IBRD financial highlights

• net income of $1,243 million;

• new loan commitments to member countries of $21,086 million;

• loan disbursements to member countries of $19,232 million;

• outstanding borrowings, at fiscal year end, of $105,577 million, after swaps with an average maturity of five years;

• average cost of all borrowings, after swaps, of 6.10 percent;

• new policy specifying the minimum size of the liquid asset portfolio, as approved by the executive directors in April 1997, was implemented beginning with fiscal 1998; at the end of fiscal 1998, IBRD's liquidity totaled $24,648 million and financial return on the investment portfolio was 5.62 percent;

• a reserves-to-loan ratio of 14.06 percent;

• strong demand for single currency loans as borrowers selected libor-based single-currency loan terms for $15,434 million and fixed-rate single-currency loan terms for $4,626 million;

• single-currency lending rates ranging from 5.76 percent to 6.09 percent in U.S. dollars, from 3.34 percent to 4.03 percent in deutsche mark, and from 3.60 percent to 4.01 percent in French francs for libor-based and fixed-rate single-currency loans respectively;

• conversion of $14,703 million of undisbursed multicurrency pool loans to single-currency loans terms and $29,408 million of disbursed and undisbursed multicurrency pool loans to single- currency pool terms, under the program of currency choice offered to borrowers with multicurrency pool loans for which the invitation to negotiate was issued by September 1, 1996;

• loan loss provisions maintained at a level equal to 3 percent of total loans disbursed and outstanding plus the present value of callable guarantees. At the end of the year, there were eight countries with loans in nonaccrual status with an aggregate principal balance outstanding of $2,044 million representing 2 percent of the total IBRD outstanding loan portfolio;

• waiver of twenty-five basis points of the semester interest rate of loans to all borrowers that had made all loan-service payments within thirty days of their due date continued;

• waiver on part of the IBRD's commitment charge on undisbursed balances continued, resulting in a reduction of that fee from seventy-five to twenty-five basis points.

The Board of Governors agreed at the September 1997 Annual Meeting to allocate net income earned during fiscal 1997 as follows:

• $500 million to the general reserves to maintain the targeted reserves-to-loan ratio;

• $112 million to a pension reserve representing the difference between the actual funding of the Staff Retirement Plan and its accounting expenses for fiscal 1997;

• $304 million equivalent in SDRs in the component currencies of the SDR as of June 30, 1997, as an immediate grant to IDA;

• $250 million to the HIPC Debt Initiative Trust Fund in support of the HIPC Debt Initiative;

• $119 million to surplus.