GRUPO FINANCIERO IMPROSA 2011 ANNUAL REPORT

GRUPO FINANCIERO IMPROSA 2011 ANNUAL REPORT
Grupo Financiero Improsa 2011 Anual Report
Index
Grupo Financiero Improsa Mission, Vision and Values
4
Brief History of Grupo Financiero Improsa
5
Strategic Pillars of Grupo Financiero Improsa
6
Grupo Financiero Improsa Subsidiaries
7
Letter from the Chairman
8
Board of Directors
12
Management Team
13
Grupo Financiero Improsa Products and Services
14
Grupo Financiero Improsa Offices
16
Funding and Correspondent Banks
19
Fernando Ortuño Sobrado Foundation
20
Audited 2011 Financial Statements
22
Grupo Financiero Improsa 2011 Anual Report
Mission
Provide our customers superior
financial solutions tailored to meet
their needs.
Vision
To be a sound, profitable and
competitive regional financial group
– a leader in its field, with a clear
customer orientation.
Values
4
Misión, Visión
y Valores
de Grupo
Improsa Improsa
Mission,
Vision
and Values
of Financiero
Grupo Financiero
Excellence
Integrity
Dynamism
Knowledge
Grupo Financiero Improsa 2011 Anual Report
Brief
History
of Grupo Financiero Improsa
Financiera
Improsa
becomes
Banco Improsa
1986
Financiera
Improsa
is founded.
1995
Probanco joins
the group;
Grupo
Financiero
Improsa
is founded.
1997
2000
Banco Improsa
is listed on the
Costa Rican
Stock Exchange.
Selective
purchase of the
PLG portfolio
provides a
regional
presence.
2001
2003
GFI expands
its services,
creating
Arrendadora
Improsa,
Improsa SAFI,
Improsa Capital
and Improseguros.
The brokerage
house opens
its doors.
2004
GFI acquires
selected
Banco Bantec
CQ assets
and liabilities.
2006
GFI signs
subordinated
loan
agreements with
DEG and FMO.
2007
2008
GFI opens
advisory and
support centers
(CAAP) for SMEs.
GFI ventures into
development
banking.
ReIntegra
kicks off
its portfolio
recovery
service.
2009
2011
GFI forms a
strategic
partnership
with the IFC.
Reseña
Histórica
de Grupo
Financiero Improsa
Improsa
Brief
History
of Grupo
Financiero
5
Grupo Financiero Improsa 2011 Anual Report
Strategic
Pillars
of Grupo Financiero Improsa
Selective
focus on
strategic
segments
Use of
technology
Broad range
of products
Strategic
Pillars
Superior
personalized
service
Efficient cost
and operating
structure
Prudent risk
management
6
Pilares Estrategicos
Grupo Financiero
Financiero Improsa
Strategic
Pillars ofdeGrupo
Improsa
Grupo Financiero Improsa 2011 Anual Report
Grupo Financiero Improsa
Subsidiaries
Risk Rating
Long-term Local
AA+Colones
AA Dollars
Commercial Banking
Investment and Other
Financial Services
Banco Improsa S.A.
Improsa SAFI S.A.
Improsa Servicios
Internacionales
Improsa Valores
Puesto de Bolsa
Improactiva S.A.
Improsa Capital S.A.
Inmobiliaria Improsa S.A.
Improsa SAFI Panamá S.A.
Banprocesos S.A.
Improsa Agencia
de Seguros S.A.
Subsidiarias
de Grupo
Financiero
Imrosa
Grupo
Financiero
Improsa
Subsidiaries
7
Grupo Financiero Improsa 2011 Anual Report
Letter from the
Chairwoman
To our Grupo
Shareholders:
Financiero
Improsa
As we conclude a year replete with
challenges, it gives me great pleasure to
be able to report on a financial group that
has handled itself with great wisdom in a
complex environment, drawing strength
from its experience. Today more than
ever we are seeing a future filled with
exciting opportunities, and we believe
we have the right organization to take
full advantage of them.
As we all know, the global financial and
economic crisis has impacted most local
and international companies differently,
depending on their area of business.
We have been able to capitalize on
our country’s earlier periods of great
economic abundance. We have faced
the crisis with wisdom, maturity and
sharp insight, and we must acknowledge
that the primary reason for our success
has been the unwavering confidence
and support of our funding and
correspondent banks and our private
banking investors. Special mention
goes to development banks and
multilateral organizations such as the
International Finance Corporation (IFC),
German Investment Corporation (DEG),
Netherlands Development Finance
8
Carta de
la Presidencia
Letter
from
the Chairwoman
Corporation (FMO), Central American
Bank for Economic Integration (CABEI),
Inter-American Development Bank (IDB),
Andean Development Corporation (CAF),
Overseas Private Investment Corporation
(OPIC) and Belgian Investment Company
for Developing Countries (BIO), which
have not only maintained their
confidence in us but also extended new
loans and credit facilities to us in periods
of greater global uncertainty.
In subsequent years we focused
on
restructuring
our
business
and subsidiaries, optimizing our
organizational structure and managing
with the liquidity, solvency and prudence
befitting a changing and volatile
environment. Although many of these
efforts were not aimed at generating
earnings, they were definitely wellchosen.
We have expanded our investing
customer base and today are capturing
funds from far more diverse sources. Our
share of the banking industry’s deposits
has grown systematically, going from
41.2% in 2007 to 59.8% at the close of
2011.
In addition, Grupo Financiero Improsa
has kept its equity sufficiency well above
Grupo Financiero Improsa 2011 Anual Report
allowable minimums (though this affects
its return on equity), demonstrating an
obvious commitment to maintaining a
solid equity base.
4. The portfolio of property received as
dation in payment has fallen from ₡5.2
billion to ₡995 million in the last three
years.
Another key aspect of this four-year
period has been a focus on prudent
portfolio growth. Thus, growth has been
moderate rather than fast-paced, with a
very controlled default rate in the credit
portfolio and low vacancy rate in the
managed real estate investment fund
portfolio.
5. For its part, the Trust Department has
maintained its characteristic leadership
and dynamism, positioning Banco
Improsa with a 44% market share –
much larger than that of any other bank.
The year 2011 was a pivotal one, since its
first manager, Mr. Jorge Calvo, retired.
We have been fortunate in keeping
him on as our advisor, but we must
underscore the tremendous job being
done by our new manager, Mr. Alfonso
Meléndez, and his team.
In addition, in 2011 we concentrated on
meeting various goals in the different
subsidiaries, some of the most significant
achievements are as follows:
1. We worked hard to recover important
customers who had migrated in previous
years to banks with more active positions
during the crisis, such as the state banks,
by stepping up our visits to them. The
fruits of our labor were largely seen in
the last quarter of 2011, when these
efforts, together with renewed demand
for loans, led to a thirty-five milliondollar portfolio growth.
2. In the last two years the quality of
our loan portfolio has improved steadily,
with our default rate dropping by 30
points from 2.42% to 2.12% – placing
us in a favorable light compared to the
overall national financial system, whose
rate dropped by merely 25 points.
3. With an approach emphasizing
personalized service, tailored financial
solutions, and a clear knowledge of
our customers’ needs, our group has
focused on providing our customers
with financial facilities in line with their
needs, making it possible to pay adequate
attention to customer loans and a high
quality loan portfolio.
6. One strategic change has been to
base the future growth of SAFI (our
investment fund management company)
on its real estate funds, particularly our
Gibraltar and Crestones funds. These
funds have performed extremely well,
with yields and occupancy rates higher
than the market average despite the
financial crisis in the real estate sector.
With a view to future growth we have
started the process of listing these funds
on Central American stock markets,
where we’ve seen strong interest among
a large number of investors due to
the special features offered by these
investment instruments.
7. We should also note the achievements
of the real estate development funds. The
Cala Luna fund, which was hard hit by the
financial crisis and its circumstances, was
settled with all its investors in preparation
for its delisting. The fund’s delisting is
currently underway in accordance with
the rules of the General Superintendent of
Securities Office, with the full cooperation
of its shareholders.
Cartathe
de la
Presidencia
Letter from
Chairwoman
9
Grupo Financiero Improsa 2011 Anual Report
8. The Multipark fund has completed
its second and third project phases,
which have been occupied by prominent
tenants such as Emerson, the SUTEL
and ARESEP. Although there are still
some pending issues to resolve, today
Multipark is a consolidated business
park of noted prestige in western San
Jose.
9. In 2011 we concentrated on
strengthening several companies in
the group, such as Improsa Servicios
Internacionales, where a top-notch
executive team was put together that
has produced tangible results for the
subsidiary in the first year under its
management. With its new brand,
Improsa Leasing redefined its strategy
to emphasize leasing in Costa Rica and
Guatemala, setting up new partnerships
with equipment suppliers – essential
for future growth. Operationally, it
defined its asset management process
and strengthened its business risk
management. To lower company costs,
it exhaustively revised its insured assets
and obtained annualized insurance
savings of 43% across the region.
10. ImproActiva, for its part, redefined
its business strategy with the launch
of its new product, ReIntegra, designed
to provide third parties with a financial
asset recovery service. Through its strong
performance in asset recovery, ReIntegra
has been able to build partnerships with
related companies, taking advantage
of its infrastructure and extensive
knowledge of portfolio collection.
11. Improsa Capital has become the
growth engine for real estate funds,
maintaining a sales team for promoting
any properties that become vacant. It has
also taken over real estate management
Carta de
la Presidencia
from
the Chairwoman
10 Letter
with a strong commitment to keeping
properties in optimum condition at all
times.
12. With its highly dynamic management,
Improsa Seguros has focused on growing
the company’s customer base to offset
falling insurance premiums resulting
from increased competition. It has also
created, in conjunction with the INS,
innovative insurance products with very
attractive rates for new customers and
those of Grupo Financiero Improsa.
13. Our group has continued making
enormous efforts and progress on
strategic projects:
a. The SIGMA project, conceptualized
as the new financial core, has advanced
notably toward its projected 2012/2013
implementation. At present we have
an exclusively dedicated team of some
forty members working seven days a
week on this project alone, which has
turned out to be extremely ambitious.
It involves cutting-edge global banking
technology, of which the group will reap
the rewards in improved service quality
and efficiency.
b. Our relationship banking strategy,
the Chirripó project, has entailed
major efforts in terms of both culture
and technological platform so that
executives are managing their customer
relationships rather than selling
products. To supplement the project,
product manager positions were created
for which staff specializing in different
products, such as invoice discounting,
leasing, insurance, company treasuries,
foreign currency sales and COMEX,
were promoted and hired. The primary
role of product managers is to innovate
and reinforce these services, but they
Grupo Financiero Improsa 2011 Anual Report
also provide strong support for segment
managers when cross-selling to their
customers, since they offer specialized
assistance with an in-depth knowledge
of each of the products offered by the
group. This strategy has strengthened
our
relationships
with
current
customers, thereby generating increased
revenue from services. In addition, by
keeping customer benefit in mind at all
times these managers have considerably
improved product competitiveness and
response times – sometimes by more
than 50% – thus strengthening the
group’s offer.
c. Given the stricter requirements
and control standards of new risk and
compliance rules and regulations, our
risk and compliance units have continued
evolving their consolidation and control,
often with state-of-the-art methods.
Although the role of these units is not
always very visible to the general public,
their functions are extremely important
for the group in that they provide
preventive control of risks associated
with the business of finance.
In short, these last four years have
definitely posed changes, uncertainties
and challenges. The solid commitment
of all our employees has made the
difference, however. For this reason I
began this report by stating that today
more than ever we feel prepared to
take advantage of any opportunities
the future may bring. We now have revamped subsidiaries, fully committed
employees and the immense satisfaction
of having faced the crisis and survived.
I’d like to emphasize here that our
most satisfying achievement has
been the strong commitment, loyalty,
professionalism and performance of
our employees and Board of Directors.
For a group dedicated to providing
financial services, human capital is our
most valuable asset, one that makes it
possible for us to stand out above all
other financial institutions.
For all of these reasons, then, we are
happy and proud to be able to reaffirm
that our group is now much stronger,
and that as of January 2012 our primary
job is to grow in order to provide our
shareholders with satisfactory profits
and high quality assets.
My greatest thanks go to you, our
esteemed shareholders.
Marianela Ortuño Pinto
Chairwoman Grupo Financiero Improsa
Cartathe
de la
Presidencia
Letter from
Chairwoman
11
Grupo Financiero Improsa 2011 Anual Report
Board of
Directors
Chairwoman
Marianela Ortuño Pinto
Vice Chairman
Mauricio Bruce Jiménez
Secretary
Manuel Ortuño Pinto
Treasurer
Víctor Watkins Parra
Member
Carlos Montoya Dobles
Member
Fernando Vargas Cullel
Member
Alejandro Schweldhem Beick
Alternate Member
Controller
12 Board of Directors
José Miguel Fuster
Arnoldo Camacho Castro
Junta Directiva
Grupo Financiero Improsa 2011 Anual Report
Management
Team
Management Team
Franco Naranjo Jiménez
General Manager,
Banco Improsa
Félix Alpízar Lobo
Assistant General Manager,
Banco Improsa
Hugo Aymerich Aubert
Assistant General Business Manager,
Banco Improsa
Jaime Ubilla Carro
General Manager,
Improsa SAFI
Michael Ruiz Delgado
General Manager,
Improsa Agencia de Seguros
Marco Urbina Soto
General Manager a.i.,
Improsa Capital
Ana Julieta Chaves Jiménez
General Manager,
Improsa Servicios Internacionales
Support Team
Bernal Allen Chávez
Finance Manager
Aneth Alfaro Chávez
Compliance Officer
Randall Chavarría Soto
IT and Operations Director
Alfonso Meléndez Vega
Trust Manager, Banco Improsa
Carolina Mena Ramírez
Administrative and Human Resources Manager
Francisco Ramírez Chinchilla
Risk and Operations Manager,
Improactiva
José Alberto Rodríguez Sánchez
Operations and Finance Manager,
Banca de Inversión
Marianela Salazar De Miguel
Risk Director
Mónica Volio Orozco
Product and Marketing Director
Laura Ruíz Víquez
Loan Operations Manager, Banco Improsa
Sergio Quesada Roldán
Integrated Risk Manager, Banco Improsa
Auditoría Interna
Jorge Muñoz Quirós
Internal Auditor
Equipo Gerencial
Management Team
13
Grupo Financiero Improsa 2011 Anual Report
Products and
Services
Customized Product Offer
Productive
Assets
Working
Capital
Inventory
Management
• Leasing
• Asset Financing
• Letters of Credit
•Working Capital
Credit Lines
• Inventory
Pledging
Sales
• Invoice
Discounting
• Commercial
Documents
• Bank
Guarantees
Payments
• Payrolls
• Transfers
• Credit Cards
• Foreign
exchange
Cash
Management /
Collection
• Accounts
•Investment
Certificates
• Collection
Customized
Product Offer
Insurance
SME Support and Training
SME Advisory and Support Centers (CAAPs)
• Training cycle on topics of interest for SME management
- Marketing, human resource, financial, strategic and legal advisory
• Meeting rooms for customer use
• Partnering with consulting firms for taking advantage of customer relationships
• Channel for new project generation
• Loyalty-building with SME customers
• Only bank in the market offering these services
14
Products and Services
Productos y Servicios
Grupo Financiero Improsa 2011 Anual Report
Investment Alternatives
Trusts
• Term Investment Certificates
• Current and At-Sight Investment
Accounts
• Smart Savings Virtual Account
• Real Estate Investment Funds
• Investment Portfolio Management
• Stock Market Advisory
• Surety Trusts
• Testamentary or Endowment Trusts
• Life Insurance Trusts
• Management and Investment Trusts
• Educational and Other Types of Trusts
Credit Facilities
•Revolving Credit Lines for Working
Capital
•Corporate Credit Cards
•Letters of Credit (Import/Export)
•Bid and Performance Bonds
•Invoice Discounting
•Bank Overdrafts
Leasing
•Operating Lease for Financing
•Financial
Productos y Servicios
Insurance
• Life
• Medical
• Fire
• Workers Compensation
• Car
• Others
Other Services
• Services and Advisory for Small and
Medium Enterprises (SMEs)
• International Transfers
• Foreign Exchange Purchases an Sales
(FOREX)
• Payment of Public Utilities
• E-Banking with Payroll Payments and
Batch Payment Scheduling
• Payment of Annual Road Tax
Products and Services 15
Grupo Financiero Improsa 2011 Anual Report
Grupo Financiero Improsa
Offices
Head Office – Barrio Tournón Branch
South side of the La República Newspaper Office,
Barrio Tournón, San José
Tel: (506) 2284-4000
Barrio Escalante Branch
300 meters east and 200 meters south of the
Santa Teresita Church, Barrio Escalante
Tel: (506) 2523-1500
Curridabat Branch
Plaza Freses Shopping Center, Curridabat
Tel: (506) 2253-9339
Escazú Branch
Fuentes del Obelisco Shopping Center, Escazú
Tel: (506) 2288-3011
16 Grupo Financiero Improsa Offices
Oficinas de Grupo Financiero Improsa
Grupo Financiero Improsa 2011 Anual Report
San José Branch
Grupo Improsa Building, south side of the Club Unión,
downtown San José
Tel: (506) 2248-2125
Heredia Branch – SME Advisory
and Support Center
Plaza Rubí Shopping Center, across from the DHL
office, La Aurora, Heredia
Tel: (506) 2589-1490
Barrio Escalante SME Advisory
and Support Center
300 meters east, 100 meters south and 25 meters west
of the Santa Teresita Church, Barrio Escalante
Tel: (506) 2284-4260
Virtual Branch
Improb@ank
www.improsa.com
Oficinas de Grupo Financiero Improsa
Grupo Financiero Improsa Offices 17
Grupo Financiero Improsa 2011 Anual Report
Improsa International Services
Guatemala
Tel: (502) 2222-8400
El Salvador
Tel: (503) 2298-6311
Honduras
Tel: (504) 2550-7172
Nicaragua
Tel: (505) 2277-1135
Costa Rica
Tel: (506) 2284-4000
Panamá
Tel: (507) 396-3051
Improsa Agencia de Seguros
Grupo Improsa Building, south side
of the Club Unión, downtown San José
Tel: (506) 2284-4000
Improsa Capital
Grupo Improsa Building, south side of
the Club Unión, downtown San José
Tel: (506) 2284-4000
Improsa SAFI
Grupo Improsa Building, south side of
the Club Unión, downtown San José
Tel: (506) 2284-4000
Improsa Valores Puesto de Bolsa
Grupo Improsa Building, south side of
the Club Unión, downtown San José
Tel: (506) 2284-4000
Improsa Servicios Internacionales
As a platform for regionalizing the leasing and insurance business
• Improsa takes the INS to Central America
using the ISI regional platform.
• Improsa is one of the region’s biggest
generators of business for the INS.
Guatemala
Honduras
El Salvador
Nicaragua
Costa Rica
Panamá
18 Grupo Financiero Improsa Offices
Oficinas de Grupo Financiero Improsa
Grupo Financiero Improsa 2011 Anual Report
Funding and
Correspondent
Banks
Foreign Cooperation Institutions
Main Correspondent Banks
•International Finance Corporation (IFC)
•Inter-American Development Bank (IDB)
•German Investment Corporation (DEG)
• Netherlands Development Finance
Corporation (FMO)
•Central American Bank for Economic
Integration (CABEI/BCIE)
•Inter-American Investment Corporation (IIC)
•Andean Development Corporation (CAF)
•Multilateral Investment Fund (MIF)
•Overseas Private Investment Corporation (OPIC)
•World Business Capital Inc. (WBC)
•Belgian Investment Company for
Developing Countries (BIO)
• Wells Fargo
• Citibank
• Standard Chartered Bank
• Commerzbank
• BAC Florida Bank
• Banco Sabadell
• BICSA
• Eastern National Bank
• Bancoldex
• Cobank
• Scotiabank
• Unicredit
Funding and Correspondent Banks 19
Grupo Financiero Improsa 2011 Anual Report
Fernando
Ortuño Sobrado
Foundation
Faith and Effort for Growing
From its inception in 2005, the Fernando
Ortuño Sobrado Foundation has sown
seeds of hope among at-risk children,
adolescents and youths. More recently,
it has helped give the families of Grupo
Improsa employees a chance to own a
dignified home.
During 2011 its student scholarship
programs benefitted 28 children and
20
Fernando Ortuño Sobrado Fundation
youths of GFI and ILG employees. This
contribution not only helps them forge
ahead with their studies but also commits
them to contributing to the recycling
program set up in our organization.
The Foundation has set new challenges
for 2012 in an effort to expand its social
plan to generate more benefits for our
at-risk employees.
Fundación Fernando Ortuño Sobrado
AUDITED 2011 FINANCIAL STATEMENTS
Grupo Financiero Improsa 2011 Anual Report
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Grupo Financiero Improsa 2011 Anual Report
24 Audited 2011 Financial Statements
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Grupo Financiero Improsa 2011 Anual Report
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Grupo Financiero Improsa 2011 Anual Report
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Grupo Financiero Improsa 2011 Anual Report
32 Audited 2011 Financial Statements
Grupo Financiero Improsa 2011 Anual Report
Audited 2011 Financial Statements 33
Tel.:(506) 2284-4000
www.improsa.com