Abroad:
increased volume in local currency.
Eurocurrency loans:
innovative trend continues.
Our market share in this sector, where we are
active through both our branches and our
subsidiaries, could virtually be maintained.
The IDM Bank, partly thanks to the successful
conclusion of a number of agreements with
leading motor manufacturers - an area in
which this subsidiary has come to specialize -
retained its position as the largest finance
company.
The results achieved by the other group
members also met the targets set.
Measures introduced during the year will
contribute to a better control of credit risks
and, with this, a socially responsible credit
system.
Measured by the four balance sheet items
referred to, the volume of loans provided by the
Bank's foreign network fell by 2.8% in 1985. As
indicated earlier, the main reason for this decline
was the fall in the value of most currencies,
including the dollar. But in a number of
countries the cause lay in the state of the
economy and the problems which have existed
in particular sectors, including shipping and
diamond trading, for several years.
In the majority of countries, however, aided by
the recovery of the economy, we were able to
substantially increase our loan portfolio. The
most striking examples were the United States
and the United Kingdom.
Generally speaking, our loan activities abroad
are directed towards large businesses. In a
number of countries where we have been
established tor a long time, or have a eompaia-
tively large branch network, we also look to
other sectors of the market. Thus, in the United
States we are making efforts to increase our
share of the business from medium-sized
companies, and it is anticipated that the
Financial Services Group referred to on page 32
will be of great value in this context. In a few
countries we also operate in the consumer loan
market, where we have achieved particular
success in Brazil.
The above examples show the diversity of the
loan operations of our foreign network. We shall
seek to extend this, where possible, in the years
ahead.
The shift towards the issue of negotiable paper
which is taking place in the Euroloan and
capital markets, and for which the term
"securitisation" has been coined, influenced the
Bank's operations in these markets.
Nevertheless, there was no lack of activity in the
market for syndicated Eurocurrency loans.
However, a sizeable portion of this related to
refinancing, which in itself does not increase the
portfolio. Moreover, as the transactions were
frequently accompanied by relaxation of the
conditions applying to the debtor, interest
margins in this sector were squeezed.
Other developments, however, led to a modest
increase in our syndicated loan portfolio, among
them a limited revival of spontaneous credit to a
number of East European countries and a
continuing demand for fixed-interest guilder
loans. We also participated in a number of fixed-
interest, syndicated loans in ECUs.
40
Consumer spending is on the rise.
