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Managing Directors’ Report
report from the Managing directoR
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2010. ”
The National Export-Import Bank has long been recognized as playing a critical role in facilitating the growth and development of the export and productive sectors. With a solid foundation built on excellent service and competitive financial offerings, for over 24 years, the organization is poised to have even greater impact.
At the start of the financial year 2011, it was evident that it would not be ‘business as usual’. With the advent of the Jamaica Debt Exchange (JDX) which signalled the lowering of interest rates coupled with the charge of the Government to grow the economy and facilitate the development of a strong cadre of SME’s who could compete both locally and internationally, the Bank took on the challenge of repositioning itself despite the challenges in the economic environment.
Under the mantle of new leadership the Bank revisited its Vision and Mission Statements, bringing into more direct focus, its mandate “to facilitate growth through increased exports and sustained job creation by providing competitively-priced trade financing solutions to the productive sectors of the economy”. Underpinned by the solid foundation laid by previous Managing Directors, the Bank formulated its Strategic Initiatives for a new three-year period 2011 - 2013 with expanded vision, innovation and commitment to respond to the needs of its target market.
These strategic initiatives centered around the prime objective of facilitating improved national export performance and addressed, inter alia, growth in loan utilization; leadership development; the enhancement of customer relations and sales through a comprehensive and sustained marketing and advertising campaign; the implementation of a new Information Technology strategy to support the organization’s goals; the review and implementation of internal processes to generate greater levels of productivity; prudent governance, compliance and risk management and the promotion of the Bank as a customer focused, strong and profitable financial institution.
These have borne good dividends, as the year 2011 was characterized by the Bank’s achievement of its key performance indicators viz: the sustained viability of the organization, strong shareholder value, increased loan utilization and value of exports from our customers while maintaining a bad debt portfolio of under 2%, and a cadre of knowledgeable, professional staff to ensure continued good customer service delivery.
FINANCIAL HIGHLIGHTS
The Bank achieved loan utilization of J$6 billion at financial year end 2011 which reflected an increase of approximately 9% over the J$5.5 billion achieved the previous year 2010 while many leading financial institutions reported reduced loan demand.
Interest income from loans reported at J$444.8 million represented approximately 85% of the Bank’s revenue recorded at J$524.8 million. Net interest income from loans amounted to J$192.3 million and contributed 64.6% to operating profit of J$297.6 million. Due to the relative stability of the US dollar, operating profit was not buoyed, as in the previous year 2010, by foreign exchange gains. This coupled with increases in administrative expenses and extraordinary adjustments required under International Accounting Standards resulted in a modest profit of J$7.5 million at year end 2011. Shareholder’s Equity remained strong, and was reported at J$1.9 billion.
Secrets to Business Success:
A Conversation with Denis O’Brien
left to right Chairman Butch Hendrickson, Lisa Bell, Managing Director, Denis O’brien, Chairman, Digicel Group below Hon. Audley Shaw, Minister of Finance & the Public Service
In aligning its strategy with the Government’s objective to make funds available to the productive sector at reduced rates of interest, the Bank secured low cost funds to meet the expanded demands of its customers. An amount of US$6 million, accessed from the PetroCaribe Fund was specifically earmarked for the development of small and medium sized businesses with export potential and/or which provide linkages to the tourism exporting sectors. This augmented a sum of US$23.0 million previously accessed from the Inter-American Development Bank. A further J$605.33 million was accessed through the Government of Jamaica for onlending at competitively-priced rates of interest.
Contingent on the foregoing, the Bank effected a reduction in its interest rates which saw the Jamaica dollar loan rate reduced from 12% per annum to a range of 10% to 11% per annum while the Bank’s US dollar loan rate was reduced from 8.5% to 7.5% per annum.
EXIM Bank continued to build its brand and awareness within the marketplace through sustained and targeted public relations and advertising programmes. This year however, focus was shifted from heavy reliance on mass media advertising campaigns, to marketing programmes and channels which interacted more intimately with existing and potential customers – such as seminars, radio interviews, email campaigns and SMS messaging. The Bank also joined the social media highway, and established a presence on Twitter and Facebook. It is expected that by utilizing these new media, the Bank’s message will reach burgeoning businesses as well as a younger and untapped market.
The Bank successfully hosted two seminars, ‘Tackling Business Problems, Finding Solutions” and “Secrets to Business Success - A Conversation with Denis O’Brien”. The former workshop, geared for exporters took the form of a panel discussion with experts in the fields of Marketing, International Requirements and Standards, Export Financing and Customs Best Practices. The latter workshop, co-sponsored by telecommunications giant Digicel, The Mona Institute of Business and The Jamaica Institute of Financial Services had Digicel’s Chairman, Mr. Denis O’Brien as guest presenter and other business leaders sharing business insights and their secrets to business success.
Efforts at engaging stakeholders such as Jamaica Exporters’ Association, Jamaica Manufacturers’ Association, The Private Sector Organisation of Jamaica, JAMPRO, Jamaica Chamber of Commerce to expand the Bank’s customer base and facilitate increased exports were realized. Emanating from these initiatives, the Bank forged new relationships with new sectors and funded new clients to the tune of J$760 million while further cementing its relationship with its existing clients.
A special loan programme “Champions Assist” to finance viable SMEs with the potential to export was launched at the end of the financial year 2011. Beneficiaries of this loan programme will have the opportunity to benefit from loan financing and/or equity financing and will also have available the coaching and mentoring of experienced business owners with considerable business expertise. The successful take-up of this facility is expected to be realized in the up-coming financial year, 2012. We continue to promote Trade Credit Insurance as a vital tool for the expansion of local and foreign trade and propose to redouble our efforts to further increase usage in the upcoming year. During the year, the Bank also sought to broaden its geographic reach to engage its target market, primarily in tourism, in the northern and western regions of the island. This initiative is expected to be fully operational in the new financial year 2012.
In the area of Information Technology, new software tools were utilized to expand the scope of data services and streamline internal processes to achieve greater efficiencies in customer service delivery. The Bank also facilitated online multi-currency payments and began the focused use of SMS messages and alerts to its clients and potential clients. To further enhance customer service delivery, the Bank embarked on the establishment of a Business Advisory Services Unit which is to be implemented in 2012. This Unit will act as a repository of information, providing value added service offerings in getting businesses ready for financing and positioning them for growth.
INTERNATIONAL ASSOCIATIONS
As a member of the Berne Union (an Association of International Credit and Investment Insurers) since 1986, the Bank has gained invaluable insight on the operational methodologies of Credit Insurance worldwide as well as international best practices. The Bank continues to maintain membership in the Latin American Association of Credit Insurance (ALASECE), a non-profit entity comprising fourteen (14) active members in the Latin American and Caribbean regions offering Trade Credit Insurance and sharing information on the developments in the region.
FUTURE PROJECTS
Within an even greater need to facilitate growth within the SME sector, the 2012 financial year will largely mirror the key performance indicators and strategic initiatives employed in 2011 save and except for any changes in the economic landscape which may result in Government policy changes and directives. Present economic indicators suggest that the ensuing financial year 2012 will continue to experience reduction in lending rates which should serve to stimulate increased economic activity in targeted sectors. In this regard, the Bank has projected loan utilization of $7 billion for the 2012 financial year, a modest growth target of 16% over the current year’s $6 billion.
I take this opportunity to acknowledge the sterling contribution made by my predecessor, Mrs. Pamella McLean who with Management and Staff laid a solid foundation and blazed a trail of excellence and first class service delivery to the productive sector. My special thanks to the Bank’s Board of Directors, Management and Staff who have embraced change and supported initiatives to achieve success in a very challenging year. exim bank ... expect to succeed Lisa Simone Bell Managing Director
