The World Bank announced today its preliminary, unaudited financial results for the six months ended December 31, 1991, the first half of its 1992 fiscal year.
These included new loan commitments of $5.2 billion and disbursements on loans to developing countries of $6.3 billion equivalent, compared to $4.6 billion and $5.6 billion, respectively, in the first half of FY91. Commitments by the International Development Association (IDA), the Bank's concessional lending affiliate, totaled about $2.7 equivalent, compared to $1.8 billion in the first half of FY91, while IDA disbursements were $2.1 billion, about 4 percent more than in the first half of FY91.
The World Bank's medium- and long-term (MLT) borrowings amounted to $5.8 billion equivalent at an average maturity of 5.8 years. The average cost was 6.75 percent on the $5.5 billion of borrowings for which the cost was fixed in the six months ended December 31, 1991. This compares to MLT borrowings of $6.3 billion at a cost of 8.32 percent in the first half of FY91. After swaps, virtually all of first half FY92 borrowings were in four currencies: U.S. dollars, 35 percent; Japanese yen, 30 percent; Swiss francs, 18 percent; and Deutsche mark, 16 percent. The Bank also borrowed five currencies for use as swap vehicles -- European Currency Units, Hong Kong dollars, Italian lire, Portuguese escudos and Spanish pesetas.
Prepayments of borrowings in the first half of FY92 totaled $1.9 billion equivalent and another $571 million equivalent had been called for redemption or prepayment in the fiscal year.
Net Income and Financial Ratios
The Bank's net income, after provisioning $67 million against possible loan losses, was $1,036 million in the first half of FY92 compared to $797 million, after provisioning $201 million, in the first half of FY91. Of the increased net income, $123 million was from overdue interest and commitment charges receive d from Nicaragua related to periods prior to FY92.
Also contributing to the increase was the 10.03 percent financial return on investments during a period of generally declining interest rates in world markets. The return on average earning assets for the first half of FY92 was 1.80 percent and the interest coverage ratio (interest expense plus net income divided by interest expense) was 1.30, compared to 1.40 percent and 1.23, respectively, for FY91.
Selected Balance Sheet Data
At the end of the first half of FY92, the World Bank's disbursed and outstanding loans totaled $101.4 billion, compared to $90.6 billion at the end of FY91. Its other major asset -- cash and liquid investments – totaled $19.8 billion, compared to $20.0 billion at the end of FY91. On the liability side of the balance sheet were outstanding borrowings, after swaps, of $98.1 billion and equity of $20.3 billion, consisting of $7.2 billion of usable paid-in capital and $13.1 billion of reserves and surplus. The comparable figures at the end of FY91 were $94.9 billion of outstanding borrowings and swaps and $18.7 billion of equity.
By the end of the first half of FY92, member countries had subscribed to about 59 percent of the General Capital Increase (GCI) approved in April 1988. Thirty-six-member countries had subscribed all of the GCI shares available to them, while 18 others had subscribed part of the GCI shares allocated to them. The subscription period for the GCI shares ends on September 30, 1993. Partly as a result, the Bank had $54.5 billion of lending headroom or 35 percent of its $155.9 billion lending limit. Headroom is the difference between the sum of the total amount outstanding of the Bank's direct loans, participations in loans and callable guarantees and the total amount of its subscribed capital, reserves and surplus.
WORLD BANK SELECTED FINANCIAL INFORMATION
(In US$ billion*)
June 30, 1991
Cash and Investments
LIABILITIES, CAPITAL AND RESERVES
Medium and Long-term
Borrowings, after Swaps
Total Borrowings outstanding, after Swaps
Net other Liabilities
Accumulated Provision for Loan Losses
Usable Paid-in Capital, Reserves, Surplus and Accumulated
*Figures for December 31, 1991 are preliminary.