Annual Report

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Annual Report 2018 ANNUAL REPORT This document is an English translation of the original Portuguese language document “Relatório de Gestão e Contas 2018” delivered by Banco Interatlântico, S. A. In the event of any inconsistency, the original version prevails. Index INDEX 1. Key Indicators ..................................................................................................... 5 7. Human Resources .............................................................................................. 29 2. Message from the Chairman of the Board of Directors ........................................ 7 7.1. Distribution by Type of Employment Contract .............................................. 30 3. Executive Committee Report .............................................................................. 9 7.2. Functional Distribution ................................................................................ 30 7.3. Distribution by Gender ................................................................................ 30 4. Principal Shareholders ........................................................................................ 11 7.4. Distribution by Age Bands ........................................................................... 30 4.1. Equity Structure .......................................................................................... 12 7.5. Distribution by Seniority .............................................................................. 30 4.2. Statutory Bodies .......................................................................................... 13 7.6. Distribution by Academic Qualifications ...................................................... 31 4.3. Milestones ................................................................................................... 14 7.7. Training ....................................................................................................... 31 4.4. Strategy and Business Model ...................................................................... 16 4.5. Geographical Footprint and Channels ......................................................... 18 8. Social Responsibility ........................................................................................... 33 9. Financial Analysis ............................................................................................... 35 5. Macroeconomic and Financial ............................................................................ 19 9.1. Balance Sheet ............................................................................................ 36 5.1. International ................................................................................................ 20 9.2. Profit and Loss ............................................................................................ 37 5.2. Monetary and Financial Situation in Cabo Verde ......................................... 21 10. Proposal for the Appropriation of Net Income .................................................... 39 6. Main Business Areas .......................................................................................... 23 11. Financial Statements ........................................................................................ 41 6.1. Competitive Position ................................................................................... 24 6.2. Retail Banking ............................................................................................. 27 12. Notes to the Financial Statements ................................................................... 49 6.3. Corporate Banking ...................................................................................... 27 13. Audit Report and Report and Opinion of the Supervisory Board .......................... 107 6.4. Credit by Sector of Activity ........................................................................... 28 4 KEY 1 INDICATORS Key Indicators Indicators at 31 December CVE thousand 2018 2017 Amount % BALANCE SHEET INDICATORS Net assets 22 789 157 25 766 353 -2 977 196 -11,55% Cash and cash balances at central banks 1 488 467 2 663 292 -1 174 825 -44,11% Loans and advances to credit institutions 2 096 593 2 808 816 -712 223 -25,36% Loans and advances to customers (net) 17 518 413 17 544 940 -26 528 -0,15% Loans and advances to customers (gross) (excluding interest and commissions and 14 708 578 15 073 070 -364 492 -2,42% public debt securities) Overdue credit and interest 2 322 407 2 609 519 -287 113 -11,00% Impairment on loans and advances to customers 1 309 810 1 288 520 21 290 1,65% Customer resources (excluding interest and other debits) 20 402 441 22 399 503 -1 997 062 -8,92% Customer deposits 20 402 441 22 399 503 -1 997 062 -8,92% Shareholders’ equity 1 926 826 1 809 037 117 788 6,51% OPERATING INDICATORS Total operating income 1 088 901 936 939 151 962 16,22% Income before tax 167 172 56 247 110 925 197,21% Net income 165 826 54 284 111 543 205,48% OTHER INDICATORS Profitability Net income / net assets 0,68% 0,20% 0,48% p.p Net income / average shareholders’ equity 8,88% 3,05% 5,83% p.p Solvency and loans-to-deposits Shareholders’ equity / assets 8,46% 7,02% 1,43% p.p Loans-to-deposits ratio (gross credit / customer resources) 72,09% 67,29% 4,80% p.p Solvency ratio (BCV criterion) 12,94% 15,76% -2,82% p.p Asset quality Overdue credit and interest / gross credit 15,79% 17,31% -1,52% p.p Quality of BCV credit ( Circular Series “A “ no. 150/DSE/2009) 10,69% 12,05% -1,36% p.p Credit impairment / net credit 7,48% 7,34% 0,13% p.p Credit impairment / overdue credit and interest 56,40% 49,38% 7,02% p.p Productivity and efficiency Non-interest income / total operating income 19,61% 22,59% -2,98% p.p Structural costs / total operating income 52,84% 66,96% -14,13% p.p (Credit + deposits) / number of employees 267 048 275 479 -8 431 -3,06% Number of employees 142 145 -3 -2,07% Number of branch offices 9 9 0 0,00% Employees per branch office 15,8 16,1 -0,3 -2,069% (Credit + deposits / number of branch offices 4 213 428 4 438 272 -224 843 -5,07% 6 MESSAGE FROM THE CHAIRMAN OF THE BOARD 2 OF DIRECTORS Message from the Chairman of the Board of Directors The bank completed its twentieth year of activity in 2018 and will celebrate the 20th to all of my colleagues, especially those who have been with me since the beginning year of its foundation in 2019. It has consistently succeeded in making a profit across and who with determination and persistence have made a decisive contribution to its twenty years of existence. The bank therefore has good reason to be proud of its enable us never to deviate from our objectives and with whom I maintain a healthy achievements while, at the same time, enjoying the satisfaction of having benefited friendship and an excellent level of professional companionship. from the contributions of many who merit a special and sincere word of appreciation, Other diverse factors also contributed to the bank’s operation in 2018, particularly: particularly: – The domestic and international economic situation that, notwithstanding a high – our customers whose number and intensity of whose relationship with the bank level of uncertainty and level of risk, evolved favourably, particularly in a positive has been growing and whose loyalty has been remarkable (several of whom dynamic of foreign investors’ intentions to invest in the tourism and property have been with the bank since its foundation) and upon whom the bank’s exis- sectors, whose completion is always invariably difficult and slow to achieve. tence and sustainability depend; – The situation in the financial system, in an increasingly demanding and inter- – the bank’s workers (some of whom have been identified as high-fliers) for their ventionist regulatory and supervisory framework which kept pace with economic dedication and commitment and particularly those who, when called upon to growth, albeit moderate, in business volume (customers) and quality (margins) face challenges, have succeeded in responding with enthusiasm and profes- and the rate of assets requalification (NPLs). sionalism, even in adverse circumstances; In such a context, the bank’s management endeavoured to continue to consolidate – our shareholders (all founders), for their support and encouragement to the bank its results in the operating areas that, since 2014, it has defined as being crucial: to and to the bank’s management for its reiterated confidence which in the case of recover profitability (operating and equity), improve asset quality (increasing fund- Caixa Geral de Depósitos as our main shareholder has been publicly expressed generating assets and decreasing others) and qualifying resources (particularly human in having chosen us from the two banks operating in this market and of which it resources). is a shareholder, to continue its presence in Cabo Verde; The activity performed and results achieved, on which detailed information is set out in – the other statutory bodies for the existence of a good relationship, namely the the annual report, particularly the increase of net interest income and return on equity supervisory board that, following the appointment of José Nunes Liberato as and reduction of overdue credit and increase of its respective coverage, bear witness its new chairman and José Mário Sousa as its new statutory auditor have been not only to the consolidation of a more robust situation but also an increasingly more more actively engaged in monitoring the works of the board of directors;
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