Annual Results 2004-05: Exim Bank PAT up thirteen per cent at Rs.258 crore

The Export-Import Bank of India (Exim Bank) Chairman and Managing Director, T.C. Venkat Subramaniam, has announced the bank's results for the year 2004-05.

With respect to its financial performance, the bank said that its profit after tax have amounted to Rs258 crore, as compared to Rs229 crore in the previous year, marking a growth of thirteen per cent. The bank has also said that it will pay Rs65.44 crore by way of dividend to the government, compared to Rs47 crore for the previous year. This amounts to a pay out of 25 per cent of the post-tax profit of the bank for the year 2004-05. The bank has also stated that its capital adequacy ratio stands at 21.58 per cent.

With regard to its business performance, loan sanctions for the year aggregated Rs15,853 crore, as compared to Rs.9,266 crore in the previous year, marking an increase of 71 per cent over the previous year. Disbursements have aggregated Rs.11,435 crore during 2004-05, as compared to Rs.6,957 crore during the previous year, marking an increase of 64 per cent over the previous year. Loan assets have also increased by 24 per cent, moving upwards to Rs.13,410 crore as on March 31, 2005, as compared to Rs.10,775 crore as of March 31, 2004. The net NPAs/Net Loan Assets stood at 0.85 per cent, showing an improvement from 1.26 per cent in the previous year. The bank said that its cumulative provisions cover over 82 per cent of its gross NPAs.

During the year, the bank has extended sixteen lines of credit (LOC) amounting to US$423 million. As of March 31, 2005, the bank has 44 Lines of Credit (LOC), with credit commitments aggregating US$ 953mn, available for utilization. The LOCs, in all, cover 68 countries in Asia, Africa, CIS and Latin America. The LOC facility seeks to finance export of goods, services and projects from India, in particular from the SME sector.

During the year, 570 export contracts worth Rs7,945 crore, covering 64 countries, were secured by 198 Indian exporters with the bank's support, as against 164 contracts, worth Rs7,543 crore covering 48 countries, which were secured by 96 Indian exporters in the previous year. The bank also sanctioned and issued guarantees aggregating Rs1,589 crore and Rs1660 crore respectively.

With respect to its treasury operations the bank said that its market borrowings as on March 31, 2005 constituted 80 per cent of the total resources. During the year, the Government of India also subscribed to the share capital of the Bank to the tune of Rs200 crore. The bank's paid-up capital has accordingly increased to Rs850 crore as on March 31, 2005.

The Bank has also raised Rs955 crore by way of bonds at benchmark rates for tenors varying from one to three years, and Rs525 crore by way of loans from banks. The bank has also raised commercial paper of a face value of Rs1705 crore at the finest rates for one month to one-year tenors.

The Bank's debt instruments continue to enjoy the highest rating from CRISIL and ICRA, viz. "AAA" and "LAAA" for bonds and "P1+" and "A1+" for short-term instruments. As on March 31, 2005, outstanding rupee borrowings, including bonds, loans and commercial paper amount to Rs9,318 crore.

The ratings from international credit rating agencies for the bank's overseas bond issue are at par with the sovereign rating. The ratings from the various agencies stand respectively as follows- Moodys (Baa3), Fitch (BB+) and S&P (BB+). The bank has also raised US$250 million by way of its debut Eurodollar bond issue and US$ 50 million equivalent by way of Euroyen Floating Rate Notes (FRN) issue, the first of its kind in the recent past by an Indian issuer. Short term US$ resources, amounting to US$ 200 million, were raised by the bank for financing pre-cum-post shipment credit requirements of export-oriented units. The outstanding foreign currency resources were in the order of US$ 1.4 billion.

By way of new initiatives the bank has extended loans to three companies in the entertainment industry, engaged in film production. The bank says that all the three Hindi films financed by the bank, which were released during the year, proved to be box office hits, both in India and abroad, earning foreign exchange in excess of US$ 8 million, excluding revenues from the sale of DVD/VCD/Cable rights in the overseas market.

With its emphasis on Small and Medium Enterprise (SME) exporters, the bank has taken the initiative to set up an SME group to address this sector in a focused manner. The primary objective of the group is to develop a portfolio of externally oriented SMEs and to ensure smooth credit delivery to these clients.

The bank's support to the SME sector included term loans for setting up of new projects, modernization, expansion and equipment finance and export credit by way of pre-shipment/post-shipment credit including working capital term loans. During the year, SMEs covering a wide range of sectors such as textiles, readymade garments, chemicals, information technology, pharmaceuticals, auto components and engineering goods have been extended credit by the bank. During the year, the bank sanctioned credit facilities amounting to Rs133.50 crore to export oriented SMEs under the new initiative.

A MoU was also signed to evidence the co-operation between the Bank and International Trade Centre (ITC), Geneva, to implement the Enterprise Management Development Services programme of ITC for supporting Small and Medium Enterprises in their globalisation efforts.

As part of its overseas investment finance programme the Bank has a comprehensive programme in terms of equity finance, loans, guarantees and advisory services to support Indian outward investment. In select cases, the Bank takes an equity position alongwith the Indian promoter. Overseas investments financed by Exim Bank during the year include acquisitions of a stainless steel plant in Indonesia; a BPO services company in the USA; a pharmaceuticals company in Denmark; an engineering company manufacturing transformers, headquartered in Belgium, with factories in five countries; an auto ancillaries unit in the USA, with both loan and equity support.

Finance was also provided for setting up a consumer durables dealer network in the UK as also funded/ non-funded assistance by way of working capital for joint ventures in the pharmaceuticals sector in Brazil, USA and Mexico. The bank's support to the agri-sector included term finance for the food processing, floriculture, fruits and vegetables and contract farming sectors. Pre-shipment/post-shipment credit was also extended to finance export of a wide range of agro-based products. To highlight the untapped potential of this sector, the bank brought out an Occasional Paper on 'Fresh Fruits, Vegetables and Dairy Products: India's Potential for Exports to Other Asian Countries'.

An export credit line of US$15 million extended to the Government of Senegal focuses on export of agricultural machinery and equipment and food processing technology from India for the development of rural SMEs in Senegal. The Exim Bank has taken up equity in the Development Bank of Zambia, a Development Finance Institution which has been restructured and assigned to play a pivotal role in promoting Zambia's economic development, and in the West African Development Bank (BOAD), headquartered in Lome, capital of Togo in West Africa, which operates in eight French speaking African countries. Exim Bank of India is the first non-regional and non-European institution to be admitted as a shareholder of BOAD.

The Bank has been conferred with the 2005 'Trade Development Award,' by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP). The Development Award recognises and honours ADFIAP member institutions, which have assisted projects that have created a developmental impact in their respective countries. Awards are given to member institutions, which have implemented or enhanced outstanding and innovative development projects during the year.

The award is in recognition of the bank's Export Marketing Services programme that proactively creates the enabling environment for Indian firms to explore newer geographies leveraging upon the bank's extensive institutional and trade linkages, its reach, access and credibility to serve as the marketing arm of select Indian companies effectively utilising the bank's overseas offices. The bank had been conferred with this award in the years 2002 and 2004 as well.

The ADFIAP Awards Board, this year, has also bestowed upon the Chairman and Managing Director of Exim Bank, a special 'Plaque of Merit' in recognition of his leadership role in moulding the bank into a dynamic and innovative organization, contributing to India's trade with the world.