2014 activities and results: ICO granted 6,536 million euros through May, 165% more than in the same period of 2013

2014 activities and results: ICO granted 6,536 million euros through May, 165% more than in the same period of 2013


There was spectacular growth in the funding of companies' short-term export activity, rising from 69 million euros at 7 May 2013 to 1,550 million euros in the same period of 2014.

Approximately 29% of the loans were granted to self-employed workers and 63% to micro SMEs.

To date, 3,680 million euros has been raised in the international financial markets, of which 70% were placed outside Spain.

So far this year, two rating agencies, Moody's and Fitch, have upgraded ICO's rating.


To date, ICO has granted self-employed workers and companies 6,526 million euros in second-floor loans, stated ICO's Chairman at a press conference on 7 May.

To 7 May, ICO had granted 6,536 million euros and formalised 91,515 loans to self-employed workers and SMEs through its credit facilities. This 165% increase is nearly three times higher than the 2,462 million euros extended in the same period of 2013.

These figures are the best ever obtained by ICO for this period, evidence that ICO is actively contributing to reactivate credit to the self-employed and small enterprises.

Most of ICO's facilities were granted to self-employed workers and micro-businesses, with 29% going to the self-employed and 63% to micro-businesses (firms with between 1 and 9 employees). Self-employed workers and micro-businesses have become the main recipients of ICO's credit facilities in recent years.

Businesses and self-employed workers from Catalonia were the main beneficiaries in this period (19%), followed by those from Madrid (14%) and Andalusia (12%).

Marketing and data of ICO's second-floor loans (at 7 May 2014)

ICO's loans are distributed solely through the branch network of Spain's major credit institutions. The data obtained in this period show that ICO's lending activity, via these financial entities, is a key public-private collaboration model in reactivating the Spanish economy.

In these credit facilities ICO does not assume any transaction risks, which are fully taken on by the institution. Neither does it participate in or decide on their approval or rejection, nor formalise the loans.

To 7 May, loans granted through the SME and Entrepreneurs Facility, designed to provide financing to make investments and meet liquidity needs, totalled 4,839 million, 106% higher than in the same period of 2013.

Also noteworthy is the massive increase in loans granted to Spanish companies to fund international expansion.

The credit facility to fund companies' short-term export activity increased from 69 million euros granted through 7 May 2013 to 1,550 million euros in the same period of 2014, up 22 times.  Through the short-term export facility, 17,503 export transactions aimed at 28 countries were formalised, compared with 434 operations approved until May 2013. This now accounts for 24% of ICO's total loan volume.

At 7 May 2014, ICO's International Facility, intended to fund investment abroad, helped finance investment worth 112 million euros in 19 countries, 228% higher than in the same period of 2013. The number of transactions rose by 125%. 


Funding

To date, 3,680 million euros have been raised in long- and short-term transactions on the international financial markets. Of this, more than 70% was placed outside Spain, namely France, the UK, Asia and the US.

So far this year, Fitch has upgraded ICO's rating from BBB to BBB+, with a stable outlook, while Moody's has raised it to Baa2. This will improve the ICO's financing conditions in the near future.

1Q14 earnings

ICO generated 22 million euros in pre-tax profit and 15.4 million euros in net profit. As a government-owned bank, ICO does not depend on the State Budget (PGE) but looks to the capital markets to finance its activities.

ICO's main management indicators were similar to those of the first quarter of 2013.The solvency ratio increased from 15.70% to 20.37% and the coverage ratio is still very high at 140%. The efficiency ratio declined from 5.53% to 4.44% since operating expenses decreased by 10% in this period. The NPL rate was 5.36%, well below the Spanish banking sector average.