Notes to the consolidated balance sheet: assets

1. Banks

2011

2010

Banks

38,909

14,744

Mandatory reserve deposit with Dutch central bank

3,205

3,954

Total

42,114

18,698

Mandatory reserve deposits are not available for use in FMO's day-to-day operations.


2. Short-term deposits

 

2011 2010
Collateral delivered 15,750 2,190
Commercial paper 69,246 -
Money market funds 113,794 280,990
Dutch central bank 299,997 49,995
Total 498,787 333,175

3. Derivative financial instruments

FMO utilizes the following derivative instruments for both hedging and non-hedging purposes:

  • (Cross-currency) interest rate swaps are commitments to exchange one set of cash flows for another. Swaps result in an economic currency exchange or interest rate exposure (for example fixed rate or floating rate) or a combination of all these (i.e. cross-currency interest rate swaps).
  • Currency forwards represent commitments to purchase foreign and domestic currency, including undelivered spot transactions.

The following table summarizes the notional amounts and the fair values of the 'derivatives other than hedging instruments'. These derivatives are held to reduce interest rate risks and currency risks but do not meet the specified criteria to apply hedge accounting. The following table also includes derivatives related to the asset portfolio.

At December 31, 2011

Notional amounts

Fair value assets

Fair value liabilities

Derivatives other than hedging instruments:

  • Currency swaps

35,495

360

-806

  • Interest rate swaps

544,583

524

-2,029

  • Cross-currency interest rate swaps

2,880,657

258,014

-63,069

  • Forward Rate Agreements

385,460

-

-134

Sub-total

3,846,195

258,898

-66,038

Embedded derivatives related to asset portfolio

-

14,539

-

Total derivative assets (/liabilities) other than hedging instruments

3,846,195

273,437

-66,038

The increased notionals of derivatives other than hedging instruments are due to the hedging of interest rate and foreign exchange risks for loans in local currencies and funding in currencies other than euros and US dollars. FMO does not apply hedge accounting for these derivatives. FMO does not hold derivatives for trading purposes.

At December 31, 2011, FMO had no structured funding anymore.


The following table summarizes the notional amounts and the fair values of the derivatives designated as fair value hedges.

At December 31, 2011

Notional amounts

Fair value

assets

Fair value

Liabilities

Derivatives designated as fair value hedges:

  • Interest rate swaps

1,883,788

60,625

-

Total derivatives designated as fair value hedges

1,883,788

60,625

-

Total derivative financial instruments assets (/liabilities)

5,729,983

334,062

-66,038



For the year ended December 31, 2011, FMO recognized an ineffectiveness of €0.3 million net profit (2010: €1.0 million net profit) on the fair value hedges. The profit on the hedging instruments amounted to €19.9 million (2010: €12.8 million loss). The loss on hedged items attributable to the hedged risk amounted to €19.6 million (2010: €13.8 million profit).

The comparative figures for derivatives have been included in the following tables.

At December 31, 2010

Notional amounts

Fair value assets

Fair value liabilities

Derivatives other than hedging instruments:

  • Currency swaps

272,116

779

-7,909

  • Interest rate swaps

265,845

343

-621

  • Cross-currency interest rate swaps

2,220,792

246,881

-35,744

Sub-total

2,758,753

248,003

-44,274

Derivatives related to asset portfolio

-

5,644

-

Total derivative assets (/liabilities) other than hedging instruments

2,758,753

253,647

-44,274

At December 31, 2010

Notional amounts

Fair value

assets

Fair value liabilities

Derivatives structured:

  • Interest rate swaps

3,738

-

-157

  • Cross-currency interest rate swaps

9,196

1,142

-

Total derivative assets (/liabilities) structured

12,934

1,142

-157

At December 31, 2010

Notional amounts

Fair value

assets

Fair value

liabilities

Derivatives designated as fair value hedges:

  • Interest rate swaps

1,627,121

62,190

-

Total derivatives designated as fair value hedges

1,627,121

62,190

-

Total derivative financial instruments assets (/liabilities)

4,398,808

316,979

-44,431

4. Loans to the private sector

These loans to the private sector in developing countries are for FMO's account and risk. The movements of the loans to the private sector can be summarized as follows:

2011

2010

Balance at January 1

2,509,157

2,180,567

Disbursements

867,363

586,623

Re-class from equity investments

-4,787

794

Repayments

-545,421

-394,095

Write-offs

-18,433

-5,830

Changes in amortizable fees

-896

-7,797

Changes in fair value

856

-

Exchange rate differences

30,290

148,895

Balance at December 31

2,838,129

2,509,157

Value adjustments

-316,017

-296,444

Net balance at December 31

2,522,112

2,212,713

The following table summarizes the loans segmented by sector.

2011

2010

Financial institutions

1,164,891

932,725

Energy

341,462

284,307

Housing

213,308

185,187

Agribusiness, food & water

218,709

196,886

Diverse sectors

583,742

613,608

Net balance at December 31

2,522,112

2,212,713

2011

2010

Gross amount of loans to companies in which FMO has equity investments

189,896

174,634

Gross amount of subordinated loans

496,712

466,736

Gross amount of non-performing loans

97,350

58,571

A loan is classified as non-performing when payments of interest or principal are past due by 90 days or more.

5. Loans guaranteed by the State

These loans in developing countries are individually guaranteed by the Dutch State for 80% to 95%. Any losses will be compensated by the State up to the guaranteed percentage.

The loan portfolio guaranteed by the State comprises the loans issued under the FOM program. The movements can be summarized as follows:

2011

2010

Balance at January 1

62,475

51,050

Disbursements

14,821

32,831

Repayments

-8,465

-11,277

Write-offs

-526

-10,897

Changes in amortizable fees

200

185

Exchange rate differences

849

583

Balance at December 31

69,354

62,475

Value adjustments

-6,804

-6,183

Net balance at December 31

62,550

56,292

The following table summarizes the loans guaranteed by the State segmented by sector.

2011

2010

Financial institutions

-

-

Energy

-

-

Housing

-

-

Agribusiness, food & water

44,050

38,064

Diverse sectors

18,500

18,228

Net balance at December 31

62,550

56,292

Gross amount of subordinated loans

40,479

40,132

Gross amount of non-performing loans

6,139

6,303

6. Equity investments

These equity investments in developing countries are for FMO's account and risk. The movements in net book value of the equity investments are summarized in the following table.

2011

2010

Net balance at January 1

637,802

489,232

Purchases and contributions

179,488

150,153

Re-class to loans

4,787

-794

Re-class from/to associates

-

1,709

Decrease due to loss deconsolidation BanyanTree Growth Capital L.C.C.

-

-1,166

Sales

-86,521

-52,460

Value adjustments

-36,298

-10,967

Changes in fair value

54,108

62,095

Net balance at December 31

753,366

637,802

2011

2010

Equity investments at fair value

581,853

476,437

Equity investments at cost less impairment

171,513

161,365

Net balance at December 31

753,366

637,802

The following table summarizes the equity investments segmented by sector.

2011

2010

Financial institutions - of which investment funds: €519,136 (2010: €430,218

607,371

521,892

Energy

70,320

50,113

Housing

429

176

Agribusiness, food & water

21,709

16,579

Diverse sectors

53,537

49,042

Net balance at December 31

753,366

637,802

7. Investments in associates

The movements in net book value of the associates are summarized in the following table.

2011

2010

Net balance at January 1

50,385

41,577

Purchases and contributions

9,886

7,420

Re-class to/from equity investments

-

-1,709

Re-class from subsidiaries

-

12,346

Sales

-10,134

-15,316

Share in net results

-9,253

4,291

Translation differences

1,189

1,776

Net balance at December 31

42,073

50,385

2011

2010

Associates at cost

12

4,175

Associates at equity method

42,061

46,210

Net balance at December 31

42,073

50,385

The following table summarizes FMO's share in the total assets, liabilities, total income and total net profit/loss of the associates.

Associates at equity method

Associates at cost less impairment

Total

Total assets

106,681

12

106,693

Total liabilities

64,620

-

64,620

Total income

4,643

-

4,643

Total profit/loss

-9,253

-

-9,253

The associates valued at cost less impairment have incurred no cumulative impairment losses (2010: €0).

8. Movement in value adjustments

Movement in value adjustments FMO portfolio

Guarantees

Loans

Total

Balance at January 1, 2010

16,237

275,264

291,501

Additions

11,708

45,551

57,259

Reversals

-1,924

-38,112

-40,036

Exchange rate differences

1,474

19,571

21,045

Write-offs

-

-5,830

-5,830

Balance at December 31, 2010

27,495

296,444

323,939

Additions

-

59,592

59,592

Reversals

-13,791

-22,877

-36,668

Exchange rate differences

-160

1,291

1,131

Write-offs

-

-18,433

-18,433

Balance at December 31, 2011

13,544

316,017

329,561

Movement in value adjustments on loans guaranteed by the State

2011

2010

Balance at January 1

6,183

14,494

Additions

1,287

3,000

Reversals

-140

-414

Write-offs

-526

-10,897

Balance at December 31

6,804

6,183

FMO's own risk participation with regard to FOM (5% to 20%) is not guaranteed. The guaranteed part is recorded under other receivables (see note 11), and this amounts to €961 (2010: €2,161) for the value adjustment recognized in 2011.

9. Interest-bearing securities

This portfolio contains marketable bonds and private loans with fixed interest rates.

2011

2010

Bonds (listed)

666,660

558,709

Private loans

4,918

5,001

Balance at December 31

671,578

563,710

All interest-bearing securities are classified as available for sale assets. The movements can be summarized as follows:

2011

2010

Balance at January 1

563,710

629,567

Amortization premiums/discounts

-2,089

-1,042

Purchases

130,845

152,424

Sale and redemption

-26,129

-220,346

Revaluation

5,241

3,107

Balance at December 31

671,578

563,710

The interest-bearing securities have been issued by.

2011

2010

Private parties:

 

  • Credit institutions

521,169

471,041

  • Other

41,821

43,350

Public bodies

108,588

49,319

Balance at December 31

671,578

563,710

10. Tangible fixed assets

Furniture

ICT equipment

Leasehold improvement

Land and buildings due to business combination

Total 2011

Total 2010

Historical cost price at January 1

6,258

22,251

870

5,026

34,405

33,194

Accumulated depreciation at January 1

-5,646

-19,544

-723

-

-25,913

-23,133

Balance at January 1

612

2,707

147

5,026

8,492

10,061

Decrease historical cost price due to sale subsidiary TCX Investment Management Company B.V.

-

-

-

-

-

-93

Decrease accumulated depreciation due to subsidiary TCX Investment Management Company B.V.

-

-

-

-

-

15

Investments

331

1,432

9

1,105

2,877

1,304

Depreciation

-238

-1,259

-47

-347

-1,891

-2,795

Accumulated depreciation on divestments

5

19,346

711

-

20,062

-

Divestments historical cost price

-138

-19,263

-756

-

-20,157

-

Balance at December 31

572

2,963

64

5,784

9,383

8,492

Historical cost price at December 31

6,451

4,420

123

6,131

17,125

34,405

Accumulated depreciation at December 31

-5,879

-1,457

-59

-347

-7,742

-25,913

Balance at December 31

572

2,963

64

5,784

9,383

8,492

 

The land, buildings and equipment due to business combinations (€5,784) relate to Blauser S.A.

11. Other receivables

2011

2010

Debtors related to sale of equity investments

2,231

997

Taxes and social premiums

380

378

To be declared on State guaranteed loans

5,948

6,707

Accrued management fees State funds

4,235

4,106

Other receivables

20,102

19,273

Balance at December 31

32,896

31,461


12. Accrued income

2011

2010

Accrued interest on loans

37,828

31,464

Accrued interest on swaps and other assets

43,983

39,686

Other accrued income

305

-

Balance at December 31

82,116

71,150