Dutch development bank FMO has published its Annual Results 2008(i). Despite inevitable effects of the global financial downturn in the last quarter, FMO closed the year with a positive result of EUR 48 mln. “We regard our profits as a necessary condition to realize our activities. Through continued reinvesting of our profits in sustainable projects, we can increase development impact in emerging markets. In the coming year our target is to commit EUR 1 bln in investments in private companies in these markets,” stated Nanno Kleiterp, FMO’s CEO.

Portfolio growth
The development bank, which acquired an official bank status in 2008, committed EUR 1.3 bln in new investments and increased its total committed portfolio from EUR 3.4 bln in 2007 to EUR 4.2 bln in 2008. FMO raised its percentage of the portfolio in low-income countries to 37% by entering countries such as Sierra Leone, Laos and Tajikistan. FMO’s AAA rating from Standard & Poor’s facilitates the company’s access to financial markets for funding, which should moderate liquidity risk compared to other banks. However, in these times, attracting long-term funding has become more difficult. To support its operations in times of adverse market circumstances, FMO has taken steps to diversify its funding base to have access to additional sources of liquidity if needed.

Sustainable development impact
FMO has seen proof that there is a clear correlation between strong financial results and good corporate governance, sound management of environmental and social risks. “Therefore we are convinced that sustainability is an integral part of business and we will keep promoting these values and principles in the markets where FMO is active,” comments Kleiterp. Due to the significant economic growth of several emerging markets in recent years, FMO will shift its focus further towards low income countries in order to stimulate sustainable private sector growth and to increase access to finance where the highest impact is achieved. Besides that, in the coming years the development bank will focus on three sectors that are imperative for sustainable economic, social and environmental development impact: finance, (renewable) energy and housing.

Experts in crisis
FMO’s experience with several financial crises in emerging markets has shown that companies in these markets are often quite resilient to shocks. “Our clients show a capability to rebound from financial downturn and focus on the future. It has always been FMO’s role to stand by its clients and help them through difficult times. This is no different in the current financial turmoil. Whether it’s in Asia, Africa, Eastern Europe or Latin America, we will do what we can to support their activities when commercial investors are withdrawing from these markets,“ said Kleiterp.

Outlook 2009
For all markets and companies – FMO included – 2009 will be a challenging year. The adverse economic circumstances companies across the globe face, will affect FMO’s performance through higher value adjustments and lower equity income. Although the effects of the financial crisis are already being felt in emerging markets, there is also reason for optimism: emerging markets will continue to grow with an average of 2 percent in 2009, where more advanced markets are facing an estimated negative growth in 2009 with an average of over 3 percent(ii).

FMO strongly believes that this global financial crisis makes it even more important to continue investing in emerging markets. It can help low income people to move up to the middle class enabling them to make their own living, now and in the future.

(i)The Annual Results shall be adopted in FMO’s General Shareholders’ Meeting on May 13, 2009.
(ii)Source: IMF Survey online, March 19, 2009 http://www.imf.org/external/pubs/ft/survey/so/2009/NEW031909A.htm

Note:
A webcast with an explanation on the Annual Report 2008 by the Management Board of FMO is available as of today, click here to view it.

About FMO
The Netherlands Development Finance Company (FMO) is the international development bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries. With an investment portfolio of €4.2 billion, FMO is one of the largest bilateral private sector development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not - or not yet - prepared to take. FMO's mission: to create flourishing enterprises, which can serve as engines of sustainable growth in their countries.

Press contact:
Nicoline van Slingelandt
Communications Officer (PR)
T: +31 70 314 9790
M: +31 622 563 047
E: n.van.slingelandt@fmo.nl

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