The agrarian Bank said that it is not true that the entity has a decapitalization problem or lack of capital to advance their missionary operations.
The bank’s solvency, as of June 2022, stood at 15.72%. And taking into account that the latest data from the Financial Superintendence for the month of April indicate that the average solvency of the banking system in Colombia is 16.23%, it can be concluded that the entity’s solvency is adequate.
(See: Francisco Mejía resigned from the presidency of Banco Agrario).
The solvency indicator measures, in general terms, the rrelationship between the capital of a banking entity and its portfolio volume, being the regulatory limit 9%.
Having a solvency margin 74.6% higher than the regulatory limit means that the bank has enough capital to meet its growth expectations even in the most aggressive scenarios.
In December 2019, the general assembly of Banco Agrario authorized the split of the capital of the entity to nurture the Bicentennial Group with $700,000 million.
(See: Banco Agrario launched parametric agricultural insurance: what it consists of).
As input for making this decision, the Ministry of Finance asked the bank’s management to analyze the impact that a capital reduction could have on the portfolio’s growth plans.
After the financial analysis, it was determined that a reduction of $700,000 million would not limit the entity’s growth plans or its financial strength.
The Agrarian Bank said that, as of 2020, with its new capital, its loan portfolio has grown, until June 2022, by 18.1%, reaching a total amount of $16.41 billion, which would show that its capital has been sufficient to support its credit portfolio and other investment operations that require it.
Currently, the capital (technical equity) of the bank stands at $2.05 trillion, which gives a solvency, as mentioned above, of 15.72%, with which it could, according to the regulatory limit, leverage growth immediately from your 91% portfolio.
(See: Why banking is necessary in small and medium mining).
The Agrarian Bank assured that in this government it has been financially strengthened as indicated by the profit figure for the year 2021, which was $779 billion, which represents a growth of 217% compared to the figure for 2018.
As of June 2022, accumulated profits total $361,000 million, with a closing forecast of $760,000 million as of December 2022, with which the solvency margin would remain at 19.54%.
Additionally, he warned that in this government the largest expansion of development credit, with accumulated disbursements for the four-year period 2018-2022 of $13.6 billion for small and medium agricultural producers, which represents a growth of 38% compared to the previous four-year period (2014-2018) and with a growing trend, since the accumulated 2022, as of July, totals $2.51 trillion, a growth of 58% versus the accumulated as of July 2018.
In rural women, The bank has disbursed $3.32 in this four-year period, which represents a growth of 56%; and in rural youth, also a record figure of $854,000 million.
(See: The transformation of the Agrarian Bank).
Another issue that was assured in the press conference of the joint report was that “We were able to evidence specific cases of the Agrarian Bank that in its mission leaves important issues and also dedicated a good percentage of the budget to develop real estate projects….”.
Regarding this statement, Banco Agrario said that has not made investments in real estate projects, among other things “because this type of investment is prohibited for banks in accordance with current regulations“.
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