boosted 

both production and exports. According to 

estimates by the National Planning Office, the 

country achieved real GNP growth of 5.8%, much of 

which was attributable to the mining, building and 

construction and trading sectors. 

The world market prices for our main exports (i.e. 

alumina, oil and gold) rose substantially during the 

year, just as they did in the previous three years. 

Prices are expected to continue developing 

favourably in the near future. These sectors are 

attracting the interest of investors, particularly from 

abroad. And this in turn means we can expect 

significant levels of investment in the near future. 

Substantial investments were also made in other 

sectors, which means that economic growth can be 

expected to remain at a good level in the future. 

The bilateral investment protection agreement 

between Suriname and the Netherlands came into 

force in early September 2006. This agreement, 

which was signed on 31 March 2005, provides for 

foreign investors to be treated as national investors 

and for investment-related payment transfers 

abroad to be made in a freely convertible currency, 

while also giving investors protection against illegal 

expropriations of property and allowing disputes to 

be submitted to international arbitration. Neither of 

the countries is permitted to amend the agreement 

unilaterally. 

Various important developments in Suriname’s 

main production and export sectors are discussed in 

detail below. 

Bauxite sector 

The bauxite sector had a significantly better year in 

2006 than in 2005, when both alumina production 

and exports fell by 4%. This was despite the increase 

in alumina refining capacity to 2.2 million tons a 

year. Alumina production in the year under review 

totalled 2,132,800 metric tons, representing an 

increase of 10% on the total for 2005. Exports were 

also higher, with an increase of 9.3% to 2,127,200 

metric tons. The refinery had a very good capacity 

utilisation rate of almost 97%. 

The total value of these exports amounted to 

USD 642.5 million, representing an increase of 

almost 44%. The price per metric ton rose in 2006 by 

31.6% to USD 302. Some USD 234.4 million of the 

total exports accrued to Suriname in the form of 

local payments for oil product sales (including the 

amounts paid to State Oil Company). This was 

USD 37 million, or 18.7%, higher than in 2005. 

A total of USD 144.2 million was transferred to State 

Oil Company, while USD 44.6 million was paid in 

taxes (approximately USD 2 million less than in 

2005). Investments in 2006 totalled around USD 150 

million. We expect alumina prices to be maintained 

in 2007 because of the continuing high levels 

of demand in the world market and various 

evelopments on the supply side of the market. 

Negotiations are due to start shortly between the 

government of Suriname and the bauxite companies 

BHP-Billiton and Alcoa/Suralco on the opportunities 

for bauxite mining in the Bakhuys area of 

Western Suriname. The companies have expressed 

their interest in mining bauxite and processing it 

into alumina in the Paranam refinery. Suriname 

would like to see an integrated bauxite industry in 

the west of the country, providing this is technically 

and economically feasible. These negotiations are 

24

particularly important for the country, and the 

momentum to achieve results is excellent. It is 

crucial, therefore, to ensure a highly competent team 

is appointed to conduct the negotiations. It would 

also seem sensible to consider a range of business 

models, including some non-traditional ones, in 

order to ensure that Suriname’s interests are 

properly safeguarded. 

Oil sector 

Our State Oil Company had another year of excellent 

operating results, with record sales and profits. 

These were primarily due to the rise in world market 

prices and the increased levels of production. Gross 

sales in 2006 came out at USD 263.5 million, which 

represented an increase of USD 62.2 million, or 

31%, on the figure for 2005. The average price of 

Saramacca crude oil rose from USD 38.57 per barrel 

in 2005 to USD 46.43 in 2006. Profit before tax 

totalled USD 153.1 million and was, therefore, 46% 

higher than in 2005. A total of USD 106.9 million 

was contributed to the Treasury in the form of taxes 

and dividends, while the balance of payments was 

boosted to the tune of USD 114.7 million. 

Total crude oil production for the year amounted to 

4.8 million barrels, which was around 10% higher 

than in 2005. Much of this increase is attributable to 

improved results from existing wells, while a total of 

98 new wells also became operational during the 

year. 

The oil refinery was able to achieve a high capacity 

utilisation rate and processed a total of 2.5 million 

barrels of oil into heavy vacuum gas oil, diesel and 

heating oil and asphalt (bitumen). Most of the 

production was sold to Suralco. 

Over the coming years, State Oil Company will start 

focusing also on generating electricity. Its 15 MW 

electricity power station at Tout Lui Faut became 

operational in July 2006. 

For the first time in the country’s history, Repsol YPF 

and its partners conducted a three-dimensional 

seismic survey of the oil reserves along Suriname’s 

coastline in 2006. As a result of this survey, the 

companies decided to drill two exploratory wells. 

These will be drilled in the first quarter of 2008. The 

USD 100 million contract for this drilling work 

was signed with the US company Trans Ocean in 

October 2006. Maersk Oil and Occidental Petroleum 

Inc. also continued their own two-dimensional 

seismic survey along the Surinamese coast during 

the year. The international tender round for blocks 

15, 36 and 37 resulted in a tender being submitted 

for each block. 

Paradise Oil Company N.V., a wholly owned 

subsidiary of State Oil Company was established in 

early 2006. The intention is to use this subsidiary 

as a vehicle for participating in joint ventures 

with third parties and conducting exploratory 

programmes. The first activity will be to perform 

on-shore explorations in Uitkijk and Coronie in 

collaboration with the Irish company Tullow Oil. 

The outlook for our oil industry is very promising. 

Gold sector 

Suriname’s gold sector continued to develop well in 

2006, largely thanks to developments in the world 

market. Investments in explorations were higher 

than in 2005, while the trend of rising gold prices on 

the world market, which started back in mid-1999, 

continued throughout the year. The rise between 10 

March and 12 May 2006 was particularly striking, 

with an increase from USD 535 to USD 725 per troy 

ounce (= 31.1035 grams). The average gold price on 

the London Metal Exchange in the year under 

review was USD 603.46 per troy ounce, which was 

35.7% higher than in 2005. 

This rise was primarily the result of the growing 

political and financial uncertainty in the world and 

the concerns about the value of the US dollar in 

particular, which were prompted by the twin 

American budget and trade deficit. Investments in 

gold have traditionally provided a safe haven for 

money in times of uncertainty. Demand for gold in 

emerging economies such as China and India is also 

rising sharply in response to the increased scope for 

industrial applications and the growth in the 

countries’ prosperity. These developments will 

continue to put upward pressure on prices in the 

near future. 

The largest goldmining company in Suriname, 

Rosebel Goldmines N.V., which is a subsidiary of the 

Canadian mining company Cambior Inc., recorded 

another set of excellent operating results in 2006, 

with production of around 300,000 troy ounces 

(9,400 kg). A detailed exploratory survey resulted in 

proven reserves rising by 19% to over 3.8 million 

troy ounces (approximately 118,000 kg). This in 

turn resulted in the Rosebel mine’s remaining 

economic life being extended by two years to around 

25

twelve years. A total of around USD 5.5 million will 

be invested in more detailed explorations in 2007. 

In November 2006, Cambior Inc. was taken over by 

IAMGOLD, a listed Canadian company. The 

acquisition price of almost USD 1.2 billion was over 

30% above Cambior’s stock market value. Following 

this acquisition, IAMGOLD is now the tenth largest 

goldmining company in the world, with annual 

production of over one million troy ounces from 

eight mines in Africa and the Americas. 

According to a rough estimate, the gold production 

of the many small-scale producers, most of whom 

are individual pork nokkers, fell to around 10,000 

kg, with a total value of around USD 180 million. 

This decrease is primarily attributable to the 

exhaustion of the richer mining areas, the lower 

numbers of new finds and the sharp rise in 

operating costs. 

The largest Surinamese goldmining company, 

Sarakreek Resource Corporation, also achieved 

good operating results, and there are plans to 

expand its activities. 

The joint venture partners Alcoa/Suralco LLC and 

Newmont Mining Corporation, which is the world’s 

largest goldmining company, continued their 

intensive explorations near the Nassau mountain in 

Marowijne district in 2006. The survey has to date 

produced promising results, and these have further 

increased the chances of mining activities in the 

area. The company has since announced that it is 

looking to sign a Memorandum of Understanding 

with the Surinamese government on the possibility 

of mining these gold deposits. 

Agricultural sector 

Rice 

The developments in the rice sector are very 

important for the economy, particularly the 

economy of Nickerie. Farmers and rice-processors 

have for many years been facing a wide range of 

problems, mainly of a structural nature, and these 

have had an adverse impact on production. Nothing 

essentially changed in this respect in 2006. 

Various key figures showing the developments in the 

sector over the past five years can be seen in the 

following table. 

2006*) 2005 2004 2003 2002 

Under cultivation (hectares) 44,266 45,563 49,020 54,425 40,050 

Production of dry paddy (Mt) 198,162 163,955 174,490 193,685 157,105 

Average production per hectare (Mt) 4.48 3.59 3.56 3.69 3.92 

Export volumes (USD 1,000) 38,617 35,877 51,830 41,949 71,812 

Export value (USD 1,000) 10,690 8,913 11,891 9,097 14,175 

Export price of cargo rice (USD/mt ton) 236 220 190 191 191 

Export price of white rice (USD/mt ton) 297 301 268 273 286 

Source: Ministry of Agriculture, Animal Husbandry and Fisheries 


The total area of rice fields under cultivation fell 

slightly during the year. The volumes sown by the 

larger growers have been on the low side for some 

years, primarily because of the decision by rice 

growers on the left bank of the Nickerie river and 

Stichting Machinale Landbouw (SML) to stop 

cultivating.A slight increase in sowing was, however, 

seen among the smaller growers in 2006. 

The increase in the average overall production per 

hectare from 3.6 to 4.5 metric tons of wet paddy was 

a positive factor during the year. As a result of these 

factors, paddy production rose by 16% to over 

198,000 metric tons. Export volumes were 8% 

higher than in 2005, partly because of the exports of 

rice harvested at the end of 2005. Export prices were 

slightly higher because of developments on both the 

supply and demand sides of the world market. 

26

In both the spring and autumn growing seasons rice 

farmers received refunds of diesel duty paid, and 

this refund of SRD 112.50 per hectare under 

cultivation helped to improve the sector’s 

profitability. 

The agreement signed in 2003 between the 

European Commission and the Cariforum in 

support of the rice sectors in the Cariforum 

countries resulted in € 9,255,000 being made 

available for Suriname’s rice sector. This will be used 

as follows: 

1. Technical assistance € 1,815,000 

2. Training € 140,000 

3. Restructuring of water facilities € 3,800,000 

4. Lending facilities € 3,500,000 

The lending facilities will be made available via 

Landbouwbank N.V. 

A programme has been established to improve the 

sector’s quality and reduce the cost price. This 

programme, which will run until 2010, started being 

implemented in early 2007. The aim of this and 

various other restructuring programmes, which are 

still to be arranged, is to return the whole rice sector 

to the strong position it enjoyed in the past. 

Banana industry 

The European Union’s trade policy on banana 

imports improved significantly in 2006, thanks in 

part to the relevant authorities’ willingness to listen 

to Suriname. The principle of ‘First Come, First 

Served’ applied to 81% of the EU’s import quota 

of 775,000 tons for the ACP countries in 2006, 

which meant in effect that Suriname had to purchase 

licences for or pay import duties on 19% of 

its exports. This cost the country a total of around 

3 million. The outlook for further improvements in 

2007 and subsequent years is good. A total of 46,368 

tons of bananas, with an FOB value of USD 14 million, 

were exported in 2006, compared with 39,472 

tons and an FOB value of USD 12 million in 2005. 

At the end of the year under review, SBBS had a total 

of 1,925 employees and also indirectly provided 

work to many other companies on the supply side in 

the sector. 

Preparations to privatise Surland N.V. started in 

January 2003, while the process itself started in 2005 

in the form of an open international bidding round. 

This involved drawing up a short list of investors, 

identified through market research. Unfortunately 

the uncertainties surrounding the European Union’s 

policy for this market meant that none of these 

potential investors submitted a bid. Since then, 

however, a cooperation agreement has been signed 

with the French Agrisol/Katope group, and it has 

been decided to restart the privatisation process 

in 2008. 

Palm oil production 

After a long period of preparations, the Chinese 

China Zhong Heng Tai consortium provided the 

Surinamese government with the required bank 

guarantee of USD 16 million in mid-2006, and this 

meant that the large-scale production of palm oil at 

Patamacca in the Marowijne district could begin. 

The business plan assumes that a total area of 

400 km2 will in due course be cultivated, with 

ultimate production of 700,000 tons of palm oil a 

year. The total investments over a 10-year period 

will be around USD 116 million. The start of 

production has unfortunately been delayed as a 

result of concerns among the local population about 

the possible effects on their surroundings. They are 

worried about an inflow of Chinese workers 

working for low wages and also about the impact 

that the plantations may have on the local 

population’s land rights. We hope that the problems 

will be able to be resolved through dialogue since 

this project is very important for the development of 

Eastern Suriname, now that the bauxite industry 

there will soon come to an end. 

Aquaculture 

In mid-2006 Suraq N.V. started creating a modern 

shrimp-farming business in Nickerie. The land has 

now been cleared and the issue of drainage 

addressed. Cultivation ponds started being 

constructed in early 2007, while the rest of the work 

will be completed in the second half of the year. The 

business will involve total investments of around 

USD 17 million and will be farming black tiger 

prawns, all of which will be for export. This 

nvestment is very important for the development of 

the Nickerie economy. 

Outlook for 2007 

The macro-economic outlook for 2007 is promising. 

The IMF concluded during its country review in 

early 2007 that “the macro-economic outlook for 

2007 is broadly favourable. Confidence is expected 

27

to remain strong, aided by continued favourable 

external conditions and the commitment to a stable 

exchange rate and low inflation. Against this background, 

real GDP is projected to expand by 5 - 5 1 / 2 

per cent, driven mainly by the non-mining 

sector, while inflation would stay in the range of 

3 - 6 per cent. The external current account surplus 

could fall to about 2 percent of GDP.” 

The government will need to ensure a balanced 

budget if it is to achieve these objectives. In the 

longer term, a successful Public Sector Reform 

(PSR) programme must be executed to maintain 

and increase financial stability and to promote 

economic growth. 

We believe that the favourable outlook provides the 

right conditions for a successful PSR programme. It 

is also important in this respect to improve the 

macro economic monitoring of the country’s 

economy and to strengthen key institutions so as to 

improve the overall quality of public governance. 

Important negotiations will be held with various 

multinationals in 2007 on using our natural 

resources. The challenge is to devise a business 

model that will be acceptable to all stakeholders and 

will benefit the country as a whole. We will need to 

ensure that sufficient amounts are invested in our 

negotiating position. 

The Caricom single market was officially launched 

in January 2006, and the intention is to create a 

single economy by 2009. This far-reaching process 

of regional integration will have significant 

consequences for the investment climate and 

Suriname’s business sector, and our strategic 

planning will have to take this into account. 

We firmly believe that Suriname is well positioned 

to achieve further accelerated and sustainable 

development, but we will have to ensure that we 

adopt the right stance and approach. 

One of the events held to mark our bank’s 70th anniversary 

was a bicycle trip to White Beach. 

28

Business of the bank 

Introduction 

Excellent operating results were once again recorded 

in the year under review. The bank continued to 

grow and its operating returns improved. We also 

continued to give priority to improving our 

governance structures and to ensuring that our 

operating processes are properly and effectively 

managed. Risk management is increasingly 

becoming a common thread in this respect. 

Management is based on task-setting budgets, with 

objectives being quantified wherever possible. These 

objectives are recorded in the annual plan, which is 

part of the bank’s strategic plan. It is pleasing to 

note that the business objectives set for 2006 were 

comfortably achieved, and that the strategic 

objectives will consequently not need to be revised. 

Considerable energy will be devoted in 2007 to 

preparing a new strategic plan for the coming years. 

Our main business objectives for 2006 were to 

achieve sustainable growth, to improve profitability 

and assets and liabilities management, to increase 

productivity and to improve risk management and 

customer relationships management. Other important 

objectives included achieving an increase in the 

levels of employee satisfaction and demonstrating a 

clear commitment to the community of which we 

are a part by actively sponsoring various community 

projects. 

Total consolidated assets rose by 28.6% to 

SRD 606.5 million in 2006, which is a higher 

increase than in 2005. Consolidated lending rose by 

33.4%, which was over 3.4 percentage points above 

the budget. The extent of US dollarisation in the 

lending portfolio increased slightly, but remained 

within the short-term target. The ratio of nonperforming 

loans continued falling to 2%, which is 

also satisfactory from an international perspective. 

Hakrinbank’s share of the country’s lending market 

increased slightly. 

The bank’s assets and liabilities management 

improved in comparison to 2006 and also when 

compared with local benchmarks. This in turn had a 

positive effect on operating results, with the profit 

before tax rising by 50.6% to SRD 19.95 million. 

One of the bank’s main operational objectives in 

2006 was to improve overall productivity by 

achieving a better efficiency ratio. This ratio 

improved from 59% to 56% during the year, and we 

will strive to achieve further improvements in the 

future. In addition, the return on assets increased 

from 1.95% to 2.37%, while the return on equity 

rose from 46.10% to 46.90%. During the year under 

review, the bank’s corporate governance code was 

approved and is now being used as the basis for our 

activities. This code, the contents of which can be 

viewed on our website, sets out a series of principles 

and rules for proper corporate governance. We 

officially presented the code to the President of the 

Republic of Suriname in May 2006, when we also 

took the opportunity to call for a national corporate 

governance code to be compiled and implemented. 

Compliance – in other words, seeking to promote 

the bank’s reputation for integrity, together with that 

of its management and employees, as a means of 

managing risks and preventing damage to our 

reputation by adherence to strict rules of conduct – 

is a high priority within our bank. We also have an 

integrity code, which all our employees have signed. 

During the year under review we arranged Anti- 

Money-Laundering (AML) courses for our staff and 

also worked on a compliance handbook, which 

includes a manual on anti-money-laundering.We also 

invested in AML software, which will be installed in 

2007. 

Almost all transactions performed by a financial 

institution involve an element of risk. Effective risk 

management is consequently crucial for the success 

of any bank, which is why we attach such a high 

priority to it within our organisation. The primary 

objectives of risk management is to assess and manage 

risks within the limits set by the bank. It is also 

important to ensure a balance between risk and return. 

During the year under review we set up a separate 

Risk Management department and appointed a 

manager to run it. The aim in due course is to bring 

all the bank’s risk management activities within the 

scope of this department. The department’s main 

activities in 2006 involved formalising and 

tightening up the bank’s credit risk policy and 

performing credit risk assessments. In due course, 

responsibility for monitoring and managing other 

risks, such as market, liquidity and operational risks, 

will be assigned to this department. 

29

Managing customer relationships is of fundamental 

importance to a bank as no bank can survive without 

satisfied clients. We consequently strive to 

provide the highest quality of professional services 

to our customers, with their needs and wishes 

running as a common thread through our activities. 

In the year under review we once again spent time 

training our employees in customer relations 

management and communication skills. We also 

simplified our procedures for dealing with customer 

complaints and made the process more accessible. 

Our policy is to treat all complaints seriously 

because they arise as a result of concerned but loyal 

clients drawing our attention to possible imperfections 

in our services and giving us the opportunity 

to take corrective action. 

Our preparations to establish a full-service 

marketing department continued in 2006. This 

department will become operational in early 2007, 

and we will also be appointing a manager to run it. 

Over the past few years we have made donations and 

provided sponsoring as a way of demonstrating our 

commitment to the community of which we are a 

part and which we serve. Every week we receive 

many requests for sponsoring. All of them are dealt 

with carefully, but we are unfortunately unable to 

grant them all. Most of the projects sponsored by 

Hakrinbank are in the areas of sport, education, 

healthcare and culture. Our budget for sponsoring 

community projects was somewhat higher in 2006 

because of its being the bank’s seventieth 

anniversary year. The most significant project for 

which we provided sponsoring during the year was 

the creation of an endowed chair in Money, Credit 

and Banking at Anton de Kom University’s Faculty 

of Graduate Studies. The professor occupying the 

endowed chair will be Dr. A.R. Caram, who has a 

proven track record in this field. 

We also provided funds to enable the Medical 

Sciences Institute to purchase a spectrophotometer 

and related equipment that will improve the quality 

of the institute’s education and research. 

The most important developments within the 

various departments of the bank and its subsidiary 

Nationale Trust- en Financierings Maatschappij N.V 

in 2006 are discussed in more detail below. 

Our Chief Executive Officer Jim Bousaid and the Deputy Chairman of ADEK, A. Li Fo Sjoe, signing the letter of intent to 

establish the endowed chair in Money, Credit and Banking at Anton de Kom University. 

30

Corporate Governance 

Banks were not involved in the major accounting 

scandals that affected various well-known listed 

companies in the United States and Europe around 

2002 and caused major financial losses. The fact that 

these scandals could occur is attributable to failures 

of corporate governance. In other words, the way in 

which companies are managed. 

Proper corporate governance is particularly 

important for banks, given that they play such a 

major role in economic stability and development. 

This means that, here in particular, good checks and 

balances, together with proper and effective internal 

control of processes, are essential. Effective 

governance is a precondition for retaining public 

confidence. Given its importance, it is not only 

regulators, parties operating in the market and other 

stakeholder organisations that are continually 

seeking to set new standards for ensuring proper 

corporate governance. Institutions themselves are 

also increasingly accepting that they have a role to 

play in this process. And Hakrinbank is no 

exception in this respect as we are continually 

striving to apply best practices in our corporate 

governance so that we improve our operating 

performance and increase our accountability. 

During the year under review we implemented the 

corporate governance code drawn up in 2005. This 

demonstrates our commitment to corporate 

governance in practice. As far as we know, 

Hakrinbank is the first Surinamese-owned 

company to compile a formal corporate governance 

code and to use it as the basis for its activities. This 

code, which can be found on our website, contains 

guidelines for the Executive Board, Supervisory 

Board and shareholders. The issues of integrity and 

transparency, which are important preconditions for 

good corporate governance, have a prominent place 

in the code. We officially presented the code to the 

President of Suriname and the Governor of the 

Central Bank in May 2006, when we also took the 

opportunity to call for a national corporate 

governance code that could be used as the basis for 

ensuring good governance throughout the country’s 

business sector. 

The activities involved in implementing the code 

included the decision during the year to set up two 

specialised committees within the Supervisory 

Board. The tasks, powers and responsibilities of 

these committees – the Audit Committee and the 

Remuneration and Nomination Committee – have 

been laid down in separate sets of regulations. Each 

committee currently has three members, all of 

whom are members of the Supervisory Board. 

Presentation of Hakrinbank’s corporate governance code to the President of Suriname, Runaldo Ronald Venetiaan. 

31

The main task of the Audit Committee is to help 

the Supervisory Board monitor the integrity of 

the bank’s financial reporting and its compliance 

with legislation and regulations and to ensure 

that the bank’s internal and external auditors are 

independent and function properly and effectively. 

The Remuneration and Nomination Committee 

makes recommendations to the Supervisory Board 

on proposed appointments and reappointments 

to the Executive and Supervisory Boards, on 

succession planning for members of the Executive 

Board, on management development and on the 

remuneration of the Executive Board members. 

More details of the committees’ work can be found 

in the Supervisory Board’s report elsewhere in this 

annual report. The Supervisory Board’s report also 

contains information on the Caribbean Association 

of Audit Committee Members, which was 

established in St. Lucia in 2006 and of which 

Hakrinbank was a founding member. The new 

Executive Board and Supervisory Board regulations 

also came into force during the year under review. 

Our decision to set up a separate Risk Management 

department should also be seen against the background 

of our wish to strengthen our governance 

structure, as was the decision to switch from rulesbased 

to risk-based auditing principles from the 

2007 financial year onwards. Over the coming years, 

efforts to improve our corporate governance will be 

a priority within our bank. This is also because 

we firmly believe there to be a high degree of 

correlation between effective risk management and 

a good operating performance and the creation of 

sustainable value for stakeholders. 

Performance indicators and benchmark analysis 

Against the background of the establishment of the 

Caricom single market on 1 January 2006 and the 

intended development into a single economy in 

2009, we consider it important to compare 

Hakrinbank’s performance with that of larger banks 

in the Caribbean. We do this by conducting an 

annual benchmark survey. 

The most important indicators that we use to 

measure and monitor our operating performance 

are: 

- Return on Assets 

- Non-performing ratio (this measures the quality 

of our main asset, the lending portfolio) 

- Return on Equity 

- Efficiency ratio (this measures our general 

efficiency). 

Our bank’s performance in the benchmark survey 

for 2006 compared favorably with that of our peer 

group, which consisted of NCB Jamaica Ltd., 

Republic Bank Ltd., RBTT Financial Holdings Ltd., 

Scotiabank Trinidad & Tobago Ltd., Barbados 

National Bank Inc. and Republic Bank Guyana Ltd. 

We also conduct benchmarking against the results of 

the larger banks in Suriname. 

Results of benchmark survey in 2006 (%) 

Institution Period RoA RoE Efficiency Non-performing 

ratio 

ratio 

NCB Jamaica Ltd. 2006 2.65 23.96 59.87 3.66 

Republic Bank Ltd. 2006 1.92 14.79 58.00 3.40 

RBTT Financial Holdings Ltd. 2006 2.40 22.10 58.00 2.70 

Scotiabank Trinidad & Tobago Ltd. 2006 3.70 25.05 42.00 1.30 

Barbados National Bank Ltd. 2006 2.31 19.91 51.33 3.58 

Republic Bank Guyana Ltd. 2006 1.63 24.22 56.70 4.28 

DSB Bank N.V. 2006 1.71 24.61 54.20 p.m. 

Hakrinbank N.V. 2006 2.37 46.88 56.34 2.00 

Source: External annual reports 

32

Return on Assets (RoA) 

We were pleased by the significant improvement in 

our RoA. This rose from 1.95% at the 2005 year-end 

to 2.37% in 2006, which is reasonable compared 

with the peer-group average. The RoA of the peer 

group varies between 1.63% and 3.70%. The main 

factors contributing to the improvement in this ratio 

were the more active balance sheet composition, the 

improvement in the quality of our lending portfolio 

and the strong rise in other income, while the 

reduction of 3 percentage points in the percentage of 

cash reserves required to be held in SRD with effect 

from 4 January 2006 also helped. The more active 

composition of our balance sheet is the result of 

stricter Assets and Liabilities Management, which 

is designed to optimise the share of incomegenerating 

assets in our balance sheet. Our main 

income-generating assets (i.e. receivables from 

clients) rose from 48.70% of total assets at the 2005 

year-end to 50.53% at the 2006 year-end. The ratio 

of receivables from clients/funds entrusted to us also 

rose from 54.24% in 2005 to 57.77% at the end of 

2006. This can be regarded as relatively good, given 

the cash reserve percentages applying at the yearend 

and the need to retain prudent levels of liquid 

reserves. 

Return on Equity (RoE) 

Our RoE increased slightly from 46.10% in 2005 to 

46.90% in 2006. This was largely attributable to the 

sharp rise of 56.6% in shareholders’ equity as a result 

of the retained earnings dotated to the general 

reserve and the periodic revaluation of property. If 

the effects of this revaluation are excluded, the RoE 

in 2006 would have been close to 50.5%. This is very 

good in comparison with that of our peer group, 

where the RoE varies between 14.79% and 25.05%. 

Efficiency ratio 

Our efficiency ratio improved, with a reduction 

from 59% in 2005 to 56% at the end of 2006. The 

reason that this was slightly higher than the target 

for 2006 of 55% was the higher than expected 

increase in certain expenditure items. In view of the 

forecast slowdown in our rate of growth on the 

income side and given our ambition of achieving a 

further reduction to around 53% in this ratio in 2007, 

we will have to attach greater priority to managing 

our costs and analysing and improving our operating 

processes than has been the case in previous years. 

Our ratio is reasonable in comparison with the 

average for the peer group, where the efficiency ratios 

vary between 42% and 60%. 

Non-performing ratio 

Our non-performing ratio improved from 3.0% at 

the 2005 year-end to 2.0% at the end of 2006, with 

most of this improvement being attributable to the 

consumer credit sector. The latter figure is an 

indicator of the good quality of the lending portfolio 

and compares very favourably with that of our 

peer group. The ratio is also better than our own 

internal norm of a maximum of 3%. The nonperforming 

ratio within the peer group varies from 

1.30% to 4.28%. We are pleased by the improvement 

in our non-performing ratio as a low ratio has a 

beneficial effect on our profitability. On the one 

hand, it is beneficial from a perspective of interest 

income continuity, which is certainly important in a 

period of falling interest rates and margins, while on 

the other hand it reduces the need to make specific 

provisions for bad and doubtful debtors. 

More information on Hakrinbank’s financial 

performance can be found in the section financial 

development of the bank further in this annual 

report. 

Credits department 

Despite the fierce competition in the market, our 

lending to corporate and consumer clients rose in 

the year under review by SRD 76.7 million, or 

33.4%, to SRD 306.5 million. This increase was 

higher than the growth figure of 23% for the 

banking sector as a whole, which means that our 

market share increased slightly. The rise was also 

higher than the budgeted rise of 30% in consolidated 

lending. The growth in Hakrinbank’s lending was 

well above budget, while the reverse was the case for 

our subsidiary, Nationale Trust- en Financierings 

Maatschappij. The growth was achieved by 

combining a consistently commercial approach with 

competitive rates. 

Most of the growth in lending was attributable to the 

trade, housing construction, industry and fishing 

sectors, as well as consumer credit. Our Nationale 

Trust- en Financierings Maatschappij subsidiary is a 

dominant player in the consumer credit market. 

More information on its activities can be found elsewhere 

in this report. 

Total lending to sectors directly involved in 

production has been on an upward trend for several 

years, thanks to the improved investment climate 

that is reflected in the higher levels of investment in 

these sectors. 

33

Investments in treasury promissory notes were slightly 

lower at SRD 32.1 million. In view of the Central 

Bank of Suriname’s policy of gradually reducing the 

amounts of these investments held by commercial 

banks in favour of institutional investors, we have to 

assume that these investments’ share of our portfolio 

will successively fall over time. The return on these 

investments has decreased as a result of the Central 

Bank’s decision to cut rates from 12.5% to 10% at the 

start of 2006. On 1 January 2007, the interest on 

treasury paper was reduced further to 8% a year. 

As indicated above, the quality of the lending portfolio 

remained good. Effective credit management 

meant we were able to improve the non-performing 

ratio from 3.0% to 2.0% in 2006, with our longer-term 

aim being to keep the ratio consistently below 3%. 

An overview of our lending to the various sectors 

can be found below. This overview has been 

compiled in line with the classification model used 

by the Central Bank of Suriname. 

The SRD base lending rate was cut by 2 percentage 

points to 14% in February 2006, partly in response 

to the reduction from 30% to 27% in the SRD cash 

reserve requirement set by the Central Bank. The latter 

was further reduced to 25% in early 2007. In 

response, the banks cut their annual lending rates in 

February 2007 to between 12% and 13%. The percentage 

of the cash reserve requirement to be used 

for long-term, low-rate housing loans was increased 

from 8% to 9% of the reserve base in early 2006, and 

this created scope for extra lending. On 2 January 

2007, this percentage increased further to 10%. The 

base rate for foreign currency lending remained 

unchanged during the year. The difference between 

the SRD and foreign currency base lending rates has 

been narrowing further during the year under 

review. Although this could have been expected to 

result in less dollarisation in the lending market, this 

unfortunately did not occur. 

Lending by sector (in thousands of SRD) 

Year-end 

Year-end 

2006 in % 2005 in % 

Agriculture 22,462.7 7.3 22,065.2 9.6 

Fishing 12,717.6 4.2 4,192.6 1.8 

Forestry 183.9 0.1 112.2 - 

Mining 2,206.4 0.7 2,228.9 1.0 

Industry 31,594.9 10.3 20,489.6 8.9 

Construction and installation 6,496.7 2.1 5,753.4 2.5 

Electricity, gas and water 30.7 - 26.8 - 

Total direct production sectors 75,692.9 24.7 54,868.7 23.8 

Trade 86,939.6 28.3 71,555.8 31.2 

Transport, storage and communications 3,095.1 1.0 2,624.0 1.2 

Services 20,746.6 6.8 14,798.8 6.4 

Housebuilding 53,015.7 17.3 38,411.8 16.7 

Other 66,959.1 21.9 47,470.9 20.7 

Total other sectors 230,756.1 75.3 174,861.3 76.2 

Total commercial lending 306,449.0 100.0 229,730.0 100.0 

Treasury promissory notes (government) 32,104.0 32,850.3 

Total general lending 338,553.0 262,580.3 

34

Although the extent of dollarisation fell in 2005 to 

45.8% of our total lending, it returned to 47.9% by 

the end of 2006. This increase may be the result of 

low inflation and the stable exchange rate, which 

may have prompted clients to opt for loans in 

foreign currencies that had lower rates of interest in 

absolute terms. Doing so, however, results in a 

foreign currency risk for clients whose income is in 

Surinamese dollars.It should,however,be noted that 

the degree of US dollarisation is still below the 

short-term guideline that we have defined of a 

maximum of 50% of consolidated lending. We will 

seek to reduce the extent of US dollarisation in 2007 

by offering interest incentives designed to encourage 

lending in local currency. 

Hakrinbank complied with all the requirements of 

the Loan Classification and Provisioning regulations 

in 2006 and also with all the other regulations 

applied by the Central Bank of Suriname as part of 

its supervision of the general banks. 

Owing to the growth in our lending portfolio and our 

stricter loan portfolio management, we decided to 

recruit an additional account manager during the year. 

In 2006, we started implementing the organisational 

change within the Credits department that we had 

announced in our previous year’s annual report. 

This change will result in account management 

handling all aspects of the lending process, and we 

expect to complete the process in mid-2007. This 

will make our lending more efficient and make the 

account managers fully responsible for ensuring that 

lending requests are handled quickly. The Credit 

Administration department will remain responsible 

for providing administrative support. We will be 

evaluating various software packages in 2007 in an 

effort to further optimise the credit process and 

reduce the time taken to handle loan applications. 

The Social Entrepreneurship Programme (SEP) set 

up in the fourth quarter of 2004 in conjunction 

with the Chamber of Commerce and the Inter- 

American Development Bank (IDB) as a means of 

encouraging entrepreneurship among selected 

graduates or students soon to graduate from Anton 

de Kom University has not yet produced the desired 

results. A total of 85 new entrepreneurs have so far 

received training under this programme, which 

provides expert help in preparing a business plan for 

a new, usually small, business. A committee, whose 

members come from a wide range of disciplines, 

selects the best projects. These are then eligible for a 

Hakrinbank loan on very favourable terms and 

conditions. The extent of lending under this 

programme has, however, been lower than expected. 

The Chamber of Commerce, IDB and Anton de 

Kom University will shortly be evaluating the 

programme, and steps will be taken to make it more 

effective. 

The emphasis in Hakrinbank’s future lending 

activities will remain on achieving growth in 

volumes, with the quality of our services, a commercially 

responsible approach and a pro-active policy 

on pricing being essential ingredients in this 

process. Growth is crucial if we are to maintain our 

profitability, both in the short and longer term. 

Risk Management department 

Banks are exposed to more and more risks, 

primarily as a result of the pressure of competition, 

the increasing complexity of banking products, 

specifically many of the newer ones, and the need to 

protect their reputation. As poor risk management 

may have far-reaching consequences for banks and 

also because of stricter regulations, many banks have 

decided to introduce Enterprise Risk Management 

(ERM) into their organisations. ERM comprises 

programmes that provide a sustainable way of 

managing risks in various areas in which a bank may 

be active. The most significant risks that financial 

institutions have to face are credit, market, liquidity, 

operational and legal risks and reputational risk. 

ERM is also very important within Hakrinbank, 

where we devote considerable attention to risk 

management structures and processes. This 

included the setting-up in mid-2006 of a separate 

Risk Management department. The bank’s policy is 

for this department to play a central role in 

managing risks throughout the bank. This compares 

with the current situation, in which risk management 

is the responsibility of various department 

managers. 

The Risk Management department’s activities 

during the year under review focused primarily on 

examining the credit risk policy and assessing the 

credit risks in loan applications. In 2007 it will be 

working on a Credit & Risk manual and on various 

risk management reports. 

Enterprise Risk Management also involves 

implementing the Risk-Based Audit project in 

35

conjunction with our external auditors and 

consultants from Deloitte & Touche. The ultimate 

aim in this respect is to establish procedures for 

internal control that are derived from risk-based 

rather than the current rules-based principles. This 

means examining operating processes from a 

perspective of risk and then managing the risks 

identified. Risks at a process level obviously have to 

be assessed within the bank’s risk management 

framework. In the first phase of this project, which 

began in November 2006, we conducted a risk 

assessment at a strategic level, while also seeking to 

increase the awareness of risk. A pilot project will be 

conducted in a department during 2007. 

Treasury and Securities department 

The most important activities of this department are 

managing our liquidity position, buying and selling 

foreign currencies, conducting currency swap transactions 

and acting as an intermediary in securities 

transactions on the stock exchange. The department’s 

work is increasing and we consequently 

decided to recruit an additional officer in late 2005. 

We monitored our liquidity positions during the 

year very closely, and this resulted in the bank’s 

liquidity position consistently remained satisfactory. 

We used a large investment bank to invest some 

of our foreign currencies in the international capital 

market, and these investments generated satisfactory 

returns. We will be seeking to improve our 

liquidity management further in 2007, particularly 

in respect of foreign currencies. 

Foreign currency trading and swap transaction 

volumes were below the department’s budget in the 

first half of 2006. However, after reassessing the 

position in the second half of the year, we adopted a 

more aggressive approach to the market and also 

approached new clients. These efforts proved 

successful, which meant that we were ultimately able 

to achieve the department’s targets for 2006 just 

before the year-end. 

More information on the results of our securities 

activities can be found in the section on the 

Surinamese Stock Exchange elsewhere in this 

annual report. 

During 2006 we completed the process of 

automating our open custody administration, and 

this will improve the efficiency and quality of our 

services. 

Administration & Management Information 

(AMI) department 

Accounting 

We devoted special attention in the year under 

review to increasing our operational efficiency. The 

measures we took included starting electronically 

exchanging interbank payment transactions and 

updated our general ledger accounts system. We also 

updated our manual on expense and income 

accounts. 

Financial control 

This department’s activities are determined to a 

large extent by our corporate governance objectives, 

which are specifically designed to achieve further 

improvements in our operating processes and 

greater accountability to our Supervisory Board and 

shareholders. The department also increased the 

number of management reports it produces. From 

2006 onwards, task-setting budgets will be set and 

periodic overviews of results compiled for all 

departments in order to improve the overall 

management of the bank. We also started preparing 

half-year figures and having them assessed by the 

external auditors. Half-year figures will be published 

from 2007 onwards. 

Information & Communication Technology 

(ICT) department 

The ICT Department is responsible for providing 

relevant, reliable and timely management 

information that enables us to identify and monitor 

risks, to manage our operating activities and to take 

the correct decisions. ICT is also becoming an 

increasingly important activity in view of our efforts 

to improve the efficiency of the bank’s operating 

processes. Given the high reliance on ICT in our 

day-to-day activities, we regularly perform EDP 

reviews to test the reliability and continuity of our 

data-processing. In the fourth quarter of 2006, 

Hiralal Lutchman & Co. once again conducted an 

EDP review with the support of Deloitte & Touche 

Netherlands Antilles and Aruba. This time the 

review focused primarily on our ICBS banking 

administration software and the Alliant Branch 

Teller (ABT) cash system. We have since started 

implementing the various recommendations. 

By upgrading our AS/400 computer in 2006 from an 

820 model to a 520 model, we improved its 

performance and avoided the need to buy new 

computers. The first phase of the project to provide 

36

e-mail and internet access from the individual workstations 

was completed in December 2006. As 

security is such an important element in these 

communication systems, we have appointed a 

specialised external company to deal with security, 

maintenance and management. 

Domestic department / Cash department 

Promoting electronic payments is a priority for 

these two departments. 

Hakrinbank N.V., RBTT Bank (Suriname) N.V., 

DSB Bank N.V. and Surinaamse Postspaarbank all 

participate in Banking Network Suriname (BNETS) 

N.V. Since July 2005, these banks’ customers have 

been able to use the other banks’ ATMs, while they 

have also been able to use their cards in all the 

participating banks’ point-of-sale (POS) terminals 

since May 2006. To date, however, the extent to 

which customers have been making use of these new 

opportunities has fallen short of expectations, 

despite intensive advertising. Most payments are still 

being made in cash. We will therefore continue to 

look at ways of encouraging people to use the 900 or 

so POS terminals linked via BNETS. 

Our total number of accounts increased by an 

average of around 10% in 2006, which was in line 

with the increases seen in previous years. 

A total of four ATMs were installed in 2006, and we 

expect a similar number to be added in 2007. The 

number of our POS terminals also rose during the 

year. In addition, we launched our new savings 

product, the Anansi savings account, which pays an 

attractive rate of interest on savings for and by 

children. Once a child reaches the age of fourteen, 

the account will automatically be converted into a 

student account or into an ordinary savings account 

once they become adults. Colouring and essaywriting 

competitions for various age categories and 

with a range of attractive prizes were held to mark 

the launch of this new product. 

The Customers Identification Act for service 

providers, which came into force in late 2002, 

requires us to investigate clients’ identity when 

we perform banking transactions for them. We 

consequently worked closely together with the 

compliance officer in 2006 to screen our client database 

and establish whether all the files contain the 

required documentation. 

We then wrote to any clients on whom we were 

lacking information and requested them to provide 

the required items. 

In December 2006 we signed a cooperation agreement 

with Surpost that will allow Dutch bank 

account holders to use their cards at our capital city 

and district branches to draw euros from their 

Dutch accounts. If necessary, the euros can then be 

converted into local currency. 

Maintenance & Technical Support (MTS) 

department 

The building work involved in restructuring our 

Cash department was one of the reasons why the 

MTS department had to be relocated within our 

head office. This move also improved the quality of 

the relevant employees’ working environment. The 

building work will create additional office space for 

the Cash department and enable us to implement 

various measures to improve the safety of our 

security transports. 

We will start renovating our Nieuwe Haven branch 

in the first half of 2007, while the other branches in 

Paramaribo are also due for renovation. We made a 

special client area available at the Flora branch in 

2006 in order to improve the quality of the services 

we provide to clients there. In due course we will be 

renovating the whole branch, but this special area 

will guarantee our clients’ privacy in the meantime. 

The client area at our Tourtonne branch was also 

expanded during the year. 

The new signboard on our head-office roof was 

illuminated for the first time on 28 June 2006 to 

mark the bank’s seventieth anniversary. Seeing our 

name in lights looks particularly impressive in the 

evening. Our MTS department performed excellent 

work setting up and installing the 1.5 meter high 

letters. 

Foreign Transfers department 

Both the number of incoming and outgoing foreign 

payments increased during the year in response to 

the higher levels of economic activity in Suriname. 

We discussed the issue of the declining numbers of 

letters of credit we were being asked to open for 

imports in previous annual reports. This trend 

continued in the year under review, with the vast 

majority of importers opting for ordinary (clean) 

payments, despite the greater security provided by a 

letter of credit. This is because payment under a 

letter of credit will be made only once certain 

37

documents, such as a bill of lading, have been 

provided. 

Our request to join the MasterCard organisation was 

approved in September 2006. We expect to complete 

the various formalities involved in issuing these 

credit cards by late 2007. Hakrinbank clients 

choosing to use this product will then be able to use 

their card in all the countries that accept 

MasterCard. 

We started using the Swift Payment Router (SPR) 

software in October 2006. This has made our 

international payment administration more straightforward 

and faster. Once outgoing transactions have 

been entered into SPR and authorised, they are automatically 

processed in our administration and 

converted into a SWIFT message. 

Compliance & Legal department 

Hakrinbank operates in accordance with 

professional standards when providing its services 

to clients. These standards ensure that we can be 

worthy of the confidence and trust that our stakeholders 

have vested in us. Compliance – in other 

words, seeking in the widest sense to promote the 

bank’s reputation for integrity, together with that of 

its management and employees, by adhering to strict 

rules of conduct as a means of managing risks and 

preventing damage to our reputation – is a high 

priority within our bank. The bank will consequently 

not be a party to transactions that contravene the 

spirit of the law or do not accord with the ethical 

standards that the bank has set for itself. Our 

integrity code sets standards for all employees’ 

conduct, with the aim of preventing money 

laundering and conflicts of interest, protecting 

clients’ privacy and ensuring compliance with 

legislation and regulations. 

We also spent time during the year compiling a 

compliance handbook, which also includes an antimoney-laundering 

manual. In addition we 

purchased a new software package that will be 

installed in the first half of 2007. This will enable us 

to monitor transactions online and compile various 

risk profiles for clients. 

Making all our employees more aware of compliance 

is one of our priorities. It is important that all 

our employees deal with applicable legislation 

professionally and so readily recognise instances of 

improper conduct if they occur. We are consequently 

devoting considerable amounts of time to staff 

training. 

Human Resources and General Affairs 

As a business in the services sector we are expected to 

provide a high standard of quality, and that means we 

need qualified, motivated and committed employees. 

Changing customer requirements, technological 

developments and greater competition demand a 

professional culture and a focus on results and clients. 

We consequently devote substantial time and energy 

to selection and training so as to ensure that we 

have the right people in the right place within the 

organisation. This also means ensuring that our 

remuneration policy reflects the extent to which an 

employee achieves targets. Performance management 

is, therefore, an important issue within the bank. 

Employee numbers 

We had a net increase of seven employees in 2006. 

This meant our workforce rose from a total of 247 to 

254, of whom 143 are women and 111 are men. A 

total of twenty new employees joined the bank, 

including two at management level. Thirteen 

employees left the bank either voluntarily or because 

they had reached retirement age, while two of our 

employees died during the year. 

Lives remembered 

We were very shocked by the sudden death in 

February 2006 of our much valued employee Lothar 

van Kanten, who was due to complete 25 years of 

service for the bank in the following October. 

We were also upset to hear of the completely 

unexpected death in September 2006 of Ivy Myr- 

Kromopawiro, who worked in our Foreign Transfers 

department. For Ivy, 2006 was also an anniversary 

year as she completed 12.5 years of service in April. 

Awards 

The celebrations marking the seventieth anniversary 

of Hakrinbank also included three employees being 

recommended for awards conferred by the President 

of the Republic of Suriname. Jim Bousaid (CEO), 

Mariette Tjon A Ten (COO) and Marijke Lie A 

Njoek (Head of Foreign Transfers) were all 

appointed as an Officer or Knight of the Honorary 

Order of the Palm. 

Anniversaries 

A total of 38 employees, of whom 35 work in 

Paramaribo and three in Nickerie, celebrated 

38

anniversaries in 2006. Sixteen employees celebrated 

12.5 years of service for the bank, while six 

completed 25 years of service and seven celebrated 

30 years of working for the bank. Eight employees 

completed 35 years of service, while one employee 

has now worked for us for 40 years. We owe these 

employees a great deal of thanks and gratitude for 

their loyal service over the years. 

Education and training 

Employees underwent training in client-orientation, 

leadership and communication skills during the 

year in order to develop their skills and improve 

their levels of professional knowledge. Courses were 

also arranged to upgrade the computer skills of our 

administrative staff. 

Personnel activities 

The anniversary committee and staff association 

worked together to arrange a number of highly 

successful events to mark the bank’s 70th 

anniversary. Two day centres in Vierkinderen, near 

Colakreek, also became available during the year for 

holiday use by employees. 

Miscellaneous 

Sale of Latour site 

Despite all the efforts to achieve a sale, it has not yet 

proved possible to find a buyer for the site 

Hakrinbank owns at the junction of Latourweg and 

Indira Gandhiweg.We will continue intensifying our 

efforts to dispose of this asset as the sale proceeds 

will play an important part in funding future investments, 

specifically in the Saramaccastraat premises 

that we purchased in 2005. 

Renovation of Saramaccastraat premises 

In 2005 we purchased the property at Saramaccastraat 

20 (the ‘Brandon’ building). This property, 

which can be regarded as a monument, is adjacent to 

the Hakrinbank head office and so fits in with our 

plans to expand our office space. We are currently 

planning to renovate and expand the building in line 

with our business needs for more space. Renovation 

was on the agenda for 2006, followed by expansion 

in 2007 and subsequent years. 

Our annual fun run. 

39

We will be drawing up an investment and funding 

plan that will cover a period of several years and 

obviously take account of the Central Bank of 

Suriname’s rules that require investments to be 

funded from shareholders’ equity. 

The plan in due course is for Nationale Trust- en 

Financierings Maatschappij and various other 

Hakrinbank departments to move to the new 

location and thus reduce the pressure on office space 

at the head office. Part of the site will be used as a car 

park so as to alleviate some of the current parking 

problems at the head office. We have so far cleared 

and resurfaced the site and erected a wall around it, 

and it is now being used as a car park. Progress has, 

however, been delayed by the bureaucracy involved 

in obtaining the permits required for the partial 

demolition and subsequent expansion of the 

building.At the time of writing, the required permits 

had still to be received. 

Marketing 

Various activities were undertaken in the year 

under review to improve our knowledge and understanding 

of existing and potential clients’ needs and 

wishes so that we can tailor our services more 

accurately. These included various successful 

marketing campaigns, while we also provided our 

employees with additional training in commercial 

skills and customer relations management. In 2006, 

we completed the preparations to establish a fully 

equipped marketing department able to coordinate 

all the bank’s marketing activities. The intention is 

for this department to start work in early 2007 under 

the leadership of a newly appointed marketing 

specialist. These activities will then be able to be 

more systematic and effective than in the past. 

their common interests. More information on the 

organisation can be found on www.caib.org. 

The CAIB was actively involved in establishing 

the Caribbean Association of Audit Committee 

Members (CAACM) in 2006. This can be seen as 

part of its efforts to promote good corporate 

governance in banks and other businesses. The 

meeting establishing the association was held at 

Castries, St. Lucia in June 2006. Hakrinbank is a 

founder member of CAACM and also proposed the 

appointment to the Board of M. Brahim, who is 

chairman of the Executive Board of the Fernandes 

group. 

The start of the 10 km run held around the time of 

Hakrinbank’s anniversary. 

Caribbean Association of Indigenous Banks (CAIB) 

In November 2006, Hakrinbank, which was 

represented by our CEO Jim Bousaid, attended the 

annual meeting of CAIB in Port of Spain, Trinidad. 

During this meeting our bank was reappointed to 

the Board of Directors of CAIB for a further two 

years. Hakrinbank and First Citizens Bank of 

Trinidad & Tobago will together represent the countries 

and islands in the southern Caribbean on the 

CAIB Board. The CAIB, which many Caribbean 

banks have now joined, currently has 51 members. 

Its primary objectives are to promote contacts and 

cooperation among members and to represent 

40

Nationale Trust- en Financierings 

Maatschappij N.V. 

Our subsidiary Nationale Trust- en Financierings 

Maatschappij (NTFM) had a reasonable year in 

2006. Total assets rose by 28%, while profit was up by 

16%. These percentages were below budget because 

of a certain amount of market saturation and 

competition, which meant that the levels of growth 

budgeted in a number of product categories were 

not able to be achieved.Various measures were taken 

during the year to improve operating efficiency and 

the collection of problem debts. We will also be 

installing new software in 2007 to improve the speed 

and efficiency of the company’s lending activities. 

Mortgage loans 

Mortgage lending rose by 32% to SRD 36.6 million 

in 2006. The main reason why the company was 

unable to achieve the growth target for the year was 

because it reached the 7% ceiling for housing loans 

funded from the bank’s cash reserve before the yearend. 

The Central Bank subsequently increased this 

ceiling from 8% to 9% of the reserve base. 

Vehicle financing 

The volume of term loans increased by 

over 9% to SRD 22.6 million, with loans to fund 

purchases of cars and mopeds accounting for most 

of this growth. The signs of saturation seen in this 

market and the increasingly fierce competition were 

the reasons for our failing to reach our production 

targets. 

Personal loans 

Volumes of personal loans rose by over 30% to 

SRD 13.0 million, which was above the budget. Our 

branches played a major part in achieving this 

increase. It is noticeable that individuals’ freely 

disposable income is coming under pressure 

because they sometimes have several personal loans 

to repay. Our prudent policies on risk management 

mean that this situation will have consequences for 

the numbers of new clients we seek to acquire in this 

market. We have therefore budgeted for only a 

modest increase in this product category in 2007. 

Asset management (private banking) 

Third-party assets under management rose by 

almost 20% in the year under review, with most 

of these funds being invested in mortgages denominated 

in foreign currencies. The rate of growth 

was below that of 2005 and also slightly below 

budget. The favourable risk and return profile 

meant a good level of assets being available for 

management. We are seeking to expand the range of 

investment opportunities for our clients by creating 

opportunities for them to invest in, for example, the 

international capital market. 

41

Financial development of the bank 

Hakrinbank had another successful financial year in 

2006, thanks in part to the improved management of 

our operating processes and also the positive effect 

that the favourable macro-economic environment 

had on our business. Our total assets increased, 

while our balance sheet ratios improved and 

operating results rose. We comfortably achieved the 

main financial objectives that we set ourselves in our 

2005 – 2007 Strategic Policy Plan, in which we forecast 

annual real growth in income of at least 15% - 

20% and a real growth in profits of at least 10%. 

Despite a few expense items coming out higher than 

forecast we very nearly achieved our operational 

objective of an efficiency ratio of 55%. 

Score card 

Objective Actual 

2006 2006 

Financial targets 

Real growth in income 15-20% 20,3%* √ 

Real growth in profits > 10% 35,3%* √ 

Operational targets 

Efficiency ratio 55% 56% 

* Real growth is nominal growth adjusted for average inflation of 11.3% 

A detailed analysis of the main items in the balance 

sheet and the consolidated results of Hakrinbank 

can be found below, followed by information on the 

proposed appropriation of the profit. 

Consolidated balance sheet 

Total assets at the 2006 year-end amounted to 

SRD 606.46 million. This represented an increase of 

SRD 134.78 million, or 28.6%, compared with the 

previous year. This percentage is higher than the 

increase of 18% achieved in 2005. 

Total assets (in millions of SRD) 

700 

600 

500 

400 

300 

200 

100 

0 

181.0 

2002 

251.5 

2003 

399.6 

2004 

471.7 

2005 

606.5 

2006 

Most of the increase on the assets side of the balance 

sheet is attributable to Receivables from clients and 

Receivables from credit institutions. The increase in 

these items contributed to the rise in interest 

income. Cash and cash equivalents and Tangible 

fixed assets also rose, while the value of investments 

in treasury paper fell slightly. 

The increase in Receivables from clients was 

substantial, with a rise from SRD 229.73 million in 

2005 to SRD 306.45 million in 2006. The SRD 76.72 

million increase in lending, representing a rise of 

33.40% from the previous year, was attributable to 

both Hakrinbank and Nationale Trust- en Financierings 

Maatschappij. It related to loans in local 

currency and also to loans denominated in 

foreign currencies. Most of the increase in 

receivables was attributable to lending in the trade, 

housing construction, industrial and fishing sectors, 

while the volumes of consumer credit loans 

provided by our subsidiary also rose significantly. 

Receivables from credit institutions increased in 

the year under review by SRD 46.03 million to 

SRD 172.69 million as a result of the rise in the 

foreign-currency credit balances held for third 

parties and invested in part at foreign banks. Some 

of the increase in this item is also attributable to the 

euro’s rise against the Surinamese dollar. 

42

Cash and cash equivalents rose by 11.9% to 

SRD 72.06 million, in part because of the increase in 

funds entrusted to us. This latter increase correlates 

to the growth in the domestic money supply. 

Tangible fixed assets were also SRD 4.76 million 

higher at SRD 20.66 million, mainly because of the 

revaluation of fixed assets. Under the Central Bank 

of Suriname’s rules, such revaluations are permitted 

only once every three years. This revaluation has 

dispensed with the hidden reserves relating to 

property in the balance sheet. 

The items on the liabilities side of the balance sheet 

can be divided into three main groups: Amounts 

owed to third parties (specifically Amounts owed to 

clients), Provisions and Shareholders’ equity. 

Amounts owed to clients, which represent our most 

important source of funding, rose by SRD 106.89 

million, or 25.24%, to SRD 530.42 million. Savings, 

which include long-term investments, rose slightly 

more (29.11%) than Other debts, which include 

credit balances on checking accounts. This 

development reflects our policy of seeking to attract 

more long-term funding in order to maintain a 

healthy funding structure. This policy is underpinned 

by the current stable macro-economic 

environment, in which private individuals and 

businesses are increasingly prepared to invest 

money for longer periods. 

The item Amounts owed to credit institutions rose 

by SRD 7.35 million to reach SRD 22.07 million at 

the year-end. This item relates to the daily clearing of 

amounts owed to and by other banks in the interbank 

market and is simply the position on the last 

day of the year. 

Provisions rose by a total of SRD 3.09 million to 

SRD 7.23 million, primarily because of employeerelated 

liabilities. 

Shareholders’ equity rose by SRD 12.0 million, or 

56.55%, to reach SRD 33.24 million by the year-end. 

The main reasons for this were the transfer of 

SRD 8.11 million of net profit to the general reserve 

– which brought this to a total of SRD 23.58 million 

at the year-end – and the increase of SRD 3.90 

million in the revaluation reserve, which now totals 

SRD 9.59 million. The rise in shareholders’ equity 

has reinforced the bank’s solidity and has also had a 

positive effect on its business activities in that it is 

now able to consider applications for larger loans. 

Off-balance sheet items, such as guarantees 

provided and letters of credit opened, which have an 

impact on the bank’s solvency position because of 

the element of risk they contain, rose by SRD 19.09 

million to SRD 22.76 million in 2006. 

Consolidated results 

Once again, the consolidated results improved 

significantly, albeit at a lower rate in percentage 

terms than in the previous year. 

Operating result before tax 

(in thousands of SRD) 

22,500 

20,000 

17,500 

15,000 

12,500 

10,000 

7,500 

5,000 

2,500 

0 

6,783.1 

2,347.5 

8,579.5 

13,243.1 

19,948.4 

2002 2003 2004 2005 2006 

The bank earned a net profit before tax of SRD 19.95 

million in 2006. This increase of SRD 6.71 million, 

or 50.63%, on the profit in 2005 was well above the 

target set for the year of a real increase (i.e. adjusted 

for inflation) of at least 10%. The net profit after 

tax totalled SRD 12.77 million, compared with 

SRD 8.48 million in 2005. The rise in the profit is 

the result of income increasing by SRD 12.44 million, 

or 33.92%, to SRD 49.10 million and expenses 

rising by SRD 5.73 million, or 24.48%, to SRD 29.15 

million. 

Income 

As stated above, total operating income rose s 

ignificantly. This increase was attributable both to 

interest income and other (i.e. non-interest) income. 

The increase in the share of non-interest income 

from 21.3% to 24.5% of the total was a particularly 

important development. Our policy is to aim to 

increase this latter income to a structural level of 

around 35% of the total. It should, however be 

43

emphasised that some of this income is of a volatile 

nature and so will require careful and alert management. 

Interest income currently accounts for 75.5% 

of total income. We comfortably achieved our overall 

target of real growth in income of 15% - 20%. 

Interest income 

Net interest income rose in the year under review by 

SRD 8.22 million to SRD 37.06 million. This was the 

result of growth in the lending portfolio and the rise 

in international capital market interest rates. The 

reason why income from investments in Republic of 

Suriname treasury paper was lower than in 2005, 

despite an unchanged level of investment, was 

because of the annual interest rate on these investments 

being reduced from 12.5% to 10% during the 

year. 

Although the increasing competition had an impact 

on our margins, the growth in lending volumes 

meant we were nevertheless able to improve our 

profitability. The growth in lending volumes was 

accompanied by tighter credit and assets and 

liabilities management, specifically of our liquidity 

position. This meant that our net interest margin 

remained satisfactory, despite the slight fall referred 

to above. Thanks to the decision to upgrade the 

relevant management information system, our overall 

liquidity position could be closely monitored on 

a daily basis and managed profitably. Tighter 

management of our foreign-currency liquidity 

position also contributed to the improvement in this 

result. 

Non-interest income 

Fee and commission income and other income 

increased by SRD 1.58 million to SRD 9.35 million, 

primarily because of earnings from domestic payment 

services, treasury activities and lendingrelated 

income such as arrangement fees and 

guarantee commission. Our insurance activities also 

made a positive contribution to this increase in 

income. 

The result of financial transactions improved 

significantly in 2006, with an increase of SRD 2.64 

million, whereas the year 2005 had seen a decrease. 

The increase in 2006 was primarily the result of the 

appreciation of the EURO and USD vis a vis the 

Surinamese Dollar. The euro rose by 11.81% against 

our local currency in 2006, while the USD rose by 

only a modest 0.37%. In addition, the policy we 

adopted in 2005 of using a large investment bank to 

invest part of our foreign currencies in the 

international capital markets generated a satisfactory 

return. We will therefore be pursuing this 

policy more intensively in the future. 

Expenses 

Operating expenses rose by SRD 6.02 million, or 

27.74%, to SRD 27.71 million in 2006, with most of 

this increase being attributable to employee-related 

costs. The various provisions required were one 

of the reasons why this item rose by SRD 4.33 million, 

or 31.47%, to SRD 18.09 million. The staff 

provisions relate to provisions for pensioners’ rights, 

including medical provisions. 

Other operating expenses also rose considerably, 

with the increase in this case being by SRD 1.38 million, 

or 24.16%, to SRD 7.07 million. Although some 

of these higher expenses are of an incidental nature, 

such as the costs of the activities arranged to mark 

the bank’s seventieth anniversary, the majority is of a 

structural nature,including,for example,the costs of 

postage and security. 

The increase in operating expenses was higher than 

budgeted.We will therefore be seeking to redress this 

by improving our costs management and increasing 

our overall efficiency. 

A total of SRD 1.44 million was transferred to 

specific provisions for bad and doubtful debtors. 

This transfer, which was slightly lower than in 2005, 

is the result of the improved quality of the lending 

portfolio and the very prudent policies we apply 

when assessing credit quality. 

Ratios 

Solvency 

The most important solvency ratios are the capital 

ratio and the BIS ratio. The capital ratio, which is the 

ratio of tangible shareholders’ equity to total assets, 

is a standard solvency ratio, while the BIS ratio is 

more tailored to the banking sector. The BIS ratio 

relates shareholders’ equity to the sum of the various 

risk-weighted assets and is a better way of assessing 

the solvency of a bank. 

The capital ratio at the 2006 year-end was 5.48%, 

which represented an increase of 0.98 percentage 

points. Tangible shareholders’ equity as a percentage 

of Receivables from clients was 10.85%, compared to 

9.24% in 2005. The increase was attributable to the 

44

ise of around 57% in shareholders’ equity in 2006, 

which exceeded the increase in the lending portfolio. 

The bank’s BIS ratio at the year-end was 11.31%, 

compared with 10.01% at the end of 2005. As usual, 

we comfortably complied with the solvency 

standards set by the Central Bank of Suriname. 

These are in essence based on the Basle I Capital 

Accord, which specifies a minimum ratio of 8%. 

BIS ratio (%) 

14 

Return on equity (%) 

50 

45 

40 

35 

40.2 39.9 

30 

26.4 

25 

20 

15 

46.1 46.9 

12 

10 

9.74 

11.68 

10.19 

10.01 

11.31 

10 

5 

0 

2002 2003 2004 2005 2006 

8 

6 

4 

2 

0 

2002 

2003 

2004 

2005 

2006 

Profitability 

The most important indicators of our profitability 

are the RoE and RoA, which are discussed in detail 

in the ‘Business of the bank’ section of this report. 

Both these ratios improved thanks to the operating 

results achieved for the year 

The sharp rise in shareholders’ equity had as 

a consequence that the RoE improved only 

marginally, despite the significant increase in profit. 

The RoA rose by 3 percentage points thanks to more 

active assets and liabilities management, an 

improvement in the quality of our lending portfolio, 

the strong growth in other income and the 

reduction in the SRD cash reserve requirement. The 

ratio was also boosted by the increase to 9% in the 

percentage of the compulsory cash reserve 

permitted to be used for long-term housing loans on 

favourable terms. 

Return on assets (%) 

2.50 

2.25 

2.37 

2.00 

1.95 

1.75 

1.50 

1.69 

1.69 

1.25 

1.00 

1.01 

0.75 

0.50 

0.25 

0 

2002 

2003 

2004 

2005 

2006 

Our policy is designed to achieve further 

improvements in these ratios. 

45

Operations 

The most important operational or productivity 

ratio is the efficiency ratio. 

Efficiencyratio (%) 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

77 

2002 

64 

2003 

The efficiency ratio, which is the total expenses less 

provisions expressed as a percentage of total income, 

is a good measure of operating efficiency. The lower 

this ratio is, the more efficient the operations are. The 

downward trend in this ratio continued in the year 

under review. Thanks to the fact that the increase in 

income exceeded the increase in expenses, our ratio 

improved from 59% in 2005 to 56% in 2006. 

However, the sharper than expected rise in certain 

expense items meant we were unable to achieve our 

target of 55%. We will therefore be implementing 

various efficiency measures in 2007 in an effort to 

reduce this ratio to around 53% by the year-end. 

63 

2004 

59 

2005 

56 

2006 

and liabilities management, increasing our earning 

capacity and implementing various cost-saving 

measures. 

Hakrinbank share 

Our policy is to pay an attractive dividend 

representing one third of the net profit for the 

year. This policy also takes account of our 

solvency, profitability and growth objectives. More 

information on the Hakrinbank share and its 

performance over the years can be found below. The 

developments in the share price reflect the 

favourable development of our business over the 

years, with both profits and dividends per share on a 

rising trend. The price/earnings ratio indicates that 

Hakrinbank shares are a good investment. For the 

purposes of comparison, the previous years’ figures 

have been converted to reflect the exchange of 20 old 

shares of SRG 7.50 nominal value for each new 

share of SRD 0.15 nominal value that took place in 

2006. 

Development of share price (in SRD) 

150 

140 

130 

120 

110 

100 

90 

80 

70 

60 

61.0 

79.2 

106.0 

136.0 

124.0 

Our efforts to achieve further reductions in the 

efficiency ratio will focus on improving our assets 

50 

2002 2003 2004 2005 2006 

Key figures showing development of Hakrinbank share (in SRD) 

2006 2005 2004 2003 2002 

Price at year-end 136.00 124.00 106.00 79.20 61.00 

Net asset value at year-end 71.37 45.59 33.38 25.71 16.16 

Market capitalisation (x SRD 1,000) 63.335 57.746 49.364 36.883 23.673 

Net earnings per share 27.41 18.20 11.79 9.43 4.26 

Dividend per share 10.00 6.07 4.00 2.80 0.91 

Dividend yield (%) 7.4 4.9 3.8 3.5 3.5 

Price/Net asset value (%) 190.6 272.0 317.6 308.8 377.5 

Price/Earnings ratio at year-end 5.0 6.8 9.0 8.4 14.3 

46

Appropriation of profit for the 2006 financial year 

As the above figures show, the net earnings of 

SRD 27.41 per share were 51% higher than in 2005. 

The improved underlying result and the bank’s 

reasonable solvency position mean we are able to 

propose a cash dividend to the General Meeting of 

Shareholders that is 65% higher than in 2005. The 

proposed increase in the dividend demonstrates the 

importance we attach to generating value for our 

shareholders. The additional amount included to 

mark the bank’s seventieth anniversary means the 

proposed dividend is higher than the one third of 

net profit normally paid out. 

We propose appropriating the profit as follows: 

1. Payment of a cash dividend of SRD 10.00 per 

share of SRD 0.15 nominal value, which amounts 

to a dividend percentage of 6,666.67%. This 

includes the extra amount of SRD 1.00 per 

share paid to mark Hakrinbank’s seventieth 

anniversary. An amount of SRD 1.40 per share 

was distributed as an interim dividend in 

October 2006, which means a total amount of 

SRD 4.66 million being distributed for the year 

and a pay-out ratio of 36.48%. 

2. Transfer of the remaining profit of SRD 8.11 

million to the General Reserve. 

The proposed appropriation of profit will further 

reinforce the bank’s shareholders’ equity. This will 

increase the bank’s solidity and improve its potential 

for growth, while also ensuring we can comply with 

the Central Bank of Suriname’s requirement for 

investment programmes to be funded by shareholders’ 

equity. Improving our solvency is also 

important in anticipation of a possible tightening of 

the solvency requirements. 

Outlook for 2007 

We expect the favourable economic trends seen in 

recent years to continue in 2007. We are assuming a 

stable macro-economic environment, falling 

inflation, stable exchange rates and economic 

growth of around 6%. There will be substantial 

investments in various sectors of the economy, while 

the government’s financial position and the 

monetary reserve will both continue to improve. 

growth rates we have budgeted for the year are 

admittedly lower than in 2006 because of the falling 

inflation and the effect that the increasing 

competition in the market will have on our margins. 

We will therefore be seeking to introduce more 

innovative products and to diversify the range of 

financial services we offer as a means of improving 

our profitability. 

Our employees put in another excellent 

performance in 2006, our anniversary year, and this 

forms the basis of the impressive results achieved by 

our business activities. Productivity improved, as 

did the level of service our employees provide, and 

these factors both played a major part in boosting 

the already good image enjoyed by Hakrinbank. The 

hard work and efforts of all our employees helped 

our bank to establish various new records for 

growth and profitability in its seventieth anniversary 

year. We are very grateful to them for the commitment 

and loyalty they have demonstrated. 

We should also like to take this opportunity to thank 

all the members of the Supervisory Board for 

their active involvement in our activities and the 

tremendous efforts they made during the year. 

We are obviously also particularly grateful to our 

many and valued clients – both consumer and 

commercial – for their business and the trust and 

loyalty they have shown to Hakrinbank N.V. and its 

subsidiary, Nationale Trust- en Financierings 

Maatschappij. 


Executive Board Hakrinbank N.V. 

Jim D. Bousaid, Chief Executive Officer 

Hakrinbank will benefit from the external 

economic environment. We are expecting to achieve 

increased volumes of business, which will in turn 

boost the bank’s growth and profitability. The 

47

Employees at work in traditional dress on the day of the bank’s anniversary. 

48

AUDITOR’S REPORT 

To: the Board of Supervisory Directors of 

Hakrinbank N.V. 

We have audited the accompanying financial statements 

of Hakrinbank N.V. (“the Company”) in 

Paramaribo which comprise the consolidated 

balance sheet at December 31, 2006, the consolidated 

profit and loss account for the year then ended, the 

company balance sheet at December 31, 2006 and 

the company profit and loss account for the year 

then ended and the notes to these financial 

statements. 

Management’s responsibility 

Management of the company is responsible for the 

preparation and fair presentation of the financial 

statements, in accordance with generally accepted 

accounting principles. Management’s responsibility 

includes: designing, implementing and maintaining 

internal control relevant to the preparation and fair 

presentation of the financial statements that are 

free from material misstatement, whether due to 

fraud or error; selecting and applying appropriate 

accounting policies; and making accounting 

estimates that are reasonable in the circumstances. 

Auditor’s responsibility 

Our responsibility is to express an opinion on the 

financial statements based on our audit. We 

conducted our audit in accordance with generally 

accepted Standards on Auditing. These standards 

require that we comply with ethical requirements 

and plan and perform the audit to obtain reasonable 

assurance whether the financial statements are free 

from material misstatement. 

statements in order to design audit procedures 

that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the 

effectiveness of the company’s internal control. An 

audit also includes evaluating the appropriateness of 

accounting policies used and the reasonableness of 

accounting estimates made by management, as well 

as evaluating the overall presentation of the financial 

statements. 

We believe that the audit evidence we have obtained 

is sufficient and appropriate to provide a basis for 

our audit opinion. 

Opinion 

In our opinion, the financial statements referred to 

above give a true and fair view of the financial 

position of Hakrinbank N.V. at December 31, 2006, 

and of its result for the year then ended in 

accordance with generally accepted accounting 

principles. 

Paramaribo, April 10, 2007 

Hiralal Lutchman & Co 

An independent correspondent firm of Deloitte Touche 

Tohmatsu 

An audit involves performing procedures to obtain 

audit evidence about the amounts and disclosures in 

the financial statements. The procedures selected 

depend on the auditor’s judgment, including the 

assessment of the risks of material misstatement of 

the financial statements, whether due to fraud or 

error. In making those risk assessments, the auditor 

considers internal control relevant to the company’s 

preparation and fair presentation of the financial 

49

FINANCIAL STATEMENTS 2006 


comprising: 

- Consolidated balance sheet 

- Consolidated profit and loss account 

- Company balance sheet 

- Company profit and loss account 

- Notes 

51

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2006 

AFTER APPROPRIATION OF PROFIT (in SRD) 

2006 2005 

ASSETS 

Cash and cash equivalents 72,055,445 64,390,355 

Treasury paper 32,103,968 32,850,327 

Receivables from credit institutions 172,692,670 126,666,969 

Receivables from clients 306,449,015 229,730,032 

Securities 95 95 

Participating interest 168,000 168,000 

Tangible fixed assets 20,656,739 15,895,748 

Prepayments and accrued income 2,337,078 1,977,784 

606,463,010 471,679,310 

LIABILITIES 

Amounts owed to credit institutions 22,072,559 14,725,404 

Amounts owed to clients: 

- Savings 239,200,868 185,265,134 

- Other debts 291,222,248 238,272,824 

Other liabilities 10,959,113 6,080,054 

Accruals and deferred income 2,537,188 1,961,856 

Provisions 7,233,350 4,143,349 

573,225,326 450,448,621 

Authorised share capital 120,000 

Issued and paid-in capital 69,854 69,854 

Share premium reserve 916 916 

Revaluation reserve 9,590,657 5,693,677 

General reserve 23,576,257 15,466,242 

33,237,684 21,230,689 

606,463,010 471,679,310 

Liabilities relating to indemnities and guarantees 19,234,844 2,574,201 

Liabilities relating to irrevocable documentary credits 3,527,142 1,100,601 


22,761,986 3,674,802 


Executive Board 

A.K.R. Shyamnarain - Chairman J.D. Bousaid - CEO 

R.A. Mac Donald - Deputy Chairman Ms M.M. Tjon A Ten - COO 

H.B. Abrahams 


H.R. Ramdhani 



52

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR 2006 (in SRD) 

2006 2005 

OPERATING INCOME 

Interest margin 37,061,187 28,842,891 

Fee and commission income 9,326,575 7,758,114 

Result of financial transactions 2,684,064 48,781 

Other operating income 24,280 9,720 

49,096,106 36,659,506 

OPERATING EXPENSES 

Employees 18,090,462 13,760,660 

Depreciation 2,546,749 2,234,629 

Other operating expenses 7,071,223 5,695,216 

Provision for credit risks 1,439,274 1,725,902 

29,147,708 23,416,407 

PROFIT BEFORE TAX 19,948,398 13,243,099 

Corporate income tax 7,181,423 4,767,516 

PROFIT AFTER TAX 12,766,975 8,475,583 






H.B. Abrahams 


H.R. Ramdhani 



53

COMPANY BALANCE SHEET AS AT 31 DECEMBER 2006 

AFTER APPROPRIATION OF PROFIT (in SRD) 

2006 2005 

ASSETS 






Participating interest 71,645,235 57,371,679 

Tangible fixed assets 20,567,778 15,849,233 


605,384,254 470,028,422 

LIABILITIES 


Amounts owed to clients: 

- Savings 238,852,238 184,867,130 

- Other debts 291,018,006 238,047,670 



Provisions 7,233,350 4,143,349 

572,146,570 448,797,733 

Authorised share capital 120,000 

Issued and paid-in capital 69,854 69,854 

Share premium reserve 916 916 

Revaluation reserve 9,590,657 5,693,677 

General reserve 23,576,257 15,466,242 

33,237,684 21,230,689 

605,384,254 470,028,422 




22,761,986 3,674,802 





H.B. Abrahams 


H.R. Ramdhani 



54

COMPANY PROFIT AND LOSS ACCOUNT FOR 2006 (in SRD) 

2006 2005 

Operating income 43,022,991 32,720,303 

Operating expenses 25,179,335 21,286,370 

Profit before tax 17,843,656 11,433,933 


PROFIT AFTER TAX 12,766,975 8,475,583 






H.B. Abrahams 


H.R. Ramdhani 



55

NOTES TO THE 2006 CONSOLIDATED FINANCIAL STATEMENTS 

General 

Unless stated otherwise, assets and liabilities are shown at face value. 

Receivables and debts in foreign currencies are converted at the Central Bank of Suriname’s buying rate for 

bank notes on the balance sheet date (2006: USD 1 = SRD 2.71 and EUR 1 = SRD 3.559 / 

2005: USD 1 = SRD 2.70 and EUR 1 = SRD 3.138). 

Receivables from clients are shown net of specific provisions for credit risks. The movement in these 

provisions is taken to the profit and loss account for the year. 

The corporate income tax shown in the profit and loss account is calculated on the commercial profit for the 

year (less the result from participating interests). Any difference between this figure and the actual tax due is 

taken to the provision for deferred taxation liabilities. 

Properties are shown at replacement value, with buildings being depreciated on a straight-line basis over their 

useful economic life. Changes in value are taken to the revaluation reserve, less any tax due on the changes. 

The revaluation reserve is shown as a separate element of shareholders’ equity, less any deferred taxation. 

Deferred taxation is calculated on the present value, assuming a tax rate of 36%. 

The consolidated financial statements contain the figures of the bank and its wholly owned subsidiary, 

Nationale Trust- en Financierings Maatschappij N.V. 

Unless stated otherwise, the following notes refer to the consolidated figures for the year. All amounts are in 

Surinamese dollars. 

56

BALANCE SHEET AS AT 31 DECEMBER 2006 

2006 2005 

ASSETS 


This item comprises cash, credit balances available on 

demand from the Central Bank of Suriname and the 

cash reserve of SRD 42,668,099 (2005: SRD 49,648,637) 

held in SRD at the Central Bank of Suriname and not freely 

available to Hakrinbank N.V. 


This item comprises investments in treasury promissory notes 

of the Republic of Suriname. These notes have maturities of 

6 months and pay interest of 10% per annum (2005: 12.5%). 


This item comprises receivables owed by domestic and 

foreign credit institutions, together with the foreign currency 

cash reserve of SRD 88,567,137 (2005: SRD 68,050,581) 

required by the Central Bank of Suriname, held at foreign banks 

and not freely available to Hakrinbank N.V. 


This item comprises receivables owed as a result of lending, 

net of any provisions deemed necessary. 


This item comprises shares in Nationale Ontwikkelingsbank N.V. 

These shares are shown at cost. 

Participating interest (in company balance sheet) 71,645,235 57,371,679 

This item comprises a participating interest of 100% 

in the capital of SRD 5,000 of Nationale Trust- en Financierings 

Maatschappij N.V. This is shown at net asset value, while 

the receivable is shown at face value. It also includes 

the participating interest in the capital of BNETS N.V. of 

SRD 168,000, which is shown at cost. 

57

2006 2005 

Tangible fixed assets 

Properties: 

Balance sheet as at 1 January 11,770,562 10,840,708 

Investments 326,003 1,444,688 

Adjustments (2,468) – 

Revaluations 10,408,413 – 

Depreciation (5,979,342) (514,834) 

Balance sheet as at 31 December 16,523,168 11,770,562 

Replacement value 31,096,153 20,364,205 

Cumulative depreciation 14,572,985 8,593,643 

16,523,168 11,770,562 

Machinery, equipment and vehicles: 


Investments 2,003,822 2,291,548 

Adjustments – (91,596) 

Depreciation (1,995,437) (1,719,795) 


Cost 11,764,202 9,760,380 

Cumulative depreciation 7,630,631 5,635,194 

4,133,571 4,125,186 

Total 20,656,739 15,895,748 


This item comprises investments in progress, prepayments of 

expenses attributable to future years and amounts earned, but not 

yet collected. 

58

2006 2005 

LIABILITIES 


This item comprises amounts owed to banks. 

Amounts owed to clients (Savings) 

This item comprises: 

Deposits and savings certificates 13,868,057 13,196,019 

Balances on savings accounts and in savings books 225,332,811 172,069,115 

239,200,868 185,265,134 

Amounts owed to clients (Other debts) 291,222,248 238,272,824 

This item comprises liabilities relating to the bank’s 

operating activities that are not included in savings or 

amounts owed to credit institutions. 


This item comprises liabilities not able to be included 

under any other heading. 


This item comprises prepayments received of income 

attributable to future years and amounts still to be paid 

in respect of expenses attributable to previous years. 

Provisions 

This item comprises: 

Deferred taxation liabilities 1,760,562 811,034 

Provision for pensions 1,282,407 1,125,330 

Provision for medical expenses and bonuses/extras for pensioners 3,405,506 1,619,610 

Maintenance fund 649,375 452,375 

Provision for insurance excess (‘own risk’) 135,500 135,000 

7,233,350 4,143,349 

Issued and paid-in capital 

The shares have a nominal value of SRD 0.15. 

Balance sheet as at 1 January 69,854 69,854 

Balance sheet as at 31 December 69,854 69,854 

Share premium reserve 

Balance sheet as at 1 January 916 916 

Balance sheet as at 31 December 916 916 

59

2006 2005 

Revaluation reserve 


Added as a result of revaluations of tangible fixed assets 

less deferred taxation liabilities 3,896,980 (56,189) 


General reserve 


Addition of net profit 8,110,015 5,743,810 



This item comprises bank guarantees issued on behalf of 

third parties. 


This item comprises irrevocable and confirmed documentary 

credits issued. 

60

PROFIT AND LOSS ACCOUNT FOR 2006 

2006 2005 

Interest margin 37,061,187 28,842,891 

This item comprises the positive difference between interest 

income from lending, investments and other assets on the one 

hand and interest expense on funds borrowed by or entrusted to 

the bank on the other hand. 

Fee and commission income 9,326,575 7,758,114 

This item comprises fees and commission received in return for 

services provided. 

Result of financial transactions 2,684,064 48,781 

This item comprises the results of currency transactions, 

currency translation differences and movements in the 

value of securities. 

Other operating income 24,280 9,720 

This item comprises income not relating to the bank’s 

core activities. 

Employees 18,090,462 13,760,660 

This item comprises wages, salaries, bonuses, social security 

expenses and other staff provisions. 

Depreciation 2,546,749 2,234,629 

This item comprises the depreciation on tangible fixed assets. 

Other operating expenses 7,071,223 5,695,216 

This item comprises accommodation, office and computer 

expenses and the like. 

Provision for credit risks 1,439,274 1,725,902 

This item comprises the transfer to specific provisions 

in respect of lending activities. 


This item comprises the corporate income tax calculated on the 

gross profit shown in the profit and loss account. 

Appropriation of profit 

Cash dividend 4,656,960 2,731,773 

Transfer to the general reserve 8,110,015 5,743,810 

12,766,975 8,475,583 

61

OTHER INFORMATION 

Curricula vitae and details of ancillary positions of members of the 

Supervisory Board and Executive Board of Hakrinbank 


A.K.R. (Roy) Shyamnarain 

Chairman 

Age: 56 

Mr Shyamnarain trained as a tax lawyer, with supplementary training in general 

law at the University of Leiden. He is a partner in Tjong A Hung Tax Advisers and 

has also worked for the tax authorities in the Netherlands and as an adviser to the 

Minister of Finance in Suriname. He is also chairman of the Foreign Currency 

Control Board and a member of the IFONS Supervisory Committee. 

R.A. (Richard) Mac Donald 

Deputy Chairman 

Age: 64 

Mr Mac Donald graduated in Food Sciences from the Higher Agricultural 

Institute in Wageningen and is currently director of the Medical Sciences Institute 

of the University of Suriname. He has extensive experience in business and was for 

many years managing director of Varossieau N.V. He is a member of the State 

Council of Suriname and the Supervisory Board of Jetzza International N.V. 

M.M. (Milton) Sandvliet 

Member 

Age: 36 

Mr Sandvliet graduated in General Economics from Anton de Kom University and 

has a Master’s degree in International Business from the University of the West 

Indies. He is Head of Economic and Administrative Services at the Civil Aviation 

Safety Authority of Suriname, has been a director of STPO and has been a senior 

civil servant focusing on international economic relations at the Ministry of Trade 

and Industry. 

62

Mrs G. (Ghamie) Lie Sem-Nawikromo 

Member 

Age: 36 

Mrs Lie Sem-Nawikromo’s educational background is in government accounting, 

with additional training in financial management and marketing. She is a deputy 

head at the Ministry of Social Affairs (AMZ), has worked in various government 

accounting positions and has been head of the General Retirement Provision 

Fund. 

H.B. (Enrico) Abrahams 

Member 

Age: 64 

Mr Abrahams graduated in General Economics from the Erasmus University in 

Rotterdam in 1969. He is the Managing Director of the Government Debt 

Management Office and has also been Head of Economic and Social Planning at 

Suriname’s National Planning Office and managing director of Melkcentrale N.V. 

H.R. (Harold) Ramdhani 

Member 

Age: 62 

Mr Ramdhani has a Master’s degree in Business and is the director/owner of 

RAMSHOLDING. He is a member of the State Council of Suriname, chairman 

and deputy director of Stichting Experimentele Landbouwbedrijven Prins 

Bernhard Polder (seed crops) and Baboenhol and Tibiti (live stock), as well as 

being a member of the National Air Transport Negotiating and Advisory Board. 

J. J.F. (Johan) Tjang-A-Sjin 

Member 

Age: 67 

Mr Tjang-A-Sjin graduated in Business Economics from the Erasmus University 

in Rotterdam in 1971. He is a director of N.V. Comfish and for many years was also 

a member of the executive board of Fernandes Concern Beheer N.V. He is deputy 

chairman of N.V. Self Reliance Assurantie Maatschappij, a member of the IFONS 

Supervisory Committee and a business development consultant. 

63


J.D. (Jim) Bousaid 

Chief Executive Officer 

Age: 50 

Jim Bousaid studied General Economics at the Erasmus University in Rotterdam, 

where he specialised in Money, Credit and Banking and also in Public Finances. 

Since joining Hakrinbank in 1984 he has worked in various commercial and 

financial management positions and was appointed CEO on 1 August 2002. From 

March 2005 – March 2007 Mr Bousaid was chairman of the Surinamese Bankers 

Association and is also on the Board of Directors of the Caribbean Association of 

Indigenous Banks. 

Ms M.M. (Mariette) Tjon A Ten 

Chief Operations Officer 

Age: 54 

Mariette Tjon A Ten graduated in Law from the University of Leiden in 1977. She 

joined Hakrinbank in May 1981 and has since worked in various positions for the 

bank and its subsidiary NTFM. She was appointed to the Executive Board on 

1 August 2002. Since March 2007 she has been the secretary of the Surinamese 

Bankers Association. 

H. S.K.G. (Harold) Liu Hung Chung 

Assistant Managing Director Operations 

Age: 58 

Harold Liu Hung Chung has an educational background in accounting and ICT. 

He has worked for Hakrinbank since 1969 in a wide range of positions. He was 

appointed to the position of Assistant Managing Director Operations on 1 August 

2001. 

G.M. (Gerard) Raghoenathsingh 

Assistant Managing Director Commercial 

Age: 43 

Gerard Raghoenathsingh graduated in Business Economics and also has a Master’s 

degree in Business Administration from the Maastricht School of Management, 

where he specialised in Corporate Strategy and Economic Policy. He has worked 

for Hakrinbank since 1991 in various different roles. He was appointed to the 

position of Assistant Managing Director Commercial on 1 August 2001. Since June 

2006 he has been secretary of the Surinamese Association for Securities Trading. 

64

Adresses 


HEAD OFFICE 

Dr. Sophie Redmondstraat 11-13 

Tel.: (597) 477722 

Fax: (597) 472066 – (597) 475073 

P.O. Box 1813 Paramaribo 

E-mail: clientenservice@hakrinbank.com 

Website: www.hakrinbank.com 

Swift code: HAKRSRPA 

BRANCHES 

Nieuwe Haven 

Havencomplex 

Tel.: (597) 401836 

Tel./Fax: (597) 402466 

Flora 

Mr. Jagernath Lachmonstraat 164 

Tel.: (597) 497875 

Fax: (597) 499357 

Tourtonne 

Hk.Anamoestraat/Plutostraat 

Tel.: (597) 451977 

Fax: (597) 551362 

Latour 

Hk. Indira Gandhiweg/Latourweg 10 

Tel.: (597) 481802 

Tel./Fax: (597) 481856 

Tamanredjo 

Hadji Iding Soemitaweg 471 

Tel.: (597) 0356446 

Fax: (597) 0356447 

Nickerie 

G.G.Maynardstraat 49 

Tel.: (597) 0231176, 0231711, 0231750 

Fax: (597) 0231931 

SUBSIDIARY 

Nationale Trust- en Financierings Maatschappij N.V. (NTFM) 

Dr. Sophie Redmondstraat 11-13 

Tel.: (597) 410000 

Fax: (597) 479874 

E-mail: ntfm@hakrinbank.com 

65

Appendix I 

SURINAME: Key macro-economic data 

2006*) 2005 2004 2003 2002 

Production 

Nominal GDP market prices (x SRD millions) 5,142.5 4,675.2 3,908.3 3,178.4 2,432.4 

Real growth in GDP (%) 5.8 5.5 8.1 6.0 2.6 

Oil production (millions of barrels) 4.8 4.4 4.1 4.3 4.5 

Alumina (1000 m. tons) 2,133 1,940 2,014 2,005 1,903 

Gold (kg) 21,960 21,700 21,586 11,710.9 n.a. 

Rice production (m. tons) 198,162 163,955 174,490 193,685 157,105 

Inflation (%) 

Consumer price index (average) 11.3 9.5 9.1 23.0 15.5 

Consumer price index (year-end) 4.7 15.8 9.1 13.1 28.4 

Balance of payments (cash) 

Export of goods (x USD millions) 931.1 677.7 633.3 487.3 369.3 

Import of goods (x USD millions) 790.4 768.9 592.8 448.1 321.9 

Current account (x USD millions) 94.3 (257.2) (138.4) (148.2) (131.0) 

Balance of non-monetary sectors (x USD millions) 86.7 16.9 36.9 (126.2) (19.8) 

Monetary reserve (x USD millions) 258.9 162.6 143.0 107.0 104.5 

Import coverage (months) 2.8 1.7 1.5 2.0 2.6 

Exchange rate 

Average official exchange rate (USD) 2.78 2.77 2.76 2.58 2.30 

Average free exchange rate (USD) 2.80 2.80 2.72 2.73 2.64 

Government debt 

Domestic government debt (x SRD millions) 650.8 695.7 539.2 410.4 294.5 

Foreign government debt (x USD millions) 388.6 387.2 382.8 394.3 334.0 

Monetary and financial sector 

M1 money supply (x SRD millions) 941.3 772.9 699.5 547.1 538.4 

M2 money supply (x SRD millions) 1,082.0 879.8 787.8 614.4 591.1 

Domestic liquidity (%) 21.1 18.8 20.1 19.3 24.3 

Weighted average nominal deposit rate (%) 6,6 7.8 8.1 8.5 8.4 

Weighted average nominal lending rate (%) 15,5 17.2 19.1 21.0 21.3 

Government finances 

Receipts on ordinary account (x SRD millions) 1,523.0 1,286.5 1,087.8 858.4 628.1 

Expenditure on ordinary account (x SRD millions) 1,342.8 1,247.6 1,160.0 835.5 788.8 

Financing surplus/(deficit) (mln. SRD) 49.2 -98.2 -72.2 2.9 -160.7 

Financing surplus/(deficit) (% of GDP) 1.0 -2.0 -1.9 -0.1 -6.7 

Sources: National Planning Office of Suriname, Central Bank of Suriname, Ministry of Finance, Ministry of Agriculture, Animal Husbandry, Government Debt 

Management Office, General Office of Statitistics, International Monetary Fund and own estimates. 

*) Provisional figures 

66

Ontwerp/layout: i.d. graphics - Hakrinbank

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?