- This volume represents an increase of 32% in its credit activity in the past year.
- The ICO obtained a profit of 60 million euros, 50% more than in 2011, increasing its solvency ratio to 14.5%.
The Official Credit Institute (ICO) granted loans amounting to 27,532 million euros during 2012, of which two thirds have been to SMEs, representing an increase of 32% compared to the previous year. In this sense, it is important to highlight the financing through the Mediation Lines (11,511 million euros), and the contribution to the Fund for the Payment to Suppliers (6,387 million euros).
In addition to its own lending activity, ICO managed funds and official financing instruments for exports and development (FIEM, FONPRODE and CARI); has been a payment agent for the Supplier Payment Fund (FFPP); and also, the financial management of the Autonomous Liquidity Fund (FLA) was entrusted to it. For all these reasons, the activity managed by the ICO as a whole reached the figure of 131,600 million euros, compared to 82,117 million in 2011, which represents an increase of 60% in 2012.
Regarding fundraising in the capital market, in 2012 the ICO made issues for more than 19,000 million euros. In a complicated and volatile environment, ICO has continued with its diversification strategy of its financing sources, both in terms and in its investment base.
Analyzing the income statement, it should be noted that in 2012 the Institute made net provisions for provisions of 679 million euros, 81% higher than those made in 2011. Despite the aforementioned increase, the profit after tax was 60 million euros, representing an increase of 50% over 2011. The financial interest margin, meanwhile, stood at 760 million euros, an increase of 75% over the previous year.
Furthermore, the Institute improved its solvency indicator, being in line with the requirements established by Basel III. This index stood at 14.5% in 2012.
The ICO during 2012 continued to gain weight among Spanish credit institutions: ICO assets represented 3.4% of the system and credit to companies for more than 1 year 10.4% (data as of October 2012).
Lastly, it is important to highlight that the efficiency ratio has improved, standing at 4.7% in 2012 in 2012, clearly above the average for the financial sector. Given the austerity and cost containment policy, operating expenses, excluding amortization, have decreased by 13% compared to December 2011. The reduction is 22% in general expenses and 6% in personnel expenses .
Mediation Lines for SMEs
As mentioned, the ICO through the Mediation Lines granted 11,511 million euros to a total of 162,075 companies, for an average amount of 70,000 euros.
The loans destined to finance the working capital needs through the ICO-Liquidity line represented 6,775 million euros, in 89,741 loans. Likewise, through the ICO-Investment line, 4,174.9 million euros were granted in 65,728 loan operations to companies for the execution of new projects.
With respect to the rest of the Mediation Lines, it should be noted that the ICO-Entrepreneurs line has financed 4,261 new business projects for an amount of 141 million euros. On the other hand, 231 million euros from the ICO-Internationalization Line have been earmarked to finance 462 foreign expansion projects for Spanish companies. Finally, 188 million euros have been provided through the rest of the ICO-Guarantee SGR, ICO-Exporters and other lines.
Supplier Payment Financing Fund:
One of the main economic policy measures of the Government in 2012 has been the launch of the Supplier Payment Financing Fund, in which the ICO contributed with a contribution of 6,387 million euros. In addition, the ICO was designated a payment agent and has been in charge of managing and executing the process of payment of all invoices to companies and freelancers.
In two months 5.5 million invoices were paid to 135,450 suppliers for an amount of 27,000 million euros. This measure has meant a great injection of liquidity in the Spanish economy, equivalent to 2.5% of GDP.
This mechanism has especially benefited SMEs. In the case of the City Councils, of every 100 suppliers to whom their invoices have been paid, 65 were SMEs, 34 individuals and 1 large company. Regarding payments from the Autonomous Communities, two out of every three pending invoices have been paid to SMEs.
With this, the ICO has carried out during 2012 an essential work in the effort to guarantee financing to SMEs.
Breakdown of ICO credit activity in 2012
|MEDIATION AND SMEs||AMOUNT|
(millions of euros)
|NO. OF OPERATIONS|
|ICO – LIQUIDITY||6,775.3||89,741|
|ICO – INVESTMENT||4,174.9||65,728|
|ICO – INTERNATIONALIZATION||231.3||462|
|ICO – ENTREPRENEURS||141.2||4,261|
|REST OF LINES||188.2||1,883|
|TOTAL MEDIATION AND SMEs||11,510.9||162,075|
|ICO LINE – AUTONOMOUS COMMUNITIES||5,333|
|SUPPLIER PAYMENT FINANCING MECHANISM||6,387|
Outlook for 2013
Continuing with the effort to support SMEs, in 2013 the ICO made 22 billion euros in financing lines available to the self-employed and companies. The Institute has simplified the operation of the Lines, focusing on two main areas of activity: Companies and Entrepreneurs, and Internationalization.
(Data pending audit)