The World Bank announced today its financial results for the six months ended December 31, 1989, the first half of its 1990 fiscal year.
Lending
New loan commitments totaled $4.6 billion, about $1 billion more than in the first half of FY89. Disbursements on loans to developing countries were $5.7 billion, a decrease of nearly 8 percent from the same period in FY89. Commitments by the International Development Association (IDA), the Bank's concessional lending affiliate, totaled about $1.0 billion equivalent, about the same as in the first half of FY89, while IDA disbursements totaled about $1.7 billion or 6 percent less than in the first half of FY89.
Financial Ratios
The Bank's net income, after provisioning $201 million against possible loan losses, was $556 million in the first half of FY90 compared to $486 million, after provisioning $176 million, in the first half of FY89.
The return on average earning assets for the first half of FY90 was 1.11 percent and the interest coverage ratio (interest expense plus net income divided by interest expense) was 1.18 percent compared to 1.09 percent and 1.17 percent, respectively, at the end of FY89.
GCI Subscriptions
By the end of the first half of FY90, member countries had subscribed to about 36 percent of the General Capital Increase (GCI) approved in April 1988, up from about 12 percent of the available GCI shares at December 31, 1988. Twenty-member countries subscribed all of the GCI shares available to them, while fifteen others used the extended subscription available under the GCI and subscribed part of the GCI shares allocated to them. Partly as a result, the Bank had almost $48 billion of lending headroom, or 36 percent of its $132.6 billion lending limit.
Borrowings
The World Bank borrowed $5.1 billion equivalent in the six months ended December 31, 1989 or about 44 percent of its $11.6 billion FY90 borrowing program. After swaps, the Bank borrowed four currencies: U.S. dollars accounted for 56 percent of the total; Japanese yen accounted for 17 percent; and Swiss francs and Deutsche mark accounted for the remaining 27 percent. The Bank borrowed five currencies for use as swap vehicles –Australian dollars, ECU, Italian lire, Pounds sterling and Spanish pesetas. In addition to the borrowing plan, the Bank borrowed about $1.1 billion equivalent to refinance prepayments of certain yen borrowings.
Borrowings, net of refinanced prepayments, made in the first half of FY90 had an average cost, after swaps, of 7.38 percent and an average maturity of 8.2 years, compared to 7.19 percent and 7.4 years for the same period in FY89.
Selected Balance Sheet Data
At the end of the first half of FY90, the Bank's disbursed and outstanding loans totaled $85.0 billion, compared to $84.7 billion at the end of the first half of FY89. Its other major asset -- cash and liquid investments -- totaled $18.6 billion, compared to about $19.5 billion a year earlier. On the liability side of its balance sheet were outstanding borrowings and swaps of $86.5 billion and equity of $16.2 billion, consisting of $6.2 billion of usable paid-in capital and $10.0 billion of reserves and surplus.
World Bank Financial Information
(in $ billions)
| December 31. 1988 | December 31, 1987 |
ASSETS |
|
|
Cash and Investments | 19.5 | 18.6 |
Loans Outstanding | 84.7 | 85.0 |
| 104.2 | 103.7 |
Liabilities, Capital and Reserves |
|
|
Short-Term Borrowings | 4.6 | 5.0 |
Medium-and Long-Term |
|
|
Borrowings and Currency Swaps | 83.5 | 81.5 |
Total Borrowings, Outstanding | 88.1 | 86.5 |
|
|
|
Other Liabilities (Net of Other Assets)and Accumulated Provision for Loan Losses | 1.2 | 1.0 |
Unable Paid-in Capital, Reserves and Accumulated Net Income, Unallocated |
14.9 | 16.2
|
| 104.2 | 103.7 |
* The Bank holds assets and liabilities in many currencies, but its financial statements are expressed in US dollars. Therefore, the translation of other currencies into US dollars at market rates of exchange results in adjustment to its assets and liabilities, including charges or credits to the general reserve.
Items may not add to totals due to rounding.
