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GDB And EDB Report Gains In First Half Of FY 2004
GDBs income and loan portfolio increase to $98 million, $3.4 billion respectively; EDB approves 504 loans valued at $60.8 million
By LUIS A. RAMOS
March 4, 2004
The Government Development Bank (GDB) and the Economic Development Bank (EDB) both reported positive performances in the first half of fiscal year (FY) 2004, ending June 30.
The GDB, which serves as the governments principal fiscal agent and promotes economic development through alliances with the private sector, reported that its net income in the first half of FY 2004 was $98 million. Its loan portfolio was $3.4 billion in the first half of FY 2004, up from $1.9 billion during the same period the previous year. Investments grew by $62 million to $3.9 billion.
The banks assets as of Dec. 31, 2003 totaled $7.8 billion, reflecting an increase of $1.7 billion compared with the same period in FY 2003.
During the first two quarters of FY 2004, the GDB originated $6.6 billion in bond issues for the central government and public corporations, bringing the projected total for 2004 to $10 billion. Of the bond issues in the first two quarters, $3.9 billion was considered a new injection of capital supporting public investments. Placement of the new bond issues saved the government $225 million during the current fiscal year.
"We recently placed a $663 million bond issue in the U.S. for the Housing Financing Authority, which turned out to be the largest transaction of its kind for an entity like ours. The transaction will allow the rehabilitation of 8,250 housing units in 44 public housing complexes around the island, generating 10,000 direct and indirect jobs," said GDB President Antonio Faria.
In the tourism arena, so far in FY 2004, the GDB has approved $105 million through the Tourism Development Fund, providing a $296 million line of credit for the forthcoming convention center in Isla Grande.
The GDB also approved over $135 million in financing to the private sector, including $27 million for the San Geronimo Caribe project, $7.9 million for Mova Pharmaceutical, $7.3 million for the Rincon Beach Resort, and $94 million for the Vanderbilt and La Concha hotels in San Juan.
Afica financing totaling $111 million facilitated other private-sector projects like Galeria Towers ($52 million), the Doral Financial Center ($7.6 million), Polytechnic University ($34.3 million), and Serralles ($16.8 million), among others.
Meanwhile, the EDB, which primarily focuses on small and midsize businesses in its efforts to promote economic development, reported approving 504 loans amounting to $60.8 million in the first half of FY 2004. That is 178 loans and $5 million more than were approved in the same period the previous year.
In the first half of FY 2004, the EDB closed on 366 loans valued at $34 million, compared with 296 loans valued at $23 million in the same period in FY 2003. Approved loans are loans qualified by credit committees but which do not become binding until closed, or when all the papers have been signed.
The EDBs loan portfolio grew from $130 million to $163 million in the first half of FY 2004. Of those loans, $47 million went to the agriculture sector (an increase of 16%), $42 million to commerce (up 49%), $25 million to manufacturing (up 38%), and $19 million to tourism (up 116%).
The loan delinquency rate fell to 18% in the first two quarters of FY 2004 from 31% in FY 2003, a record improvement of 41%. Collections on delinquent loans improved by 313% in the first half of FY 2004, allowing the EDB to recover $4.5 million, compared with the $1.4 million collected in the equivalent period the year before.
In the first two quarters of 2004, 936 deposits represented 10% of the investment deposits at the EDB. Conventional deposits, now representing the remaining 90% of deposits, reflect an increase of 52% from FY 2003.
"These results reflect a combination of our efforts to attract participation loans in conjunction with the private banking sector, maintain loan-quality control, and sustain tangible collection activities," said EDB President Francisco Rodriguez.
Government Development Bank
Loan Portfolio (79% Increase)
First Half of FY 2003: $1.9 billion
First Half of FY 2004: $3.4 billion
Source: Government Development Bank for Puerto Rico
Economic Development Bank
Loan Portfolio (25% Increase)
First Half of FY 2003: $130 million
First Half of FY 2004: $163 million
Source: Economic Development Bank for Puerto Rico
This Caribbean Business article appears courtesy of Casiano Communications.