Financial results
The year 2010 was a very good one for FMO. We once again
improved our development impact and achieved robust financial
results. Net profit more than doubled to €126 million, up from €60
million in 2009. New commitments in loans and private equity
investments amounted to €1,026 million (2009: €911 million), in
line with our target of increasing new commitments to above €1
billion. Our committed portfolio grew to €5,292 million from €4,598
million in 2009.
Our efforts to monitor clients closely and proactively assess
whether they needed support in the aftermath of the international
financial crisis paid off. The strong growth in our net profit can
largely be attributed to fewer value adjustments and increasing
results from equity investments. Net value adjustments, reflecting
the net addition to provisions for bad debts and equity
investments, fell to €29 million in 2010 from €52 million in 2009.
Where necessary, we helped companies through debt restructuring and
advised them to ensure they could continue their business on a
sound basis again.
Total income, mainly consisting of interest on loans and results
from equity investments and services, grew 35% to €225 million
(2009: €166 million). Although our portfolio grew significantly,
continued strict cost control resulted in a 4.2% overall decrease
in costs.
Our healthy results reflect the quality of our selection process
as well as the strong economic performance of emerging markets,
which were less affected by the global crisis than developed
countries. FMO focuses on profitable companies, with good prospects
of sustainable growth and a potentially high development impact. We
closely monitored our clients' environmental, social and governance
(ESG) performance and focused on low-income countries. Once again,
about half of our new commitments were in low-income countries (48%
as compared to 47% in 2009), to enhance our development impact.
Although the FMO strategy and portfolio are inherently
high-risk, sufficient risk controls, capital and adequate liquidity
management help us achieve sustainable growth, healthy financial
results and execute our mission.