Fondo De Garantia De Depositos En Cooperativas De Credito
FONDO DE GARANTIA DE DEPOSITOS EN
COOPERATIVAS DE CREDITO
SPAIN
ANNUAL REPORT 2004
TABLE OF CONTENTS
MANAGEMENT REPORT.........................................................
FINANCIAL STATEMENTS ......................................................
Balance sheets.......................................................................
Statements of income.............................................................
Statements of cash flows .......................................................
EXTERNAL AUDITORS’ REPORT ...........................................
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This is a translation of the Spanish original and it has been prepared for the convenience of readers and in the
event of ambiguity, the Spanish text will prevail. The Spanish version can be downloaded from the web site
(www.fgd.es) or can be requested to:
Fondo de Garantía de Depósitos en Cooperativas de Crédito
C/ José Ortega y Gasset, 22
28006 Madrid España
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MANAGEMENT REPORT
INTRODUCTION
Order ECO 2801/2003, of 3 October, published on 14 October 2003, establishing the
contributions to be made to the Fondo de Garantía de Depósitos en Cooperativas de Crédito
(hereinafter FGDCC) by integrated entities.
These contributions were fixed at 0,8‰ of the calculation basis established in articles
3 and 4 of Royal Decree 2606/1996, in accordance with Royal Decree 948/2001 on investor
compensation systems. The contributions of the entities amounted a total of € 34,015.9
thousand, which were disbursed on 27 February 2004.
The Resolution of the Ministry of Economy of 1 August 2002, in accordance with the
point 3 article 74 of Law 24/2001, of 27 December, on Tax, Administrative and Labour
Matters, fixed the contributions payable by the Investment Guarantee Fund and the Deposit
Guarantee Funds as a percentage of total compensation for non-compliance of the
repayment obligation by investment services firms, before the above mentioned Law 24/2001
coming into force.
By virtue of the above mentioned Resolution of the Ministry of the Economy, the
percentage distribution of compensation payable to affected investors between the
Investment Guarantee Fund and the Deposit Guarantee Funds has been established as
follows:
•
Fondo de Garantía de Depósitos en Establecimientos Bancarios..............................
53.98%
•
Fondo de Garantía de Depósitos en Cajas de Ahorro ................................................
40.90%
•
Fondo de Garantía de Depósitos en Cooperativas de Crédito ...................................
4.95%
•
Fondo General de Garantía de Inversiones ................................................................
0.17%
The estimated amount for the compensation by the Gestora of the Investment Guarantee Fund
has been updated this year to € 79.7 million, approximately € 3.9 million of this figure shall be payable
by the Fondo de Garantía de Depósitos en Cooperativas de Crédito. Of the former amount € 2,9
million have been disbursed at year-end.
INTEGRATED ENTITIES AND CONTRIBUTIONS
At the beginning of the year there were 86 entities integrated in FGDCC. A list of the
member entities was published in the Official Spanish State Gazette 86, on 9 April 2004, as
Royal Decree 2606/1996, requires it.
At the date of this report, there are 85 entities integrated in FGDCC. The decrease of one
is due to one merger.
These entities disbursed contributions corresponding to 0.8‰ of guaranteed deposits
and securities at the previous year-end amounting to € 34,015.9 thousand. Although an
increase of the deposits has taken place regarding the previous exercise of 10.4%, the
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contributions have decreased in 11.7% due the reduction of the percentage of the
contributions from 1‰ to 0.8‰ according to Order ECO/2801/2002, of 3 October. Of the total
amount entered, the 99.7% corresponds to guaranteed deposits and the 0.3% to guaranteed
securities. In accordance with the legislation, the Central Bank (Banco de España) has made
no contributions.
ASSISTANCE GRANTED
During the year no new assistance has been granted to credit entities.
ACTIVITY DURING THE YEAR
Management and administration during the year have been carried out by virtue of the
contract signed on 29 June 2000, with Fund Management Company (Sociedad Gestora de
los Fondos de Garantía de Depósitos en Entidades de Crédito AIE), and have been in line
with the performance and guidelines observed in previous years, as follows:
• Management of third party debts acquired in prior years from credit co-operative
banks crisis.
• Management of finances in accordance with the established conditions in the
above mentioned contract. Total investments in Treasury bills have amounted to €
336,507.9 thousand, up 12.6% on prior year. Financial income net of these
investments totals € 7,466.1 thousand, representing a return of 2.26% on an
average investment of € 330,032.7 thousand. The financial management on the
whole shows a net profit of € 7,421.1 thousand, down € 937.5 thousand from the
previous year, the 11.2%, due to cuts in interest rates during the year.
• Other significant activities include the actions required for the preparation of
Executive Committees and for the execution of the decisions adopted, the study
and report on the guarantee deposits in securities and other financial
instruments, and the analysis of FGDCC’s coverage level on the basis of its
equity.
FINANCIAL POSITION
Available resources have been increased in € 40,175.3 thousand during the year, of
which € 34,015.9 thousand comes from to credit co-operatives banks contributions and €
6,159.4 thousand to FGDCC management, primarily financial interests. These resources
have been invested totally in Treasury bills.
As consequence of these incomes that have been invested in Treasury bills, financial
resources which amount to € 344,456.4 thousand and represent the 99.9% of total assets
and 100.2% of net equity at year-ended.
Therefore, FGDCC fulfils article 3.7 of Royal Decree 2606/1996, which establishes
that uncommitted net equity shall be invested in public debt or in other highly liquid, low-risk
assets.
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SURPLUS FOR THE YEAR AND EQUITY
The surplus of the year shows the next figures, Euros in thousands:
Items
Management
Financial
TOTAL
Incomes ..................................................
34,015.9
7,487.2
41,503.1
Expenses ................................................
1,032.6
66.1
1,098.7
TOTAL ..............................................
32,983.3
7,421.1
40,404 4
The surplus generated in 2004 stand at € 44,404.4 thousand, a decrease of €
6,176.3 thousand from the previous year, which represent 13.3%. The surplus includes in
incomes € 34,015.9 thousand from contributions, which represent 87.2% of the surplus of
the year, and in expenses the increase of € 782.1 thousand of the provision for payment of
estimated compensation in accordance of the article 74 of the Law 24/2001.
Considering the amount of the surplus for the year, the equity of FGDCC amounts to
€ 303,194.8 thousand as at 31 December 2004, up 18.1 on the opening balance.
GUARANTEED DEPOSITS
The evolution of deposits in last years has been as follows, Euros in million:
Deposits and securities
Calculation bases
Deposit and
%
Year
guaranteed
of contributions
securities covered
Guaranteed
31.12.1990
8,962,800
8,962,800
5,924,200
66.1
31.12.1991
10,373,600
10,373,600
6,743,212
65.0
31.12.1992
11,458,600
11,458,600
7,276,207
63.5
31.12.1993
13,085,100
13,085,100
7,913,772
60.5
31.12.1994
14,967,300
14,967,300
8,426,611
56.3
31.12.1995
17,128,262
17,128,262
9,145,337
53.4
31.12.1996
18,918,737
18,918,737
12,112,810
64.0
31.12.1997
20,539,655
20,539,655
12,947,862
63.0
31.12.1998
22,973,610
22,973,610
14,590,885
63.5
31.12.1999
26,397,900
26,397,900
16,346,399
61.9
31.12.2000
29,763,051
29,763,051
19,479,782
65.4
31.12.2001
36,777,551
34,827,706
22,928,802
62.3
31.12.2002
40,994,055
38,505,644
24,793,857
60.5
31.12.2003
44,454,161
42,519,973
26,560,119
59.7
31.12.2004
49,725,428
47,525,762
28,612,315
57.5
From 31 December 2001, guaranteed deposits include the total amount of securities and
financial instruments and the calculation bases include the cash deposits and the 5% of
securities and financial instruments.
FGDCC’s equity amounted to € 343,599 thousand and represent coverage of 0.72% of the
calculation base for contributions in 2004, compared with 0.71% in 2003.
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In compliance with article 3.4 of Royal Decree 2606/1996, the contributions will
cease when FGDCC’s equity reach 1% of the calculation bases of contributions.
ECONOMIC/FINANCIAL CONTROL
Court of Auditors
The results of audit of accounts and contracts in 2003, submitted to the Court of Auditors
(Tribunal de Cuentas), will be set in the annual report for that year, its approval is still pending.
External audit
The audit report for 2004, prepared by KPMG Auditors, SL, is attached.
EXECUTIVE COMMITTEE
During the year and referring to members representing Banco de España, the vowels Mr.
Pedro Pablo Villasante and Mr. José María Roldán Alegre and the substitute vowel Mr. Francisco
Javier Priego Pérez, have been renewed, and Mr. Julián María Atienza has joined as an alternate
member, ceasing Mr. Eduardo Galilea Ortega. Referring to members representing credit
institutions, Mr. Joaquín Vázquez López has joined as a full member and Mr. José María Jiménez
Jiménez has joined as an alternate member, ceasing Mr. Ángel Félix Oliván Ramón.
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FINANCIAL STATEMENTS
Next is shown the balance sheets, statements of income and the statements of cash flows
as at 31 December 2004 and 2003.
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FONDO DE GARANTIA DE DEPOSITOS EN COOPERATIVAS DE CREDITO
Balance sheets, as at 31 December
(Euros in thousands)
ASSETS
2004
2003
FIXED ASSETS
Long term investment ......................................
56,360.1
97,308.0
- Treasury bills ..................................................
56,027.1
96,705.0
- Securities........................................................
333.0
333.0
Total fixed asset .........................................
97,308.0
97,308.0
ASSETS BEING SOLD OFF as a result of
assisted entities
- Loans to third parties......................................
2,255.9
2,255.9
- Provision for loss on loans .............................
(2,255,9)
(2,255,9)
Total assets being sold off ........................
-- --
CURRENT ASSETS
Short term investments . ...............................
286,629.7
205,776.5
- Treasury bills ..................................................
280,480.8
202,194.2
- Interests receivable on investments ...............
6,210.8
3,582.3
- Provision.........................................................
(61.9)
--
Debtors ............................................................
0.1
0.1
- Debtors ...........................................................
0.1
0.1
Cash at banks .................................................
1,799.6
2,692.1
Total current assets ....................................
288,429.4
208,468.7
TOTAL ASSETS ..............................................
344,789.5
305,506.7
LIABILITIES
FUND BALANCE
- Accumulated net income ................................
303,194.6
256,613.9
- Surplus for the year ........................................
40,404.4
46,580.7
Total fund balance ..........................................
343,599.0 303,194.6
PROVISION
- Indemnities for legal prescription....................
1,002.6
2,122.3
- Provisions for others liabilities ........................
124.5
122.7
Total provisions ..............................................
1,127.1
2,245.0
CURRENT LIABILITIES
- Short term creditors ........................................
63.4
67.1
Total current liabilities ...................................
63.4
67.1
TOTAL LIABILITIES AND FUND BALANCE ..
344,789.5
305,506.7
Memorandum accounts .................................
74.4
291.4
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FONDO DE GARANTIA DE DEPÓSITOS EN COOPERATIVAS DE CREDITO
Statements of income, as at 31 December
(Euros in thousands)
EXPENSES 2004
2003
MANAGEMENT EXPENSES
Operating expenses...............................
250.5
283.5
Extraordinary expenses .........................
782.1
--
Total management expenses ................
1,032.6
283.5
MANAGEMENT REVENUES ..........................
32,983.3
38,222.1
Financial expenses........................................
66.1
4.5
FINANCIAL REVENUES.................................
7,421.1
8,358.6
SURPLUS FOR THE YEAR ............................
40,404.4 46,580.7
INCOME
MANAGEMENT INCOME
Contributions .............................................
34,015.9
38,505.6
Total management income .....................
34,015.9
38,505.6
FINANCIAL INCOME
Interest on investments .............................
7,466.1
8,274.7
Other financial income ...............................
21.1
88.4
Total financial income .............................
7,487.2
8,363.1
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FONDO DE GARANTIA DE DEPÓSITOS EN COOPERATIVAS DE CREDITO
Statements of cash flows, for the year ended 31 December
(Euros in thousands)
2004
2003
CASH FLOW PROVIDED BY
Contributions..................................................
34,015.9
38,505.6
Financial products and others.......................
4,830.4
10,440.6
Decrease in liquid assets ..............................
892.5
1,301.2
TOTAL ........................................................
39,738.8
50, 247.4
CASH FLOW USED BY
Increase in financial investments ..................
37,580.3
49,177.4
Operating expenses......................................
256.7
285.7
Indemnities for legal prescription ..................
1,901.8
784.3
TOTAL
39,738.8
50,247.4
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Auditors’ Report on the Financial Statements
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Auditors’ Report on the Financial Statements
(Translation from the original in Spanish)
To the Executive Committee of
Fondo de Garantía de Depósitos en Cooperativas de Crédito
We have audited the financial statements of the Deposit Guarantee Fund for Credit Cooperative
Banks (hereinafter the Fund), which comprise the balance sheet at 31 December 2004, the
statement of profit and loss, the disclosure of source and application of funds then ended and the
notes thereto, the preparation of which is the responsibility of the directors of the Sociedad Gestora
de los Fondos de Garantía de Depósitos en Entidades de Crédito, A.I.E. (hereinafter Directors of the
Fund Management Company). Our responsibility is to express an opinion on the financial statements
taken as a whole, based on our examination which was conducted in accordance with generally
accepted auditing standards, which require examining, on a test basis, evidence supporting the
amounts in the financial statements and assessing the appropriateness of their presentation, of the
accounting principles applied and of the estimates employed.
The Directors of the Fund Management Company, shown to comparative effects, for each individual
caption in the balance sheet, statement of profit and loss and disclosure of source and application of
funds, besides the figures of the 2004, figures of the previous year, and movement with regard to
initial balances for certain captions. We express our opinion solely on the financial statements for
2004. On 11 February 2004 we issued our unqualified audit report on the financial statements for
2003.
In our opinion, these financial statements for 2004 present fairly, in all material respects, the
shareholders’ equity and financial position of the Deposit Guarantee Fund for Credit Cooperative
Banks at 31 December 2004 and the results of its operations and the source and application of
funds for the year then ended, and contain sufficient information necessary for their adequate
interpretation and understanding, in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding year.
The accompanying directors’ report for 2004 contains such explanations as the Directors of the Fund
Management Company consider relevant to the situation of the Fund, the evolution of its business
and other matters, but is not an integral part of the financial statements. We have verified that the
accounting information contained therein is consistent with that disclosed in the financial statements
for 2003. Our work as auditors is limited to the verification of the directors’ report within the scope
described in this paragraph and does not include a review of information other than that obtained
from the accounting records of the Deposit Guarantee Fund for Credit Cooperative Banks.
KPMG AUDITORES, S.L.
(Signed by)
Julio Álvaro Esteban
21 January 2005
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