Annual ReportAnnual Report 2004 1 04 pride youth achievement Highlights of Consolidated Position 2004 2003 1994 Total Assets NAf* 3,682,764,000 3,437,530,000 2,039,308,000 Deposits 3,297,906,000 3,055,985,000 1,724,709,000 future Loans 2,020,767,000 1,952,275,000 1,305,642,000 Capital Funds 186,365,000 175,939,000 120,475,000 outstanding performances Staff 1349 1327 1319 Offices 45 45 39 Bankomatiko ATM’s 105 100 29 Curaçao, Netherlands Antilles champs Affiliated with The Bank of Nova Scotia * Netherlands Antilles Guilders Toronto, Canada Naf. 1.79 – US$ 1.00 motivated 1 Maduro & Curiel’s Bank Group is a privately held bank, which was established in 1916 as the first commercial bank in the Dutch Caribbean and continues to be the leading financial institution of the Netherlands Antilles and Aruba. Management’s Maduro & Curiel’s Bank Group is affiliated, since 1970, with The Bank of Nova Scotia, Canada’s most international financial institution, which serves over 10 million customers in 50 countries around the world. MCB also maintains a network of correspondent Report banks throughout the world, which include representation in all of the world’s money centers. It is a cliché to say that our future is our youth. Cliché or not, however, we have plenty of reasons to be very proud of the youth of our Islands. In this Annual Report Maduro & Curiel’s Bank Group prides itself on extending personal and customized financial services to its personal and commercial clients through its branch network in we continue the tradition of placing the spotlight on a particular development in our Curaçao, its subsidiaries in Aruba (Caribbean Mercantile Bank NV), St. Maarten and communities, and this year we dedicate the 2004 Annual Report to the youth of the St. Eustatius (The Windward Islands Bank NV), and Bonaire (Maduro & Curiel’s Bank islands of the Netherlands Antilles and Aruba. In this past year, young people of all ages Bonaire NV) and through its Representative Office in Amsterdam. have excelled in undertakings from sports to culture, from social work to literary Maduro & Curiel’s Bank Group believes that its clients and communities deserve to be publication, from individual accomplishment to team efforts.Through the youth high- provided continuously with the most innovative services and products in personal, lighted in this Report, we applaud and commend all who in one way or another have private and commercial banking and in investment and insurance services. made their mark at a young age as a person to be reckoned with in our future. Maduro & Curiel’s Bank Group provides financial services at the highest level of integrity and maintains strict guidelines for ethical business conduct which the Bank, This past year for our bank was one also dedicated to the future. Important transitions all of its executives and staff must comply with. These include strict adherence to took place at both the Supervisory Director and the Executive Management levels. Lio principles of client confidentiality and to anti-money laundering regulations. Capriles retired as CEO after 50 years of active and successful service to our bank and Maduro & Curiel’s Bank Group is the largest private sector employer in the Netherlands took on the challenge of Chairman of the Board of Supervisory Directors, a position Antilles and offers its employees good working conditions, opportunities for growth, an vacated by Nicole Henriquez upon her own request. In addition, Claude Norfolk was equitable income and ample social benefits, security of employment and the opportu- elected Vice Chairman of the Supervisory Board. The Board’s Audit, Credit, Risk, nity to own part of their bank. Compensation and Succession committees actively continued to oversee in more detail Maduro & Curiel’s Bank Group serves its shareholders by providing them with a fair the operations of our bank. The new Chairman has this year also introduced a self- and equitable return on their investment and strengthening of their bank by continu- evaluation process for members of the Supervisory Board as well as monthly informal ously adding to its reserves. meetings where the Directors can receive more in-depth information from the Maduro & Curiel’s Bank Group believes that sounder communities provide a healthier managers of various departments of our bank. All of this has further strengthened the environment in which to operate and is committed to using its human and financial corporate governance structure of Maduro & Curiel’s Bank. resources towards the goal of enhancing the well being of the peoples of all of the islands on which it does business. At the Executive Management level, Chicu Capriles became our bank’s new CEO and Maduro & Curiel’s Bank Group welcomes your inquiries, directed to our President, is rapidly stamping his own mark on that high office. Chicu has been on the forefront on any of the above topics or on any subject in connection with our bank. of accentuating all that is positive in our community, and in Curaçao the bank’s new 2 3 slogan,“Let’s give positivism a chance,” has become a rallying cry to spur new positive This past year we again donated record amounts to relieve some of the social needs of developments in our society and in our economy. our community and to stimulate the positive development of our youth.We are parti- cularly grateful that so many on our staff have continued to volunteer their free time to Regrettably, the economy of the Netherlands Antilles barely grew in 2004, while assist the neediest in our societies. Curaçao’s economy, our main market, continued to decline.The economies of Aruba, St. Maarten and Bonaire did grow in 2004 and their growth was of importance to our The bank’s net earnings surpassed the previous year’s by 12%. In the earnings-category bank’s growth. our smallest market showed the greatest growth, with our bank in Bonaire recording record profits. Our bank in Aruba again posted most impressive earnings and profit Maduro & Curiel’s Bank’s consolidated balance sheet marked growth of 7.1% in 2004. growth. Most of all, however, we are very proud to report that all our banks recorded Among the markets in which we operate, the greatest relative balance sheet growth was increased net profits in 2004. experienced in St. Maarten, where the economy is growing very nicely due to both local initiatives taken to enhance the tourist product there, as well as a large increase in These fine results would not have been possible were it not for the hard work of our cruise calls and stay-over tourists.The bank’s consolidated equity continued to grow,last loyal and dedicated staff and the support of our Supervisory Directors and Shareholders, year by 5.9% as our Shareholders continued to invest in their bank. especially in view of the declining economy of our main market of Curaçao.To all of them go our warmest gratitude. We trust that we can continue to count on their Loans were up on a consolidated basis by 3.5%.The relative greatest loan growth was a support during the coming year and beyond. gain experienced in St. Maarten, followed closely by Aruba, which also enjoys a strong and growing economy. Client deposits once more increased significantly, by 7.9%, We continued to make significant investments in 2004 to further the level of service we evidencing clients’ confidence in our bank.The largest growth of customer deposits in extend to our clients and the efficiency of our bank.We upgraded the teller system of absolute terms was in Curaçao, perhaps an indication that funds are being saved instead our bank in Curaçao and in 2005 will do so also with our banks in all the markets we of invested due to the lack of economic growth and confidence here. serve; we are already seeing some of the benefits of that as we offer new enhancements to client-service.We also moved to a new credit card processor, which will enable us to offer new products and services to our clients; the first of these, a local currency gift card usable at over 2000 merchants in our markets, was launched just in time for the year- end Holiday Season. Our Internet-based home banking system is being renovated as well, and the new MCB@Home was launched in the first month of 2005. A Risk Manager has been added to the senior officers of the bank. His task will be to assess the elements of risk present in each of the bank’s business units and operational areas. The Risk Manager reports directly to the President as a concrete signal of the importance of this new position for our bank, and he has as well frequent contact with the chairman of the Board’s Risk Committee. Little League’s champion team visits MCB Management 4 5 At the very end of 2004, we took an important step to create new facilities for our issues that confront our country.Together, the private and public sectors seek to reach clients and an even better working environment for our staff by buying a large plot of a consensus on timely actions to remedy the ills of our society. We believe that the land at Rooi Catootje in Curaçao on which we will build a state-of-the-art banking future of our people - and of our youth - lies in continuing in a constructive way this center. The planning for this new banking center has started and we look forward to spirit of dialogue and of working together.