Banco de Costa Rica and Subsidiaries Unaudited Consolidated

Transcription

Banco de Costa Rica and Subsidiaries
Unaudited Consolidated Financial Statements
March 31, 2016 and 2015
Table of Contents
Consolidated Financial Statements
Balance Sheet
Income Statement
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
(1) Summary of operations and significant accounting policies .................................. - 8 (a) Operations .................................................................................................... - 8 (b) Accounting policies for consolidated financial statement preparation ............... - 11 (c) Investment in other companies ..................................................................... - 12 (d) Foreign currency ......................................................................................... - 13 (e) Basis for the recognition of the consolidated financial statements ..................... - 15 (f)
Financial instruments .................................................................................. - 15 (g) Cash and cash equivalents ............................................................................ - 18 (h) Investments in financial instruments ............................................................. - 18 (i)
Loan portfolio............................................................................................. - 19 (j)
Allowance for doubtful accounts .................................................................. - 20 (k) Securities sold under repurchase agreements .................................................. - 25 (l)
Accounting for interest receivable ................................................................. - 26 (m) Other receivables ........................................................................................ - 26 (n) Realizable assets ......................................................................................... - 26 (o) Offsetting ................................................................................................... - 27 (p) Property, furniture, and equipment ................................................................ - 27 (q) Deferred charges ......................................................................................... - 29 (r)
Intangible assets .......................................................................................... - 29 (s)
Impairment of assets.................................................................................... - 30 (t)
Accounts payable and other payables ............................................................ - 31 (u) Provisions .................................................................................................. - 31 (v) Legal reserve .............................................................................................. - 32 (w) Revaluation surplus ..................................................................................... - 32 (x) Use of estimates .......................................................................................... - 32 (y) Recognition of main types of income and expenses ........................................ - 33 (z) Income tax ................................................................................................. - 34 (aa) BICSA - Financial leases ............................................................................. - 34 (bb) Pension and retirement plans for employees from Banco de Costa Rica ............ - 35 (cc) Profit sharing .............................................................................................. - 35 (dd) Development Financing Fund ....................................................................... - 36 -
(ee) Development Credit Fund ............................................................................ - 36 (ff) BICSA - Trusts ........................................................................................... - 38 (gg) Fiscal year .................................................................................................. - 38 (2) Collateralized or restricted assets ..................................................................... - 38 (3) Balances and transactions with related parties ................................................... - 39 (4) Cash and cash equivalents ............................................................................... - 40 (5) Investments in financial instruments ................................................................. - 40 (6) Loan portfolio ................................................................................................ - 45 a)
Loan portfolio by sector ............................................................................... - 45 b)
Current loans .............................................................................................. - 46 c)
Loan portfolio by arrears:............................................................................. - 47 d)
Past due loans ............................................................................................. - 48 e)
Interest receivable on loan portfolio .............................................................. - 49 f)
Allowance for loan impairment .................................................................... - 49 g)
Syndicated loans ......................................................................................... - 51 (7) Realizable assets, net ...................................................................................... - 54 (8) Interest in other companies’ capital .................................................................. - 55 (9) Property, furniture, and equipment ................................................................... - 57 (10) Intangible assets ............................................................................................. - 60 (11) Obligations with the public at sight .................................................................. - 62 (12) Term and at sight obligations with the public and entities ................................... - 62 (13) Other obligations with the public ..................................................................... - 63 (14) Obligations with entities and the Central Bank of Costa Rica .............................. - 65 (a) Maturities of loans payable .......................................................................... - 66 (15) Income tax ..................................................................................................... - 68 (16) Provisions ..................................................................................................... - 74 (17) Other miscellaneous accounts payable .............................................................. - 79 (18) Equity ........................................................................................................... - 80 Technical reserves of BICSA´s retained earnings ..................................................... - 81 (19) Contingent accounts ....................................................................................... - 87 (20) Trusts ............................................................................................................ - 93 (21) Other debit memoranda accounts ..................................................................... - 95 (22) Current and term brokerage operations and portfolio management operations ....... - 97 (23) Investment fund management agreements ....................................................... - 101 (24) Pension fund management agreements............................................................ - 102 (25) Financial income on investments in financial instruments ................................. - 106 (26) Financial income on loan portfolio ................................................................. - 106 (27) Expenses from obligations with the public ...................................................... - 107 (28) Expenses from allowances for impairment of assets ......................................... - 107 (29) Income from recovery of assets and decreases in allowances and provisions ....... - 108 (30) Service fee and commission income ............................................................... - 109 (31) Income from interests in other companies ....................................................... - 110 (32) Administrative expenses ............................................................................... - 111 (33) Legal profit sharing ...................................................................................... - 112 (34) Components of other comprehensive income .................................................. - 113 -
(35) Operating leases ........................................................................................... - 113 (36) Fair value of financial instruments ................................................................. - 114 (37) Segments ..................................................................................................... - 115 (38) Risk management ......................................................................................... - 121 (39) Financial information of the Development Financing Fund ............................... - 168 (40) Situation of the Development Credit Fund ...................................................... - 180 (41) Transition to the International Financing Reporting Standards (IFRSs) .............. - 188 (42) Figures for 2014 ........................................................................................... - 212 (43) Relevant and subsequent events ..................................................................... - 212 (44) Date of authorization for issuance of the financial statements ............................ - 214 -
-8BANCO DE COSTA RICA AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2016
(1)
Summary of operations and significant accounting policies
(a)
Operations
Banco de Costa Rica (hereinafter, the Bank) is an autonomous, independently managed,
public law institution organized in 1877. As a State-owned public bank, it is regulated by
the Internal Regulations of the National Banking System (IRNBS), the Internal Regulations
of the Central Bank of Costa Rica, and by the Political Constitution of the Republic of Costa
Rica. It is also subject to oversight by the General Superintendence of Financial Entities
(SUGEF) and the Comptroller General of the Republic (CGR). The Bank’s registered office
is located at Avenida Central and Avenida Segunda, Calle 4 and Calle 6, in San José, Costa
Rica.
The Bank´s website and its subsidiaries located in Costa Rica is www.bancobcr.com.
The Bank is mainly dedicated to extending loans and granting bid and performance bonds;
issuing certificates of deposit; opening checking accounts in colones, U.S. dollars, and
euros; issuing letters of credit; providing collection services; buying and selling foreign
currency; managing trusts; providing custodial services for assets; and other banking
operations. As of March 31, 2016, the Bank has a total 235 branches (239 and 245 in
December and March 2015, respectively) distributed across the national territory and has
in operation 592 automated teller machines (594 and 581 in December and March 2015,
respectively), and it has 3.574 employees (3.554 and 3.873 in December and March 2015,
respectively).
The consolidated financial statements and notes thereto are expressed in colones (¢), the
legal tender of the Republic of Costa Rica and functional currency.
The Bank fully owns 100% of the following subsidiaries:
BCR Valores, S.A. - Puesto de Bolsa, S.A., was organized as a corporation in February,
1999 under the laws of the Republic of Costa Rica. Its main activity is securities trading.
As of March 31, 2016, the brokerage house had 64 (60 and 62 in December and March
2015, respectively), and it is regulated by the General Superintendence of Securities
(SUGEVAL).
(Continues)
-9BANCO DE COSTA RICA AND SUBSIDIARIES
BCR Sociedad Administradora de Fondos de Inversión, S.A. (investment fund manager
company) was organized as a corporation in July 1999 under the laws of the Republic of
Costa Rica. Its main activity is investment fund management. As of March 31, 2016, it had
86 employees (86 and 91 in December and March 2015, respectively), and it is regulated
by the General Superintendence of Securities (SUGEVAL).
BCR Pensión Operadora de Planes de Pensiones Complementarias, S.A. (pension fund
operator) was organized as a corporation in September 1999 under the laws of the Republic
of Costa Rica. Its main activity is managing supplemental pension plans and offering
additional services related to disability and death plans to members. As of March 31, 2016,
it had 113 employees (105 and 109 in December and March 2015, respectively), and it is
regulated by the Superintendence of Pensions (SUPEN).
BCR Sociedad Corredora de Seguros, S.A. (insurance broker) was organized as a
corporation in February 2009 under the laws of the Republic of Costa Rica. Its main activity
is insurance underwriting. As of March 31, 2016, it had 81 employees (81 and 80 in
December and March 2015, respectively), and it is regulated by the General
Superintendence of Insurance (SUGESE).
BAN Procesa - TI. S.A. was organized as a corporation in August, 2009 under the laws of
the Republic of Costa Rica. Its main activity will be to provide IT processing services and
technical support, purchase, lease, and maintain hardware and software, including software
development, and address the Bank’s IT needs. This entity has not started operations.
The Bank holds a 51% ownership interest in the following subsidiary:
Banco Internacional de Costa Rica, S.A. and subsidiary (BICSA) was organized as a bank
under the laws of the Republic of Panama in 1976. It operates under a general license
granted by the Superintendence of Banks of Panama to engage in banking transactions in
Panama or abroad; its office is located in the city of Panama, Republic of Panama, BICSA
Financial Center, 50th floor, Avenida Balboa and Calle Aquilino de la Guardia, and its
subsidiary in Miami, Florida, United States of America. The remaining 49% of BICSA’s
shares are owned by Banco Nacional de Costa Rica. As of March 31, 2016, BICSA has 259
employees (259 and 243 in December and March 2015, respectively).
(Continues)
- 10 BANCO DE COSTA RICA AND SUBSIDIARIES
In the Republic of Panama, banks are regulated by the Superintendence of Banks of Panama
through Executive Order No. 9 of February 26, 1998, and by the resolutions and directives
issued by that entity. Among other aspects, that law regulates authorization of banking
licenses, minimum capital and liquidity requirements, general oversight, and procedures for
credit risk and market risk management, money laundering prevention, and bank takeover
and liquidation. Banks are also subject to an audit at least every two (2) years by auditors
from the Superintendence of Banks to verify compliance with Executive Order No. 9 and
Law No. 42 on Money Laundering Prevention.
BICSA wholly owns subsidiaries Arrendadora Internacional, S.A. and Bicsa Capital S.A.,
engaged in providing funding through financial leases and purchase of invoices and
brokerage services, respectively.
The Branch in Miami has been operating since September 1, 1983 under an international
banking license granted by the office of the State Comptroller and Banking Commissioner
of the State of Florida, United States of America.
Regulatory Matters of Banco Internacional de Costa Rica, S.A. and Subsidiary
Miami Branch
The Branch is subject to regulations and periodic oversight by certain federal and state
agencies. For such purposes, the Branch has an agreement with federal and state regulatory
authorities, which requires the Branch to continually maintain and report certain minimum
capital ratios and maturity parameters, e.g. the Branch must maintain a minimum ratio of
eligible assets to third party liabilities of 110%, on a daily basis.
Panama Branch
Executive Order No. 9 of February 26, 1998 requires that banks operating under a general
license maintain capital funds for an amount greater than or equal to 8% of risk-weighted
assets, including off-balance sheet operations. This law also limits the amount that can be
loaned to a single economic group to a maximum of 25% of capital funds. It also limits the
amount that can be loaned to related parties to a maximum of 5% and 10% of capital funds,
depending on the guarantee provided by the borrower, up to a cumulative maximum of 25%
of BICSA’s capital funds.
(Continues)
(b)
Accounting policies for consolidated financial statement preparation
The financial statements have been prepared in accordance with the legal provisions, rules,
and accounting regulations issued by the Central Bank of Costa Rica (BCCR), the General
Superintendence of Financial Entities (SUGEF), the Central Bank of Costa Rica (BCCR),
and in those matters that are not covered by those entities, according to the International
Financial Reporting Standards as of January 1, 2011 (IFRS).
Through communication C.N.S. 116-07 from December 18, 2007, the National Financial
System Supervisory Board issued a reform to the regulations denominated “Accounting
Standard Applicable to the Entities Supervised by SUGEF, SUGEVAL and SUPEN and
to the non financial issuers.” The objective of such standard is to regulate the adoption
and application of the International Financial Reporting Standards (IFRS) and the
corresponding interpretations (SIC and IFRIC interpretations.”)
Afterwards, through articles 8 and 5 of minutes corresponding to sessions 1034-2013 and
1035-2013, held on April 2, 2013, respectively, the National Financial System
Supervisory Board made a change to the “Accounting standard applicable to the entities
supervised by SUGEF, SUGEVAL, SUGEF and SUGESE and to the non-financial
issuers.”
According to such document, the IFRS and its interpretations must be mandatorily applied
by the supervised entities, in accordance with the texts in force as of January 1, 2011. This
is for the audits as of December 31, 2015, except for the special treatments applicable to
the supervised entities and non-financial issuers. The anticipated adoption of standards is
not allowed.
Issuing new IFRSs or interpretation issued by the IASB, as well as any amendment to the
adopted IFRSs to be applied by the entities under supervision will require a prior
authorization by the National Financial System Oversight Board (CONASSIF).
The financial statements have been prepared based on historical costs as explained in the
accounting policies below.
Historical costs are generally based on the fair value of the consideration for goods and
services.
(Continues)
Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants on the measurement date, regardless
of whether that price is directly observable or estimated using another valuation technique.
In estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability on the measurement date.
Fair value for measurement and/or disclosure purposes in these financial statements is
determined on such a basis, except for the stock-based payment transactions within the
scope of IFRS 2, the lease transactions within the scope of IAS 17, and the measurements
that have certain similarities with the fair value but which are not fair value, such as the
net realizable value in IAS 2 or the value in use in IAS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into
Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirely,
which are described as follows:
•
Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities that the entity can access at the measurement date;
•
Level 2 - inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
•
(c)
Level 3 - unobservable inputs for asset or liability.
Investment in other companies
Valuation of investments by the equity method
i.
Subsidiaries
Subsidiaries are entities controlled by the Bank. Control exists when the Bank has the
power, directly or indirectly, to govern the financial and operating policies of an entity
so as to obtain benefits from its activities. As prescribed by regulations, the financial
statements must present investments in subsidiaries by the equity method rather than
on a consolidated basis. Transactions that affect the equity of those companies, such
as translation adjustments and unrealized gain or loss on valuation of investments, are
recognized in the same manner in the Bank's equity, the effects are recorded in the
“Adjustment for valuation of investments in other companies" account.
The consolidated financial statements include the financial figures of the Bank and of
the following subsidiaries:
(Continues)
Name
BCR Valores, S.A. – Puesto de Bolsa
BCR Pensión Operadora de Planes de Pensiones
Complementarias, S.A.
BCR Sociedad Administradora de Fondos de Inversión, S.A.
Banco Internacional de Costa Rica, S.A. and Subsidiary
(Arrendadora Internacional, S.A., which is wholly-owned).
BCR Sociedad Corredora de Seguros, S.A.
Ownership
Percentage
100%
100%
100%
51%
100%
All significant intercompany balances and transactions have been eliminated on
consolidation.
(d)
Foreign currency
i.
Foreign currency transactions
Assets and liabilities held in foreign currency are converted to colones at the exchange
rate prevailing on the date of the consolidated balance sheet. Transactions in foreign
currency during the year are converted at the foreign exchange rate prevailing on the
date of the transaction. Conversion gains or losses are presented in the consolidated
income statement.
ii. Monetary unit and foreign exchange regulations
As of January 30, 2015, the Board of Directors of the Central Bank of Costa Rica, in
article 5 of the minutes of session 5677-2015, established a managed floating
exchange rate regime starting February 2, 2015, whose main aspects are detailed
below:
 In this regime, the Central Bank of Costa Rica will allow the exchange rate to be
freely determined by the foreign exchange market, but may participate in the
market in a discretionary manner, to meet its own requirements of currency and
those of the non-banking Public Sector, in order to avoid sharp exchange
fluctuations.
 The Central Bank of Costa Rica may carry out direct operations or use forex heldfor-trading instruments it deems appropriate in accordance with the current
regulations.
(Continues)
 In its stabilization transactions, the Central Bank of Costa Rica will continue to
use in the Foreign Currency Market (MONEX), the rules of engagement with the
amendments provided for in this agreement. The Financial Stability Committee
must determine the intervention procedures consistent with the strategy approved
by the Board.
As established in the Chart of Accounts, assets and liabilities held in foreign currency
should be expressed in colones at the exchange rate disclosed by the Central Bank of
Costa Rica. Thus, as of March 31, 2016, monetary assets and liabilities denominated
in U.S. dollars were valued at the exchange rate of ¢529,59 for US$1,00 (¢531,94 and
¢527,36 for US$1,00 in December and March 2015, respectively).
Valuation in colones of monetary assets and liabilities in foreign currency for the
period ended March 31, 2016 gave rise to foreign exchange losses of ¢65.935.402.397
(¢27.739.661.184 in March 2015), and gains of ¢65.494.272.747 (¢28.441.313.644
in March 2015), which are presented in the consolidated income statement..
Additionally, valuation of other assets and other liabilities gave rise to gains and
losses, respectively, which are booked in “Other operating income” and “Other
operating expenses”, respectively. For the period ended March 31, 2016, valuation of
other assets gave rise to gains of ¢619.302.428 (¢140.253.385 in March 2015), and
valuation of other liabilities gave rise to losses of ¢393.544.280 (¢289.891.191 in
March 2015).
iii. Financial statements of foreign subsidiaries (BICSA)
The financial statements of BICSA are presented in U.S. dollars, which is its
functional currency. The translation of the financial statements to colones was carried
out as follows:
(Continues)
 Assets and liabilities have been converted at the closing exchange rate.
 Income and expenses have been converted at the average exchange rates in effect
during each year.
 The equity is measured in terms of historical cost and has been converted using
the exchange rate on the transaction date.
As result of BCR’s interest in BICSA, net profits in the amount of ¢915.316.501,00
arose for the period ended March 31, 2016 (¢1.215.816.114 in March 2015), which
are disclosed in the consolidated income statement.
As result of the conversions for the period ended on March 31, 2016, net losses arose
for exchange rate differences in the amount of ¢232.564.632 (¢584.380.056 in March
2015), shown in the equity section, within the account “Currency translation
adjustment of the financial statements”.
(e)
Basis for the recognition of the consolidated financial statements
The consolidated financial statements have been prepared on the fair value basis for
available-for-sale and held-for-trading assets. Other financial and nonfinancial assets and
liabilities are recorded at amortized or historical cost. The accounting policies have been
consistently applied.
(f)
Financial instruments
A financial instrument is any contract that gives rise to both a financial asset of one entity
and a financial liability or equity instrument of another entity. The Bank’s financial
instruments include primary instruments: cash and due from banks, investments in financial
instruments, loan portfolio, other receivables, obligations with the public, obligations with
entities, and payables.
(Continues)
(i) Classification
Held-for trading financial instruments are instruments held by the Bank for short-term
profit taking.
Originated instruments are loans and other accounts receivable created by the Bank
providing money to a debtor rather than with the intention of short-term profit taking.
Available-for-sale assets are financial assets that are not held for trading purposes,
originated by the Bank, or held to maturity. Available-for-sale assets include certain
debt securities.
In accordance with accounting standards issued by CONASSIF, as of January 1,
2008, investments in financial instruments made by regulated entities are to be
classified as available-for-sale. Own investments in open investment funds are to be
classified as held-for training financial assets. Own investments in closed investment
funds are to be classified as available-for-sale.
Entities regulated by SUGEVAL, SUGEF, SUPEN, and SUGESE may classify other
investments as held-for trading financial instruments, provided there is an express
statement of intent to trade them within 90 days from the acquisition date.
(ii) Recognition
The Bank recognizes available-for-sale assets on the date on which the Bank becomes
a party to the contractual provisions of the instrument. From this date, any gains or
losses arising from changes in the fair value of the assets are recognized in equity.
(Continues)
Held-to-maturity assets and originated loans and other accounts receivable are
recognized using settlement date accounting, i.e. on the date they are transferred to
the Bank. In 2015 and 2014, the Bank did not classify financial instruments as held
to maturity, except for the securities received to capitalize the Bank. (See notes 5 and
18).
(iii) Measurement
Financial instruments are measured initially at fair value, including transaction costs.
Subsequent to initial recognition, available-for-sale assets are measured at fair value,
except for any instrument that does not have a quoted market price in an active market
and whose fair value cannot be reliably measured is stated at cost, including
transaction costs less impairment losses.
All non held-for-trading financial assets and liabilities, originated loans and other
accounts receivable, and held-to-maturity investments are measured at amortized cost
less impairment losses. Any premium or discount is included in the carrying amount
of the underlying instrument and amortized to finance income or expense using the
effective interest method.
Article 17 of the Accounting Regulations applicable to entities regulated by SUGEF,
SUGEVAL, SUPEN and SUGESE and to Non-financial Issuers prescribes availablefor-sale classification for investments in financial instruments by regulated entities.
(iv) Fair value measurement principles
The fair value of financial instruments is based on their quoted market price on the
consolidated financial statement date without any deduction for transaction costs.
(v) Profits and losses on subsequent measurement
Profits and losses arising from a change in the fair value of available-for-sale assets
are recognized directly in equity until the investment is considered to be impaired, at
which time the loss is recognized in the consolidated income statement. When the
financial assets are sold, collected, or otherwise disposed of, the cumulative gain or
loss recognized in equity is transferred to the consolidated income statement.
(vi) Derecognition
(Continues)
A financial asset is derecognized when the Bank loses control over the contractual
rights that comprise the asset. This occurs when the rights are realized, expire, or are
surrendered. A financial liability is derecognized when it is extinguished.
(g)
Cash and cash equivalents
The Bank considers cash and due from banks, at sight and term deposits, and investment
securities that the Bank has the intent to convert into cash within two months or less to be
cash and cash equivalents, with the exception of BICSA whose period is ninety days or less.
(h)
Investments in financial instruments
Investments in financial instruments that are classified as available-for-sale investments are
valued at market prices using the price vector provided by Proveedor Integral de Precios de
Centroamérica, S.A. (PIPCA). In accordance with accounting standards issued by
CONASSIF, starting January 1, 2008, the Bank no longer classifies investments in financial
instruments as held-to-maturity. However, pursuant to Law No. 8703 “Amendment to Law
No. 8627 on the Ordinary and Extraordinary Budget of the Republic for Fiscal Year 2008,”
securities received to capitalize State-owned banks are to be classified as held-to-maturity
and are not subject to market price valuation.
The effect of market price valuation of available-for-sale investments and restricted
financial instruments are included in the equity account with the caption “Adjustment for
valuation of available-for-sale investments” until those investments are realized or sold.
Regular purchases or sales of financial assets are recognized by the settlement date method,
date of delivery in exchange for an asset.
Investments in repurchase agreements (forward seller positions) and investment in
securities with original maturities of less than 180 days are not valued at market prices.
(Continues)
Held-to-maturity investments are measured at amortized cost by the effective interest
method. In accordance with Law No. 8703, the Bank no longer classifies investments as
held to maturity, except investments in financial instruments received to capitalize the
Bank.
Held-for-trading investments are measured at fair value through profit or loss and are
acquired with the intention of selling the financial instrument in the short term.
When a financial asset is acquired with accrued interest, interests are booked in a separate
account as interest receivable.
Investments in securities of BICSA:
The fair value of BICSA’s investment in securities that are quoted in active markets are
based on recent purchase prices. If a security is not quoted in an active market, its fair value
is determined by using a valuation technique, such as the use of recent transactions, the
analysis of discounted cash flows, and other valuation techniques commonly used by
market participants. Shares for which fair values cannot be reliably determined are
measured at cost less impairment losses.
(i)
Loan portfolio
Banco de Costa Rica - Loan portfolio:
SUGEF defines credits as any operation formalized by a financial intermediary irrespective
of the type of underlying instrument or document, whereby the intermediary assumes the
risks of either directly providing funds or credit facilities or guaranteeing that their customer
will honor its obligations with third parties. Credits include loans, factoring, purchase of
securities, guarantees in general, advances, checking account overdrafts, bank acceptances,
interest, open letters of credit, and preapproved lines of credit.
The loan portfolio is presented at the value of outstanding principal. Interest on loans is
calculated based on the outstanding principal and contractual interest rates, and is accounted
for as income on the accrual basis of accounting. Further, the Bank follows the policy of
suspending interest accruals on loans with principal or interest that are more than 180 days
past due.
BICSA -Loan portfolio:
Loans receivable are non-derivate financial assets with fixed or determinable payments that
are not quoted in an active market and usually originate in providing resources for a loan.
(Continues)
Loans are reported at their outstanding principal pending collection, less not generated
interest and commissions and reserve for loan losses. Not earned commissions and interest
are recognized as income over the life of the loan using the effective interest method.
(j)
Allowance for doubtful accounts
Banco de Costa Rica - Loan portfolio
The loan portfolio is valued in accordance with provisions established in SUGEF Directive
1-05 “Regulations for Borrower Classification”, which was approved by CONASSIF on
November 24, 2005, published in the Official Journal “La Gaceta” No. 238 on Friday,
March 9, 2005, and effective as of October 9, 2006.
Loan operations approved for individuals or legal entities with a total outstanding balance
exceeding ¢65,000,000 (Group 1 under SUGEF Directive 1-05) are classified by credit risk.
This classification takes into account the following considerations:

Creditworthiness, which includes an analysis of projected cash flows, an analysis of
financial position, consideration for experience in the line of business, quality of
management, stress testing for critical variables, and an analysis of the
creditworthiness of individuals, regulated financial intermediaries, and public
institutions.

Historical payment behavior, which is determined by the borrower’s payment history
over the previous 48 months, considering servicing of direct loans, both current and
settled, in the National Financial System as a whole. SUGEF is responsible of
calculating the historical payment behavior level for borrowers reported by entities
during the previous month.

Arrears

Pursuant to the aforementioned Directive, collateral may be used to mitigate risk for
purposes of calculating the allowance for loan impairment. The market value and its
updates should be considered and adjusted at least once annually. Further, the
percentage of acceptance of collateral is also a mitigating factor. Collateral must be
depreciated six months after the most recent appraisal.
Risk categories are summarized below:
Risk
category
A1
Arrears
30 days or less
Historical payment
Creditworthiness
behavior
Level 1
Level 1
(Continues)
A2
B1
B2
30 days or less
60 days or less
60 days or less
Level 2
Level 1
Level 2
C1
90 days or less
Level 1
C2
90 days or less
Level 2
D
120 days or less
Level 1 or Level 2
Level 1
Level 1 or Level 2
Level 1 or Level 2
Level 1, Level 2 or
Level 3
Level 1, Level 2 or
Level 3
Level 1, Level 2,
Level 3 or Level 4
Remaining loan operations, for which the total outstanding balance is lower than
¢65,000,000 (Group 2 under SUGEF Directive 1-05), are classified in the following
categories based on historical payment behavior and arrears:
Risk
category
A1
A2
Arrears
30 days or less
30 days or less
B1
60 days or less
B2
60 days or less
C1
90 days or less
C2
90 days or less
D
120 days or less
Historical
Creditworthiness
payment behavior
Level 1
Level 1
Level 2
Level 1
Level 1 or Level
Level 1
2
Level 1 or Level
Level 2
2
Level 1, Level 2
Level 1
or Level 3
Level 1, Level 2
Level 2
or Level 3
Level 1, Level 2,
Level 1 or Level
Level 3 or Level
2
4
Borrowers are to be classified in risk category E if they fail to meet the conditions for
classification in risk categories A through D mentioned above, are in bankruptcy, a
meeting of creditors, court protected reorganization procedure, or takeover, or if the Bank
considers classification in such category to be appropriate.
(Continues)
Pursuant to SUGEF Directive 1-05: "Regulation for Rating Debtors", as of January 1,
2014, the Bank must maintain a minimum amount of allowance resulting from the sum of
generic and specific allowances, calculated in accordance with Transitory XII.
The generic allowance must be at least equal to 0.5% of the total due balance,
corresponding to the loan portfolio classified in A1 and A2 risk categories, without
reducing the effect of mitigators of loan operations which apply to contingent claims.
The specific allowance is calculated on the covered and uncovered portion of each loan.
The allowance on the exposed portion is equal to the total outstanding balance of each
loan transaction less the weighted adjusted value of the relevant security. The resulting
amount is multiplied by the percentage that corresponds to the risk category. The
allowance on the covered part of each credit operation is equal to the amount
corresponding to the covered part of the operation, multiplied by the appropriate
percentage.
Classification categories and specific allowance percentages for each risk category are as
follows:
Risk
category
A1
A2
B1
B2
C1
C2
D
E
Specific allowance percentage on
the uncovered portion of the loan
0%
0%
5%
10%
25%
50%
75%
100%
Specific allowance percentage on
the covered portion of the loan
0%
0%
0,5%
0,5%
0,5%
0,5%
0,5%
0,5%
As of January 1, 2014, as an exception in the case of risk category E, the minimum
allowance for loans to a borrower whose historical payment behavior is rated as level 3 is
to be calculated as follows:
(Continues)
Arrears
30 days or less
60 days or less
More than 61
days
Specific
allowance
percentage on
the uncovered
portion of the
loan
Specific
allowance
percentage on
the covered
portion of the
loan
20%
0,5%
50%
0,5%
100%
0,5%
Creditworthiness
(Borrowers
Group 1)
Creditworthiness
(Borrowers
Group 2)
Level 1
Level 1
Level 2
Level 2
Level 1 or Level 2
or Level 3 or Level
4
Level 1 or Level 2
Pursuant to SUGEF Directive 1-05, as of March 31, 2016, the minimum allowance required
is ¢41.573.126.463 of which ¢41.269.711.852 corresponds to valuation of direct loans and
¢303.414.611 to contingent loans. As of December 31 and March 2015, a structural
allowance is ¢38.331.339.378 (corresponding to direct loans for ¢38.079.259.254 and
contingent loans for ¢252.080.124) and ¢38.025.082.637 (corresponding to direct loans for
¢37.962.713.170 and contingent loans for ¢62.369.467), respectively.
As of March 31, 2016, the allowance disclosed in the accounting records amounts to
¢44.267.399.469 (¢41.184.376.726 and ¢38.078.595.303 in December and March 2015,
respectively).
As of March 31, 2016, December and March de 2015, increases in the allowance for loan
impairment resulting from the minimum allowance are included in the accounting records
in compliance with article 17 of SUGEF Directive 1-05 “Regulation for Rating Debtors”,
prior authorization from SUGEF in compliance with article 10 of IRNBS.
As of March 31, 2016, December and March de 2015, Management considers the allowance
to be sufficient to absorb any potential losses that could be incurred on recovery of the
portfolio.
(Continues)
Accounts and interest receivable - Banco de Costa Rica
In order to qualify the risk of accounts and interest receivable unrelated to loan operations,
the Bank considers the arrears based on ranges established for other assets in SUGEF
Directive 1-05 “Regulations for Rating Debtors”, approved by CONASSIF.
Arrears
30 days or less
60 days or less
90 days or less
120 days or less
More than 120 days
Allowance percentage
2%
10%
50%
75%
100%
BICSA- Allowance for loan impairment
BICSA assesses whether there is any objective evidence of impairment of a loan or loan
portfolio. The amount of losses on certain loans during the period is recognized as provision
expense in the operations result and increases a provision account for loan losses. When a
loan is determined to be uncollectible, the unrecoverable amount is reduced of that
provision account. Subsequent recoveries of previously written-off loans increase the
provision account.
Impairment losses are determined using two methods, which indicate whether there is
objective evidence of impairment, i.e. individually for loans that are individually significant
and collectively for loans that are not individually significant.
Impairment losses on individually assessed loans are determined based on an exposure
assessment on a case by case basis. If it is determined that there is no objective evidence of
impairment for an individually significant loan, this loan is included in a group of loans
with similar characteristics and is collectively assessed for impairment. The impairment
loss is calculated by comparing the present value of expected future cash flows, discounted
at the loans current interest rate or the fair value of the loans collateral less the selling costs,
to its current carrying value. The amount of any loss is recognized as a provision for losses
in the consolidated income statement. The carrying value of impaired loans is reduced
through the use of an allowance account for losses on loans.
For the purposes of a collective assessment of impairment, BICSA uses statistical models
of historical trends for probability of default, opportunity for recoveries and the amount of
loss incurred, and makes an adjustment if current economic and credit conditions are such
that actual losses are higher or lower than those suggested by historical trends. Default and
(Continues)
loss ratios as well as the expected term of future recoveries are regularly compared with
actual outcomes to ensure they remain appropriate.
If in a subsequent period the amount of the impairment loss decreases and the decrease can
be linked objectively to an event occurring after the impairment loss was recognized, the
impairment loss is reversed through an adjustment to the provision account. The amount of
the reversal is recognized in the consolidated income statement.
Management considers the allowance for loan impairment to be sufficient. The regulatory
authority periodically reviews the allowance for loan impairment as an integral part of its
audits. The regulatory authority may require that additional allowances are recognized
based on its evaluation of information available as of the date of the audits.
As of March 31, 2016, a consolidated allowance for ¢54.271.485.907 has been recorded
(¢51.568.650.867 and ¢46.967.913.104 in December and March 2015, respectively).
BICSA -Accounts and interest receivable
In order to assess the allowance for accounts and interest receivable, BICSA applies the
criteria mentioned in the section on the allowance for loan impairment.
(k)
Securities sold under repurchase agreements
The Bank carries out transactions of securities sales under repurchase agreements at future
dates and agreed prices. The obligation to repurchase sold securities is reflected as a liability
in the consolidated balance sheet and disclosed at the value of the original agreement. The
underlying securities are held in asset accounts. Finance expense recognized is calculated
by the effective interest method. Interest is presented as finance expense in the consolidated
income statement, and accrued interest payable in the consolidated balance sheet.
(Continues)
(l)
Accounting for interest receivable
Interest receivable is accounted for on the accrual basis. Under current regulations, interest
accrual is suspended on loan operations that are more than 180 days past due. Interest
receivable on those loans is recorded when collected. BICSA does not suspend the
recognition.
(m) Other receivables
The recoverability of these accounts is assessed by applying criteria similar to those
established by SUGEF for the loan portfolio. If an account is not recovered within 120 days
from the due date or from the date of its accounting record, an allowance is created for
100% of the outstanding balance. Items with no specified due date are considered
enforceable immediately. BICSA applies the criteria mentioned in the section on the
allowance for loan impairment.
(n)
Realizable assets
Realizable assets are assets owned by the Bank for realization or sale. Included in this account
are assets acquired as payment in kind, assets adjudicated in judicial auctions, assets acquired
to be leased under finance and operating leases, goods produced for sale, idle property and
equipment, and other realizable assets.
Realizable assets are valued at the lower of cost and fair value. If fair value is less than the cost
booked in the accounting records, an impairment allowance must be recorded for the
difference between both values. Cost is the historical acquisition or production value in local
currency; these assets should not be revalued or depreciated for accounting purposes, and they
are to be recorded in local currency. The cost registered in the accounting records for a
realizable asset may only be increased by the amount of improvements or additions, up to the
amount by which they increase the asset’s realizable value. Other expenditures related to
realizable assets are to be recognized in the period incurred.
The net realizable value of an asset should be used as its market value, which should be
determined by applying strictly conservative criteria and is calculated by subtracting expenses
to be incurred on the sale of the asset from its estimated selling price. The estimated selling
price of the asset is determined by an appraiser based on current market conditions. Future
expectations for market improvements are not considered and it is assumed that the assets must
be sold in the shortest period of time possible to enable the Bank to recover the resources
invested and use them for its business activities. For all realizable assets, the Bank should have
reports from the appraisers which are to be updated at least annually. If an asset recorded in
this group is used by the Bank, it should be reclassified to the appropriate account in the
corresponding group.
(Continues)
Pursuant to article 20-b of SUGEF Directive 1-05, “Regulations for Rating Debtors”, the Bank
is required to record an allowance for disposed assets and for realizable assets that were not
sold or leased under operating or finance leases within two years from the acquisition or
production date, for an amount equivalent to the carrying amount of the assets. The allowance
must be established gradually by recording one-twenty-fourth of the value of such assets each
month until the allowance is equivalent to 100% of the carrying amount, without exception.
The recording of the allowance shall begin at closing date of the month in which the asset was
i) acquired, ii) produced for sale or lease, or iii) disposed of.
(o)
Offsetting
Financial assets and liabilities are offset and the net amount presented in the consolidated
financial statements when the Bank has a legal right to set off the recognized balances and
intends to settle on a net basis.
(p)
Property, furniture, and equipment
(i)
Own assets
Property, furniture and equipment are depreciated on the straight-line method over
the estimated useful lives of the assets for both tax and financial purposes. Leasehold
improvements are amortized straight line over a period of sixty months, starting the
month after the deferred charge is recorded. Leasehold improvements are amortized
solely at the end of the term of the lease agreement. When the lessor or the Bank
notifies the other party that it does not intend to renew the lease at the end of the
original lease term or extension, the remaining balance is amortized over the
remainder of the lease term.
Pursuant to requirements established by regulatory authorities, the Bank must have
its real property appraised by an independent appraiser at least once every five years,
in order to determine its net realizable value. If the realizable value is less than the
carrying amount, the carrying amount must be adjusted to the appraisal value.
(Continues)
(ii)
Leased assets
Leases in terms of which the Bank assumes substantially all the risks and benefits of
ownership are classified as financial leases.
At the beginning of the lease term, the financial leasing is recognized in the statement
of financial position as an asset and a liability by the same amount, equal to the fair
value of the leased assets or the present value of the minimum lease payments, if this
were the lowest between the present value of the stipulated payments in the agreement
discounted at the interest rate implicit in the operation, determined at the beginning
of the lease. To calculate the present value of the minimum lease payments, the
interest rate implicit in the lease is used as the discount factor, wherever practicable
to determine; otherwise the incremental interest rate of the tenant loans is used. Any
initial direct cost of the tenant will be added to the amount recognized as an asset.
(iii) Subsequent disbursements
Costs incurred to replace a component of an item of property, furniture and equipment
is capitalized and accounted for separately. Subsequent expenses are only capitalized
when they increase the future economic benefits; otherwise, the will be recognized in
the consolidated income statement when incurred.
(iv) Depreciation and amortization
Depreciation and amortization are charged to the operating results on the straight-line
method, using the annual depreciation rates established for tax purposes. When
appraisals made by independent appraisers determine that the technical useful life is
less than the remaining useful life calculated using applicable rates for tax purposes,
the technical useful life is to be used. Estimated useful lives are as follows:
Useful lives of assets owned by the Bank and subsidiaries,
except for BICSA:
Building
Vehicles
Furniture and equipment
Computer hardware
Leasehold improvements
50 years
10 years
10 years
5 years
5 years
Useful lives of assets owned by BICSA:
(Continues)
Buildings
Improvements
Furniture and equipment
Computer hardware
Vehicles
(v)
40 years
5 years
5 years
3 years
3 years
Revaluation
At least every five years financial entities should assess the real estate by appraisals,
stating the net realizable value of the property.
If the realizable value of the assets is different from the one disclosed in the
accounting records, the Bank must adjust the book value to the resulting value of the
appraisal.
These assets are depreciated by the straight-line method for financial and tax
purposes, based on the expected life of the respective assets.
The last appraisal was made in 2015, and it was recorded on November 30, 2015.
(q)
Deferred charges
Deferred charges are valued at cost and recorded in local currency. These charges are not
subject to revaluations or adjustments.
(r)
Intangible assets
Intangible assets acquired by the Bank are recorded at cost less accumulated amortization
and impairment losses.
Until May 2015, the Bank recognized amortization expense on goodwill acquired on shares,
which will be amortized over a 5 years period, in compliance with the Accounting
Regulations applicable to Entities Regulated by SUGEF, SUGEVAL, SUPEN, and
SUGESE and to Non-financial Issuers.
(Continues)
Amortization of IT systems is charged to operation results on a straight-line basis over the
estimated useful lives of the related assets. The estimated useful life is of five years.
Subsequent expenditures or disbursements are capitalized only when they increase the
future economic benefits; otherwise they are recognized in the results as incurred.
(s)
Impairment of assets
The carrying amount of an asset is reviewed on each consolidated balance sheet date, in
order to determine whether there is any indication of impairment. If any such indication
exists, the recoverable amount of the asset is estimated.
An impairment loss is recognized whenever the carrying amount of an asset exceeds its
recoverable amount. Impairment losses are recognized in the consolidated income
statement for assets carried at cost, and treated as a decrease in revaluation surplus for assets
recorded at revalued amounts, until the amount of the surplus of the specific asset is
sufficient to absorb the impairment loss.
The recoverable amount of an asset is the greater of its net selling price and value in use.
The net selling price is equal to the value obtained in free transaction between seller and
buyer. Value in use is the present value of future cash flows and disbursements derived
from the continuing use of an asset and from its disposal at the end of its useful life.
If in a subsequent period the amount of the impairment loss decreases and the decrease can
be linked objectively to an event occurring after impairment loss was determined, the loss
is reversed in the consolidated income statement or consolidated statement of changes in
equity, as appropriate.
For Banco de Costa Rica, SUGEF establishes the following: regardless of the previously
expressed, at least once every five years, financial institutions must have its property
appraised by an independent appraiser, in order to determine the net realizable value of
property and buildings, whose net book value exceeds 5% of the entity’s equity. If the net
realizable value of the assets appraised, taken as a whole, is less than the corresponding net
carrying amount, the carrying amount is to be reduced to the appraisal value by adjusting
assets that are significantly overstated. The decrease in the value of real property for use is
recorded against account “331 – Adjustments for revaluation of assets.”
In cases where an entity is aware of a significant overstatement in the carrying amount of
one or more assets, regardless of the cause of the reduction in their value and/or the useful
life originally assigned, the entity must hire an appraiser to perform a technical appraisal,
immediately notify SUGEF of the results, and register the applicable adjustments in the
accounting records.
(Continues)
(t)
Accounts payable and other payables
Accounts payable and other payables are recognized at cost.
(u)
Provisions
A provision is recognized in the consolidated statement of financial position if, as a result
of a past event, the Bank has a present legal or constructive obligation and it is probable
that an outflow of economic benefits will be required to settle the obligation. The provision
made approximates settlement value; however, final amounts may vary. The estimated
value of provisions is adjusted at the consolidated statement of financial position date,
directly affecting the consolidated income statement.
Employees’ legal benefits (severance pay)
Costa Rican legislation requires the Bank and its subsidiaries domiciled in Costa Rica to
pay employees’ legal benefits to employees dismissed without just cause, equivalent to a
seven days’ salary for employees with three to six months of service, 14 days salary for
employees with between six months to one year of service, and compensation in accordance
with the Workers Protection Law for those with more than one year of service. In the
specific case of the Bank, this limit is increased to twenty months for personnel who have
worked for more than twenty years and for those who have fewer years, it corresponds to
seniority in the Employees’ Association up to twenty months.
In February 2000, the Workers Protection Law was enacted and published. This law
modifies the existing severance benefit system and establishes a mandatory supplemental
pension plan, thereby amending several provisions of the Labor Code.
Pursuant to the Workers Protection Law, all public and private employers must contribute
3% of monthly employee salaries during the entire term of employment. Contributions are
collected through the Costa Rican Social Security Administration (CCSS) and are then
transferred to pension fund operators selected by the employee.
The Bank follows the practice of transferring to the Employee Association the severance
benefits corresponding to each employee based on the employee’s current salary.
The amounts of severance benefits not transferred to the Employee Association are
provisioned as indicated in the Collective Labor Agreement.
BICSA retirement savings plan for employees
BICSA offers its employees defined contribution pension plans in accordance with the
conditions and practices in the jurisdictions where it operates. Under those plans, BICSA
contributes specified amounts to a fund managed by a third party, and is under no legal
(Continues)
obligation to make additional contributions in the event the fund has insufficient assets to
pay employees their benefits.
BICSA has adopted a voluntary retirement savings plan in which BICSA contributes twice
the amount contributed by employees, up to a maximum of 10% of the monthly salaries.
The contribution made by BICSA and subsidiary under this plan as of March 31, 2016
amounted to ¢98.789.330, equivalent to US$177.098 (¢422.250.780, equivalent to
US$793.794 and ¢90.373.156, equivalent to US$171.369 in December and March 2015,
respectively).
BICSA -Seniority premium and indemnity for employees
Under Panamanian labor law, companies are required to establish a severance fund to
guarantee payment of a seniority premium and indemnity to eligible employees upon
resignation or dismissal without just cause. To create the fund, quarterly contributions of
the relative portion to the employee seniority premium equivalent to 1.92% of salaries paid
in the Republic of Panama are made to cover the seniority premium, while monthly
contributions equivalent to 5% are made to cover the indemnity. Quarterly contributions
are to be placed in a trust. As of March 31, 2016, the severance fund had a balance of
¢415.674.661, equivalent to US$784.899 (¢419.363.942, equivalent to US$788.367 and
¢365.630.817, equivalent to US$693.323 in December and March 2015, respectively),
which is disclosed in the consolidated financial statements as prepaid expenses.
(v)
Legal reserve
According to Article 12 of the Organic Law of the National Banking System, the Bank
yearly sets aside 50% of net earnings after income tax to increase its Legal Reserve. The
Bank’s subsidiaries, except for BICSA, allocate yearly 5% of their earnings after taxes to a
legal reserve.
(w) Revaluation surplus
Revaluation surplus included in equity may be transferred directly to accrued earnings of
prior periods when the surplus is realized. The whole surplus is realized upon disposal or
use of the asset. The transfer of revaluation surplus to prior period retained earnings should
not be made through the consolidated income statement. Further, the Bank was authorized
by SUGEF to capitalize revaluation surplus by increasing the capital stock.
(x)
Use of estimates
Management has made a number of estimates and assumptions relating to the reporting of
assets, liabilities, profit or loss, and the disclosure of contingent liabilities in preparing these
consolidated financial statements. Actual results may differ from those estimates. Material
(Continues)
estimates that are particularly susceptible to significant changes are related to the
determination of the allowance for loan impairment.
(y)
Recognition of main types of income and expenses
(i) Interest
Interest income and expense is recognized in the consolidated income statement on an
accrual basis considering the effective yield or interest rate. Interest income and
expense includes amortization of any premium or discount during the term of the
instrument and until its maturity, and is calculated on an effective interest basis.
(ii) Income from fees and commissions
When loan origination fees are generated, they are taken against effective yield, and
they are deferred over the loan term. Other service fees and commissions are
recognized when the services are rendered.
(Continues)
(iii) Net income from held-for-trading securities
Net income on marketable securities includes gains and losses arising from sales and
from changes in the fair value of held-for-trading assets and liabilities.
(iv) Operating lease expenses
Payments for operating lease agreements are recognized in the consolidated income
statement over the term of the lease.
(z)
Income tax
Pursuant to the Income Tax Law, the Bank and its subsidiaries are required to file their
income tax returns for the twelve months ending December 31 of each year.
(i) Current:
Current tax is the expected tax payable on taxable income for the year, using tax rates
valid on the consolidated balance sheet date, and any adjustment to tax payable in
respect of previous years.
(ii) Deferred:
Deferred tax is provided using the balance sheet liability method, providing for
temporary differences between the carrying amounts of assets and liabilities for
financial purposes and the amounts used for taxation purposes. In accordance with this
method, temporary differences are identified as either taxable temporary differences
(which result in future taxable amounts) or deductible temporary differences (which
result in future deductible amounts). A deferred tax liability represents a taxable
temporary difference, while a deferred tax asset represents a deductible temporary
difference. Deferred tax assets are recognized only to the extent there is a reasonable
probability that they will be realized.
BICSA’s Miami branch is subject to state and federal income taxes in the United States
of America. Income tax expense is determined by using the separate currency pools
method, as described in Section 1.882-5 of the U.S. Treasury Department Regulations.
(aa) BICSA - Financial leases
(Continues)
BICSA’s financial lease operations mainly consist of leases for transportation, machinery,
and equipment. Average lease terms are between 36 and 60 months.
Lease receivables represent the present value of future lease payments. The difference
between the gross receivable and the present value of the receivable is presented as
unearned income, which is recognized in profit or loss over the life of the lease.
(bb) Pension and retirement plans for employees from Banco de Costa Rica
A fund was created by Law No. 16 as of November 5, 1936, which has been amended on a
number of occasions. The most recent amendment was included in Law No. 7107 dated
October 26, 1988. Pursuant to this Law, the fund was established as a special wage
protection and retirement system for the Bank’s employees. The fund is comprised of
allotments established by the related laws and regulations, and monthly contributions made
by the Bank and employees equivalent to 10% and 0.5% of total wages and salaries,
respectively. Starting October 1, 2007, this fund is managed by BCR Pension Operadora de
Planes de Pensiones Complementarias, S.A. (subsidiary) under a comprehensive
management agreement.
The Bank’s contributions to the fund are considered to be defined contribution plans.
Consequently, the Bank has no additional obligations.
(cc) Profit sharing
Under article 12 of IRNBS, the net earnings of commercial State-owned banks are allocated
as follows: 50% to a legal reserve; 10% to increase the capital of the National Institute for
Cooperative Development (INFOCOOP); and the remainder to increase the Bank’s capital,
pursuant to article 20 of Law No. 6074. Transition provision III of Law No. 8634
“Development Banking System” establishes that for a five-year period starting in 2007, the
contributions made by State-owned banks equivalent to 5% of their annual net earnings for
the creation of the National Commission for Educational Loans (CONAPE) will be
allocated as follows: two percent to CONAPE and three percent to the capital of the
Development Financing Fund (FINADE). On January 2013 transitory III is removed and
will 5% will be allocated to CONAPE, in accordance with Law 9092, “Refund of Income
of the National Commissions for Educational Loans.”
In accordance with article 46 of the “National Emergency and Risk Prevention Law”, all
institutions of the central administration and decentralized public administration, as well as
State-owned companies, must contribute three percent (3%) of their reported earnings
before taxes and profits and of their accumulated budget surplus to the National Emergency
Commission (CNE). Such funds are deposited in the National Emergency Fund to finance
(Continues)
the National Risk Management System. The expenditure for CNE is calculated as 3% of
income before taxes and profit sharing.
Pursuant to article 78 of the Employee Protection Law, State-owned public entities must
contribute up to 15% of their earnings with the purpose of strengthening the funding base
for the Disability, Old Age, and Death Benefit System of CCSS and to provide universal
CCSS coverage for impoverished non-salaried workers. According to Executive Order
number 37127-MTSS, starting in 2013 a progressive yearly contribution from net earnings
must be set aside starting with 5% in 2013, up to 7% in 2015 and 15% as of 2017.
(dd) Development Financing Fund
As of 2008, in accordance with article 32 of Law No. 8634 “Development Banking
System”, all State-owned banks, except for Banco Hipotecario para la Vivienda
(BANHVI), shall allocate each year at least five percent (5%) of their net earnings after
income taxes to creating and strengthening of its own development funds. The objective of
that allocation is to provide financing to individuals and legal entities that present viable
and feasible projects pursuant to the provisions of the aforementioned Law (See note 38).
(ee) Development Credit Fund
The Development Credit Fund (DCF), comprised of the resources provided in Article 59 of
the Organic Law of the National Banking System, No.1644, commonly called "Banking
Toll," will be managed by the State Banks. In compliance with Law No. 9094 "Derogatory
of Transitory VII-Law No. 8634," and in accordance with Article 35 of Law No. 8634
"Development Banking System", in meeting 119 of January 16, 2013, by agreement number
AG 1015-119-2013, agreed to appoint Banco de Costa Rica and Banco Nacional de Costa
Rica as managers for a five-year period from the signature of the respective management
agreements. Each bank is responsible for managing fifty percent (50%) of the fund.
The Technical Secretariat of the Governing Board through written communication
CR/SBD-014-2013 informed all private banks to open up checking accounts with each of
the managing banks (Banco Nacional and Banco de Costa Rica), both in colones and foreign
currency with the obligation to distribute fifty percent of the resources to each bank.
The powers granted by the Governing Board to the administrators are:
a) Managing Banks can perform services with the beneficiaries of the Development Banking
System as recognized by Article 6 of Law 8634.
b) In accordance with Article 35 of the Law 8634 with funds from the Development Credit
Fund, the Managing Banks can provide services to other financial entities, except for private
(Continues)
banks, provided they meet the objectives and obligations under Law 8634 and that are duly
approved by the Governing Board.
c) The Banks may allocate in accordance with Article 35 Law 8634 the resources of the
Development Credit Fund through: associations, cooperatives, foundations, NGOs,
producer organizations or other entities if they have credit operations in programs that meet
the objectives established in the Law 8634 and are duly approved by the Governing Board.
The contract signed for a five-year term will be renewable for equal and successive periods
unless otherwise decided by the Governing Board, notified in writing at least three months
in advance. It may be terminated as provided for in Article 12 paragraph j) of Law 8634
and its executive regulations, if the managing banks demonstrate proven lack of capacity
and expertise. (See note 39).
(Continues)
(ff) BICSA - Trusts
BICSA has a license to manage trusts in or from the Republic of Panama. Fee and
commission income derived from trust management is recognized on an accrual basis.
BICSA is required to manage trust funds in accordance with the contractual terms and
independently of its own equity.
(gg) Fiscal year
The economic fiscal year corresponds to the period ended on December 31 of every year.
(2)
Collateralized or restricted assets
As of December 31, collateralized or restricted assets are as follows:
March
2016
Cash and cash equivalents deposited in the Central Bank
deofCosta
CostaRica
Rica(véase
(see note
nota4)4)
¢
Restricted cash and cash equivalents (see note 4)
Total cash and cash equivalents
Investments in financial
instruments (see note 5)
Other assets
¢
December
2015
March
2015
447.897.468.800
462.215.382
448.359.684.182
447.467.235.032
347.881.097
447.815.116.129
396.884.198.172
611.637.980
397.495.836.152
110.122.082.698
439.377.521
558.921.144.401
112.559.433.729
443.171.449
560.817.721.307
76.596.018.987
389.233.341
474.481.088.480
(Continues)
(3)
Balances and transactions with related parties
The consolidated financial statements include balances and transactions with related parties as
follows:
March
2016
Assets:
Loan portfolio
Other accounts receivable
Interests in other entities
Total assets
¢
¢
December
2015
1.268.253.487
53.185.241
10.000.000
1.331.438.728
1.210.529.783
66.446.486
10.000.000
1.286.976.269
March
2015
810.909.684
60.022.056
10.000.000
880.931.740
The amount paid for the compensation for key staff is as follows:
Short-term benefits
Directors' seating fees
¢
¢
March
2016
632.526.738
77.568.563
710.095.301
December
2015
3.424.564.510
292.320.241
3.716.884.751
March
2015
559.198.424
89.758.798
648.957.222
(Continues)
(4)
Cash and cash equivalents
For purposes of reconciliation with the consolidated statement of cash flows, cash and cash
equivalents are as follows:
March
2016
Cash
Deposits at sight in the Central Bank of Costa Rica
Checking accounts and deposits at sight
in local financial entities
Checking accounts and deposits at sight
in foreign financial entities
Notes payable on demand
Restricted cash and cash equivalents
Investments in short-term financial instruments
¢
¢
December
2015
March
2015
60.698.447.783
473.303.049.998
77.087.721.928
449.338.816.634
60.585.745.272
412.646.059.979
1.820.402.567
2.580.038.329
3.405.760.998
74.818.572.039
11.371.256.631
756.435.811
622.768.164.829
86.501.658.542
709.269.823.371
77.783.992.827
3.174.984.208
526.316.466
610.491.870.392
146.951.678.276
757.443.548.668
181.304.119.964
21.781.358.642
611.637.980
680.334.682.835
63.701.907.019
744.036.589.854
As of March 31, 2016, deposits at sight in BCCR are restricted as a minimum legal reserve in the
amount of ¢447.878.081.039 (¢447.451.631.078 and ¢396.878.756.501 in December and March
2015, respectively).
As of March 31, 2016, the Pension Fund Manager’s deposits in BCCR are restricted as a
minimum legal reserve in the amount of ¢2.621.877 (¢3.526.001 and ¢2.819.183 in December
and March 2015, respectively).
As of March 31, 2016, BCR Valores, S.A. – Puesto de Bolsa holds restricted demand deposits in
Central Bank of Costa Rica in the amount of ¢16.765.884 (¢12.077.953 and ¢2.622.489 in
December and March 2015, respectively), for a total of ¢447.897.468.800 (¢447.467.235.032 and
¢396.884.198.173 in December and March 2015, respectively).
As of March 31, 2016, BCR Valores, S.A. – Puesto de Bolsa holds restricted assets as part of the
guarantee fund in the amount of ¢320.699.930 (¢347.881.097 and ¢611.637.980 in December and
March 2015, respectively) (see note 2).
As of March 31, 2016, the Bank has a liability for outstanding checks in the amount of
respectively), which is offset by notes payable on demand cashed the next day once cleared by
the clearing house.
(5)
Investments in financial instruments are as follows:
(Continues)
Held for trading
Available for sale
Held-to-maturity (see note 18)
Interests receivable on available-for-sale
investments
¢
¢
December
2015
2.498.559.178
822.508.161.721
27.030.597.126
March
2015
7.874.390.888
611.518.999.357
27.280.583.228
7.018.551.145
907.903.788.794
6.131.302.652
858.168.620.677
6.118.916.326
652.792.889.799
March
2016
Fair value
Held for trading:
Local Issuers:
Government
State-owned banks
Other (open investment funds)
¢
¢
Available for sale:
Local Issuers:
Government
State-owned banks
Private Banks
Private Issuers
Other
¢
Foreign Issuers:
Governments
State-owned banks
Private Banks
Private Issuers
¢
Fair value of held-to-maturity
investments:
Local Issuers:
Government (see note 18)
March
2016
54.128.277.065
819.497.565.299
27.259.395.285
¢
¢
317.549.250
53.810.727.815
54.128.277.065
December
2015
Fair value
March
2015
Fair value
364.605.332
2.133.953.846
2.498.559.178
150.398.236
50.716.412
7.673.276.240
7.874.390.888
March
2016
Fair value
December
2015
Fair value
March
2015
Fair value
595.780.099.184
132.546.424.114
1.392.032.501
5.363.658.310
5.794.056.321
740.876.270.430
599.939.845.173
111.503.105.997
645.645.684
1.870.199.979
7.105.668.465
721.064.465.298
421.671.051.026
66.470.962.805
2.537.306.478
1.468.992.575
5.390.493.989
497.538.806.873
24.840.694.031
25.207.303.803
12.338.228.967
16.235.068.068
819.497.565.299
21.998.903.187
44.096.705.202
18.078.675.614
17.269.412.420
822.508.161.721
19.150.292.998
40.599.103.698
36.935.380.829
17.295.414.959
611.518.999.357
March
2016
December
2015
March
2015
Fair value
Fair value
Fair value
27.259.395.285
27.259.395.285
27.030.597.126
27.030.597.126
27.280.583.228
27.280.583.228
(Continues)
As of March 31, 2016, the investment portfolio amounts to ¢136.020.387.347 (¢131.380.981.968
and ¢153.708.026.777 in December and March 2015, respectively) corresponding to the managed
amounts of the Development Credit Fund (See note 40)
(Continues)
Maturities for investments in financial instruments are from April 01, 2016 to May 27, 2020.
Purchased financial instruments earn annual yield rates as follows:
Colones
US dollars
March
2016
0,0833% to 11,50%
0,0019% to 6,90%
December
2015
1,25% to 13,00%
0,0100% to 6,90%
March
2015
3,50% to 5,2584%
0,0199% to 0,5384%
Investments have been pledged as follows:
March
2016
Deposited in the Central Bank of Costa Rica
as guarantee of clearing
house (SINPE)
Deposited as bid
bonds
Guarantee for deposits collected
Minimum restricted operating
capital of BCR Pensión Fund Manager
Operadora de Pensiones complementarias, S.A.
Guarantee for obligations for securities repurchase
agreements BCR Valores, S.A.Puesto de Bolsa
¢
¢
December
2015
March
2015
69.890.046.933
66.014.048.300
42.322.444.570
33.533.500
4.142.187.125
51.785.185
4.086.082.747
51.191.750
2.486.352.101
1.994.652.092
1.936.676.631
1.734.097.294
34.061.663.048
110.122.082.698
40.470.840.866
112.559.433.729
30.001.933.272
76.596.018.987
In accordance with Article 37 of the Workers Protection Law, the Pension Fund Manager must
hold a minimum operating capital equivalent to a percentage of the net assets of the managed
funds that as of March 31, 2016 amount to ¢1.994.652.092 (¢1.936.676.631 and ¢1.734.097.294
in December and March 2015, respectively).
As of March 31, 2016, the Brokerage House holds restricted investments in securities in the
amount of ¢34.095.196.548 (¢40.522.632.222 and ¢30.053.125.022 in December and March
2015, respectively).
Repurchase Operations:
(Continues)
The Bank purchases financial instruments through agreements in which it binds to sell the
financial instruments at future dates at previously agreed upon price and yield.
As of March 31, 2016, purchased financial instruments remain under resale agreements.
Issuer
Central Bank
of Costa Rica
Local government
Other
Asset Balance
¢
¢
1.804.635.260
21.324.990.462
3.558.746.787
26.688.372.509
Fair value of
collateral
1.799.985.358
21.256.188.969
3.474.349.144
26.530.523.471
Resale Date
01-04-16 to 23-03-16
01-04-16 to 31-03-16
01-04-16 to 30-03-16
Resale Price
100%
100%
As of December 31, 2015, purchased financial instruments remain under resale agreements as
follows:
Issuer
Central Bank
of Costa Rica
Local government
Other
Asset Balance
¢
¢
1.804.635.260
21.324.990.462
3.558.746.787
26.688.372.509
Fair value of
collateral
1.799.985.358
21.256.188.969
3.474.349.144
26.530.523.471
Resale Date
01-04-16 to 23-03-16
01-04-16 to 31-03-16
01-04-16 to 30-03-16
Resale Price
100%
100%
As of March 31, 2015, there are no financial instruments under purchased under resale
agreements.
(Continues)
(6)
Loan portfolio
The total loans originated by the Bank by sector are as follows:
a) Loan portfolio by sector
Sector
Agriculture, livestock, hunting and related
service activities
Fishing and aquaculture
Manufacturing
Telecommunications and public utilities
Mining and quarrying
Retail
Services
Transportation
Real estate, business and leasing
activities
Construction, purchase and repair
of real estate
Consumer
Hospitality
Education
¢
Plus interest receivable
Less allowance for loan impairment
¢
March
2016
December
2015
March
2015
205.805.751.775
16.878.015.005
450.533.360.553
46.960.110.583
740.417.623
144.605.713.978
1.164.700.979.381
96.218.492.967
210.316.618.527
20.101.434.121
439.152.544.387
44.144.161.392
609.581.914
130.716.323.221
1.150.040.333.777
99.630.150.753
204.050.058.035
11.471.879.139
448.430.739.382
45.006.937.133
1.600.972.457
137.265.074.557
1.076.922.088.058
91.779.456.428
1.302.416.120
1.130.754.942
999.214.456
844.142.386.383
375.265.405.399
94.553.201.508
958.175.516
3.442.664.426.791
832.181.858.723
381.250.224.330
95.336.105.027
901.629.239
3.405.511.720.353
765.592.765.911
364.345.049.335
90.754.800.087
1.086.147.601
3.239.305.182.579
23.324.898.855
(54.008.895.281)
3.411.980.430.365
21.080.633.628
(51.305.971.436)
3.375.286.382.545
26.241.063.961
(46.898.425.364)
3.218.647.821.176
(Continues)
b) Current loans
The total current loans originated by the bank are detailed as follows:
Current checking account overdrafts
Loans with other current funds
Current credit cards
Current factoring
Current financial leases
Current issued and negotiated letters of credit
Current confirmed and negotiated letters of credit
¢
¢
March
2016
December
2015
13.446.289.916
2.983.765.009.648
41.569.126.154
38.077.188.613
3.673.229.355
60.446.423
11.777.748.870
3.092.369.038.979
13.790.896.417
3.017.885.380.282
44.293.424.524
48.017.926.372
5.416.784.554
6.732.627.318
3.136.137.039.467
March
2015
12.946.242.766
2.868.641.542.409
40.645.956.054
44.777.116.151
6.458.652.779
30.066.244
4.244.344.621
2.977.743.921.024
BICSA - Financial lease receivables:
The balance of financial lease receivable is as follows:
March
2016
Total minimum payments
Unearned interest collected
¢
¢
4.705.018.431
4.705.018.431
December
2015
6.512.745.185
(508.011.743)
6.004.733.442
March
2015
7.100.993.111
7.100.993.111
(Continues)
The maturities of the financial leases are as follows:
Less than a year
From 1 to 5 years
More than 5 years
March
2016
535.341.877
4.169.676.554
4.705.018.431
¢
¢
December
2015
288.394.995
5.557.476.162
158.862.285
6.004.733.442
March
2015
281.097.831
6.819.895.280
7.100.993.111
c) Loan portfolio by arrears:
The loan portfolio by arrears is detailed as follows:
Current
1 to 30 days
31 to 60 days
61 to 90 days
91 to 120 days
121 to 180 days
More than 180 days
Legal collection
¢
¢
March
2016
3.092.369.038.979
179.393.948.330
86.083.677.479
20.034.768.993
11.652.320.251
7.066.593.590
12.718.145.544
33.345.933.626
3.442.664.426.792
December
2015
3.136.137.039.467
142.967.144.607
36.548.889.611
23.263.213.592
7.903.811.382
14.536.495.138
13.741.892.047
30.413.234.509
3.405.511.720.353
March
2015
2.977.743.921.024
170.610.049.177
18.107.634.213
12.352.890.717
7.395.607.587
4.249.714.974
15.422.458.214
33.422.906.673
3.239.305.182.579
Loans with contractual non-compliance in the payments of the principal or interest are
classified as past due.
(Continues)
d) Past due loans
Past due loans, including loans in accrual status (for which interest is recognized on a cash
basis) and unearned interest on past due loans, are as follows:
March
2016
Number of operations
Past due loans in
nonaccrual status
Past due loans
bearing interest
Total of unearned interest
December
2015
March
2015
1.369
2.030
6.128
¢
42.829.036.369
40.186.206.996
37.071.434.651
¢
¢
307.466.351.443
7.078.561.203
229.188.473.890
7.018.787.747
224.489.826.904
7.330.877.744
Loans in legal collection as of March 31, 2016:
# operations
1.165
Percentage
0,97%
¢
Balance
33.345.933.626
Loans in legal collection as of December 31, 2015:
# operations
1.085
Percentage
0,89%
¢
Balance
30.413.234.509
¢
Balance
33.422.906.673
Loans in legal collection as of March 31, 2015:
# operations
1.730
Percentage
1,03%
(Continues)
As of March 31, 2016, the average annual interest rate earned on loans is 10,65% in colones
(10,92% and 11,08% in colones in December and March 2015, respectively) and 6,75% in
US dollars (6,46% and 6,40% in US dollars in December and March 2015, respectively). As
of March 31, 2016, for Banco Internacional de Costa Rica, S.A., the annual rate for operations
in US dollars is 5,90% per annum (6,04% and 6,28% in December and March 2015,
respectively).
e) Interest receivable on loan portfolio
Interest receivable is detailed as follows:
Current loans
Past due loans
Loans in legal collection
¢
¢
f)
March
2016
16.730.671.575
4.809.906.699
1.784.320.581
23.324.898.855
December
2015
14.977.379.918
4.449.875.791
1.653.377.919
21.080.633.628
March
2015
16.275.361.973
7.654.995.871
2.310.706.117
26.241.063.961
Allowance for loan impairment
Movement in the allowance for loan impairment is as follows:
2016 Opening balance
Currency translation effect
2016 Adjusted opening balance
Plus:
Allowance charged to profit and loss (see note 28)
Recoveries
Less:
Currency translation exchange adjustment
Transfer to unpaid balances
Reversal of allowance against income (see note 29)
Balance as of March 31, 2016
¢
51.305.971.436
(48.319.413)
51.257.652.023
3.811.205.914
204.635.813
¢
(43.451.922)
(1.216.208.004)
(4.938.543)
54.008.895.281
(Continues)
Plus:
Recoveries
Less:
Currency translation exchange adjustment
Transfer to unpaid balances
Balance as of December 31, 2015
¢
Plus:
Recoveries
Transfer of balances
Less:
Adjustment from exchange rate differences
¢
43.472.149.547
4.136.137
32.400.607.352
206.633.036
¢
(3.447.596)
(18.092.034.799)
(6.682.072.241)
51.305.971.436
43.472.149.547
(93.107.924)
3.693.535.177
11.458.537
66.670.433
¢
(77.230.449)
(175.049.957)
46.898.425.364
(Continues)
g) Syndicated loans
As of March 31, 2016; the syndicated loan portfolio is detailed as follows:
Banco de Costa Rica syndicated loan portfolio:
The Bank does not maintain a syndicated loan portfolio with other banks.
BICSA - Syndicated loans:
No. of
Operations
2
Banco Agromercantil
de Guatemala
4
Credicorp Bank
3
Banco Latinoamericano
de Comercio Exterior
2
FMO
3
Banco Hipotecario Dominicano
8
Citibank
1
Nederlandse FinancieringsMaatschappij voor
Ontwikkelingslanden N. V.
1
Banco G&T Continental, S.A.
4
Global Bank
1
Credit Suisse Cayman
1
Banque Nationale de Paris
y Paribas N.Y.
1
Espiritú Santo Bank
1
MMG Bank Corporation
1
Prival Bank
2
Banco Rabobank International Brasil
2
Inter-American Development Bank
1
Corpbanca New York
1
Banco Financiera Comercial
Hondureña
1
Terrabank. N. A.
40
Syndicated
balance other
2.647.950.000
4.660.328.979
Syndicated
balance BICSA
Total balance
5.825.490.000 ¢
906.105.188
8.473.440.000
5.566.434.167
42.996.289.899
150.297.642.000
28.721.608.766
14.363.528.329
2.548.450.297
8.579.358.000
3.754.203.481
7.084.866.671
45.544.740.196
158.877.000.000
32.475.812.247
21.448.395.000
23.937.468.000
30.164.118.718
58.968.729.065
51.899.820.000
2.118.360.000
5.189.982.000
5.552.896.485
1.059.180.000
26.055.828.000
35.354.100.718
64.521.625.550
52.959.000.000
101.151.690.000
6.196.756.951
18.727.704.225
19.072.218.937
114.815.112.000
27.273.885.000
27.803.475.000
4.766.310.000
767.969.051
867.125.775
1.059.180.000
1.694.688.000
4.501.515.000
3.971.925.000
105.918.000.000
6.964.726.002
19.594.830.000
20.131.398.937
116.509.800.000
31.775.400.000
31.775.400.000
13.892.275.315
217.513.205
737.808.114.389
1.995.424.685
15.887.700.000
1.410.976.045
1.628.489.250
63.654.005.678 ¢ 801.462.120.067
(Continues)
As of December 31, 2015 the syndicated loan portfolio is detailed as follows:
Banco de Costa Rica’s syndicated loan portfolio:
BICSA - Syndicated loan portfolio:
Syndicated
No. of
balance other
Syndicated
Operations
banks
balance BICSA
Total balance
2
Banco Agromercantil
de Guatemala
2.659.700.000
5.851.340.000 ¢
8.511.040.000
4
Credicorp Bank
4.635.013.443
956.121.191
5.591.134.634
3
43.119.379.820
2.627.460.228
45.746.840.048
2
FMO
153.491.287.000
6.090.713.000
159.582.000.000
3
28.611.837.649
4.008.082.486
32.619.920.135
8
Citibank
14.179.307.530
7.364.262.470
21.543.570.000
1
Nederlandse Financierings-Maatschappij voor24.043.688.000
Ontwikkelingslanden N. 2.127.760.000
V.
26.171.448.000
1
Banco G&T Continental, S.A.
30.297.968.826
5.213.012.000
35.510.980.826
4
Global Bank
53.587.012.166
11.220.921.523
64.807.933.689
1
Credit Suisse Cayman
52.130.120.000
1.063.880.000
53.194.000.000
1
Banque Nationale de Paris y Paribas N.Y. 101.600.540.000
4.787.460.000
106.388.000.000
1
6.224.254.409
771.376.833
6.995.631.242
1
MMG Bank Corporation
18.810.806.445
870.973.555
19.681.780.000
1
Prival Bank
19.156.849.905
1.063.880.000
20.220.729.905
2
Banco Rabobank International Brasil
115.324.592.000
1.702.208.000
117.026.800.000
2
Inter-American Development Bank
27.394.910.000
4.521.490.000
31.916.400.000
1
Corpbanca New York
27.483.566.844
4.432.833.156
31.916.400.000
1
Hondureña
13.853.707.056
2.104.492.944
15.958.200.000
39
736.604.541.093
66.778.267.386 ¢ 803.382.808.479
(Continues)
As of March 31, 2015; the syndicated loan portfolio is detailed as follows:
Banco de Costa Rica’s syndicated loan portfolio:
BICSA - Syndicated loan portfolio:
No. of
Operations
1
8
7
4
1
1
2
1
2
3
4
3
1
4
3
3
2
1
1
52
Banco Nacional de Costa Rica
Banco Citigroup
Credicorp Bank
Bancolombia
Citibank
Banco Aliado
Corporación Interamericana
de Inversión
Global Bank
Multibank
BAC Nicaragua
Citibank New York
Banco Itau BBA
Rabobank Curacao
Banco Lafise
Copbanca NY
Hondureña
Syndicated
balance other
banks
13.016.985.088
41.634.218.204
4.292.263.726
Syndicated
balance BICSA
15.504.106.609 ¢
4.113.408.000
586.311.465
Total balance
28.521.091.697
45.747.626.204
4.878.575.191
25.576.960.000
122.537.369.600
27.968.418.417
9.753.493.562
3.955.200.000
4.224.153.600
3.480.576.000
2.795.677.331
9.653.125.985
3.955.199.916
29.801.113.600
126.017.945.600
30.764.095.748
19.406.619.547
7.910.399.916
5.800.960.000
12.540.620.800
6.855.680.000
4.862.688.998
1.908.219.464
138.453.094
126.566.400.000
110.745.600.000
11.847.469.363
26.368.000.000
4.983.552.000
8.689.335.221
6.247.377.623
6.641.406.776
1.146.975.003
7.232.215
5.273.600.000
5.273.600.000
11.589.406.517
5.273.600.000
10.784.512.000
21.229.956.021
13.103.057.623
11.504.095.774
3.055.194.467
145.685.309
131.840.000.000
116.019.200.000
23.436.875.880
31.641.600.000
1.582.080.000
557.951.080.316
2.384.420.565
3.966.500.565
101.823.064.826 ¢ 659.774.145.142
(Continues)
(7)
Realizable assets, net
Realizable assets are presented net of the allowance for impairment and per legal requirement, as
follows:
March
2016
Real property
Other assets
Purchased for sale
Idle real property, furniture, and equipment
¢
Allowance for impairment and per legal requirement
¢
67.192.629.399
1.405.686.365
410.060.205
23.427.942
69.031.803.911
(49.337.727.823)
19.694.076.088
December
2015
59.286.107.685
1.429.292.396
567.216.528
6.977.537
61.289.594.146
(46.651.053.712)
14.638.540.434
March
2015
51.194.385.569
344.245.182
498.778.938
24.749.652
52.062.159.341
(38.630.443.919)
13.431.715.422
Movement in the allowance for impairment for realizable assets is as follows:
Opening balance
Increases in the allowance
Reversals in the allowance
Closing balance
¢
¢
March
2016
46.651.053.712
(24.712)
3.744.402.286
(1.057.703.463)
49.337.727.823
December
2015
36.410.170.802
(14.403)
14.984.807.976
(4.743.910.663)
46.651.053.712
March
2015
36.410.170.802
(62.558)
3.398.679.349
(1.178.343.674)
38.630.443.919
(Continues)
(8)
Interest in other companies’ capital
Interest in other companies’ capital is as follows:
March
2016
Interest in Bolsa Nacional de
Valores, S.A.
Interest in BAN PROCESA, TI S.A.
¢
¢
29.057.201
10.000.000
39.057.201
December
2015
29.057.201
10.000.000
39.057.201
March
2015
29.057.201
10.000.000
39.057.201
As of March 31, 2016 and December and March 2015, Banco de Costa Rica holds a 100% interest
in BAN Procesa-TI, represented by 100 common registered shares of ¢100.000 par value each,
subscribed and paid in full.
As of March 31, 2016, December and March 2015, the interest in Bolsa Nacional de Valores. S.
A., is 1.514.974 common shares with a par value of ¢19,18 each booked at cost since these shares
are not subject to public offering.
Interest in the equity of the financial conglomerate:
As of March 31, 2016, December and March 2015, the capital stock of BCR Pensión Operadora
de Planes de Pensiones Complementarias, S.A., is represented by 1.279.450.000 common and
registered shares, with a par value of ¢1 each, for a total of ¢1.279.450.000.
As of March 31, 2016, December and March 2015, the capital stock of BCR Sociedad
Administradora de Fondos de Inversión, S.A., is represented by 81.784 common and registered
shares with a par value of ¢50.000 each, for a total of ¢4.089.200.000.
As of March 31, 2016, December and March de 2015, the capital stock of BCR Valores, S.A. Puesto de Bolsa, S.A., is represented by 7.626 common and registered shares, subscribed and paid
in full, and with a par value of ¢1.000.000 each, for a total of ¢7.626.000.000.
As of March 31, 2016, December de 2015, the capital stock of BCR Sociedad Corredora de
Seguros, S.A., is represented by 25.000 common and registered shares, subscribed and paid in
full, and with a par value of ¢50.000 each, for a total of ¢1.250.000.000 (15.000 common and
registered shares, subscribed and paid in full, and with a par value of ¢50.000 each, for a total of
¢750.000.000 as of March 2015).
(Continues)
The Bank owns a 51% ownership interest in BICSA (domiciled in Panama). As of March 31,
2016, December and March de 2015, ownership interest is represented by 6.772.137 common
shares of US$10 par value each. The remaining 49% of shares is owned by Banco Nacional de
Costa Rica.
The Bank’s income statement for the year ended March 31, 2016 and 2015, includes the amounts
of¢915.316.501 and ¢1.215.816.114, respectively, and corresponding to the net operating income
of BICSA.
The Bank’s statement of changes in equity for the year ended March 31, 2016 and 2015 includes
an equity decrease of ¢232.564.633 and an increase of ¢584.380.056 respectively, corresponding
to the changes resulting from the currency translation effect of BICSA’s financial statement.
As of March 31, 2016, the accumulated balance of the minority interest of Banco Nacional de
Costa Rica presented in the equity section of the consolidated balance sheet amounts to
respectively) and the income of the year represents the minority interest in the consolidated
income statement in the amounts of ¢879.421.933 and ¢1.168.137.123, respectively.
The composition of BICSA’s common shares is as follows:
March
2016
Amount in US
Quantity
dollars
Balance at the beginning of the period
Shares issued
Balance at the end of the period
13.278.700
0
13.278.700
132.787.000
132.787.000
December
2015
Amount in US
Quantity
dollars
13.278.700
0
13.278.700
132.787.000
132.787.000
March
2015
Amount in US
Quantity
dollars
13.278.700
0
13.278.700
132.787.000
132.787.000
The Bank follows the policy of adjusting the value of its investment in BICSA’s equity by the
equity method. In applying this policy, the Bank considers the entity's operating results, as well
as the variation in equity (in colones) arising from adjustments by applying the year-end exchange
rate, in addition to changes resulting from revaluations. Such variation results from the fact that
BICSA’s accounting records are kept in U.S. dollars.
(Continues)
(9)
Property, furniture, and equipment
As of March 31, 2016, property, furniture and equipment are detailed as follows:
Cost:
Property
Balances as of December 31, 2015
¢ 28.323.018.863
(1.839.655)
Additions
Disposals
Transfers
Balances as of March 31, 2016
28.321.179.208
Accumulated depreciation and impairment:
Depreciation expenses
Disposals
Transfers
¢
Net balance:
December 31, 2015
¢ 28.321.179.208
Buildings
63.972.838.868
(29.284.816)
2.645.116
63.946.199.168
Furniture and
equipment
29.305.318.958
(3.800.231)
270.255.928
(22.830.165)
(45.424.123)
29.503.520.367
Computer
hardware
30.811.864.574
(10.006.679)
176.846.397
(4.767.125)
(8.010.588)
30.965.926.579
Vehicles
5.643.774.379
(225.600)
154.795.200
(10.632.530)
5.787.711.449
Financial Lease
3.031.287.146
466.624
3.031.753.770
Total
161.088.102.788
(45.156.981)
605.009.265
(38.229.820)
(53.434.711)
161.556.290.541
17.442.971.788
(1.921.279)
290.307.800
17.731.358.309
16.571.736.197
(1.940.460)
569.730.017
(3.235.079)
(31.189.878)
17.105.100.797
20.258.145.413
(7.560.353)
925.096.435
(1.416.662)
(5.804.562)
21.168.460.271
3.636.813.233
(153.725)
129.867.921
(9.214.858)
3.757.312.571
1.039.912.297
190.857.428
1.230.769.725
58.949.578.928
(11.575.817)
2.105.859.601
(13.866.599)
(36.994.440)
60.993.001.673
46.214.840.859
12.398.419.570
9.797.466.308
2.030.398.878
1.800.984.045
100.563.288.868
(Continues)
As of December 31, 2015, property, furniture and equipment are detailed as follows:
Cost:
¢
Additions
Disposals
Transfers
Revaluation
Impairment
Disposals
Transfers
Revaluation
¢
Net balance:
December 31, 2015
¢
Property
19.074.402.016
(1.072.573)
615.614.462
(114.102.300)
(274.283.976)
9.022.461.234
28.323.018.863
Buildings
57.233.321.216
(17.072.276)
1.698.017.183
(406.617.406)
5.442.193.076
22.997.075
63.972.838.868
Furniture and
equipment
27.695.540.097
(2.212.487)
2.225.843.294
(291.715.243)
(322.136.703)
29.305.318.958
Computer
hardware
28.719.687.001
(5.749.137)
3.907.078.917
(1.449.525.283)
(359.626.924)
30.811.864.574
Vehicles
5.600.782.261
(131.520)
362.602.082
(319.478.444)
5.643.774.379
Financial Lease
2.992.604.700
38.682.446
3.031.287.146
Total
141.316.337.291
(26.237.993)
8.847.838.384
(2.581.438.676)
(956.047.603)
14.464.654.310
22.997.075
161.088.102.788
-
14.397.436.005
(56.981)
1.060.352.703
(33.640.839)
2.018.880.900
17.442.971.788
14.783.305.370
342.483
2.282.734.575
(308.609.671)
(186.036.560)
16.571.736.197
18.619.684.016
(1.823.165)
3.405.775.826
(1.410.378.808)
(355.112.456)
20.258.145.413
3.374.503.397
(35.240)
541.945.771
(279.476.922)
(123.773)
3.636.813.233
1.039.912.297
1.039.912.297
51.174.928.788
(1.572.903)
8.330.721.172
(2.032.106.240)
(541.272.789)
2.018.880.900
58.949.578.928
28.323.018.863
46.529.867.080
12.733.582.761
10.553.719.161
2.006.961.146
1.991.374.849
102.138.523.860
(Continues)
As of March 31, 2015, property, furniture and equipment are detailed as follows:
Cost:
Property
¢ 19.074.402.016
(4.658.253)
Additions
204.663.625
Disposals
Transfers
19.274.407.388
Disposals
Transfers
¢
Net balance:
March 31, 2015
¢ 19.274.407.388
Buildings
57.233.321.216
(74.146.017)
297.041.171
57.456.216.370
Furniture and
equipment
27.695.540.097
(9.608.976)
1.040.243.380
(9.896.245)
(48.345.548)
28.667.932.708
Computer
hardware
28.719.687.001
(24.968.880)
55.876.841
(101.477.876)
(6.930.167)
28.642.186.919
Vehicles
5.600.782.261
(571.200)
5.600.211.061
Financial Lease
2.992.604.700
19.562.052
3.012.166.752
Total
141.316.337.291
(113.953.326)
1.617.387.069
(111.374.121)
(55.275.715)
142.653.121.198
14.397.436.005
(3.373.312)
258.049.524
14.652.112.217
14.783.305.370
(2.924.695)
560.097.772
(8.873.556)
(31.278.548)
15.300.326.343
18.619.684.016
(16.521.450)
831.371.524
(100.564.963)
(5.560.328)
19.328.408.799
3.374.503.397
(312.639)
141.481.509
3.515.672.267
134.732.087
134.732.087
51.174.928.788
(23.132.096)
1.925.732.416
(109.438.519)
(36.838.876)
52.931.251.713
42.804.104.153
13.367.606.365
9.313.778.120
2.084.538.794
2.877.434.665
89.721.869.485
Transfers are the property the entity is not using or that it is not using anymore and which value is transferred in another account.
(Continues)
(10)
Intangible assets
Intangible assets include software and goodwill acquired from the purchase of BICSA’s shares.
The changes in the balance of the net intangible assets are detailed as follows:
Cost:
Additions to computer systems
Disposals
Accumulated amortization and impairment:
Amortization expense on computer systems
Disposals
Net balance:
March 31, 2016
¢
37.547.938.127
(23.424.378)
382.967.990
(5.506.130)
37.901.975.609
23.875.653.174
(9.740.168)
1.528.629.195
(153.959)
25.394.388.242
¢
12.507.587.367
(Continues)
Cost:
Additions to computer systems
Transfers
Disposals
Amortization expense for goodwill acquired
Transfers
Disposals
Net balance:
December 31, 2015
Cost:
Additions
Amortization expense for goodwill acquired
Net balance:
March 31, 2015
¢
32.593.380.424
(9.348.996)
5.800.691.947
4.471.107
(841.256.355)
37.547.938.127
19.544.095.765
(852.716)
5.103.578.020
64.450.983
4.463.282
(840.082.160)
23.875.653.174
¢
13.672.284.953
¢
32.593.380.424
(40.607.719)
1.058.682.449
33.611.455.154
19.544.095.765
(17.110.865)
1.204.199.040
38.670.590
20.769.854.530
¢
12.841.600.624
(Continues)
(11)
Obligations with the public at sight
Obligations with the public at sight are as follows:
Checking accounts
Cashier's checks
Savings deposits at sight
Overdue term borrowings
Overnight deposits
Other borrowings at sight
Other obligations with the public at sight
¢
¢
(12)
March
2016
1.242.002.352.881
488.623.391
538.373.053.885
4.133.612.452
10.969.178.949
20.668.405.845
15.495.572.637
1.832.130.800.040
December
2015
1.080.590.346.553
278.663.038
551.043.053.706
4.384.924.210
10.857.679.123
35.305.164.240
7.175.773.195
1.689.635.604.065
March
2015
844.674.852.106
652.257.617
484.287.153.699
5.333.507.338
9.068.526.347
55.604.198.976
10.987.919.431
1.410.608.415.514
Term and at sight obligations with the public and entities
Term and at sight obligations with the public and entities per number of customers and
accumulated amount are detailed as follows:
Obligations with the public
Deposits from the public
Other obligations with the public
(see note 11)
¢
Obligations with entities
Deposits from state-owned entities
Deposits from other banks
Other obligations with entities
¢
March
2016
At sight
1.816.635.227.404
15.495.572.636
1.832.130.800.040
December
2015
At sight
1.682.459.830.871
7.175.773.194
1.689.635.604.065
March
2015
At sight
1.399.620.496.082
10.987.919.432
1.410.608.415.514
24.424.706.682
146.112.892.896
33.708.536.250
204.246.135.828
2.036.376.935.868
7.464.028.018
144.009.950.090
23.235.831.123
174.709.809.231
1.864.345.413.296
8.839.457.609
158.908.222.470
59.918.744.271
227.666.424.350
1.638.274.839.864
(Continues)
Deposits from the public
¢
Deposits from state-owned entities
Deposits from other banks
Other obligations with entities
¢
March
2016
Term
1.404.933.719.924
1.404.933.719.924
December
2015
Term
1.479.256.165.483
1.479.256.165.483
March
2015
Term
1.484.311.440.002
1.484.311.440.002
14.263.712.621
660.197.950
959.235.734.233
974.159.644.804
2.379.093.364.728
30.061.736.225
685.892.700
948.063.475.640
978.811.104.565
2.458.067.270.048
39.213.731.933
743.374.800
894.483.553.493
934.440.660.226
2.418.752.100.228
As of March 31, 2016, deposits at sight with the public include court-ordered deposits for
respectively), which are restricted because of their nature.
As of March 31, 2016, the Bank has a total of 1.336.967 customers (1.258.023 and 1.157.357
with deposits at sight in December and March 2015, respectively) and 32.025 with term deposits
(31.698 and 33.894 at term in December and March 2015, respectively). The subsidiary BICSA
has a total of 10527 customers with deposits at sight (1.117 and 1.089 in December and March
2015, respectively) and 1.128 customers with demand deposits (1.070 and 1.122 in December
and March 2015, respectively).
(13)
Other obligations with the public
Other obligations with the public are as follows:
Obligations for confirmed letters of credit
Obligations for security tripartite
agreements - forward buyer
¢
March
2016
11.708.938.711
December
2015
6.790.070.088
March
2015
5.567.898.516
¢
29.946.248.851
41.655.187.562
35.690.100.320
42.480.170.408
24.559.491.779
30.127.390.295
(Continues)
Repurchase agreements:
The Bank raises funds through the sale of financial instruments under agreements in which the
Bank undertakes to repurchase them at future dates and at a predetermined price and yield.
As of March 31, 2016, the Bank’s repurchase agreements are as follows:
Investments
¢
Fair value of the
assets
34.061.663.048
Liability balance
Repurchase date
29.946.248.851 05/04/2016 to 16/05/2016
Repurchase price
100%
As of December 31, 2015, the Bank’s repurchase agreements are as follows:
Investments
¢
Fair value of the
assets
40.470.847.037
Liability balance
Repurchase date
35.690.100.320 01/10/2015 al 17/11/2015
Repurchase price
100%
As of March 31, 2015, the Bank’s repurchase agreements are as follows:
Investments
¢
Fair value of the
assets
30.001.933.272
Liability balance
Repurchase date
24.559.491.779 02/04/2015 to 28/05/2015
Repurchase price
100%
(Continues)
(14)
Obligations with entities and the Central Bank of Costa Rica
Obligations with entities and with the Central Bank of Costa Rica are detailed as follows:
March
2016
Demand obligations with the Central Bank
of Costa Rica
Charges payable from obligations with
the Central Bank of Costa Rica
¢
Checking accounts of local
financial entities
Checking accounts of foreign
financial entities
Overdrafts on checking accounts at sight of
foreign financial entities
Demand obligations by legal mandate
Obligations for check deposit
Overnight deposits
Other obligations at sight with
local financial entities
Term deposits from local
financial entities
Term deposits from foreign
financial entities
Loans from foreign financial
entities (see note 14-a)
Obligations for financial leases (note 14-a)
Obligations for resources taken
from the liquidity market
Charges payable for obligations with
financial and non-financial entities
Subordinated loans
Charges payable for subordinated
obligations
-
12.000.000.000
993.056
13.000.993.056
-
1.833.333
12.001.833.333
33.927.002.506
14.666.478.138
15.842.697.989
2.724.114.575
8.429.354.331
455.561.845
4.864.913.435
139.633.519.605
6.694.737.249
16.401.848.458
4.893.535.272
133.538.427.751
2.260.205.158
9.565.361.581
5.920.355.601
156.271.826.740
4.278.052.030
44.897.930.145
-
1.356.447.000
-
19.795.598.769
37.452.429.623
45.529.563.643
332.021.051.860
340.496.319.365
323.045.871.699
482.775.254.458
2.052.385.669
485.679.347.164
2.061.179.953
419.921.195.070
2.602.097.012
-
2.144.984.322
4.994.755.967
1.046.414.765.100
8.385.161.076
1.048.784.246.412
4.994.423.967
1.025.904.560.063
115.900.771.499
113.121.828.460
141.196.948.480
21.085.000.000
1.183.400.536.599
1.161.906.074.872
1.167.101.508.543
21.183.600.000
55.822.117
21.239.422.117
¢
March
2015
13.000.000.000
529.582.549
Loans from local financial entities
(see note 14-a)
Obligations for deferred
liquidity operations (see note 14-a)
December
2015
1.217.640.951.772
21.277.600.000
55.763.717
21.333.363.717
1.183.239.438.589
21.094.400.000
52.814.777
21.147.214.777
1.200.250.556.653
(Continues)
The maturities of the term obligations with entities are from February 22, 2016 to December 18,
2024.
Annual interest rates for the new obligations with entities are as follows:
US dollars
March
2016
1,86637% to 2,165%
December
2015
1,4337% to 2,9346%
March
2015
1.4337% to 1,5266%
As of March 31, 2016, term obligations with foreign financial entities include the international
issuance for US$500.000.000 equivalent to ¢264.795.000.000, with an interest rate of 5,25% and
a term of 5 years, maturing in August, 2018 (US$500.000.000 equivalent to ¢265.970.000.000
and ¢263.680.000.000 in December and March 2015, respectively).
(a)
Maturities of loans payable
As of March 31, 2016; the maturities of loans payable are as follows:
Less than one year
From one to two years
From three to five years
More than five years
Total
¢
¢
Central Bank of
Costa Rica
13.000.000.000
13.000.000.000
Local financial
entities
71.181.558.599
26.214.705.000
5.190.511.590
34.928.578.859
137.515.354.048
Foreign financial
entities
355.340.892.407
61.610.427.785
61.730.334.375
4.093.599.891
482.775.254.458
International
organizations
21.183.600.000
21.183.600.000
Total
439.522.451.006
87.825.132.785
66.920.845.965
60.205.778.750
654.474.208.506
(Continues)
As of December 31, 2015, the maturities of loans payable are as follows:
Less than one year
Total
¢
¢
Central Bank of
Costa Rica
-
Local financial
entities
59.524.086.000
19.386.553.300
24.636.269.160
9.574.920.000
113.121.828.460
Foreign financial
entities
355.493.774.503
32.610.510.952
93.089.500.000
4.485.561.709
485.679.347.164
International
organizations
21.277.600.000
21.277.600.000
Total
415.017.860.503
51.997.064.252
117.725.769.160
35.338.081.709
620.078.775.624
As of March 31, 2015, the maturities of loans payable are as follows:
Less than one year
Total
¢
¢
Central Bank of
Costa Rica
12.000.000.000
12.000.000.000
Local financial
entities
78.234.594.562
34.278.400.000
1.848.396.800
28.980.541.440
143.341.932.802
Foreign financial
entities
258.930.948.116
90.252.727.383
4.817.519.571
65.920.000.000
419.921.195.070
International
organizations
21.094.400.000
21.094.400.000
Total
349.165.542.678
124.531.127.383
6.665.916.371
115.994.941.440
596.357.527.872
As of March 31, 2016, the Bank has the following obligations from financial leases:
Less than one year
From one to five years
¢
¢
Fee
975.314.318
1.596.070.789
2.571.385.107
Interest
128.042.019
136.371.876
264.413.895
Maintenance
97.305.807
157.279.736
254.585.543
Amortization
749.966.492
1.302.419.177
2.052.385.669
(Continues)
As of December 31, 2015, the Bank has the following obligations from financial leases:
Less than one year
¢
¢
Fee
979.492.485
1.602.906.637
2.582.399.122
Interest
144.018.753
121.525.072
265.543.825
Maintenance
97.721.634
157.953.710
255.675.344
Amortization
737.752.098
1.323.427.855
2.061.179.953
As of March 31, 2015, the Bank has the following obligations from financial leases.
Less than one year
¢
¢
(15)
Fee
958.741.936
2.360.812.363
3.319.554.299
Interest
187.595.799
200.725.115
388.320.914
Maintenance
95.567.125
233.569.248
329.136.373
Amortization
675.579.012
1.926.518.000
2.602.097.012
Income tax
Pursuant to the Costa Rican Income Tax Law, the Bank and its subsidiaries are required to file
income tax returns for the twelve months ending December 31 of each year.
As of March 31, 2016, the consolidated balance of income tax payable amounts to ¢5.042.641.463
(¢9.512.291.953 and ¢3.116.224.256 in December and March 2015, respectively) (see note 17)
and the income tax advance payments amounted to de ¢97.518.498 (¢7.504.561.723 and
¢76.096.877 in December and March 2015, respectively), recorded as assets.
(Continues)
The income tax expenses are detailed below:
Current income tax
¢
Income tax of the previous period
March
2016
5.549.943.897
(507.302.434)
Income tax advance payments
-
December
2015
9.776.930.871
March
2015
2.638.794.023
224.991.229
477.430.233
(489.630.147)
-
5.042.641.463
9.512.291.953
3.116.224.256
238.416.105
1.311.088.871
116.510.508
2.570.053
(294.855.902)
(1.038.358.231)
9.492.736.744
12.646.247
(65.917.626)
(1.038.358.231)
2.141.105.154
(1.018.803.022)
(63.239.129)
Deferred income tax
Adjustment of deferred tax
of the previous period
Decrease in the deferred income tax
Decrease in the deferred income tax of the previous period
Income tax
¢
(41.769.744)
5.239.287.824
Realization of deferred
income tax
¢
(196.646.361)
(Continues)
BICSA is subject to tax legislation in the following jurisdictions.
Panama
According to tax legislation in effect in Panama, BICSA is exempt from payment of income tax
on foreign source income. BICSA is further exempt from payment of income tax on interest
income earned on term deposits placed in local banks, on securities issued by the Panamanian
and foreign governments and on investments in securities traded in the Panamanian Stock
Exchange.
Miami
Income tax is not levied on any income that is unrelated to transactions or business dealings in
the United States of America. Finance expense is calculated based on the cost of liabilities
denominated in U.S. dollars.
A deferred tax liability represents a taxable temporary difference and a deferred tax asset
represents a deductible temporary difference.
Deferred tax assets and liabilities are attributed to the following:
As of March 31, 2016:
Valuation of investments
Revaluation of assets
Provisions
Losses and unused tax credits
¢
¢
Assets
Liabilities
977.814.353
105.935.783
2.043.889.054
86.864.520
3.214.503.710
(2.234.827.452)
(5.888.443.301)
(8.123.270.753)
Net
(1.257.013.099)
(5.888.443.301)
105.935.783
2.043.889.054
86.864.520
(4.908.767.043)
(Continues)
As of December 31, 2015:
¢
Provisions
¢
Assets
Liabilities
Net
985.721.846
140.410.535
2.205.967.611
127.210.264
3.459.310.256
(2.312.927.782)
(5.925.938.777)
(8.238.866.559)
(1.327.205.936)
(5.925.938.777)
140.410.535
2.205.967.611
127.210.264
(4.779.556.303)
¢
Provisions
¢
Assets
Liabilities
Net
1.139.079.257
151.909.863
3.320.086.377
100.388.052
4.711.463.549
(567.764.213)
(4.773.052.627)
(5.340.816.840)
571.315.044
(4.773.052.627)
151.909.863
3.320.086.377
100.388.052
(629.353.291)
Movement in temporary differences is as follows:
December 31, 2015
On liabilities account
¢
On assets account
Provisions
¢
Effects on income
statement
Effects on equity
March 31, 2016
(2.312.927.784)
(5.925.938.777)
37.495.476
78.100.332
-
(2.234.827.452)
(5.888.443.301)
985.721.846
2.205.967.611
140.410.535
127.210.264
(4.779.556.305)
(159.321.341)
(34.474.752)
(40.345.744)
(196.646.361)
(7.907.493)
(2.757.216)
67.435.623
977.814.353
2.043.889.054
105.935.783
86.864.520
(4.908.767.043)
(Continues)
December 31, 2014
¢
On assets account
Provisions
¢
Included in income
statement
Included in equity
December 31, 2015
(331.691.914)
(4.790.634.958)
129.807.672
(1.981.235.868)
(1.265.111.491)
(2.312.927.782)
(5.925.938.777)
1.297.921.743
3.419.420.794
123.726.853
94.456.683
(186.800.799)
(1.198.047.958)
16.683.682
32.753.581
(1.018.803.023)
(312.199.897)
(15.405.225)
(3.573.952.481)
985.721.846
2.205.967.611
140.410.535
127.210.264
(4.779.556.303)
December 31, 2014
Included in income
statement
Included in equity
December 31, 2015
¢
(331.691.915)
(4.790.634.958)
17.582.331
(236.072.298)
-
(567.764.213)
(4.773.052.627)
1.297.921.743
3.419.420.794
123.726.853
94.456.683
(186.800.800)
(114.935.838)
28.183.010
5.931.369
(63.239.128)
(158.842.486)
15.601.421
(379.313.363)
1.139.079.257
3.320.086.377
151.909.863
100.388.052
(629.353.291)
On assets account
Provisions
¢
(Continues)
The Bank maintains a tax receivable balance of ¢45.887.828 originated by an excess of advanced
payments for the returns on investments of the Development Credit Fund which are exempt from
the obligation:
March
2016
Income tax
payable
¢
45.887.829
45.887.829
December
2015
45.887.829
45.887.829
March
2015
194.080.214
194.080.214
As of March 31, 2016, the subsidiary BICSA recognized a deferred tax asset on unused tax credits
and losses in the amount of ¢2.043.889.054 equivalent to US$3.859.380 (¢2.205.967.611
equivalent to US$4.147.023 and ¢3.320.086.377 equivalent to US$6.295.674 in December and
March 2015, respectively) related to evidence that future taxable profit will be available.
In conducting the analysis of the deferred tax BICSA´s management considers whether it is
probable that some or all portion of the deferred tax asset is not realizable. Performing or not the
deferred tax assets depends on the generation of future taxable income during the periods in which
those temporary differences become deductible. BICSA´s management considers the detail of
reversals of deferred tax assets and liabilities, project future taxable income and tax planning
strategies in making this assessment. Based on the level of historical taxable income and
projections for future taxable income for the periods in which the deferred tax assets will be
deductible, BICSA´s management considers it may be able to realize the benefits of this
deductible temporary difference.
(Continues)
(16)
Provisions
The movement in provisions is detailed as follows:
Legal benefits
26.987.487.919
(2.202.329)
Lawsuits
2.364.611.406
(1.783.973)
Other
1.748.815.537
-
Total
31.100.914.862
(3.986.302)
Provision made
Provision used
Adjustment for exchange rate differences
Provisions reversed
315.426.543
(317.720.111)
26.982.992.022
336.176.388
(12.998.128)
(826.303)
(1.346.688)
2.683.832.702
2.244.396
(2.244.396)
(215.939.898)
1.532.875.639
653.847.327
(332.962.635)
(826.303)
(217.286.586)
31.199.700.363
¢
Legal benefits
Provision made
Provision used
Provisions reversed
¢
33.752.312.536
(565.483)
6.014.942.381
(12.779.201.515)
26.987.487.919
Lawsuits
3.716.097.637
(1.282.246)
346.490.860
(209.926.355)
(1.564.142)
(1.485.204.348)
2.364.611.406
Other
3.664.136.817
633.524.452
(273.118.123)
(2.275.727.609)
1.748.815.537
Total
41.132.546.990
(1.847.729)
6.994.957.693
(13.262.245.993)
(1.564.142)
(3.760.931.957)
31.100.914.862
(Continues)
Legal benefits
Provision made
Provision used
Provisions reversed
¢
33.752.312.536
(6.038.105)
659.121.195
(265.260.094)
34.140.135.532
Lawsuits
3.716.097.637
(5.568.435)
145.726.422
(122.113.916)
(12.975.551)
(37.510.967)
3.683.655.190
Other
3.664.136.817
216.897.077
(460.521)
3.880.573.373
Total
41.132.546.990
(11.606.540)
1.021.744.694
(387.834.531)
(12.975.551)
(37.510.967)
41.704.364.095
(Continues)
As of March 31, 2016, the Bank is a defendant in litigation, for which the following provisions
have been established:

Ordinary suits filed against the Bank have been estimated at ¢6.834.346.411 and
US$36.771.804, for which the Bank has provisioned ¢820.714.294 and US$92.599,
respectively.

Labor suits are difficult to estimate due to their nature. However, they have been estimated
at ¢1.939.697.903 and US$825.000, for which the Bank has provisioned ¢224.340.592,
corresponding to cases where a provisional judgment has been handed down.

The arbitration proceedings against the Bank are estimated in the amount of $12.091.217, of
which the amount of $40.000 has been provisioned.

There are administrative proceedings at different stages, for which the Bank has provisioned
¢21.321.940 and US$885.

For tax proceedings, and due to the possible future confirmations of payments of taxes, plus
corresponding interest and penalties, the Bank has provisioned the amount of ¢373.089.698.
As of March 31, 2016, other provisions correspond to employee incentives and self-insurance
recorded for a fidelity policy.
As of December 31, 2015, the Bank is a defendant in litigation, for which the following provisions
Ordinary suits filed against the Bank estimated at ¢6.796.157.887 and US$33.870.604, for which
the Bank has provisioned ¢787.990.206 and US$91.399, respectively.
Labor suits are difficult to estimate due to their nature. However, they have been estimated at
¢1.809.697.903, for which the Bank has provisioned ¢224.340.592, corresponding to cases where
a provisional judgment has been handed down.
The arbitration proceedings against the Bank are estimated in the amount of $2.091.217, of which
the amount of $40.000 has been provisioned.
(Continues)
There are administrative proceedings at different stages, for which the Bank has provisioned
¢21.321.940 and US$885.
For tax proceedings, and due to the possible future confirmations of payments of taxes or
dismissal, plus corresponding interest and penalties, the Bank has provisioned the amount of
¢373.089.698.
As of December 31, 2015, other provisions correspond to employee incentives and self-insurance
recorded for a fidelity policy.
As of March 31, 2015, the Bank is a defendant in litigation, for which the following provisions

Ordinary suits filed against the Bank have been estimated at ¢6.894.130.540 and
US$33.908.205, for which the Bank has provisioned ¢820.229.067 and US$2.091.399,
respectively.

Labor suits are difficult to estimate due to their nature. However, they have been estimated
at ¢2.155.119.669, for which the Bank has provisioned ¢543.195.038, corresponding to cases
where a provisional judgment has been handed down.

The arbitration proceedings against the Bank are estimated in the amount of $2.091.217, of
which the amount of $40.000 has been provisioned.

For tax proceedings, and due to the possible future confirmations of payments of taxes or
dismissal, plus corresponding interest and penalties, the Bank has provisioned the amount of
¢373.089.698.
As of March 31, 2015, other provisions correspond to employee incentives, self-insurance
recorded for a fidelity policy, a policy for auxiliary cashiers for cash and a policy of transportation
of securities.
As of March 31, 2015, there are other provisions amounting to ¢140.865.201 at BCR Pensión
Operadora de Planes de Pensiones Complementarias, S.A, corresponding to interim relief of the
equity of members who entered or have a voluntary agreement.
(Continues)
As of March 31, 2016, December and March de 215, BCR Pensión Operadora de Planes de
Pensiones Complementarias, S.A., is a defendant in litigation, for which it is considering the
outflow of economic benefits amounting to ¢261.153.751 for alleged breach of Article 11,
subparagraph a) of the Law on the Promotion of Competition and Effective Defense of
Consumers.
As of March 31, 2016, December and March de 2015, there are no provisions for ligation at BCR
Sociedad Administradora de Fondos de Inversión S.A.
As of March 31, 2016, BCR Valores Puesto de Bolsa, S.A. is a defendant in a lawsuit filed by a
customer, under file number 08-001181-1027-CA, which during a vote of the First Chamber of
the Supreme Court of Justice, it was admitted and Puesto de Bolsa was ordered to pay damages,
which existence and estimate must be proven in the enforcement of the judgment. The amount
claimed by the customer is US$202.737. The Brokerage House has provisioned ¢107.367.488
(¢107.843.920 and ¢131.840.000 in December and March 2015, respectively).
As of March 31, 2016 and December de 2015; BCR Valores Puesto de Bolsa, S.A. is undergoing
an administrative proceeding from a complaint filed by several investors who alleged the lack of
advice of the broker in the case of Altara; therefore, a provision was made for 200 base salaries
amounting to ¢80.680.000.
As of March 31, 2016 and December de 2015, BCR Valores Puesto de Bolsa, S.A. is undergoing
an administrative proceeding filed with the General Superintendence of Securities, under file
number J60/0/152, for which resolution number SGV-R-3073 was issued regarding the non
compliance of BCR Valores regarding services and was ordered to pay a penalty of 200 base
salaries as set out in Law No. 7337; therefore, the amount of ¢42.120.000.00 was provisioned.
As of March 31, 2016, BICSA has a provision for litigations amounting to ¢401.990.585,
equivalent to US$759.061 (¢403.774.558, equivalent to US$759.061 and ¢400.403.535,
equivalent to US$759.261 in December and March 2015, respectively).
(Continues)
(17)
Other miscellaneous accounts payable
Other miscellaneous accounts payable are detailed as follows:
Due for goods and services
Tax liability owed by the entity
Tax on DU
del
profits
periodo
Employer contributions
Court-ordered withholdings
Tax withholdings payable
Withheld employer contributions payable
Other third-party withholdings payable
Compensations and salaries payable
Interests (distributions) payable on results
of the period
Accrued vacations
Accrued statutory Christmas bonus
Commissions payable from insurance placement
Contributions to Superintendencies' budgets
Miscellaneous creditors
¢
¢
March
2016
215.208.959
5.042.641.463
December
2015
220.167.838
9.512.291.953
March
2015
222.067.721
3.116.224.256
655.697.729
2.329.003.820
927.125.828
2.050.157.888
902.741.734
7.735.453.260
1.977.268.303
639.387.649
2.375.219.104
974.035.398
1.014.120.406
809.776.196
7.843.194.372
7.449.812.657
657.424.491
2.498.667.622
911.926.418
1.543.655.448
1.173.120.611
6.995.798.674
1.792.243.500
4.963.084.551
5.856.350.479
1.934.444.973
24.945.741
177.522.975
22.035.481.696
56.827.129.399
10.525.293.325
6.672.724.811
554.500.396
72.800.228
21.665.397.420
70.328.721.753
2.908.745.821
7.468.927.088
3.123.554.034
39.358.412
16.113.575.392
48.565.289.488
(Continues)
(18)
Equity
a) Capital Stock
The Bank’s capital stock is as follows:
Capital under Law No. 1644
Bank capitalization bonds
Capital increase per Law No. 7107
Capital increase per Law No. 8703
Increase for revaluation of assets
Other
¢
¢
March
2016
30.000.000
1.288.059.486
101.739.445.784
27.619.000.002
13.576.812.597
697.630.969
144.950.948.838
December
2015
30.000.000
1.288.059.486
101.739.445.784
27.619.000.002
13.576.812.597
697.630.969
144.950.948.838
March
2015
30.000.000
1.288.059.486
79.107.385.015
27.619.000.002
13.020.197.845
697.630.970
121.762.273.318
On December 23, 2008, the Executive Branch of the Costa Rican Government authorized a
capital contribution funded under Law No. 8703 “Amendment to the Law on Ordinary and
Extraordinary Budget of the Republic for Tax Year 2008 (Law No. 8627).” Such law grants
funds to capitalize three State-owned banks, including Banco de Costa Rica, in order to
stimulate productive sectors and particularly small and medium-sized enterprises. For such
purposes, the Bank received four securities for a total of US$50,000,000 equivalent to
¢27,619,000,002 and denominated in DU maturing in 2013, 2017, 2018, and 2019 (No. 4191,
No. 4180, No. 4181, and No. 4182 for DU10,541,265.09 each, at a reference exchange rate
of ¢655,021 to DU1.00). As of March 31, 2016, and based on the exchange rate, the balance
of these investments is of ¢27.259.395.285 (¢27.030.597.126 and ¢27.280.583.228 in
December and March 2015, respectively). (See note 5).
As of June 30, 2015, the profit on the sale of a property was ¢125.865.558.
On December 21, 2015, the National Financial System Oversight Board (CONASSIF) el
authorized the Bank to increase its capital stock by ¢22.632.060.768 for accumulated profits
and the surplus from the revaluation of realized assets amounting to ¢556.614.752 for a total
of ¢23.188.675.520.
As of March 31, 2016, the amount for the constitution of the Development Financing Fund´s
equity is ¢17.382.838.706 (¢14.406.348.662 and in December and March 2015,
respectively).
b) Surplus from revaluation of property, furniture and equipment
This includes the increase in fair value of real property (land and buildings) owned by the
Bank.
(Continues)
As of March 31, 2016, the revaluation surplus amounts to ¢38.418.584.782 (¢38.410.388.251
and ¢27.183.449.854 in December and March 2015, respectively). As of November 30,
2015, as a result of the last appraisal, the amount of e ¢11.909.418.707 was recorded as an
increase in the value of the real property.
c) Adjustments for revaluation of available-for-sale investments
They include variations in the fair value of available-for-sale investments.
As of March 31, 2016, the balance of the adjustment for valuation of available-for-sale
investments corresponds to unrealized net losses in the amount of ¢3.487.040.431
d) Adjustments for valuations of interest in other companies
This mainly corresponds to foreign exchange differences arising from translation of BICSA’s
consolidated financial statements and the unrealized gain or loss on valuation of investments
in subsidiaries.
As of March 31, 2016, changes in equity include foreign exchange differences corresponding
to investments in other companies in the amount of ¢9.783.085.363 (¢10.015.649.995 and
¢9.458.482.113 in December and March 2015, respectively).
Technical reserves of BICSA´s retained earnings
As of March 31, 2016, from Banco de Costa Rica´s retained earnings resulting from the
investment in other companies, it should be considered for any purpose, that there are amounts
related to special reserves applied to equity accounts of BICSA for US$19.334.963 (51% of
US$37.911.692) due to changes made to policies concerning the subsidiary (US$19.399.126 and
US$16.465.794 in December and March 2015, respectively).
(Continues)
Laws and regulations applicable in the Republic of Panama establish that, for purposes of
compliance with standards issued by the Superintendence of Banks of Panama, from the year
2014 on, an estimated of credits reserves should be prepared based on regulatory guidelines..
The General Board of Directors resolution SBP-GJD-003-2013 dated July 9, 2013 establishes the
accounting for the differences that may arise between the regulations issued by the
Superintendence of Banks and the IFRS, so that: 1) the accounting records and the financial
statements are prepared in accordance with IFRS as required by agreement No.006-2012 dated
December 18, 2012; 2) according to standards applicable to banks and presenting additional
specific accounting aspects then those required by IFRS, in the event that an estimate of provision
or reserve is greater than the correspondent calculation under IFRS, the excess of provision or
reserve will be recognized in the equity. This general resolution came into effect for the
accounting periods ending on or after December 31, 2014. Subject to prior authorization of the
Superintendence of Banks, banks can reverse the established provision, partially or totally, based
on justification duly evidenced and presented to the Superintendence of Banks.
Agreement No.004-2013 indicates that specific provisions originate from concrete and objective
evidence of impairment. These provisions should be constituted for credit facilities classified in
the risk category known as special, subnormal, doubtful or irrecoverable, both for individual
credit facilities or a group of them. At least from December 31, 2014, banks must calculate and
maintain at all times the amount of specific provision determined by the methodology specified
in this agreement, which considers the balance due from each credit facility in any of the
categories subject to provision, the present value of each available collateral as mitigation of risk,
as established by type of guarantee in this agreement, and a table of weightings applied to the net
amount exposed to loss of such credit facilities.
(Continues)
In case of an excess of a specific provision calculated in accordance with this agreement over the
estimate calculated in accordance with IFRS, this excess will be recorded as a regulatory reserve
in the equity, that increases or decreases towards undistributed earnings. The balance of the
regulatory reserves will not be considered as capital funds for purposes of calculating certain
ratios or prudential ratios mentioned in the agreement. The Bank determines its country risk
reserve in compliance with provisions established in general resolutions No.7-2000 and No.12001 issued by the Superintendence of Banks of Panama.
Agreement No.004-2013 indicates that the dynamic provision is a reserve constituted to meet
possible future needs of specific provisions ruled by prudential banking regulations criteria. It is
constituted with quarterly periodicity on credit facilities that do not have a specific provision
assigned, i.e., credit facilities classified in normal category. This agreement regulates the
methodology to calculate the amount of the dynamic provision, considering a minimum or
maximum restriction applicable to the provision´s amount determined on credit facilities
classified in normal category. The dynamic provision is an equity account that increases or
decreases with assignments to or from undistributed earnings. The credit balance of the dynamic
provision is part of the regulatory capital but does not replace or compensates the net worth equity
requirements set forth by the Superintendence.
(Continues)
Regulatory capital
As of March 31, 2016, the net worth equity for the BCR Financial Conglomerate is detailed as follows:
Companies of the Financial Conglomerate
Parent company
Banco de Costa Rica
Base capital
¢
Individual surplus or
deficit
Non-transferable
items
Transferable surplus
and individual deficit
357.209.631.292
357.209.631.292
301.758.800.881
301.758.800.881
55.450.830.411
55.450.830.411
-
55.450.830.411
55.450.830.411
111.466.808.702
15.081.141.620
92.826.278.556
1.968.084.510
18.640.530.146
13.113.057.110
9.133.859.772
-
9.506.670.374
13.113.057.110
6.606.900.650
2.307.867.040
4.299.033.610
-
4.299.033.610
¢
6.746.237.052
139.901.088.024
2.330.479.639
99.432.709.745
4.415.757.413
40.468.378.279
9.133.859.772
4.415.757.413
31.334.518.507
¢
2.964.577.429
2.964.577.429
1.284.300.096
1.284.300.096
1.680.277.333
1.680.277.333
-
1.680.277.333
1.680.277.333
Regulated entities
Banco Internacional de Costa Rica, S. A
and Subsidiary
BCR Valores, S. A.- Puesto de Bolsa
BCR Sociedada Administradora de
Fondos de inversión, S.A.
BCR Pensión Operadora de Planes de
Pensiones Complementarias, S.A.
Non regulated entities
BCR Corredora de Seguros, S.A.
Global surplus or deficit of
financiero
the Financial Conglomerate
Minimum individual
capital requirement
¢
88.465.626.251
(Continues)
As of December 31, 2015, the net worth equity for the BCR Financial Conglomerate is detailed as follows:
Parent company
Banco de Costa Rica
Base capital
¢
deficit
Non-transferable
items
345.634.578.948
345.634.578.948
290.244.503.390
290.244.503.390
55.390.075.558
55.390.075.558
-
55.390.075.558
55.390.075.558
110.382.851.920
14.929.783.180
90.556.983.236
2.529.762.160
19.825.868.684
12.400.021.020
9.714.675.655
-
10.111.193.029
12.400.021.020
7.718.518.350
2.215.449.050
5.503.069.300
-
5.503.069.300
¢
6.112.031.606
139.143.185.056
2.232.335.689
97.534.530.135
3.879.695.917
41.608.654.921
9.714.675.655
3.879.695.917
31.893.979.266
¢
2.964.577.429
2.964.577.429
1.338.800.552
1.338.800.552
1.625.776.877
1.625.776.877
-
1.625.776.877
1.625.776.877
Regulated entities
Banco Internacional de Costa Rica, S. A
and Subsidiary
Fondos de inversión, S.A.
Not regulated entities
Minimum individual
capital requirement
¢
88.909.831.701
(Continues)
As of March 31, 2015, the net worth equity for the BCR Financial Conglomerate is detailed as follows:
Parent company
Banco de Costa Rica
Base capital
¢
deficit
Non-transferable
items
325.462.500.727
325.462.500.727
271.620.058.604
271.620.058.604
53.842.442.123
53.842.442.123
-
53.842.442.123
53.842.442.123
103.035.674.027
10.658.393.750
85.876.230.496
1.773.933.420
17.159.443.531
8.884.460.330
8.408.127.330
-
8.751.316.201
8.884.460.330
6.552.857.210
1.869.757.990
4.683.099.220
-
4.683.099.220
¢
5.710.381.487
125.957.306.474
2.081.489.029
91.601.410.935
3.628.892.458
34.355.895.539
8.408.127.330
3.628.892.458
25.947.768.209
¢
1.800.000.000
1.800.000.000
963.611.149
963.611.149
836.388.851
836.388.851
Regulated entities
Banco Internacional de Costa Rica, S.A.
and Subsidiary
Fondos de inversion, S.A.
Non regulated entities
Minimum individual
capital requirement
-
836.388.851
836.388.851
¢
80.626.599.183
(Continues)
(19)
Contingent accounts
The Bank has consolidated off-balance sheet commitments and contingencies that arise in the
ordinary course of business and involve elements of credit and liquidity risk.
Off-balance financial instruments with risk are as follows:
March
2016
Guarantees granted:
Performance bonds
Bid bonds
Other guarantees
Issued non-negotiated letters of credit
Confirmed non-negotiated letters of credit
Credit lines to be used automatically
Other contingencies
Credits pending disbursement
¢
¢
December
2015
85.563.762.843
2.626.404.421
45.524.282.050
20.325.371.252
7.384.784.143
108.171.628.228
40.242.678.425
16.055.018.080
325.893.929.442
March
2015
86.375.394.690
2.452.504.209
45.232.061.044
26.080.690.988
13.669.599.680
115.788.439.436
32.921.572.264
15.898.527.632
338.418.789.943
110.012.845.265
1.591.783.867
58.044.874.752
12.675.092.975
9.864.822.829
105.134.567.315
31.097.108.332
8.066.807.374
336.487.902.709
Off-balance financial instruments involving risk by type of deposit are as follows:
March
2016
With prior deposit
Without prior deposit
Pending lawsuits
and claims
¢
¢
December
2015
March
2015
8.373.750.399
277.277.500.618
5.713.779.454
299.783.438.225
4.851.328.087
300.539.466.289
40.242.678.425
325.893.929.442
32.921.572.264
338.418.789.943
31.097.108.333
336.487.902.709
These commitments and contingent liabilities expose the Bank to credit risk since commissions
and losses are recognized in the consolidated balance sheet until the obligations are fulfilled or
expire.
As of March 31, 2016, December and March 2015, letters of credit are backed 100% by guarantee
deposits or credit facilities.
As of March 31, 2016, floating guarantees in custody are for ¢131.048.150.325
(Continues)
The Bank has off-balance financial instruments with risk that arise in the ordinary course of
business to meet the financial needs of its customers. These financial instruments include letters
of credit and guarantees that involve varying levels of credit risk.
Other contingencies
As of March 31, 2016, the Bank’s Legal Division reported the following contingencies and
commitments:

Administrative suits against the Bank estimated at ¢6.013.632.117 and US$36.679.205. In
addition other contentious processes are filed for preliminary injunction with no estimate.

In labor matters there are active ordinary processes estimated in the amounts of
¢1.715.357.311 and US$825.000.

Criminal proceedings in which the Bank is a third-party defendant are estimated at
¢1.032.147.040 and US$203.908.

Arbitration proceedings against the Bank are estimated in the amount of US$12.051.217.

Administrative proceedings against the Bank have been estimated in the amounts of ¢612.668
and US$149.

In tax matters, for taxes plus interest and proportional penalties, the amount of
¢5.128.807.128 was estimated.
As of December 31, 2015, the Bank’s Legal Division reported the following contingencies and
commitments:


In labor matters there are active ordinary processes estimated in the amount of
¢1.585.357.311.

Criminal proceedings in which the Bank is a third-party defendant are estimated at
¢1.030.447.040 and US$203.908.

Arbitration proceedings against the Bank are estimated in the amount of US$2.051.217.
(Continues)

Administrative proceedings against the Bank have been estimated in the amounts of ¢612.668
and US$149.

¢5.128.807.128 was estimated.
As of March 31, 2015, the Bank’s Legal Division reported the following contingencies and
commitments:


In labor matters there are active ordinary processes estimated in the amount of
¢1.611.924.631.

Criminal proceedings in which the Bank is a third-party defendant estimated at ¢316.361.969
and US$200.000.

Arbitration proceedings against the Bank are estimated in the amount of $2.051.217.

¢5.128.807.128
Lawsuit filed against BICR
Until 2004, Banco Internacional de Costa Rica, S.A. – Costa Rica (BICR) was a subsidiary of
BICSA Corporación Financiera, S.A. The latter entity (holding) merged with Banco Internacional
de Costa Rica, S.A. (Panama) in September 2005, which was involved in a legal process filed by
TELESIS, S.A. related to a software contract subscribed by the parties whose basis was a
conviction against BICR relapsed in an ordinary civil proceeding in which breaches in the
contract were discussed. In 1989, the court action was estimated by the claimant at an amount in
colones equivalent to US$192,000. In September 2002, the claimant pretended US$12,595,684,
plus interest accrued up to payment date, plus legal expenses and damages. The Second Civil
Court of San José, first Section, issued ruling No. 408 on November 16, 2004, which upheld the
defense motion filed by BICR. With this ruling, BICR is released from further payment
obligations. TELESIS, S.A. filed a formal appeal to overturn the ruling by the Second Civil Court.
On December 21, 2006, the First Chamber of the Supreme Court of Justice dismissed the formal
appeal filed by TELESIS, S.A., thereby confirming that all claims filed by TELESIS, S.A. had
prescribed, releasing BICR from payment obligations. As result of that final and definitive
resolution, in 2007 the Bank recovered the amount of US$2,096,804 from Banco Nacional de
(Continues)
Costa Rica, entity that absorbed the operations of BICR and other subsidiaries in 2004, being this
amount a provision constituted to deal with this particular contingency.
To handle its defense in the above case, BICR hired three Costa Rican attorneys through an
agreement that clearly stipulated the fees to be paid by BICR in exchange for litigation services.
BICR promptly paid the full amount due under the agreement; however, the attorneys filed a
claim for payment of fees in the amount of ¢501,134,949 (approximately US$967,704), plus 2%
monthly interest of ¢70,845,379 (approximately US$136,804) that had been paid as of July 23,
2007. This file was processed by the First Board of Appeal of the Supreme Chamber under an
action of this nature filed by claimants, because its action was overruled in first and second
instance recognizing the validity and effectiveness of the professional services contract signed by
BICR and aforementioned lawyers. The Court resolution of April 12, 2013 summoned the parties
to appear before the First Civil Court, which was carried out on April 18, 2013. Likewise, in
resolution of September 13, 2013, the said Chamber admitted the appeal for processing.
Therefore, it is expect the Board to rule on the merits.
Income tax - BICSA Costa Rica
On November 9, 2006, the Bank received Conclusion of Tax Audit Notice No. 2752000016446
from the Large Taxpayer Division of the Costa Rican Tax Administration indicating an
outstanding tax liability, of tax bills not properly liquidated corresponding to the tax years running
from 1999 through 2004 for BICR. Until 2004 that entity operated as a subsidiary of BICSA
Corporación Financiera, S.A., which merged with BICSA in September 2005. The scope of the
claim amounts to a principal of ¢707,639,319 (approximately US$1,366,468) since interest,
penalties and surcharges were eliminated from the transfer of the original charges. The transfer
of charges originated in treatment by the current tax administration of certain items of expenses
and income differently from the previously authorized and notified in writing by the Tax
Administration to BICR and other banks of the Costa Rican banking system. BICR challenged
charges transfer arguing among other things that the settlement of tax in those years was
conducted in accordance with guidelines issued directly from that Directorate. By liquidator
resolution SFGCN-AL-075-12 dated 29-06-2012, the Division of Large Taxpayers of the Tax
Authorities determines a tax liability amounting to ¢621,992,593 and for interest the sum of
¢809,228,709, for a total of ¢1,431,221,302, approximately US$2,891,298. On July 23, 2012 the
Bank filed reversal appeal against that decision, considering it was infringing what ordered by
decision TFA 035-2012 from the Fiscal Administrative Court of Costa Rica.
Besides, based on resolution DGH-153-08 dated December 8, 2008 nullity of condoned interests
was requested. Thru resolution OT10R-041-13 of April 24, 2013, notified on May 14, 2013, the
Division of Large Taxpayers partially declared admissible the reversal appeal filed by the
company against the resolution, only for the calculation of interest estimated in the amount of
¢174.614.907. Total debt for the tax liability amounts to ¢621.992.593 plus ¢174,614,907 of
interests for a total of ¢796,607,500, approximately US$1.609.276. On June 5, 2013, the
(Continues)
company filed an appeal against resolution SFGN-AL-075-12 and for resolution TFA No 4972013 of November 4, 2013 the Fiscal Administrative Court overrules the nullity filed,
condemning BICSA and confirming income tax payment for fiscal periods from 1999 to 2004.
In addition, on November 22, 2013 BICSA filed a request to the Tax Administration of Large
Taxpayers for the Finance Ministry to make recommendations to clarify issues regarding the
Sentencing Resolution No. 153-08 for interests of the Finance Ministry, and also to recommend
to the Finance Ministry the condemnation of interests determined on resolution OT10R-041-13
of April 24, 2013 confirmed by resolution No. 497-2013 of the Fiscal Administrative Court for
¢174,614,907 and discharge of interests from fiscal period 2005. However, strictly respecting the
deadlines to make the payment, the amounts established in the conviction were paid by BICSA
on November 29, 2013, charging provisions, and which amounted to US$1,243,985.
On February 1, 2013 a contentious administrative process was filed to declare absolute nullity
and ineffectiveness of determinative resolution No. DT10R-11-08 of the Tax Administration of
Large Taxpayers, resolution No. AV-10-4-135-08, ruling of the Administrative Court No. 0352012 and resolution No. SFGCN-AL-075-12, all arising from the transfer of charges No.
2752000016446 of income taxes for the years 1999-2004. The increase in income taxes paid by
the company for the aforementioned fiscal years amounted to ¢621,992,593. Along with the
return of the amount plus interest, further damages by a currently undetermined amount are
claimed, amount that would be determined at any favorable resolution to the bank.
In response to this action, in January 28, 2014 the Costa Rican State started a contentious
administrative process against the bank (Harmfulness Process), referring to the party won by
BICSA in administrative proceedings.
Through resolution dated April 8, 2014, the Contentious Administrative Court proposed the
accumulation of both administrative proceedings. From April 23, 2014, the Bank has already
ruled in favor of such accumulation. The decision on the Court on the accumulation of these
processes is pending, after which progress can be made towards the oral hearing of the trial and
the subsequent sentencing.
Through ruling No.045-PJCD-2-2014, dated November 25, 2014, the Conciliation and Decision
Board declared the dismissal of an employee of the Bank as unjustified and condemned BICSA
to pay to the former employee the amount of US$160,760 as compensation. Costs were fixed at
10% of t 2014he sentence. There was a corresponding appeal presented to this verdict, which was
solved in favor of the Bank revoking the first instance judgment.
(Continues)
As of December 31, 2015 and 2014, due to the merger between INS Pensiones Operadora de
Pensiones Complementarias, S.A. and BCR Pensión Operadora de Planes de Pensiones
Complementarias, S.A., a series of contingencies arise that have been reasonably covered with
pledged securities from the seller.
As of March 31, 2016 and December 2015, BCR Valores Puesto de Bolsa, S.A. has an
administrative proceeding filed by the Large Taxpayer Division of the Costa Rican Tax
Administration against BCR Valores S.A, relating to the Preliminary Adjustment Proposal for the
Income Tax for the 2012 and 2013 fiscal years, by the Costa Rican Tax Administration
(hereinafter DGT), which might be classified in the tax contingency item against such a subsidiary
and which current status is as follows: on November 9, 2015, the DGT provided BCR-Valores
with the results of the reports on the allegations timely submitted by such an entity against the
Provisional Tax Adjustment Proposal and the Sanctioning Resolution Proposal, notified to BCR
Valores in July 2015. All this was related to the Income Tax Adjustments for 2012 and 2013, plus
interest and the penalization, which as of that date amounted to ¢621.189.153 (as of September
09, 2015, such an amount had a small increase because it has continued to bear interest).
According to such reports, the DGT totally accepted the allegations of BCR-Valores regarding
Adjustments A.3 Expenses from Legal Profit Sharing, and the partially Adjustment A-2 Expenses
from Allowances and Provisions, and A-4 Non Deductible Expenses Associated with Non
Taxable Income because such items were derogated totally and partially as indicated;
consequently, they generated an decrease in taxes, plus the corresponding proportion from interest
and the penalization, thereby generating in favor of BCR Valores a decrease in the total initial
adjustment of taxes, interest, and penalization in the amount of ¢208.831.621.
Regarding the adjusted items, especially, Adjustments A.1 for Returns on investments in foreign
financial instruments, A.1 .2 Increase in the taxable income from amortized discounts from
investments in securities, all of which were confirmed by the DGT and for a total estimate of
taxes plus interest and proportional penalizations as of September 9, 2015 amounting to
¢421.357.532. During the hearing, a proposal was made to BCR-Valores for the regularization
of the adjustments confirmed during this first instance pursuant to the provisions contained in
Articles 144 and 171, subparagraph 12 of the Tax Code of Standards and Procedures (CNPT) and
157 of the Tax Procedure Regulations, or there was an option to accept a 5 business day term,
after which it might express its approval, disapproval, or partial disapproval of the proposal. BCRValores accepted the second option by pointing out that it would issue its opinion within the
granted term.
As of March 31, 2016, December and March de 2015, BCR Valores Puesto de Bolsa, S.A. has a
legal proceeding with file number 14-007525-1027 CA.
(Continues)
As of March 31, 2016, December and March 2015, there were no contingencies and commitments
for BCR Sociedad Administradora de Fondos de Inversión, S.A. that should be disclosed.
(20)
Trusts
The Bank provides trust services, whereby it manages assets at the direction of the customer. The
Bank receives a fee for providing those services. The underlying assets and liabilities are not
recognized in the Bank’s consolidate financial statements. The Bank is not exposed to any credit
risk and it does not guarantee these assets or liabilities.
The types of trusts managed by the Bank are as follows:





Management and investment trusts
Management trusts with a testamentary clause
Guarantee trusts
Housing trusts
Management and investment public trusts
The assets in which capital trust is invested are detailed as follows:
Cash on hand and due from banks
Loan portfolio
Realizable assets
Investments in other companies
Property, furniture and equipment
Other assets
¢
¢
March
2016
26.922.274.188
163.083.066.163
175.511.021.724
(18.480.564.943)
2.869.899.361
48.603.183.516
102.311.284.742
287.524.712.907
26.698.254.592
815.043.132.250
December
2015
31.658.130.170
159.271.527.959
184.025.490.273
(19.964.563.812)
2.560.658.188
50.228.258.882
106.271.748.104
396.908.954.902
21.389.042.915
932.349.247.581
March
2015
27.977.268.043
149.770.383.938
165.313.100.347
(20.659.823.170)
2.800.923.121
41.962.864.983
108.682.921.690
404.363.791.370
12.568.377.752
892.779.808.074
Trust capital held by subsidiaries and invested in assets is detailed as follows:
March
2016
Banco de Costa Rica
BCR Valores, S.A.- Puesto de Bolsa (see note 22)
¢
¢
710.262.969.055
103.211.749.179
1.568.414.016
815.043.132.250
December
2015
825.243.633.372
105.520.221.134
1.585.393.075
932.349.247.581
March
2015
796.998.490.388
94.172.431.020
1.608.886.666
892.779.808.074
(Continues)
(Continues)
(21)
Other debit memoranda accounts
Other debit memoranda accounts are detailed as follows:
March
2016
Assets and securities held
in custody
Guarantees received and held in custody
Guarantees received and held by third parties
Granted and unused
credit lines
Write-offs
Suspense interest receivable
Other memoranda accounts
Assets and securities held in custody
for third parties
Managed funds assets
Management of individual portfolios
by Puesto de Bolsa
Held-for-trading securities held in custody for third parties
Held-for-trading securities received
as guarantee (guarantee trust)
Confirmed spot agreements
pending settlement
Futures pending settlement
Cash and accounts receivable for
custodial activities
Held-for-trading securities held in custody for third parties
Held for trading securities received from third parties
as guarantee (Guarantee Trusts)
Held-for-trading securities by third parties
as guarantee (Guarantee Trusts)
Confirmed spot agreements
pending settlement
¢
¢
December
2015
March
2015
7.023.206.541
669.249.868.813
559.972.668
7.627.303.910
676.506.378.364
562.393.605
6.284.691.201
1.360.474.701.697
879.208.327
621.472.021.892
62.539.841.305
13.346.469.524
1.979.979.167.205
593.831.279.029
63.058.701.289
13.069.904.125
1.709.888.440.283
479.784.827.438
35.759.769.997
15.190.614.648
1.629.775.269.278
125.599.950.981
1.285.356.659.367
71.165.149.752
1.234.597.885.216
109.865.725.309
1.108.163.455.758
295.221.509.486
455.662.296.774
301.180.700.167
430.931.214.554
292.300.387.512
-
29.282.523.006
21.593.264.277
-
180.045.994
30.604.361.540
35.920.053.024
26.875.458.302
33.446.544.197
5.051.585.046.708
54.183.411.614
4.658.565.009.597
21.848.037.782
5.268.102.082.134
52.248.881.823
61.456.525.105
40.307.292.301
92.490.074.550
86.550.919.753
54.250.823.905
3.506.269.491
118.065.980.497
10.927.420.692.362
105.551.618.184
10.126.240.151.848
1.562.529.605
53.349.984.049
10.504.774.859.243
(Continues)
Other memoranda accounts by entity are detailed as follows:
March
2016
Banco de Costa Rica
BCR Valores, S.A.- Puesto de Bolsa (see note 22)
BCR Sociedad Administradora de
Fondos de Inversión, S.A. (see note 23)
Pensiones Complementarias, S.A. (see note 24)
¢
¢
December
2015
March
2015
7.354.020.423.473
1.832.812.538.641
448.161.594.217
6.756.834.474.770
1.684.474.211.607
442.660.009.363
6.765.315.897.562
2.250.672.483.172
374.088.429.423
487.495.822.767
459.927.232.941
414.524.538.210
804.930.313.264
10.927.420.692.362
782.344.223.167
10.126.240.151.848
700.173.510.876
10.504.774.859.243
(Continues)
(22)
Current and term brokerage operations and portfolio management operations
Memoranda accounts of BCR Valores, S.A. – Puesto de Bolsa are detailed as follows:
2016
2015
2015
Managed funds (see note 20)
¢
1.568.414.016
1.585.393.075
1.608.886.666
Other memoranda accounts on their own
Other memoranda accounts
Total other memoranda accounts on their own
¢
70.250
70.250
70.562
70.562
69.954
69.954
¢
180.045.994
-
-
¢
30.604.361.540
30.784.407.534
35.920.053.024
35.920.053.024
26.875.458.302
26.875.458.302
295.221.509.486
583.356.958
301.180.700.167
7.567.426
292.300.387.512
-
Other memoranda accounts on their own
Contratos confirmados de contados pendientes de liquidar
- forward buyer ( see note 22-a)
Total memoranda accounts on their own
Memoranda accounts for third parties
Portfolio management
Cash and accounts receivable by custodial activity
Confirmed spot contracts
pending settlement
- forward buyer (see note 22-a)
- forward buyer (see note 22-a)
Total memoranda accounts for third parties
Total memoranda accounts (see note 21)
Total memoranda accounts and trusts
¢
¢
3.506.269.492
-
1.562.529.605
48.385.891.667
39.873.128.054
17.134.531.993
69.680.088.829
417.377.116.432
448.161.594.216
65.678.490.130
406.739.885.777
442.660.009.363
36.215.452.057
347.212.901.167
374.088.429.423
449.730.008.232
444.245.402.438
374.088.429.423
(Continues)
In repurchase and term operations, the Brokerage House is contingently liable for the short
balance that arises when a security is settled for an amount that is less than the amount payable
to the respective buyer. In accordance with the Regulations for Repurchase Operations and the
Regulations for Term Operations, all such transactions have collaterals to cover those
contingencies.
Securities backing repurchase agreements are held in the custody at Central de Valores de la Bolsa
Nacional de Valores, S.A. (CEVAL) or foreign depositories with which CEVAL has custody
agreements.
a) Repurchase
The Brokerage House enters into agreements to buy or sell securities at certain future dates
(repurchase agreements). Those agreements are comprised of securities that the parties undertake
to sell or buy on an agreed upon date and at a stated price. The difference between the contractual
value and the value of the security represents additional collateral for the operation, and
corresponds to a portion of the security held in custody.
As of March 31, 2016, forward buyer and seller positions in repurchase and reverse repurchase
agreements in which Puesto de Bolsa (Brokerage House) participates are as follows:
Third party
1 to 30 days
31 to 60 days
61 to 90 days
Total third party
Colones
¢ 21.550.510.437
3.366.542.988
¢ 24.917.053.425
Forward buyer
US dollars
13.135.655.839
9.466.684.281
866.498.122
23.468.838.242
Total
34.686.166.276
12.833.227.269
866.498.122
48.385.891.667
Colones
28.328.471.961
5.503.878.813
33.832.350.774
Forward seller
US dollars
25.056.639.929
9.927.626.119
863.472.007
35.847.738.055
Total
53.385.111.890
15.431.504.932
863.472.007
69.680.088.829
Own
1 to 30 days
31 to 60 days
Total own
Total
¢ 23.585.961.331
3.438.067.003
27.024.028.334
¢ 51.941.081.759
3.050.827.082
529.506.124
3.580.333.206
27.049.171.448
26.636.788.413
3.967.573.127
30.604.361.540
78.990.253.207
33.832.350.774
35.847.738.055
69.680.088.829
(Continues)
As of December 31, 2015, forward buyer and seller positions in repurchase and reverse
repurchase agreements in which Puesto de Bolsa (Brokerage House) participates are as follows:
Third party
Colones
1 to 30 days
¢ 17.597.303.167
31 to 60 days
2.493.197.855
61 to 90 days
More than 91 days
Total third party ¢ 20.090.501.022
Forward buyer
US dollars
14.066.251.156
4.984.776.111
563.369.180
168.230.585
19.782.627.032
Total
31.663.554.323
7.477.973.966
563.369.180
168.230.585
39.873.128.054
Colones
24.791.763.639
2.175.862.855
26.967.626.494
Forward seller
US dollars
31.607.110.679
6.372.153.193
563.369.180
168.230.584
38.710.863.636
Total
56.398.874.318
8.548.016.048
563.369.180
168.230.584
65.678.490.130
Own
1 to 30 days
31 to 60 days
Total own
Total
2.862.121.916
525.615.744
3.387.737.660
23.170.364.692
31.995.451.103
3.924.601.921
35.920.053.024
75.793.181.078
26.967.626.494
38.710.863.636
65.678.490.130
¢
¢
29.133.329.187
3.398.986.177
32.532.315.364
52.622.816.386
As of March 31, 2015, forward buyer and seller positions in repurchase agreements in which
Puesto de Bolsa (Brokerage House) participates are as follows:
Third party
1 to 30 days
¢
31 to 60 days
61 to 90 days
More than 91 days
Total third party
¢
Own
1 to 30 days
31 to 60 days
Total own
Total
¢
¢
Colones
5.061.456.808
1.684.466.560
6.745.923.368
Forward buyer
US dollars
6.379.775.169
1.434.498.104
2.444.992.850
129.342.502
10.388.608.625
Total
11.441.231.977
3.118.964.664
2.444.992.850
129.342.502
17.134.531.993
Colones
20.106.023.011
2.652.312.656
22.758.335.667
Forward seller
US dollars
9.065.632.016
2.884.999.890
1.377.141.982
129.342.502
13.457.116.390
Total
29.171.655.027
5.537.312.546
1.377.141.982
129.342.502
36.215.452.057
20.880.549.812
4.048.516.505
24.929.066.317
31.674.989.685
1.588.904.555
357.487.430
1.946.391.985
12.335.000.610
22.469.454.367
4.406.003.935
26.875.458.302
44.009.990.295
22.758.335.667
13.457.116.390
36.215.452.057
(Continues)
b) Guarantees granted
In order to comply with Bolsa Nacional de Valores, S.A., requirement for a system of
guarantees to secure operations executed by the Brokerage House on behalf of third parties,
the Brokerage Firm may either hold a performance bond in colones issued by a private Costa
Rican bank or make a contribution to the Guarantee Fund as described below.
In order to establish a risk management system, SUGEVAL set up a guarantee fund
comprised of contributions from brokerage firms. Contributions are made proportionally
based on the net buyer positions during the last six months. As of March 31, 2016, the
Brokerage House had made contributions for a total of ¢26.479.501 (¢108.611.117 and
¢206.863.323 in December and March 2015, respectively). These contributions are registered
in the subaccount “Guarantee fund – National Stock Exchange” under “Cash and due from
banks.”
c) Agreements entered into with customers of BCR Valores, S.A. – Puesto de Bolsa
Starting 2012, a multiple agreement was implemented, which includes all the products
offered by the Brokerage House, except for individual portfolio management services.
Accordingly, as of March 31, 2016 the Brokerage House has two types of agreements
available:
 Commission agreement to perform brokerage operations, foreign exchange operations,
and operations with foreign exchange and financial derivatives
 Individual portfolio management agreement
d) Customer securities and own securities in custody
As of March 31, 2016, December and March 2015, Puesto de Bolsa does not have securities
in custody.
(Continues)
(23)
Investment fund management agreements
The value of net assets in each investment fund managed by the BCR Sociedad Administradora
de Fondos de Inversión, S.A. (Investment Fund Manager) is as follows:
March
2016
Investment Funds
In Colones
BCR Short-Term Colones,
Undiversified
March
2015
Type of fund
Financial, open
¢
74.627.370.107
79.492.967.422
72.432.930.065
53.579.074.728
50.090.981.176
54.812.355.793
31.551.754.583
37.107.665.432
15.413.525.903
¢
8.610.133.906
186.907.559.917
8.405.783.096
174.262.860.894
8.302.955.755
133.257.077.155
¢
300.588.262.850
487.495.822.767
285.664.371.880
459.927.232.774
281.267.461.055
414.524.538.210
US$
80.927.484
79.773.889
121.035.820
Real estate, closed, long-term
197.322.151
194.070.902
187.126.292
Real estate, closed, long-term
Open, money market
136.136.182
131.088.045
127.797.482
78.415.855
36.905.443
63.164.291
37.587.424
58.228.891
9.050.061
37.879.627
567.586.742
31.339.121
537.023.672
30.111.463
533.350.009
BCR Mixed Colones, Undiversified Open, medium term
BCR Portfolio Fund Colones
BCR Real Estate, colones
undiversified
December
2015
Open, medium term
Closed, non-financial
and mixed portfolio
In US Dollars
Equivalent in colones of investment funds in US dollars
(see note 21)
Investment funds in US dollars
BCR Liquidity dollars, undiversified
Open
BCR Real Estate Dollars,
undiversified
BCR Real Estate Trade and
Industry, undiversified
BCR Liquidity Fund Dollars,
international, undiversified
BCR Portfolio Fund Dollars
BCR Real Estate Progress Fund,
undiversified
Open, medium-term
Real estate, closed
US$
(Continues)
(24)
Pension fund management agreements
The value of assets in each investment fund managed by the BCR Sociedad Administradora de
Fondos de Inversión, S.A. (Investment Fund Manager) is as follows:
March
2016
on their own
Guarantees held by entity
by third parties
Mandatory pension fund
Voluntary pension fund
Labor capitalization fund
Supplementary pension fund
created by special laws
(see note 21)
¢
¢
December
2015
March
2015
7.023.206.541
-
7.627.303.910
-
6.284.691.201
200.000.000
46.270.123
612.123.921.549
20.083.275.977
64.980.069.236
46.266.982
581.164.543.807
19.477.889.437
76.653.545.838
49.902.126
514.343.050.562
18.160.288.389
58.633.034.966
100.673.569.838
804.930.313.264
97.374.673.193
782.344.223.167
102.502.543.632
700.173.510.876
The detail of assets for each pension fund in the reports issued separately is detailed as follows.
(Continues)
Funds received by the Pension Fund Manager are invested in the following securities and other
investments:
March
2016
December
2015
March
2015
Voluntary Pension Fund (colones)
Securities issued by the Central Bank of Costa Rica
Securities issued by the Government
Non-financial public entities
Securities issued by government-owned commercial banks
Public banks created by law
Securities issued by private banks
Securities issued by private financial entities
Securities issued by private non-financial entities
Securities issued by closed Investment Funds
Securities issued by open Investment Funds
¢
15.638.163.056
2.769.462.951
3.906.255.685
400.050.927
754.844.111
776.840.889
3.103.123.070
2.441.133.030
1.126.934.244
39.911.332
319.606.817
15.099.687.888
2.943.677.203
4.097.025.152
397.208.604
755.529.068
727.889.506
2.708.928.015
2.077.506.151
1.124.199.980
40.032.905
227.691.304
13.809.720.740
2.094.693.971
5.034.958.682
286.644.050
665.642.020
792.966.600
2.547.618.525
1.274.784.150
864.786.500
39.560.986
208.065.256
Voluntary Pension Fund (US$)
Non financial public entities
US $
7.990.717
1.508.344
176.947
846.293
514.726
2.776.830
1.123.846
553.274
330.864
159.593
7.667.905
1.632.794
182.727
463.005
516.613
2.919.081
967.958
564.461
300.959
120.307
7.785.327
1.850.420
264.001
313.952
481.765
2.838.345
936.881
581.991
284.884
233.088
(Continues)
March
2016
December
2015
March
2015
Mandatory Regime of Supplementary Pensions (colones)
Repos and repurchase agreements
Equity securities issued by financial entities
¢ 704.249.914.663
112.604.026.428
302.440.721.286
42.763.640.238
21.513.232.523
58.442.853.050
65.895.852.925
57.371.085.049
22.251.029.991
6.870.295.397
13.966.313.969
130.863.807
666.943.188.619
112.586.229.323
285.105.679.872
41.779.640.342
29.780.853.227
50.617.571.971
53.360.771.691
51.515.794.882
22.325.266.122
6.457.006.757
12.596.422.469
683.137.089
134.814.874
608.649.814.495
106.205.786.621
266.397.110.095
35.135.532.420
23.974.350.778
48.057.101.217
48.834.317.997
44.266.669.292
22.693.644.165
6.209.415.339
4.880.507.441
1.858.383.659
136.995.471
Labor Capitalization Fund (colones)
Repos and repurchase agreements
¢
40.249.875.596
2.933.013.865
14.612.898.740
1.227.952.420
3.290.658.086
3.134.904.513
5.525.510.001
6.323.185.051
3.182.052.426
19.700.494
-
75.185.258.574
8.950.009.073
23.813.844.965
2.126.236.404
6.555.966.646
5.727.446.264
13.182.069.667
9.298.061.051
3.192.732.691
1.694.498.903
644.392.910
57.735.693.213
6.077.587.819
20.459.821.134
1.691.668.200
5.494.455.117
5.455.985.455
7.668.031.644
5.833.003.354
2.229.798.723
1.234.737.462
1.590.604.305
(Continues)
The agreements entered into by the Pension Fund Manager are found in chapter II of the Labor
Protection Law, articles 14, 15, and thereafter. The applicable agreement is known as “Voluntary
Supplemental Pension Plan Affiliation Agreement.”
Following is a general description of the nature of the agreements entered into:
The Labor Protection Law seeks to establish mechanisms to expand coverage and strengthen the
funding base for the Disability, Old Age, and Death System of the CCSS through supplemental
pension funds. The aforementioned Law establishes a voluntary personal savings system,
whereby contributions are recorded and controlled by the Centralized Collection System of the
CCSS, or directly by the pension fund operators. A close relationship exists between the funds,
plans, and agreements, the latter being a formal requirement for eligibility to access pension
funds. The agreements define and stipulate the rights and obligations of both parties.
The funds are separate equity funds administered by pension fund operators for a stated purpose,
i.e. long-term savings to be used by the member as a supplemental pension fund. The funds are
comprised of voluntary contributions from members and third-party contributors.
The plans are a set of complementary conditions and benefits offered to the plan´s beneficiaries.
(Continues)
(25)
Financial income on investments in financial instruments
Financial income on investments in financial instruments is as follows:
March
2016
Income from available-for-sale
financial instruments
Income from investments in due
and restricted financial instruments
(26)
2015
¢
9.391.420.581
6.161.096.895
¢
711.950.145
10.103.370.726
552.872.104
6.713.968.999
Financial income on loan portfolio
Financial income on loan portfolio is detailed as follows:
March
Checking account overdrafts
Loans with other funds
Income from credit cards
Factoring
Confirmed and traded letters of credit
Past due loans on legal collection
¢
Income from financial leases
¢
2016
271.703.865
67.370.267.137
2.781.312.135
51.531.158
1.365.626
12.497.696
70.488.677.617
851.720.732
71.340.398.349
2015
241.748.857
64.739.585.350
2.990.609.306
32.571.622
1.977.295
20.638.604
68.027.131.034
1.179.032.796
69.206.163.830
(Continues)
(27)
Expenses from obligations with the public
Financial expenses from obligations with the public are as follows:
Expenses from deposits at sight
Expenses from term deposits
Expenses from securities
repurchase agreements
March
2016
2015
6.049.509.897
5.554.097.999
16.578.393.809
19.346.473.029
¢
311.975.945
22.939.879.651
¢
(28)
291.865.166
25.192.436.194
Expenses from allowances for impairment of assets
Expenses from allowances for impairment of assets are as follows:
March
2016
Expenses from specific allowance
for loan portfolio (see note 6-f)
Expenses from allowance for impairment and
other doubtful receivables
Expenses for allowance for impairment and
doubtful contingent loans
Expenses for generic allowance and counter
cycle for loan portfolio (see note 6-e)
Expenses for generic allowance and counter
cycle for contingent loans
¢
3.806.267.371
3.053.183.856
422.695.960
375.461.411
-
¢
2015
4.121.438
4.938.543
640.351.321
4.233.901.874
15.956.532
4.089.074.558
(Continues)
(29)
Income from recovery of assets and decreases in allowances and provisions
Income from recovery of assets and decreases in allowances and provisions is detailed as follows:
Recovery of written-down loans
Recovery of receivables
Decrease in specific allowance
for loan portfolio (see note 6-f)
Decrease in allowance for
uncollectibility of other receivables
Decrease in allowances for
Decrease in allowances for
Decrease in generic allowance and
counter cycle for loan portfolio
Decrease in generic allowance and
counter cycle for contingent loans
¢
March
2016
239.815.545
32
561.017.178
-
¢
2015
277.374.486
173.890.046
767.105.899
150.428
4.938.543
1.159.911
805.771.298
810.552
1.220.491.322
(Continues)
(30)
Service fee and commission income
Service fee and commission income are detailed as follows:
March
Drafts and transfers
Foreign trade
Certified checks
Trust management
Custodial services
Ranking mandates
Collections
Credit cards
Investment Fund management
Pension Fund management
Insurance underwriting
Brokerage fees
(by third-parties in local market)
Brokerage fees
(Third-parties in other markets)
Individual portfolio management fees
Commissions from custodial services
of authorized securities
Other commissions
¢
¢
2016
594.824.371
67.921.148
2.456.377
984.585.802
56.391.254
480.590
124.039.652
9.261.616.980
1.781.077.487
1.561.166.410
920.507.229
2015
567.394.924
68.745.920
2.811.010
930.151.311
52.564.274
556.824
114.965.494
8.485.874.797
1.554.052.075
1.341.082.199
917.194.462
609.989.527
454.952.806
39.028.430
19.971.237
40.971.851
-
24.836.033
5.548.546.651
21.597.439.178
62.277.054
6.070.351.942
20.663.946.943
(Continues)
(31)
Income from interests in other companies
The income from interests in other companies is detailed as follows:
March
2016
Local entities:
Interest in Bolsa Nacional de
Valores, S.A.
¢
¢
-
2015
4.394.615
4.394.615
(Continues)
(32)
Administrative expenses
Administrative expenses are detailed as follows:
March
2016
Salaries and bonuses, permanent
staff
Salaries and bonuses,
contractors
Compensation for directors and auditors
Overtime
Per diem
Statutory Christmas bonus
Vacation
Incentive
Fixed representation expenses
Other compensation
Contribution to severance payment
Social security charges
Refreshments
Uniforms
Training
Employee insurance
Assets for personal use
"Back-to-school" bonus
Labor Capitalization Fund
Other personnel expenses
Outsourcing expenses
Transportation and communication expenses
Property insurance
Property maintenance and repairs
Public utilities
Leasing of real properties
Leasing of furniture and equipment
Depreciation of property, plant, and equipment
Amortization of leasehold
property
Impairment loss
Other infrastructure expenses
Overhead
¢
¢
2015
13.679.954.043
15.103.019.108
713.381.345
65.046.520
277.495.062
158.341.729
1.272.725.214
1.353.056.793
151.567.171
582.947.804
593.174.817
4.687.608.030
50.958.097
1.801.150
127.911.995
86.160.471
19.612
1.816.858.144
411.982.262
165.385.057
3.187.201.771
1.381.583.244
39.515.675
1.175.784.984
806.258.848
1.520.053.647
158.394.680
1.975.991.680
677.387.922
58.985.454
402.115.292
153.405.941
1.392.002.445
1.487.730.700
102.006.178
132.884.309
926.538.924
670.133.852
5.242.597.775
45.808.918
2.074.164
88.556.163
182.081.928
83.270
1.922.970.143
464.004.345
183.804.647
3.102.631.921
1.496.065.793
26.445.799
1.170.521.679
783.320.092
1.739.408.139
243.871.555
1.784.250.905
106.406.194
8.196.531
209.909.792
3.844.120.401
40.609.792.763
168.109.384
245.311.311
3.776.181.519
43.774.309.575
(Continues)
(33)
Legal profit sharing
Legal profit sharing (statutory allocations) of the period are detailed as follows:
March
2016
Profit sharing
of CONAPE
Profit sharing Instituto Nacional
de Fomento Cooperativo
Profit sharing of National Emergency
Commission
Profit sharing Public Pension
Fund Operators
Other profit sharing
¢
¢
2015
1.076.517.488
539.771.331
1.531.301.868
913.914.833
749.282.188
386.218.559
282.800.839
1.071.911.307
4.711.813.690
181.032.278
639.740.383
2.660.677.384
(Continues)
(34)
Components of other comprehensive income
The components of other comprehensive income are detailed as follows:
March
2016
Amount before
taxes
Surplus from revaluation of buildings
Adjustment for valuation of available-forsale investments
¢
Exchange differences from translation effect
of financial statements of foreign entities
(35)
8.196.531
(713.854.177)
(456.011.768)
¢ (1.161.669.414)
2015
Tax benefit
(expense)
Net taxes
67.435.623
8.196.531
Amount before
taxes
Tax benefit
(expense)
Net taxes
-
-
-
(646.418.554)
573.928.081
(456.011.768)
67.435.623 (1.094.233.791)
(1.145.843.069)
(571.914.988)
(379.313.363)
194.614.718
(1.145.843.069)
(379.313.363) (951.228.351)
Operating leases
Lessee
Non-cancellable operating leases are payable as follows:
Less than one year
Between one and five years
¢
¢
March
2016
903.881.003
532.430.327
1.804.890.383
3.241.201.713
December
2015
951.334.244
534.078.848
1.812.899.395
3.298.312.487
March
2015
913.417.691
1.025.223.671
1.161.166.561
3.099.807.923
These leases correspond to furniture and equipment.
(Continues)
(36)
Fair value of financial instruments
The fair values of the Bank’s main financial assets and liabilities are as follows:
Cash and due from banks
Investments
Loan portfolio
¢
Deposits at sight
Term deposits
Financial obligations
¢
March
2016
Carrying amount
Fair value
622.768.164.828
622.768.164.828
907.903.788.794
900.885.237.649
3.465.989.325.646
3.240.881.222.287
4.996.661.279.268
4.764.534.624.764
December
2015
Carrying amount
Fair value
610.491.870.392
610.491.870.392
858.168.620.677
852.037.318.025
3.426.592.353.981 3.221.960.218.253
4.895.252.845.050 4.684.489.406.670
March
2015
Carrying amount
Fair value
680.334.682.835
680.334.682.835
652.792.889.799
646.673.973.473
3.265.546.246.540 3.030.495.613.927
4.598.673.819.174 4.357.504.270.235
1.885.250.126.682
1.404.933.719.924
1.217.654.878.156
4.507.838.724.762
1.745.415.788.710
1.479.256.165.483
1.183.250.482.740
4.407.922.436.933
1.454.153.059.228
1.484.311.440.002
1.200.260.139.203
4.138.724.638.433
1.885.250.126.682
1.403.121.960.624
1.226.740.907.536
4.515.112.994.842
1.745.415.788.710
1.478.368.119.078
1.181.789.092.084
4.405.572.999.872
1.454.153.059.228
1.478.334.603.480
1.218.998.331.078
4.151.485.993.786
As of March 31, 2016, the financial obligations include ¢21.239.422.117 for subordinated
obligations (¢21.333.363.717 and ¢21.147.214.777 in December and March 2015, respectively).
Where practicable, the following assumptions were used by management to estimate the fair value
of each class of financial instruments both on and off the consolidated balance sheet:
a) Cash and cash equivalents, interest receivable, accounts receivable, demand deposits and
customer savings deposits, interest payable, and other liabilities
The carrying amounts approximate fair value because of the short maturity of these
instruments.
b) Investments in financial instruments
The fair value of available-for-sale financial instruments is based on quoted market prices or
prices quoted by brokers.
(Continues)
c) Securities sold under repurchase agreements
The carrying amount of funds owed under repurchase agreements maturing in one year or
less approximates their fair value because of the short maturity of these instruments.
d) Loan portfolio
Management determined the fair value of the loan portfolio by the discounted cash flow
method.
e) Term deposits and loans payable
Management determined the fair value of term deposits and loans payable by the discounted
cash flow method.
Fair value estimates are made at a specific date, based on relevant market information and
information concerning the financial instruments. These estimates do not reflect any
premium or discount that could result from offering for sale of a particular financial
instrument at a given date. These estimates are subjective in nature and involve uncertainties
and matters of significant judgment and, therefore, cannot be determined with precision.
Estimates could vary significantly if changes are made to those assumptions.
(37)
Segments
The Bank has defined its business segments based on the administrative and reporting structure,
and on the structure of banking, stock brokerage, investment and pension fund management, and
insurance brokerage services it provides.
(Continues)
As of March 31, 2016, assets and liabilities of each segment are as follows:
Bank
ASSETS
Loan portfolio
Accounts, fees, and accounts receivable
Foreclosed assets
Interest in other companies (net)
Property, furniture and equipment, net
Other assets
TOTAL ASSETS
Investment Fund
Manager
Brokerage House
Foreign Bank
Insurance
Broker
Total
Elimininations
Consolidated
591.089.936.933
753.961.298.051
2.574.547.843.320
3.052.920.672
12.900.722.233
93.444.971.278
92.973.566.067
39.322.424.595
4.161.293.683.149
82.770.163
7.381.096.204
598.797.726
18.214.512
243.707.839
8.324.586.444
1.537.083.913
5.865.851.037
702.794.129
8.005.231
41.420.634
8.155.154.944
724.891.501
47.465.862.576
795.862.546
29.057.201
2.375.298
434.750.218
49.452.799.340
36.171.925.901
87.611.588.857
837.432.587.045
4.043.192.456
6.793.353.855
7.535.328.511
14.657.455.016
994.245.431.641
257.327.719
5.757.531.665
341.628.075
25.799.248
39.213.776
6.421.500.483
629.863.936.130
908.043.228.390
3.411.980.430.365
9.535.195.604
19.694.076.088
93.474.028.479
100.563.288.867
54.738.972.078
5.227.893.156.001
(7.095.771.302)
(139.439.596)
(383.702.601)
(93.434.971.278)
1
(1)
(101.053.884.777)
622.768.164.828
907.903.788.794
3.411.980.430.365
9.151.493.003
19.694.076.088
39.057.201
100.563.288.868
54.738.972.077
5.126.839.271.224
¢
2.872.252.486.696
13.000.993.056
699.413.971.871
88.626.437.110
25.546.501.589
21.239.422.117
3.720.079.812.439
1.258.579.853
1.258.579.853
800.022.779
800.022.779
29.946.248.851
1.205.414.102
1.528.326.863
32.679.989.816
390.244.210.883
487.757.261.698
3.853.117.839
1.943.409.414
883.797.999.834
497.726.372
10.941.787
508.668.159
3.292.442.946.430
13.000.993.056
1.188.376.647.671
96.564.210.816
27.500.852.790
21.239.422.117
4.639.125.072.880
(2.259.099.824)
(4.976.111.072)
(383.702.599)
(1)
(7.618.913.496)
3.290.183.846.606
13.000.993.056
1.183.400.536.599
96.180.508.217
27.500.852.789
21.239.422.117
4.631.506.159.384
EQUITY
Capital
Unfunded capital contributions
Equity adjustments
Capital reserves
Prior periods retained earnings
Profit for the period
Development Financing Fund equity
Minority interest
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
¢
144.950.948.838
44.714.629.713
204.293.990.482
17.124.161.993
12.747.300.978
17.382.838.706
441.213.870.710
4.161.293.683.149
3.274.102.092
1.392.185.994
106.529.224
255.890.000
1.754.498.442
282.800.839
7.066.006.591
8.324.586.444
4.089.200.000
(83.545.557)
596.622.751
2.238.272.624
514.582.347
7.355.132.165
8.155.154.944
7.626.000.000
1.262.154.377
756.109.902
6.104.865.746
1.023.679.499
16.772.809.524
49.452.799.340
38.609.421.071
34.161.860.963
17.086.859.625
18.794.551.714
1.794.738.434
110.447.431.807
994.245.431.641
1.250.000.000
37.024.132
232.288.715
3.926.419.807
467.099.670
5.912.832.324
6.421.500.483
199.799.672.001
1.392.185.994
80.198.652.852
223.221.761.475
49.942.770.326
16.830.201.767
17.382.838.706
588.768.083.121
5.227.893.156.001
(54.848.723.163)
(1.392.185.994)
(35.484.023.139)
(18.927.770.993)
(32.818.608.333)
(4.082.900.789)
54.119.241.130
(93.434.971.281)
(101.053.884.777)
144.950.948.838
44.714.629.713
204.293.990.482
17.124.161.993
12.747.300.978
17.382.838.706
54.119.241.130
495.333.111.840
5.126.839.271.224
DEBIT CONTINGENT ACCOUNTS
TRUST ASSETS
TRUST LIABILITIES
TRUST EQUITY
OTHER DEBIT MEMORANDA ACCOUNTS
¢
¢
¢
¢
¢
267.369.848.950
710.262.969.055
364.270.288.586
345.992.680.469
7.354.020.423.473
804.930.313.264
1.568.414.016
18.821.925
1.549.592.092
448.161.594.217
58.524.080.492
103.211.749.179
103.211.749.179
1.832.812.538.641
-
325.893.929.442
815.043.132.250
364.289.110.511
450.754.021.740
10.927.420.692.362
LIABILITIES AND EQUITY
LIABILITIES
Obligations with the Central Bank of Costa Rica
Accounts payable and provisions
Other liabilities
Subordinated obligations
TOTAL LIABILITIES
¢
Pension Fund
Operator
¢
¢
487.495.822.767
-
325.893.929.442
815.043.132.250
364.289.110.511
450.754.021.740
10.927.420.692.362
(Continues)
As of December 31, 2015, assets and liabilities of each segment are as follows:
Bank
ASSETS
Loan portfolio
Foreclosed assets
Other assets
TOTAL ASSETS
LIABILITIES
Other liabilities
TOTAL LIABILITIES
¢
¢
¢
Pension Fund
Operator
Investment Fund
Manager
Brokerage House
Foreign Bank
Insurance
Broker
Total
Elimininations
Consolidated
567.672.874.212
686.343.098.074
2.565.216.935.135
2.702.063.157
13.333.753.739
92.985.686.726
94.375.078.893
45.475.356.509
4.068.104.846.445
120.190.295
7.907.147.983
633.504.316
18.617.900
224.405.539
8.903.866.033
805.633.989
8.422.069.939
671.731.670
8.229.524
456.630.226
10.364.295.348
1.081.164.730
51.712.881.149
267.103.490
29.057.201
2.067.881
617.946.235
53.710.220.686
47.418.203.145
101.176.874.594
810.069.447.409
3.976.669.046
1.304.786.695
7.706.696.739
13.738.724.778
985.391.402.406
238.335.344
5.588.041.473
392.572.998
27.832.924
447.220.022
6.694.002.761
617.336.401.715
861.150.113.212
3.375.286.382.544
8.643.644.677
14.638.540.434
93.014.743.927
102.138.523.861
60.960.283.309
5.133.168.633.679
(6.844.531.323)
(2.981.492.535)
1
(359.927.185)
(92.975.686.726)
(1)
(103.161.637.769)
610.491.870.392
858.168.620.677
3.375.286.382.545
8.283.717.492
14.638.540.434
39.057.201
102.138.523.860
60.960.283.309
5.030.006.995.910
2.115.114.734
2.115.114.734
1.513.300.342
1.513.300.342
35.690.100.321
149.737.115
1.676.160.730
37.515.998.166
396.631.154.102
473.067.827.992
4.134.873.949
2.356.617.887
876.190.473.930
1.155.414.995
89.342.574
1.244.757.569
3.226.855.224.772
1.169.548.828.151
110.086.132.220
29.568.775.371
21.333.363.717
4.557.392.324.231
(2.183.270.579)
(7.642.753.279)
(359.927.185)
(1)
(10.185.951.044)
3.224.671.954.193
1.161.906.074.872
109.726.205.035
29.568.775.370
21.333.363.717
4.547.206.373.187
4.089.200.000
(73.100.369)
596.622.751
2.314.427.628
1.923.844.996
8.850.995.006
10.364.295.348
7.626.000.000
1.473.024.488
629.243.556
3.928.627.568
2.537.326.908
16.194.222.520
53.710.220.686
38.609.421.071
34.483.534.304
17.168.745.760
9.927.025.675
9.012.201.666
109.200.928.476
985.391.402.406
1.250.000.000
40.536.670
232.288.715
2.280.645.514
1.645.774.293
5.449.245.192
6.694.002.761
199.741.696.540
1.450.161.455
81.576.296.798
208.410.769.100
26.639.342.251
43.551.694.642
14.406.348.662
575.776.309.448
5.133.168.633.679
(54.790.747.702)
(1.450.161.455)
(36.036.069.863)
(18.882.790.782)
(19.229.046.822)
(16.095.325.868)
53.508.455.767
(92.975.686.725)
(103.161.637.769)
144.950.948.838
45.540.226.935
189.527.978.318
7.410.295.429
27.456.368.774
14.406.348.662
53.508.455.767
482.800.622.723
5.030.006.995.910
1.585.393.075
35.168.406
1.550.224.669
442.660.009.363
60.574.716.194
105.520.221.134
105.520.221.133
1.684.474.211.607
-
338.418.789.943
932.349.247.581
375.154.516.270
557.194.731.310
10.126.240.151.848
¢
2.794.533.970.349
696.331.263.044
99.491.267.470
27.122.814.910
21.333.363.717
3.638.812.679.490
EQUITY
Capital
Equity adjustments
Capital reserves
Minority interest
TOTAL EQUITY
¢
144.950.948.838
45.540.226.934
189.527.978.318
7.410.295.429
27.456.368.774
14.406.348.662
429.292.166.955
4.068.104.846.445
3.216.126.631
1.450.161.455
112.074.771
255.890.000
778.320.437
976.178.005
6.788.751.299
8.903.866.033
TRUST ASSETS
TRUST LIABILITIES
TRUST EQUITY
¢
¢
¢
¢
¢
277.844.073.749
825.243.633.372
375.119.347.864
450.124.285.508
6.756.834.474.770
782.344.223.167
459.927.232.941
-
338.418.789.943
932.349.247.581
375.154.516.270
557.194.731.310
10.126.240.151.848
(Continues)
As of March 31, 2015, assets and liabilities of each segment are as follows:
Bank
ASSETS
Loan portfolio
Foreclosed assets
Other assets
TOTAL ASSETS
LIABILITIES
Obligations with the Central Bank of Costa Rica
Other liabilities
TOTAL LIABILITIES
¢
¢
¢
Pension Fund
Operator
Investment Fund
Manager
Brokerage House
Foreign Bank
Insurance
Broker
Total
Eliminations
Consolidated
573.223.814.179
503.120.926.025
2.479.128.823.663
2.594.709.322
13.037.034.452
82.085.824.002
81.756.988.821
37.471.925.078
3.772.420.045.542
25.179.724
6.342.828.505
593.938.856
92.503.653
7.054.450.738
552.791.793
6.694.913.212
659.594.721
7.496.685
39.320.207
7.954.116.618
922.075.638
37.726.878.614
612.293.814
29.057.201
445.781.202
39.736.086.469
115.296.639.521
95.099.334.918
739.518.997.514
5.002.551.230
394.680.970
7.946.478.464
13.069.858.312
976.328.540.929
167.515.132
4.267.900.093
351.959.788
10.905.514
19.775.217
4.818.055.744
690.188.015.987
653.252.781.367
3.218.647.821.177
9.815.047.731
13.431.715.422
82.114.881.203
89.721.869.484
51.139.163.669
4.808.311.296.040
(9.853.333.151)
(459.891.568)
(367.725.810)
(82.075.824.002)
(92.756.774.531)
680.334.682.836
652.792.889.799
3.218.647.821.177
9.447.321.921
13.431.715.422
39.057.201
89.721.869.484
51.139.163.669
4.715.554.521.509
1.188.601.400
1.188.601.400
715.975.259
715.975.259
24.559.491.778
2.242.141.272
608.180.074
27.409.813.124
370.470.032.346
494.919.119.873
5.516.626.779
2.449.523.447
873.355.302.445
533.629.362
155.217.818
688.847.180
2.939.974.057.934
12.001.833.333
1.175.905.174.557
95.999.509.667
37.380.665.895
21.147.214.777
4.282.408.456.163
(1.509.558.705)
(8.803.666.015)
(367.725.810)
1
(10.680.950.529)
2.938.464.499.229
12.001.833.333
1.167.101.508.542
95.631.783.857
37.380.665.895
21.147.214.778
4.271.727.505.634
3.013.547.294
1.652.740.792
(15.681.463)
255.890.000
778.320.437
181.032.278
5.865.849.338
7.054.450.738
4.089.200.000
(109.680.161)
500.430.501
2.410.619.877
347.571.142
7.238.141.359
7.954.116.618
7.626.000.000
(384.728.680)
629.243.557
3.928.627.568
527.130.900
12.326.273.345
39.736.086.469
38.609.421.071
34.851.949.979
14.090.766.425
13.037.147.772
2.383.953.237
102.973.238.484
976.328.540.929
750.000.000
10.245.204
150.000.000
2.862.934.229
356.029.131
4.129.208.564
4.818.055.744
175.850.441.683
1.652.740.792
64.493.421.034
205.154.308.801
52.934.140.522
11.411.438.383
14.406.348.662
525.902.839.877
4.808.311.296.040
(54.088.168.365)
(1.652.740.792)
(34.352.104.879)
(15.626.330.483)
(23.017.649.884)
(3.795.716.687)
50.456.887.088
(82.075.824.002)
(92.756.774.531)
121.762.273.318
30.141.316.155
189.527.978.318
29.916.490.638
7.615.721.696
14.406.348.662
50.456.887.088
443.827.015.875
4.715.554.521.509
-
336.487.902.709
892.779.808.074
373.988.488.353
518.791.319.720
10.504.774.859.245
-
336.487.902.709
892.779.808.074
373.988.488.353
518.791.319.720
10.504.774.859.245
¢
2.544.944.533.810
12.001.833.333
678.743.913.412
87.436.496.793
34.775.924.630
21.147.214.777
3.379.049.916.755
EQUITY
Capital
Equity adjustments
Capital reserves
Minority interest
TOTAL EQUITY
¢
121.762.273.318
30.141.316.155
189.527.978.318
29.916.490.639
7.615.721.695
14.406.348.662
393.370.128.787
3.772.420.045.542
TRUST ASSETS
TRUST LIABILITIES
TRUST EQUITY
¢
¢
¢
¢
¢
263.714.358.037
796.998.490.388
373.969.181.789
423.029.308.599
6.765.315.897.562
700.173.510.876
414.524.538.210
1.608.886.666
19.306.564
1.589.580.102
374.088.429.423
72.773.544.672
94.172.431.020
94.172.431.019
2.250.672.483.174
(Continues)
As of March 31, 2016, the income of each segment is as follows:
Bank
Financial income
Financial expenses
Expenses from allowance for asset impairment
Income from recovery of assets and decrease in allowance
FINANCIAL INCOME
Other operating income
Other operating expenses
GROSS OPERATING INCOME
Personnel expenses
Other administrative expenses
NET OPERATING INCOME BEFORE TAXES AND
PROFIT SHARING
Income tax
Deferred income tax
Decrease in income tax
Profit sharing
NET PROFIT FOR THE YEAR
Results for the period attributable to minority interests
Results of the period attributable to the controlling company
NET INCOME FOR THE PERIOD
¢
¢
Pension Fund
Operator
Investment Fund
Manager
Brokerage
House
Foreign Bank
Insurance
Broker
Total
Eliminations
Consolidated
68.735.955.722
25.614.869.839
3.352.399.084
773.927.893
40.542.614.692
35.472.173.931
19.655.838.974
56.358.949.649
22.091.389.627
12.737.210.264
34.828.599.891
153.546.748
153.546.748
1.642.085.249
386.348.714
1.409.283.283
484.527.803
139.620.879
624.148.682
80.752.875
6.219.841
74.533.034
1.783.135.976
531.429.789
1.326.239.221
548.771.050
33.028.771
581.799.821
1.307.167.842
335.774.168
971.393.674
1.117.926.664
213.054.209
1.876.266.129
557.409.155
64.697.328
622.106.483
13.438.305.760
6.445.705.946
876.267.371
26.823.340
6.143.155.783
489.613.597
803.797.935
5.828.971.445
2.098.198.853
1.418.239.802
3.516.438.655
78.245.950
5.540.551
5.235.419
5.020.065
72.490.045
1.132.334.114
106.135.405
1.098.688.754
416.078.827
20.620.406
436.699.233
83.793.974.897
32.408.110.345
4.233.901.874
805.771.298
47.957.733.976
41.637.269.531
21.696.605.026
67.898.398.481
26.196.375.315
14.413.417.450
40.609.792.765
(22.967.357)
(22.967.353)
(4)
(4.311.685.641)
(1.108.206.786)
(3.203.478.859)
(1)
(1)
(2)
83.771.007.540
32.385.142.992
4.233.901.874
805.771.298
47.957.733.972
37.325.583.890
20.588.398.240
64.694.919.622
26.196.375.314
14.413.417.449
40.609.792.763
21.530.349.758
4.494.903.100
37.495.476
4.325.641.156
12.747.300.978
12.747.300.978
12.747.300.978
785.134.601
195.978.884
306.354.878
282.800.839
282.800.839
282.800.839
744.439.400
207.523.871
22.333.182
514.582.347
514.582.347
514.582.347
1.254.159.646
152.509.615
43.944.798
3.599.055
37.624.789
1.023.679.499
1.023.679.499
1.023.679.499
2.312.532.790
358.473.015
159.321.341
1.794.738.434
1.794.738.434
1.794.738.434
661.989.521
140.555.413
35.149.966
675.214
19.859.686
467.099.670
467.099.670
467.099.670
27.288.605.716
5.549.943.898
238.416.105
41.769.745
4.711.813.691
16.830.201.767
16.830.201.767
16.830.201.767
(3.203.478.857)
(1)
(3.203.478.856)
(879.421.933)
(4.082.900.789)
(4.082.900.789)
24.085.126.859
5.549.943.897
238.416.105
41.769.745
4.711.813.691
13.626.722.911
879.421.933
12.747.300.978
12.747.300.978
(Continues)
As of March 31, 2015, the income of each segment is as follows:
Bank
Financial income
Financial expenses
Expenses from allowance for asset impairment
Income from recovery of assets and decrease in allowance
FINANCIAL INCOME
Personnel expenses
Other administrative expenses
NET OPERATING INCOME BEFORE TAXES AND
PROFIT SHARING
Income tax
Deferred income tax
Decrease in income tax
Profit sharing
NET PROFIT FOR THE YEAR
Results for the period attributable to minority interests
NET INCOME FOR THE PERIOD
¢
¢
Pension Fund
Operator
Investment Fund
Manager
Brokerage
House
Foreign Bank
Insurance
Broker
Total
Eliminations
Consolidated
91.697.211.843
55.127.186.248
3.176.508.585
1.122.543.157
34.516.060.167
26.584.708.182
12.263.921.863
48.836.846.486
25.023.171.149
13.018.248.708
38.041.419.857
130.399.869
10.940.632
341.333
119.117.904
1.462.824.699
423.873.845
1.158.068.758
522.814.924
147.012.522
669.827.446
118.038.472
19.633.931
98.404.541
1.565.277.722
536.894.464
1.126.787.799
606.229.905
30.139.100
636.369.005
820.031.444
361.381.753
458.649.691
792.847.167
181.556.007
1.069.940.851
433.244.125
49.313.330
482.557.455
13.071.195.239
5.590.808.599
901.922.660
97.948.164
6.676.412.144
526.125.569
835.536.779
6.367.000.934
2.262.316.345
1.248.840.409
3.511.156.754
63.776.682
13.123.661
10.301.980
40.351.041
1.014.450.800
115.992.655
938.809.186
390.415.028
42.564.028
432.979.056
105.900.653.549
61.123.074.824
4.089.074.558
1.220.491.321
41.908.995.488
31.946.234.139
14.357.775.613
59.497.454.014
29.238.191.476
14.536.118.097
43.774.309.573
(13.477.214)
(13.477.214)
(3.790.580.966)
(1.163.001.400)
(2.627.579.566)
-
105.887.176.335
61.109.597.610
4.089.074.558
1.220.491.321
41.908.995.488
28.155.653.173
13.194.774.213
56.869.874.448
29.238.191.476
14.536.118.097
43.774.309.573
10.795.426.629
1.831.002.397
1.068.586.810
2.417.289.347
7.615.721.695
7.615.721.695
488.241.312
117.981.660
6.651.694
195.879.067
181.032.279
181.032.279
490.418.794
140.928.621
12.793.533
14.712.564
347.571.142
347.571.142
587.383.396
48.562.362
1.574.670
7.506.038
17.621.502
527.130.900
527.130.900
2.855.844.180
356.955.105
114.935.838
2.383.953.237
2.383.953.237
505.830.130
143.363.877
8.737.782
15.174.904
356.029.131
356.029.131
15.723.144.441
2.638.794.022
116.510.508
1.104.275.857
2.660.677.384
11.411.438.384
11.411.438.384
(2.627.579.566)
(2.627.579.566)
(1.168.137.123)
(3.795.716.689)
13.095.564.875
2.638.794.022
116.510.508
1.104.275.857
2.660.677.384
8.783.858.818
1.168.137.123
7.615.721.695
(Continues)
(38)
Risk management
Comprehensive risk management
Sophistication and uncertainty of financial markets involve managing risks that may impair the
value of entities and of third party resources it manages. Given this reality, the Bank implemented
a System of Comprehensive Risk management, enabling it to achieve a proper balance between
the expected benefits of the business strategy and the acceptance of a certain level of risk, through
an effective risk-based management.
Corporate governance of the risk management area
Boards of Directors, committees and senior managers of member institutions of the Financial
Conglomerate strengthen and ensure the above mentioned system, aware that it contributes to the
improvement of institutional processes, and hence to the achievement of objectives and goals.
Organizational structure of the risk management area
Corporate risk management is led by the Corporate Risk Management and Internal Control Area,
which has various administrative units responsible for the specific and comprehensive
management of relevant risk to which the entity is exposed while in the subsidiaries there are risk
managing areas responsible for this work.
Objective of the Comprehensive Risk Management System
The System aims to generate information that will support the decision making to locate the entity
at a risk level consistent with its profile and risk appetite as well as it business flows, complexity,
operations volume and economic environment, and thus lead to the achievement of institutional
objective and goals.
Guiding framework of the System
The Conglomerate has policies, strategies and other corporate regulations for an effective
comprehensive risk management, thus providing administrative, legal and technical certainty to
the System, supporting the decision making.
(Continues)
Risk culture
The Boards of Directors and Senior Management of the Conglomerate members promote a risk
culture management integrated in all levels of the Organization, promoting attitudes, values, skills
and risk-based guidelines for the strategic and operational decision making.
Classification of significant risks
The relevant risks to the Bank are classified as follows:
Strategic
Financial
Credit
 Loan portfolio
 Investment portfolio (counterparty)
Market
 Liquidity
 Inflation
 Exchange rates
 Interest rates
 Prices of assets and liabilities
Operational
 Operating
 Legal
 Technological
Others
 Reputational
 Environmental and social
 Trust management
 Securitization management
 Conglomerate (intragroup)
 Money laundering and terrorism financing
(Continues)
Risk profile and limit structure
The risk profile adopted by the Bank is “moderate.” However, for some particular risks, such as
operational risks, it is “conservative.”
According to this profile, parameters of acceptability, appetite, tolerance limits and risk indicators
defining the exposure levels to assume, are established, thereby generating alerts to deviations
from normal behavior, enabling timely decision making.
Process of comprehensive risk management
The process in risk assessments includes identification, analysis, evaluation, management,
review, and documentation and risk communication. Standardized tools and methodologies for
risk assessments are developed and updated in accordance with the sophistication of the
comprehensive risk management at corporate level.
Types of risk assessments
The process in risk assessments includes qualitative and quantitative assessments. The first
correspond to specific analysis of the objectives of activities and substantial processes of the
Conglomerate. The second refers to global analysis with quantitative risk measurements using
mathematical and statistical methods and models.
In addition, during the period under study, the management generated reports about risk on new
services and products or modification to existing ones, which are issued prior to its release to the
market or the contracting of services.
For each of the members of the Conglomerate, on a consolidated basis, there is a model of
Comprehensive Risk Rating reflecting the exposure degree to the most relevant risks, by
monitoring the established tolerance limits and established risk indicators.
Risk control framework
Risk Control arises as result of the operation of the Internal Control System established in each
of the Conglomerate members, incorporating flow of processes and internal control activities to
minimize risk exposure.
(Continues)
The established risk assessments generate various alerts, recommendations and risk management
plans, contributing to its overall and specific mitigation. In addition, there are contingency plans
for unexpected events that may affect compliance with the risk tolerance limits.
As result of the above, the risks can be located at a level of acceptable exposure, consistent with
the established risk profile, thus contributing to sustainability, solvency and value of the
Conglomerate members.
Mitigation coverage
In accordance with the regulations, estimates and provisions are maintained. Implemented risk
assessment models seek to establish additional capital requirements to cover non-expected losses.
Likewise, BCR net worth equity indicator is evaluated to analyze its ability to respond to different
types of risk, which, during the period under study, was higher than the 10% limit established by
the General Superintendence of Financial Institutions.
Evaluation of the effectiveness and maturity of the System
Managing risk areas apply critical judgment on the effectiveness and maturity of the System using
self-assessment tools for continuous improvement. Annually, a Model of Corporate Maturity is
applied to evaluate the progress in management by type of risk. The results of this assessment are
used to define strategies and work plans.
In addition, risk quantitative measurement models periodically undergo retrospective and stress
tests, which allow adjustments and to determine more sensitively the variables and factors
affecting the impact derived by risk exposure.
Information generated by the Comprehensive Risk Management System
During the period under analysis, the system generated timely and periodic reports for the Boards
of Directors, Committees and other risk-taking areas of the Conglomerate as a result of the
Comprehensive Risk Management, or by the occurrence of significant events that should be
known of for suitable decision making based on risk exposure and risk based business
management. During the benchmarking period, a comprehensive risk management system
continued to be implemented with the purpose of periodically inform the General Board of
Directors, the Corporate Risk Committee, and the Bank’s Senior Management, regarding the
results of such a System through a consolidated report on the main risks to which the Entity is
exposed and the most relevant management facts.
(a) Credit risk management
Definition
(Continues)
Credit risk is the possibility of economic losses due to non-compliance with the conditions agreed
upon by the debtor.
Management of this risk contributes to the strength of BCR´s equity in the long term by providing
both tools and information to improve decision making, minimize losses and maintain risk
exposure of the loan portfolio within established parameters.
The General Board of Directors of the BCR has defined management strategies to control credit
risk from portfolios to individual debtors, using tools and methodologies framed within the
existing regulations developed internally.
Management methodology
In general, models and systems measuring credit risk that accurately reflect the value of the
positions and their sensitivity to various risk factors are applied in corporative information from
reliable sources.
The statistical support is complemented with expert criteria to analyze the borrower’s ability to
pay, as well a stress analysis on exposures to macroeconomic variables that are related to
microeconomic and Bank´s internal variables. Thus, it is possible to infer the type pf phenomena
that the entity could face and, in turn, lead to losses in the loan portfolio and, therefore, on the
financial position, due to changes in macro prices (interest rates, exchange rates, inflations) and
specific conditions of the portfolio. Moreover, mechanisms to identify, monitor and control the
effects of variations in exchange rates and interest rates on credit risk are implemented, including
stress analysis of debtors exposed to theses variations.
Specifically, for the quantitative analysis of the consolidated loan portfolio, by activity and
currency, there is a model to quantify the average probability of payment, expected loss and Value
at Risk (VaR), from which the margin of expected loss are derived.
Moreover, the risk inherent to the activities and products of the Bank is identified and analyzed,
as well as its feedback to the organization through the Executive Committee.
Tolerance limits and risk indicators
The credit risk analysis is performed through measurements, trends and deviations of the
tolerance limits and indicators established for this purpose.
The following indicators have been established for this purpose:
 Up to date portfolio: the tolerance for this indicator is 90% of the portfolio.
(Continues)
 Arrears indicator between 61 and 90 days: for this indicator it was established not to
overcome 1.25% of the total portfolio.
 Arrears indicator for more than 90 days: the tolerance for this indicator is 2.5% of the total
portfolio.
 Concentration indicator: a tolerance limit of 13% was established for this indicator.
There is an institutional credit contingency plan which is activated at the time the indicators
deviate from desirable levels in accordance with the approved risk profile.
Exposure and risk management
The allowance for the loan portfolio as of March de 2016, was ¢44.004 million (¢40.921 million
and ¢38.009 million in December and March 2015, respectively).
In order to monitor the loan portfolio in a segmented manner, credit risk indicators as expected
loss, average probability of payment and value at risk (VaR) are followed up.
In addition, depending on the limits set by General Board of Directors for indicators like up-todate portfolio and arrears ranges, the portfolio is monitored globally and by activity, location,
currency and harvest.
As of March 2016, the behavior of the most important indicators is as follows:
•
Percentage of up-to-date portfolio is 89,63% (91,50% and 91,43% in December and
March 2015, respectively)
•
Percentage of arrears between 61 and 90 days is 0,72% (0,89% and 0,82% in December
and March 2015, respectively)
•
Percentage of arrears of more than 90 days is 2,13% (2,21% and 2,25% in December and
March 2015, respectively).
This last indicator is 0,87 percentage points below the regulatory limit to be in a level of
normality, showing retail banking activities the higher delinquency.
The dollar portfolio accounts for 39,60% (38,80% and 38,10% in December and March 2015,
respectively) of the total portfolio. It is important to mention that the loan portfolio has been
managed strategically in order to attract customers with an acceptable risk profile. In addition,
regular monitoring of the loans in foreign currency is given, and in particular, the portfolio of
clients not generating income in foreign currency.
Although SUGEF regulation establishes a maximum limit of 20% of the equity for a group of
economic interest for granting a credit, the Bank has set a lower limit in order to monitor the
concentration by customer and group of economic interest.
(Continues)
While there is relative concentration in activities such as trade, housing, services and
consumption, as shown in the following chart, limits on the annual growth by sector are defined,
to achieve a loan structure in the medium and long term that is consistent with the risk appetite
established by the Senior Management.
March
2016
Activity
Trade
Housing
Services
Consumption
13,50%
27,50%
20,30%
12,40%
December
2015
13,60%
27,30%
20,20%
12,60%
March
2015
15,60%
25,10%
18,90%
12,40%
In addition, appropriate and timely communication mechanisms on exposure of the Bank to credit
risk are implemented at all levels of the organizational structure, thus allowing a prospective view
of the impact on the credit estimates and equity. The reports consider both the exposure resulting
from position taking and possible deviations arising regarding the limits and defined tolerance
levels.
Also, the commercial area is kept informed on the inherent risks of the economic activities
associated with credit underwriting, through specific studies and analysis of the credit
underwriting goals previously approved by the General Board of Directors, as well as new credit
instruments the Bank is planning to offer.
The Bank´s financial instruments exposed to credit risk are detailed as follows (see note 6):
(Continues)
March
2016
Banco de Costa Rica
Loan portfolio, gross
Less allowance for impairment
Loan portfolio, net
and Subsidiary
Loan portfolio, gross
Loan portfolio, net
Total Net Consolidated Loan Portfolio
¢
¢
¢
¢
¢
December
2015
March
2015
2.599.189.726.782
19.362.925.380
(44.004.808.843)
2.574.547.843.319
2.588.768.388.887
17.370.243.543
(40.921.697.295)
2.565.216.935.135
2.494.667.123.362
22.470.807.864
(38.009.107.563)
2.479.128.823.663
843.474.700.009
3.961.973.474
(10.004.086.438)
837.432.587.045
816.743.331.466
3.710.390.085
(10.384.274.141)
810.069.447.410
744.638.059.217
3.770.256.098
(8.889.317.801)
739.518.997.514
3.411.980.430.364
3.375.286.382.545
3.218.647.821.177
The Bank’s financial instruments exposed to the credit risk are as follows:
(Continues)
Note
Principal
Interest
6a
Allowance for bad loans
Carrying amount
¢
¢
Loan portfolio
Total balance:
A1
A2
B1
B2
C1
C2
D
E
¢
Carrying amount, net
Carrying amount
(Excess) inadequacy of allowance
over structural allowance
6a
¢
March
2016
2.599.189.726.782
19.362.925.380
2.618.552.652.162
(44.004.808.843)
2.574.547.843.319
Direct loan portfolio
December
2015
2.588.768.388.887
17.370.243.543
2.606.138.632.430
(40.921.697.295)
2.565.216.935.135
March
2015
Note
2.494.667.123.362
22.470.807.864
2.517.137.931.226
(38.009.107.563)
2.479.128.823.663
19
March
2016
218.753.420.125
218.753.420.125
(262.590.626)
218.490.829.499
Contingent loan portfolio
December
2015
239.208.722.031
239.208.722.031
(262.679.431)
238.946.042.600
March
2015
227.765.921.617
227.765.921.617
(69.487.740)
227.696.433.877
2.174.343.355.888
16.281.629.885
182.957.947.043
25.030.758.660
41.103.848.990
7.583.376.951
54.706.585.647
116.545.149.098
2.618.552.652.162
(41.269.711.852)
2.577.282.940.310
2.163.862.631.544
16.892.807.123
176.165.735.606
23.710.999.021
38.801.085.164
11.480.212.327
55.621.331.787
119.603.829.858
2.606.138.632.430
(38.079.259.255)
2.568.059.373.175
2.068.499.239.245
17.891.925.381
148.951.730.160
21.539.924.211
75.801.166.853
12.498.297.412
66.108.411.154
105.847.236.810
2.517.137.931.226
(37.962.713.170)
2.479.175.218.056
202.622.019.821
585.587.777
2.505.210.053
106.526.480
9.349.086.920
69.904.769
992.466.663
2.522.617.642
218.753.420.125
(303.414.611)
218.450.005.514
224.129.053.332
576.739.347
2.226.903.855
110.920.663
8.894.224.086
54.386.721
996.288.547
2.220.205.480
239.208.722.031
(252.080.124)
238.956.641.907
213.661.390.515
630.278.381
3.777.601.696
111.837.216
1.503.037.008
106.494.224
895.157.893
7.080.124.684
227.765.921.617
(62.369.467)
227.703.552.150
2.618.552.652.162
(41.269.711.852)
2.606.138.632.430
(38.079.259.255)
2.517.137.931.226
(37.962.713.170)
218.753.420.125
(303.414.611)
239.208.722.031
(252.080.124)
227.765.921.617
(62.369.467)
(2.735.096.991)
2.574.547.843.319
(2.842.438.040)
2.565.216.935.135
(46.394.393)
2.479.128.823.663
40.823.985
218.490.829.499
(10.599.307)
238.946.042.600
(7.118.273)
227.696.433.877
(Continues)
The assessed loan portfolio with allowance is detailed as follows:
As of March 31, 2016
Loan portfolio
Direct generic allowance
A1
A2
¢
Direct specific allowance
B1
B2
C1
C2
D
E
Principal
2.174.343.355.888
16.281.629.885
2.190.624.985.773
182.957.947.043
25.030.758.660
41.103.848.990
7.583.376.951
54.706.585.647
116.545.149.098
427.927.666.389
2.618.552.652.162
Loan portfolio
Ageing loan portfolio
Up to date
1 to 30 days
31 to 60 days
Principal
2.104.110.523.447
79.882.493.638
6.631.968.688
2.190.624.985.773
Up to date
1 to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
More than 180 days
¢
238.198.302.473
32.788.141.334
79.333.922.805
17.423.810.400
22.872.894.162
37.310.595.215
427.927.666.389
2.618.552.652.162
Direct Loan Portfolio
Covered balance
Overdraft
1.574.938.472.904
599.404.882.984
14.320.915.334
1.960.714.550
1.589.259.388.238
601.365.597.534
170.204.758.007
23.983.973.539
38.677.973.666
7.127.896.448
44.179.306.141
85.990.540.703
370.164.448.504
1.959.423.836.742
Allowance
5.048.708.787
37.447.749
5.086.156.536
12.753.189.036
1.046.785.121
2.425.875.324
455.480.503
10.527.279.506
30.554.608.401
57.763.217.891
659.128.815.425
1.031.238.488
159.841.652
817.214.015
244.134.414
7.997.072.036
25.934.054.711
36.183.555.316
41.269.711.852
Covered balance
Overdraft
1.512.483.783.229
591.626.740.217
70.751.589.637
9.130.904.001
6.024.015.372
607.953.316
1.589.259.388.238
601.365.597.534
Allowance
4.887.173.273
183.729.735
15.253.528
5.086.156.536
211.629.234.694
28.744.241.348
71.716.298.259
14.858.692.997
18.901.683.190
24.314.298.016
370.164.448.504
1.959.423.836.742
26.569.067.778
4.043.899.985
7.617.624.546
2.565.117.403
3.971.210.972
12.996.297.207
57.763.217.891
659.128.815.425
13.264.025.644
1.836.145.889
2.706.165.296
1.579.413.758
3.745.584.635
13.052.220.094
36.183.555.316
41.269.711.852
Contingent Loan Portfolio
Principal
Allowance
202.622.019.821
150.760.850
585.587.777
758.876
203.207.607.598
151.519.726
2.505.210.052
106.526.480
9.349.086.920
69.904.769
992.466.663
2.522.617.643
15.545.812.527
218.753.420.125
18.004.518
112.667
3.098.448
10.000.000
10.269.938
110.409.314
151.894.885
303.414.611
Principal
Allowance
203.207.607.407
151.519.725
191
203.207.607.598
151.519.725
15.545.434.527
378.000
15.545.812.527
218.753.420.125
151.516.886
378.000
151.894.886
303.414.611
(Continues)
As of December 31, 2015
Loan portfolio
A1
A2
¢
B1
B2
C1
C2
D
E
Principal
2.163.862.631.544
16.892.807.123
2.180.755.438.667
176.165.735.606
23.710.999.021
38.801.085.164
11.480.212.327
55.621.331.787
119.603.829.858
425.383.193.763
2.606.138.632.430
Loan portfolio
Ageing of loan portfolio
Up to date
1 - 30 days
31 - 60 days
Principal
2.113.916.829.151
65.613.381.997
1.225.227.519
2.180.755.438.667
Up to date
1 - 30 days
31 - 60 days
61 - 90 days
91 - 180 days
More than 180 days
¢
266.829.172.964
37.229.076.515
37.346.652.067
22.267.361.644
21.633.765.574
40.077.164.999
425.383.193.763
2.606.138.632.430
Covered balance
Overdraft
1.599.661.606.057
564.201.025.487
14.782.221.341
2.110.585.783
1.614.443.827.398
566.311.611.270
163.726.001.098
22.769.274.735
36.804.459.827
10.898.432.412
45.451.441.194
91.614.531.348
371.264.140.614
1.985.707.968.012
Allowance
4.373.793.322
33.785.614
4.407.578.936
12.439.734.507
941.724.286
1.996.625.337
581.779.915
10.169.890.593
27.989.298.516
54.119.053.154
620.430.664.424
951.915.371
139.710.978
687.307.427
312.686.823
7.721.078.658
23.858.981.062
33.671.680.319
38.079.259.255
Covered balance
Overdraft
1.555.678.245.239
558.238.583.912
57.601.575.384
8.011.806.613
1.164.006.774
61.220.744
1.614.443.827.397
566.311.611.269
Allowance
4.273.901.717
131.226.764
2.450.455
4.407.578.936
243.663.793.045
33.680.514.653
31.990.004.981
18.490.544.145
17.690.177.498
25.749.106.293
371.264.140.615
1.985.707.968.012
23.165.379.919
3.548.561.861
5.356.647.086
3.776.817.500
3.943.588.075
14.328.058.714
54.119.053.155
620.430.664.424
9.238.396.221
1.743.828.101
1.856.581.522
2.707.221.120
3.746.096.428
14.379.556.927
33.671.680.319
38.079.259.255
Principal
Allowance
224.129.053.332
139.399.593
576.739.347
644.357
224.705.792.679
140.043.950
2.226.903.855
110.920.663
8.894.224.086
54.386.721
996.288.547
2.220.205.480
14.502.929.352
239.208.722.031
15.800.177
2.000.000
56.364
1.059.505
440.046
92.680.082
112.036.174
252.080.124
Principal
Allowance
224.705.792.488
140.043.949
192
224.705.792.680
140.043.949
14.502.551.351
378.000
14.502.929.351
239.208.722.031
111.658.175
378.000
112.036.175
252.080.124
(Continues)
Loan portfolio
A1
A2
¢
B1
B2
C1
C2
D
E
Principal
2.068.499.239.245
17.891.925.381
2.086.391.164.626
148.951.730.160
21.539.924.211
75.801.166.853
12.498.297.412
66.108.411.154
105.847.236.809
430.746.766.600
2.517.137.931.226
Loan portfolio
Up to date
1 - 30 days
Principal
2.068.499.239.245
17.891.925.381
2.086.391.164.626
Up to date
1 - 30 days
31 to 60 days
61 to 90 days
91 to 180 days
More than 180 days
¢
306.873.623.872
43.477.389.784
18.961.415.894
12.557.803.591
12.850.385.118
36.026.148.341
430.746.766.600
2.517.137.931.226
Covered balance
Overdraft
1.534.811.990.121
533.687.249.124
16.239.758.391
1.652.166.990
1.551.051.748.512
535.339.416.114
139.543.083.874
20.466.167.535
73.879.444.198
12.187.441.374
56.776.302.880
75.493.053.174
378.345.493.035
1.929.397.241.547
Allowance
2.275.349.165
19.681.118
2.295.030.283
9.408.646.286
1.073.756.676
1.921.722.655
310.856.037
9.332.108.274
30.354.183.639
52.401.273.568
587.740.689.682
623.929.707
129.888.452
561.698.053
168.834.205
7.061.535.141
27.121.797.329
35.667.682.887
37.962.713.170
Covered balance
Overdraft
1.534.811.990.121
533.687.249.124
16.239.758.391
1.652.166.990
1.551.051.748.512
535.339.416.114
Allowance
2.247.468.854
47.561.428
2.295.030.282
286.055.403.913
36.570.491.602
16.131.152.776
10.894.724.482
10.941.723.718
17.751.996.544
378.345.493.035
1.929.397.241.547
20.818.219.960
6.906.898.182
2.830.263.118
1.663.079.109
1.908.661.400
18.274.151.799
52.401.273.568
587.740.689.682
12.414.659.621
1.084.330.718
870.063.386
1.144.623.365
1.823.135.048
18.330.870.750
35.667.682.888
37.962.713.170
Principal
Allowance
213.661.390.515
54.550.435
630.278.381
346.653
214.291.668.896
54.897.088
3.777.601.696
111.837.216
1.503.037.008
106.494.224
895.157.893
7.080.124.684
13.474.252.721
227.765.921.617
578.678
455.698
1.100
4.146.224
46.086
2.244.593
7.472.379
62.369.467
Principal
Allowance
213.661.390.515
54.897.038
630.278.381
51
214.291.668.896
54.897.089
13.467.784.785
6.467.936
13.474.252.721
227.765.921.617
5.400.816
2.071.562
7.472.378
62.369.467
(Continues)
Following is an analysis of´ the balance of the loan portfolio of Banco de Costa Rica, assessed
individually with allowance, according to gross and net amounts, after deducting the allowance
for loan losses, by risk classification in accordance with the applicable regulations:
Loan receivable
Risk category:
A1
A2
B1
B2
C1
C2
D
E
Gross
¢
¢
Net
2.174.343.355.888
16.281.629.885
182.957.947.043
25.030.758.660
41.103.848.990
7.583.376.951
54.706.585.647
116.545.149.098
2.618.552.652.162
2.169.294.647.101
16.244.182.136
181.926.708.554
24.870.917.009
40.286.634.976
7.339.242.537
46.709.513.611
90.611.094.386
2.577.282.940.310
Loans receivable
Risk category:
A1
A2
B1
B2
C1
C2
D
E
Gross
¢
¢
2.163.862.631.544
16.892.807.123
176.165.735.606
23.710.999.021
38.801.085.164
11.480.212.327
55.621.331.787
119.603.829.858
2.606.138.632.430
Net
2.159.488.838.222
16.859.021.509
175.213.820.235
23.571.288.043
38.113.777.737
11.167.525.504
47.900.253.129
95.744.848.796
2.568.059.373.175
(Continues)
Loans receivable
Risk category:
A1
A2
B1
B2
C1
C2
D
E
Gross
¢
¢
2.068.499.239.245
17.891.925.381
148.951.730.160
21.539.924.211
75.801.166.853
12.498.297.412
66.108.411.154
105.847.236.810
2.517.137.931.226
Net
2.066.182.127.227
17.871.873.945
148.315.666.360
21.408.839.331
75.233.338.526
12.329.463.207
59.045.523.981
78.788.385.479
2.479.175.218.056
In compliance with SUGEF Directive 1-05, as of March 31, 2016, the Bank must maintain a
minimum allowance in the amount of ¢41.573.126.463 of which ¢41.269.711.852 is allocated to
the valuation of the direct loan portfolio and ¢303.414.611 124 to the contingent loan portfolio.
As of December 31 and March 2015, the Bank must maintain a structural allowance in the amount
of ¢38.331.339.378 (corresponding to the direct loan portfolio for ¢38.079.259.254 and
contingent loans for ¢252.080.124) and ¢38.025.082.637 (corresponding to the direct loan
portfolio for ¢37.962.713.170 and contingent loans for ¢62.369.467), respectively. SUGEF
External Communication 021-2008 dated May 30, 2008 establishes that the expense for
allowance for impairment and bad loans corresponds to the amount necessary to achieve the
minimum structural allowance. Furthermore, there must be a duly documented technical
justification for any excess above the minimum structural allowance, which is to be sent to
SUGEF with the authorization request. The excess may not surpass 15% of the minimum required
allowance for the loan portfolio. This notwithstanding, if any additional allowances are required
above the 15%, they must be taken from net earnings for the period pursuant to article 10 of
IRNBS.
On December 17, 2015, SUGEF repealed External Communication SUGEF 021-2008, and
instead it issued External Communication SGF-3374-2015, which basically removes the limit of
15% of the surplus on the minimum allowance required.
Below is an analysis of the balances of BICSA’s loan portfolio, individually evaluated with an
allowance according to the gross amount and the net amount after deducting the allowance for
doubtful accounts resulting from the risk assessment in accordance with the applicable
regulations:
(Continues)
March
2016
and Subsidiary
Principal
Interest
¢
December
2015
March
2015
843.474.700.009
3.961.973.474
847.436.673.483
816.743.331.444
3.710.390.085
820.453.721.529
744.638.059.266
3.770.255.903
748.408.315.169
Carrying amount
¢
(10.004.086.438)
837.432.587.045
(10.384.274.141)
810.069.447.388
(8.889.317.534)
739.518.997.635
Loan portfolio, net of allowance
¢
824.917.450.681
800.058.040.228
730.700.172.045
772.234.980.866
40.315.837.901
13.064.644.774
8.098.336.699
1.207.736.880
834.921.537.120
(10.004.086.438)
824.917.450.682
739.086.373.124
46.305.217.418
18.807.687.149
4.782.807.653
1.460.228.494
810.442.313.838
(10.384.274.157)
800.058.039.681
683.463.081.585
35.203.044.019
10.067.509.652
8.892.213.535
1.963.640.781
739.589.489.572
(8.889.317.801)
730.700.171.771
Impaired renegotiated loans
Gross amount
Impaired amount
Allowance for impairment
Total , net
29.414.613.293
29.414.613.293
9.171.873.354
20.242.739.939
19.000.899.460
19.000.899.460
8.382.116.894
10.618.782.566
7.475.748.306
7.475.748.306
2.087.810.857
5.387.937.449
Not in arrears or impaired:
Level 1: Normal or low risk
Level 2: Special mention
Sub-total
772.234.980.866
40.315.837.901
812.550.818.767
739.086.373.124
46.305.217.418
785.391.590.542
683.463.081.585
35.203.044.019
718.666.125.604
Individually impaired
Level 3: Subnormal
Level 4: Doubtful
Level 5: Uncollectable
Sub-total
13.064.644.774
8.098.336.699
1.207.736.879
22.370.718.352
18.807.687.149
4.782.807.653
1.460.228.494
25.050.723.296
10.067.509.652
8.892.213.535
1.963.640.781
20.923.363.968
Specific
Collective
Total allowance for impairment
8.990.523.732
1.013.562.706
10.004.086.438
8.788.957.372
1.595.316.785
10.384.274.157
5.419.324.334
3.469.993.467
8.889.317.801
At amortized cost
Level 1: Normal or low risk
Level 2: Special mention
Level 3: Subnormal
Level 4: Doubtful
Level 5: Uncollectable
Carrying amount
Clients' obligations for acceptances
Carrying amount
¢
8.553.162.890
6.301.017.075
5.048.569.687
Interest receivable
¢
3.961.973.474
3.710.390.085
3.770.255.903
Net loan portfolio (carrying amount)
¢
837.432.587.045
810.069.447.388
739.518.997.635
As of March 31, 2016, the allowance for impairment of BICSA’s loan portfolio is
respectively).
(Continues)
The concentration of the portfolio of direct loans and contingent loans by sector (economic activity) is as follows:
March
2016
Trade
Manufacturing
Construction, purchase and repair of
real estate
Agriculture, livestock, hunting and
related services
Consumption
Education
Transportation
Electricity, telecom, gas, and water
Services
Hotel and restaurant
Mining and quarries
Real Estate, business and
leasing activities
Goverment, financial and stock
exchange management
See notes 6 and 19
Other contingencies
¢
¢
December
2015
Contingent Loan
Contingent Loan
Portfolio
Portfolio
130.716.323.221
39.307.231.253
439.152.544.387
3.880.195.854
March
2015
Direct Loan
Contingent Loan
Portfolio
Portfolio
137.265.074.557
33.519.819.623
448.430.739.382
8.501.417.173
Direct Loan
Portfolio
144.605.713.978
450.533.360.553
Contingent Loan
Portfolio
32.814.517.736
7.033.786.994
844.142.386.383
12.463.199.844
832.181.858.723
13.460.377.536
765.592.765.911
16.758.720.741
205.805.751.775
16.878.015.005
375.265.405.399
958.175.516
96.218.492.967
46.960.110.583
1.164.700.979.381
94.553.201.508
740.417.623
388.013.290
158.877.000
109.053.858.840
40.328.469
629.213.174
118.145.846.403
-
210.316.618.527
20.101.434.121
381.250.224.330
901.629.239
99.630.150.753
44.144.161.392
1.150.040.333.777
95.336.105.027
609.581.914
464.982.645
159.582.000
116.194.836.569
122.775.553
987.939.556
125.354.574.125
-
204.050.058.035
11.471.879.139
364.345.049.335
1.086.147.601
91.779.456.428
45.006.937.133
1.076.922.088.058
90.754.800.087
1.600.972.457
104.449.577
74.363.524
105.890.989.130
42.748.541
203.900.000
135.600.881.529
-
1.302.416.120
3.442.664.426.791
4.923.609.267
285.651.251.017
1.130.754.942
3.405.511.720.353
5.564.722.588
305.497.217.679
999.214.456
3.239.305.182.579
4.675.380.256
18.124.282
305.390.794.376
3.442.664.426.791
40.242.678.425
325.893.929.442
3.405.511.720.353
32.921.572.264
338.418.789.943
3.239.305.182.579
31.097.108.333
336.487.902.709
(Continues)
The concentration by geographical region of the loan portfolio of Banco Internacional de Costa
Rica S.A., is as follows:
Germany
Brazil
Chile
China
Colombia
Costa Rica
Denmark
Ecuador
El Salvador
Spain
United States of America
Guatemala
Netherlands
Honduras
England
Caribbean Islands or Countries
British Virgin Islands
Mexico
Nicaragua
Panama
Paraguay
Peru
Poland
Dominican Republic
Russia
Singapore
South Africa
Switzerland
Uruguay
Other
¢
¢
March
2016
2.229.637.451
16.511.131.659
90.335.677
5.809.720.250
372.125.664.982
27.577.593.770
41.557.815.512
5.278.318.110
35.084.893.100
35.796.846.987
6.920.383.760
7.784.708.057
1.741.104.694
262.874.177
4.563.516.156
15.130.558.814
30.307.471.534
188.831.615.488
4.607.433.000
11.684.554.687
1.182.071.709
9.050.103.481
58.899.676
2.849.194.200
9.292.181.395
7.146.071.683
843.474.700.009
December
2015
4.150.227.264
16.147.038.700
3.576.232.620
51.095.497
6.132.642.107
358.010.329.205
30.439.578.702
37.853.844.596
2.157.575.237
31.817.331.494
37.110.715.905
7.814.464.570
4.663.698.840
2.279.512.907
5.208.350.078
12.845.677.564
31.591.932.026
184.445.802.771
4.627.878.000
7.161.981.647
1.927.278.197
9.327.482.258
3.324.625.000
591.044.385
9.040.847.453
4.446.144.443
816.743.331.466
March
2015
1.895.059.195
18.711.504.328
1.420.704.148
2.015.312.568
3.976.040.212
327.854.593.971
411.145.149
13.908.685.983
33.845.348.316
38.041.066.665
34.531.107.220
5.830.825.979
3.856.101.673
2.175.545.631
5.522.239.693
7.992.046.930
33.049.488.773
182.757.001.938
3.427.840.000
3.480.360.837
1.054.720.000
4.679.106.017
5.273.600.000
1.054.720.000
281.645.573
7.383.040.000
209.208.418
744.638.059.217
(Continues)
The concentration by geographical region of the loan portfolio of Banco de Costa Rica is as
follows:
March
2016
Costa Rica ¢ 2.599.189.726.782
¢ 2.599.189.726.782
December
2015
2.588.768.388.887
2.588.768.388.887
March
2015
2.494.667.123.362
2.494.667.123.362
As of March 31, 2016, the Bank keeps trust commissions in the amount of¢7.391.625 (¢3.350.100
and ¢1.202.500 in December and March 2015, respectively).
The balance of foreclosed assets is as follows (see note 7):
March
2016
Properties
Other
¢
¢
67.192.629.399
1.405.686.365
68.598.315.764
December
2015
March
2015
59.286.107.685
1.429.292.396
60.715.400.081
51.194.385.569
344.245.182
51.538.630.751
In the case of BICSA, it has a five (5) year term to transfer the real property acquired as payment
of unpaid loans as of the registration date of the property; if after such a term the property has not
been sold, there must be an independent appraisal to estimate its value.
On the other hand, a reserve is made in the equity account through the following allocation: a)
non distributed profits and b) profits of the year. The aforementioned reserve will be kept until
an effective transfer of the acquired property.
The direct loan portfolio by type of guarantee is detailed below (see notes 6 and 19):
(Continues)
Guarantee
Pledged assets
Collections
Fiduciary
Mortgage
Chattel
Others
¢
¢
March
2016
December
2015
14.029.628.719
55.869.917.915
509.039.160.216
1.376.574.321.425
438.366.423.714
1.048.784.974.802
3.442.664.426.791
14.837.422.102
51.170.722.059
487.043.549.637
1.349.174.796.573
437.006.520.282
1.066.278.709.700
3.405.511.720.353
March
2015
12.468.127.785
29.264.803.773
418.050.772.174
1.104.749.927.227
627.078.816.756
1.047.692.734.864
3.239.305.182.579
As of March 31, 2016, el 53% of the loan portfolio is secured by mortgage or chattel collaterals
(52% and 53% in December and March 2015, respectively).
Pursuant to SUGEF Directive 5-04: "Regulations on Credit Limits to Individual Persons and
Economic Interest Groups, "the Bank debugs information on reported data of economic interest
groups as part of their responsibility to identify significant administrative and stockholder’s
equity relationships among debtors with total active operations. As of March 31, 2016, groups
of borrowers (members) having operations that add 2% or more of adjusted capital and in groups
report 5% or more of adjusted capital, are reported.
The concentration of the loan portfolio by economic interest group is as follows:
No.
1
2
3
4
Total
Percentage
0-4,99%
5-9,99%
10-14,99%
15-20%
Band
17.462.246.966 ¢
34.924.493.932
52.386.740.898
69.848.987.864
¢
Total amount
21.956.423.802
108.345.383.125
102.145.860.327
863.159.658.542
1.095.607.325.796
Nº of customers
334
72
2
273
681
(Continues)
No.
1
2
3
4
Total
Percentage
0-4,99%
5-9,99%
10-14,99%
15-20%
Band
16.723.946.358 ¢
33.447.892.716
50.171.839.073
66.895.785.431
¢
Total amount
25.354.038.143
136.100.536.525
904.894.328.578
1.066.348.903.246
Nº of customers
341
70
0
265
676
No.
1
2
3
4
Total
Percentage
0-4,99%
5-9,99%
10-14,99%
15-20%
Band
15.564.512.582 ¢
31.129.025.164
46.693.537.745
62.258.050.327
¢
Total amount
20.210.502.451
141.217.384.962
840.291.401.798
1.001.719.289.211
Nº clientes
372
67
0
263
702
(b) Market risk management
Definitions
Market risk refers to potential losses that may occur in the value of assets and liabilities in the
balance sheet due to adverse movements in the factors that determine their price, also known as
risk factors, such as liquidity, interest rates, exchange rate and inflation, including the portfolios
under management.
The liquidity risk is generated when the financial entity cannot meet the requirements or
obligations with third parties due to insufficient cash flow, resulting from the outcome between
term recoveries (asset operations) and term obligations (liability operations), or to improper price
formation mechanism that disables the price to transform an asset and/or liability into cash.
Price of assets and inflations risk measures the potential losses that may occur in financial assets
included in the Investment portfolios, and a decline in the purchasing power of the money flows
received by the Bank.
(Continues)
The risk of interest rates measures the possibility that the entity incurs in losses as a result of
changes in the present value of assets and liabilities in which the Bank holds positions on or off
balance.
The exchange rate risk is the possibility of economic loss due to variations in the exchange rate.
This risk also arises when the net result of the exchange rate adjustments does not compensate
proportionally the adjustment in the value of assets in foreign currency, causing a reduction in the
equity indicator or in any model affected negatively in the determination of the exchange rate risk
by variations in this macro price, as in Camel’s indicators or own statisticians.
Risk management methodology
The management of the liquidity risk is periodically assessed by daily updating of the BCR
projected cash flows to six months through an automated application, for the preparation of the
gap report to one and three months both in colones and in US dollars, as well as the
implementation of the Coverage of Liquidity Index (ICL), established by SUGEF 17-13 from
January 1, 2015 on, which seeks to strengthen the banks with a backup of high quality liquid
assets, for the fulfillment of their commitments in a stress scenario of 30 days. In order to decrease
the liquidity risk, following variables are taken into consideration: deposits volatility, debt levels,
liability structure, liquidity degree of assets, and availability of funding and the overall
effectiveness of the gap of timelines.
Regarding the management of market risk for the BCR’s investments portfolio, daily monitoring
of risk factors (interests rates and exchange rate) impact is given through the Value at Risk
methodology (VaR).
In addition, the risk derived from the Price quotations of financial instruments in the market is
monitored through the methodology of historical simulation of VaR calculations established in
SUGEF´s agreement 3-06; this allows the entity to manage the impact of this risk on the net worth
adequacy.
Thus the institution also applies models (stop-loss) that help to limit, to a certain degree, losses
by negative changes in securities prices.
In terms of interest rates, the Bank is sensitive to this type of risk due to the mix of rates and
terms, both in assets and liabilities. This sensibility is mitigated through the management of
variable rates and the combination of terms monitored by internal models.
Counterparty risk management is carried out through the fulfillment of the investments profile
established by the Bank in its internal policies, and the reporting of issuers, which analyzes the
financial statements and the default risk by issuers, according to internal studies and risk rating.
These limits are monitored weekly as established in the policies for managing the BCR´s
investment in securities.
(Continues)
Tolerance limits and risk indicators
The main indicators for controlling the market risk limits are the following:

Liquidity risk: VaR by currency both in colones and US dollars, term matching to one and
three month both in colones and in US dollars and coverage of Liquidity Index (ICL).
 Price risk: VaR of the Investment portfolio through internal models.
 Inflation risk: Variation of real financial income (ViR).
 Exchange risk: VaR of the equity position through internal models and the daily management
of the equity positions.
Exposure and risk management
(c) Liquidity risk
The information of December 2015 to March 2016 shows an increase of 2.24% in colones and
3.41% in dollars in the total deposits with the public, resulting from a greater dynamism in the
deposits at sight, mainly from the checking accounts.
Regarding regulatory indicators, the ICL for the year end in March 2016 was 112% in colones
and 77% in dollars, satisfactory values for the limits defined by SUGEF according the Entity’s
risk profile. This indicator shows a level of liquid assets of the Institution to deal with its
obligations with time horizon of 30 calendar days; therefore, it is a short-term indicator. The
ICL’s data for December 2014 was 91% in colones and 92% in dollars, whereas in December
2015, the data was 104% in colones and 76% in dollars. It is possible to see that the indicator has
been improving in response to the investment strategy implemented by the treasury department
to increase the number of liquid assets owned by the Bank.
(Continues)
As of 31 March, 2016, the results of matched terms are shown as follows:
Regulatory liquidity matches by currency and term
Indicator
Interpretation
Observation
1 month term matching US dollars Ratio between
assets and
1 month term matching colones
liabilities with
3 month term matching US dollars
account's
volatility
Approved levels
1,35
Limit:
1,10
1,61
Limit:
1,00
0,96
Limit:
0,94
1,04
Limit:
0,85
As of December 31, 2015, the results of matched terms are shown as follows:
Regulatory liquidity matches by currency and term
Indicator
Interpretation
Observation
assets and
liabilities with
account's
volatility
Approved levels
1,53
Limit:
1,10
1,59
Limit:
1,00
1,02
Limit:
0,94
1,08
Limit:
0,85
As of 31 March, 2015, the results of matched terms are shown as follows
Changes in the matches of regulatory liquidity by currency and term
Indicator
Interpretation
Observation
assets and
liabilities with
account's
volatility
Approved levels
1,44
Limit:
1,10
1,23
Limit:
1,00
1,03
Limit:
0,94
0,94
Limit:
0,85
The results are satisfactory at the end of March, of this year, both in dollars and colones; thus
placing the Entity within the regulatory limits. However, the matching in dollars in both terms is
more adjusted as a result of strong maturities of term deposit certificates.
(Continues)
The following chart provides details of changes in the matches of regulatory liquidity by currency
in the I quarter of 2015 to the first quarter of 2016:
Changes in the matches of regulatory liquidity by currency and term
March
December
March
2016
2015
2015
Observation
1,53
1,59
1,02
1,08
Observation
1,44
1,23
1,03
0,94
Indicator
Observation
1 month term matching US Dollars
1,35
1 month term matching Colones
1,61
3 month term matching US Dollars
0,96
3 month term matching Colones
1,04
For March de 2015, the results of the matched terms in both currencies were loose regarding the
regulatory limits. For December 2015, in general, the results improved, mainly the matched terms
of 1 month term, due a higher liquidity of the market.
However, upon analyzing the wholesale funding indicator which shows the ratio between the
wholesale funding of the Treasury and the total funding in dollars and with information as of
December 2015, the indicator was at a level of17.07%, above the internal level of 15%; in March
2016 the resulting indicator was 17.72%, and in March 2015, it was 12.99%. In the face of
possible gradual increases in the interest rates of the Federal Reserve System of the United States
(FED), risk takers must assess and review the structure of fund costs to avoid high financing
costs.
One of the liquidity risk policies defined in the comprehensive risk management framework states
that as deposits increase, the loan granting is promoted; therefore, the entity has an indicator of
deposits among credits by sectors, which shows that certain sectors, i.e., the corporate sector,
demand funds but they do not take enough deposits, so there must be a balance between them.
The Institution has an adequate level of available assets to obtain liquidity facilities the guarantee,
an indicator that is analyzed every month because its impairment implies the failure of the entity
to obtain liquidity in the interbank market. In December 2015, this indicator was 79.83%, whereas
in March 2016, it was 78.61%, and in March 2014 it was 80.08%; these results were similar, this
is evidence of some stability in the availability of assets to access the inter-bank market.
As of the cut-off date, the Bank has an adequate level of quality of the liquidity risk management
framework because it has the tools and methodologies to manage risks properly and it is
undergoing an automation improvement method.
(Continues)
(Continues)
The maturity dates of the Bank’s assets and liabilities are as follows:
Assets
Legal reserve account-BCCR
Investments in securities
Interest on investments
Loan portfolio
Interest on loans
Liabilities
Obligations with financial
entities
Charges payable on obligations
Asset and liability gaps
¢
At sight
185.014.271.504
269.429.084.436
317.549.249
13.356.437.472
468.117.342.661
1 to 30 days
365.210.868
32.296.227.287
37.467.256.961
930.575.230
138.515.262.113
12.446.638.136
222.021.170.595
31 to 60 days
60.525.012
24.063.011.972
57.116.706.143
2.694.131.827
74.264.059.436
363.232.135
158.561.666.525
61 to 90 days
91 days to 180 days
23.545.134.319
50.838.511.638
28.462.090.429
57.242.874.674
2.044.603.985
585.930.268
85.920.362.342
221.300.312.774
570.565.618
462.106.989
140.542.756.693
330.429.736.343
181 to 365 days More than 365 days
36.479.501
27.893.750.590
9.225.957.701
205.629.429.699
514.649.330.494
52.292.087
711.017.748
207.297.016.416 2.661.362.031.268
336.110.489
4.504.636.457
441.208.599.281 3.190.489.453.169
¢
1.832.130.799.769
250.173.487.577
175.251.646.344
181.713.956.793
374.190.223.035
233.495.225.422
231.764.368.586
¢
204.246.135.775
1.127.679.980
2.037.504.615.524
(1.569.387.272.863)
140.618.738.698
4.151.220.857
407.943.447.132
(185.922.276.537)
51.141.967.083
2.253.283.502
228.646.896.929
(70.085.230.404)
46.814.237.034
2.001.256.824
230.529.450.651
(89.986.693.958)
146.363.185.608
4.110.449.371
524.663.858.014
(194.234.121.671)
138.245.235.271
1.506.377.273
373.246.837.966
67.961.761.315
450.976.281.163
1.323.546.680
684.064.196.429
2.506.425.256.740
¢
More than 30 days
past due
40.648.944.971
4.641.609.031
45.290.554.002
TOTAL
185.476.486.885
437.291.677.943
900.885.237.649
7.018.551.145
3.442.664.426.792
23.324.898.855
4.996.661.279.269
-
3.278.719.707.526
45.290.554.002
1.178.405.780.632
16.473.814.487
4.486.599.302.645
510.061.976.624
(Continues)
Assets
Loan portfolio
Interest on loans
Liabilities
entities
More than 30 days
past due
45.881.955.131
2.111.207.142
47.993.162.273
¢
At sight
185.810.271.998
244.699.678.884
406.050.134
3.418.246
13.748.519.708
444.667.938.970
1 to 30 days
229.269.980
42.057.671.705
98.069.086.545
1.223.637.900
108.915.140.893
12.039.566.397
262.534.373.420
31 to 60 days
21.691.276.366
54.563.892.552
286.248.268
131.229.168.319
565.632.884
208.336.218.389
61 to 90 days 91 days to 180 days
22.944.298.147
57.002.257.438
29.169.158.931
78.159.364.108
2.811.894.985
1.324.219.019
68.910.774.927 203.584.555.727
268.644.611
530.156.890
124.104.771.601 340.600.553.182
118.611.117
27.169.635.006
8.768.899.750
158.389.401.617
433.280.364.138
35.424.318
446.459.916
194.809.997.616 2.638.431.608.032
333.871.049
5.231.554.655
380.738.329.606 3.086.277.497.608
¢
1.690.688.422.904
324.018.303.604
164.277.208.149
164.217.980.248
420.939.036.294
224.260.681.284
222.970.307.474
-
3.211.371.939.957
¢
172.300.544.168
910.246.904
1.863.899.213.976
(1.419.231.275.006)
89.174.890.884
5.118.365.078
418.311.559.566
(155.777.186.146)
43.841.812.172
8.185.785.312
216.304.805.633
(7.968.587.244)
53.295.507.090 122.906.727.359
1.788.682.003
2.685.251.752
219.302.169.341 546.531.015.405
(95.197.397.740) (205.930.462.223)
221.003.181.198
1.637.270.356
446.901.132.838
(66.162.803.232)
450.998.250.925
1.370.618.058
675.339.176.457
2.410.938.321.151
47.993.162.273
1.153.520.913.796
21.696.219.463
4.386.589.073.216
508.663.771.833
¢
TOTAL
186.158.153.095
424.333.717.296
852.037.318.025
6.131.302.652
3.405.511.720.353
21.080.633.628
4.895.252.845.049
(Continues)
Assets
Loan portfolio
Interest on loans
¢
¢
Liabilities
Obligations with BCCR
entities
¢
¢
At sight
267.076.984.876
213.601.373.509
41.087.962
12.940.845.895
493.660.292.242
1 to 30 days
240.266.496
45.429.554.029
66.727.477.478
1.011.794.186
146.661.358.715
13.004.190.749
273.074.641.653
31 to 60 days
154.508.161
23.246.464.071
34.233.843.571
1.820.828.897
56.551.812.466
731.363.112
116.738.820.278
19.312.093.175
61.647.255.844
9.484.677.266
66.225.356.863
1.749.325.618
994.825.923
77.520.090.278 181.287.510.055
666.291.877
799.092.032
108.732.478.214 310.954.040.717
216.863.323
39.428.230.544
9.981.088.807
178.399.834.105
291.561.696.228
68.978.471
473.163.231
178.320.212.056 2.540.469.554.011
645.502.647
7.436.422.561
396.862.757.823 2.850.138.788.161
1.410.608.415.514
-
316.173.455.420
12.000.000.000
160.027.717.991
-
142.009.285.975
-
295.705.400.067
-
227.666.424.350 97.954.603.677
10.009.927
3.952.094.230
1.638.284.849.791 430.080.153.327
(1.144.624.557.549) (157.005.511.674)
430.971.616.280
-
169.551.354.564
-
50.743.574.335 35.834.801.716 102.908.429.762 165.013.813.666
481.985.437.070
1.600.167.550
1.812.802.172
5.887.939.215
3.224.270.663
1.935.809.511
212.371.459.876 179.656.889.863 539.767.985.257 463.943.484.396
653.472.601.145
(95.632.639.598) (70.924.411.649) (228.813.944.540) (67.080.726.573) 2.196.666.187.016
More than 30 days
past due
45.553.799.103
2.958.200.983
48.512.000.086
TOTAL
267.688.622.856
412.646.059.979
646.673.973.473
6.118.916.326
3.239.305.182.579
26.241.063.961
4.598.673.819.174
-
2.925.047.245.811
12.000.000.000
48.512.000.086
1.162.107.084.576
18.423.093.268
4.117.577.423.655
481.096.395.519
(Continues)
(d)
Price risk of the portfolio
The result of the VaR to 21 days as a ratio of the market value of the investment portfolio of own
funds is between 0,34% and 0,30% in the period from December 2015 and March 2016, and lower
as compared to March 2015 in 85%; thereby respecting the tolerable limit of 2%. Regarding the
investment portfolio DCF, the percentage VaR decreased from 0.67% to 0,57% as of March 2016
as compared to December 2015, as of March 2015, the VaR at 21 days decreased by 97%, from
1,12% to 0,57%. These percentages are lower than the tolerable limit of 2%.
The Bank has kept the duration of the portfolio of own funds in about 1.55 years, lower than as of
December 2015, which was 1.76 years and lower as compared to March 2015, which was 1.84 years;
with regard to the investment portfolio of the DCF, the duration of the portfolio in March 2016 is
0.77 years, higher than that of December 2015 and March 2015 of 0.64 and 0.57 years, respectively.
Regarding the market risk management of this portfolio, losses arising from valuation of investments
are monitored to mitigate the impact of adjustments to the valuation of investments on the Bank’s
profits, which under the same scenario for interest rates and a stable exchange rate of ¢540 per dollar,
unrealized capital gains from adjustments to the valuation of investment of up to ¢1.654 million,
lower than ¢2.069 million as of December 2015. However, according to general guidelines of
agreement SUGEF 03-06, when investments record a credit balance in equity, this positive balance
does not add to the base capital, which rescinds the possibility of capital growth. Still, given the
restrictions imposed by the regulations, the marginal impact of investment valuation adjustments is
positive and produces a 31 basis point increase in net worth equity.
The price risk measured in accordance with agreement SUGEF 3-06, as of March 31 is ¢91.523
million, higher by 5% and 117% as compared to December 2015 and March 2015, until reaching
¢87.229 million and ¢42.183 million. The upward behavior of this risk is the result of a decrease in
the interest rates that have kept the prices of securities high and an increase in the position of
investments last year. This behavior has biased the distribution of frequencies of price variations of
the portfolio towards positive variations (to capital gains) with a relative stability of the price risk.
(Continues)
Below are the results of the VaR methodology-SUGEF 03-06:
March
2016
December
2015
March
2015
VaR
Capital requirement
Price risk
Observation 25
Exchange rate UDES
Exchange rate USD
¢
¢
1.525.396.873
9.152.381.237
91.524
(0,0029464014)
861,99000
529,59000
1.453.860.128
8.723.160.765
87.232
(0,0032671510)
854,75500
531,94000
703.064.799
4.218.388.792
42.184
(0,0022124357)
862,66000
527,36000
Par value of investment portfolio
Market value of investment portfolio
¢ 464.475.487.153
¢ 517.715.221.442
431.226.755.265
444.993.178.096
308.014.921.447
317.778.641.498
¢
¢
As part of the mitigation actions to contain the price risk, the Bank has a policy of having investment
concentrations subject to price assessment not greater than 6%, so that a sharp variation in the
securities prices does not increase the capital requirement for price risk. In addition, the entity keeps
a short-term portfolio both in own funds as in Development Credit Funds (DCF).
In general terms, given the Bank´s conservative investment profile established in their investment
policies, exposure to risk is conservative, since the entity complies with its tolerance limits, having
a moderate risk appetite.
(e)
Counterparty risk
In terms of the investment profile established by the Bank for maximum internal investments, BCR´s
total investment portfolio increases by 48,47%, in annual terms between March 2015 and March
2016. Nevertheless, the Entity keeps an investment profile that does not alter the composition of its
limits. During the last quarter (Jan – Mar 2016), the portfolio increased by 12.20%.
In addition, studies of local counterpart issuers are made every six months and international issuers
at least annually; analyzing the financial statements and the risk of default.
(Continues)
(f)
Interest rate risk
As of March 31, 2016, the Borrowing Interest Rate (BIT) the Borrowing Interest Rate (BIT) is 5,7%.
As compared to March 2015, the BIT decreased by 140 basis points (bp) and as compared to
December 2015 decreased by 25 bp. Since December 2015, the Prime Rate (PR) has remained at
3,5%; therefore it did not change during the first quarter of 2016.
The Borrowing Interest Rate is expected to decrease due to the methodological change to be
implemented in February 2016; therefore, there must be an analysis of such decreases on the Bank’s
financial income.
As of yearend in March 2016, the loan portfolio in colones has a balance of ¢1.541.252 million
(without loan on legal collection), as of December 2015, this balance was ¢1.556.101 million
(without loans on legal collection), and as of March 2015, it was ¢1.516.339 million (without loans
on legal collection); therefore, such a portfolio had decreases of -0,95% as compared to December
2015, whereas as compared to March 2015, the portfolio increased by 1,64%.
Of the total portfolio in colones, 97,64% (¢1.491.308 million) are loans with a variable rate;
therefore, they are sensitive to changes in the Borrowing Interest Rate. As of December 2015, this
percentage was 96,7%, whereas in March 2015 it was 96,54%
Of the total portfolio, 23,01% has a fixed rate whereas in December it was 22,54% and in March
2015, it was 21,72%
Given the reductions of the Borrowing Interest Rate, the percentage of the loan portfolio at a floor
level went from 24,5% (¢371.544 million) in March 2015 to 45,46% (¢707.392 million), in
December and finally at 45,77% (¢705.391 million) in March 2016; so in the face of future decreases
of the Borrowing Interest Rate, almost 69% of the income did not have any variations.
As of March 2015, 28,22% of the portfolio in colones was not at a floor level (that is, it has a floor
level but at the end of the quarter, the total rate was not at a floor level), as of December 2015, this
percentage was 3,5%; finally in March 2016 this percentage was reduced to 2,83% due to reductions
in the BIP in the last quarter of 2015 and the first quarter of 2016.
On the other hand, the loan portfolio in dollars as of yearend in March 2015 had a balance of
US$1.791 million, as of December 2015 a balance of US$1,884 million, whereas as of yearend in
March 2016 the balance was US$2,045 million, with an increase of 8,5% and 14,11% as compared
to December 2015 and March 2015, respectively.
As of March 2015 the percentage of the loan portfolio at a floor level was 46,48%, and given the
increase in the prime rate in December 2015, the percentage of the loan portfolio in dollars at a floor
(Continues)
rate was 20,56% (US$387 million) and in March 2016, such a percentage it decreased to 12,70%
(US$260 million).
As of March 2015, the net financial income was expected to increase by ¢55 million a month and in
December 2015, the net financial income was expected to decrease by ¢422 million a month;
however, given the reduction expectations of the Borrowing Interest Rate up to 100 basis points as
a consequence of a methodological change effective as of February 2016; in March 2016 the net
financial income is expected to decrease by ¢654 million a month.
The investment portfolio is valued at fair value Level 1, that is, the market value; therefore, the profit
or loss in the investment portfolio in the face of an increase or decrease in the interest rates can be
estimated.
The following table shows the profit (loss) per annum if there are variations in the interest rates of 1
and 2 percentage points, respectively:
Sensitivity to an increase in the interest rate of investments
March
2016
Increase in rates by 1%
783.288.084.096
768.366.704.703
757.910.132.320
December
2015
681.737.141.615
672.465.696.371
663.507.253.152
March
2015
496.191.271.130
489.922.005.106
483.882.739.431
Sensitivity to a decrease in the interest rate of investments
2016
Decrease in rates by 1%
783.288.084.096
790.345.902.988
801.902.937.653
2015
681.737.141.615
691.337.489.430
701.283.665.491
2015
496.191.271.130
502.704.187.292
509.475.407.019
(Continues)
Sensitivity to an increase in the interest rate of loan portfolio
March
2016
Loan portfolio
¢ 2.553.927.402.491
1.050.781.931
¢
2.404.905.283
December
2015
March
2015
2.588.768.388.887
946.997.398
2.207.202.666
2.461.244.216.700
1.055.934.310
2.233.947.922
2015
2015
2.588.768.388.887
617.393.184
1.092.572.270
2.461.244.216.700
695.148.244
1.181.133.972
Sensitivity of a decrease in the interest rate of loan portfolio
2016
Loan portfolio
¢ 2.553.927.402.491
679.910.152
¢
1.189.853.022
Sensitivity to an increase in the interest rate of obligations with the public
March
2016
Loan portfolio
¢ 2.842.347.944.619
1.567.783.166
¢
3.135.566.332
December
2015
March
2015
2.739.116.598.871
1.640.004.322
3.280.008.643
2.517.613.349.863
1.259.928.076
2.519.853.152
Sensitivity of a decrease in the interest rate of obligations with the public
2016
¢ 2.842.347.944.619
1.567.783.166
¢
3.135.566.332
2015
2015
2.739.116.598.871
1.640.004.321
3.280.008.643
2.517.613.349.863
1.259.928.076
2.519.856.152
(Continues)
Sensitivity to an increase in the interest rate of term financial obligations
March
2016
Financial term obligations
¢
¢
267.949.939.552
208.627.200
417.254.399
December
2015
254.267.320.000
211.889.433
423.778.867
March
2015
221.429.697.889
174.524.748
349.049.496
Sensitivity of a decrease in the interest rate of term financial obligations
2016
Financial term obligations
¢
¢
267.949.939.552
208.627.200
417.254.399
2015
254.267.320.000
211.889.433
423.778.867
2015
221.429.697.889
174.524.748
349.049.496
The sensitivity to variations in the interest rates is applied to the amounts exposed to these possible
fluctuations.
(Continues)
As of March 31, 2016, interest rate terms for assets and liabilities are matched as follows:
Effective
interest
rate
Colones:
Assets
Loan portfolio
Total recovery of assets (*)
Liabilities
At sight
Term
entities
Total matured liabilities (*)
Asset and liability gap
US dollars:
Assets
Loan portfolio
Liabilities
At sight
Term
entities
1 to 30 days
8,05% ¢
10,65%
31 to 90 days
91 to 180 days
181 to 360 days
361 to 720 days
More than 720
days
Total
16.435.862.365
920.223.182.434
936.659.044.799
54.694.929.302
18.801.659.899
73.496.589.201
44.534.585.748
14.669.188.280
59.203.774.028
163.027.232.938
32.567.913.738
195.595.146.676
93.846.510.668
74.235.610.380
168.082.121.048
306.882.223.902
336.988.640.662
643.870.864.564
679.421.344.923
1.397.486.195.393
2.076.907.540.316
27.929.295.144
6.734.861.630
3.927.630.773
1.417.579.756
192.711.307
140.115.350
40.342.193.960
2,12%
5,69%
1,80%
¢
2,87%
6,35%
¢
153.794.416.980
194.723.712.124
741.935.332.675
189.276.948.292
196.011.809.922
(122.515.220.721)
223.785.993.100
227.713.623.873
(168.509.849.845)
121.153.672.889
122.571.252.645
73.023.894.031
15.700.528.288
15.893.239.595
152.188.881.453
14.302.624.132
14.442.739.482
629.428.125.082
718.014.183.681
771.356.377.641
1.305.551.162.675
45.725.016.288
854.135.903.840
899.860.920.128
20.027.913.111
312.761.342.348
332.789.255.459
6.206.826.538
196.163.869.213
202.370.695.751
43.416.689.085
74.695.346.996
118.112.036.081
40.878.503.789
109.631.082.170
150.509.585.959
129.962.844.025
210.846.335.471
340.809.179.496
286.217.792.836
1.758.233.880.038
2.044.451.672.874
168.859.480.124
83.290.905.133
41.659.081.921
51.438.673.570
75.273.934.287
94.278.816.164
514.800.891.199
39.478.124.266
208.337.604.390
691.523.315.738
85.596.910.287
168.887.815.420
163.901.440.039
230.480.377.664
272.139.459.585
(69.768.763.834)
195.414.006.511
246.852.680.081
(128.740.644.000)
75.937.725.138
151.211.659.425
(702.073.466)
399.563.712.528
493.842.528.692
(153.033.349.196)
0,63%
1,14%
0,76%
¢
1.026.470.856.394
1.541.271.747.593
503.179.925.281
(*) Sensitive to rates
(Continues)
As of December 31, 2015, interest rate terms for assets and liabilities are matched as follow:
Effective
interest rate
Colones:
Assets
Loan portfolio
Liabilities
At sight
Term
entities
US dollars:
Assets
Loan portfolio
Liabilities
At sight
Term
entities
7,22%
10,92%
1 to 30 days
¢
31 to 90 days
91 to 180 days
181 to 360 days
361 to 720 days
More than 720
days
Total
89.732.396.085
835.271.640.886
925.004.036.971
29.584.792.928
88.936.947.185
118.521.740.113
38.539.549.567
30.005.641.619
68.545.191.186
104.173.281.976
29.218.813.309
133.392.095.285
102.126.134.694
73.449.681.906
175.575.816.600
243.875.777.015
343.415.237.329
587.291.014.344
608.031.932.265
1.400.297.962.234
2.008.329.894.499
33.262.013.514
7.047.116.709
3.440.415.982
685.728.466
117.811.227
10.053.733
44.563.139.631
2,24%
6,68%
3,21%
¢
2,58%
6,26%
¢
207.941.765.628
241.203.779.142
683.800.257.829
181.434.576.631
188.481.693.340
(69.959.953.227)
240.464.739.423
243.905.155.405
(175.359.964.219)
112.839.931.637
113.525.660.103
19.866.435.182
8.105.280.432
8.223.091.659
167.352.724.941
12.386.485.302
12.396.539.035
574.894.475.309
763.172.779.053
807.735.918.684
1.200.593.975.815
80.157.774.530
799.399.833.273
879.557.607.803
5.651.571.285
336.621.328.621
342.272.899.906
13.877.804.006
201.305.644.278
215.183.448.284
31.717.456.344
87.545.791.176
119.263.247.520
35.637.645.623
81.615.981.067
117.253.626.690
130.255.297.378
221.157.834.130
351.413.131.508
297.297.549.166
1.727.646.412.545
2.024.943.961.711
154.208.359.684
73.291.659.504
49.858.675.015
47.223.845.579
70.705.305.447
136.223.847.315
531.511.692.544
7.550.657.303
161.759.016.987
717.798.590.816
85.371.586.148
158.663.245.652
183.609.654.254
237.316.072.952
287.174.747.967
(71.991.299.683)
257.396.263.725
304.620.109.304
(185.356.861.784)
33.385.801.549
104.091.106.996
13.162.519.694
444.252.106.559
580.475.953.874
(229.062.822.366)
0,59%
1,09%
0,53%
¢
1.065.272.488.236
1.596.784.180.780
428.159.780.931
(Continues)
As of March 31, 2015, interest rate terms for assets and liabilities are matched as follows:
Effectiv
e
interest
rate
Colones:
Assets
Loan portfolio
Liabilities
At sight
Term
Obligaciones con el Banco
Central de Costa Rica
entities
US dollars:
Assets
Loan portfolio
Liabilities
At sight
Term
entities
1 to 30 days
7,50% ¢
11,08%
31 to 90 days
91 to 180 days
181 to 360 days
361 to 720 days
More than 720
days
Total
4.527.309.902
947.076.619.946
951.603.929.848
8.829.540.304
20.235.727.445
29.065.267.749
16.825.495.677
12.966.832.073
29.792.327.750
97.244.460.077
30.171.858.311
127.416.318.388
52.504.835.372
55.273.305.860
107.778.141.232
128.688.994.187
296.919.505.371
425.608.499.558
308.620.635.519
1.362.643.849.006
1.671.264.484.525
23.847.075.594
6.659.234.135
4.674.925.623
1.102.229.112
85.310.349
18.005.254
36.386.780.067
12.000.000.000
-
-
-
2,50%
7,00%
5,22%
¢
2,09% ¢
6,35%
-
-
12.000.000.000
189.920.773.179
225.767.848.773
725.836.081.075
140.707.963.046
147.367.197.181
(118.301.929.432)
261.686.040.402
266.360.966.025
(236.568.638.275)
186.421.748.978
187.523.978.090
(60.107.659.702)
4.559.457.444
4.644.767.793
103.133.373.439
10.374.527.714
10.392.532.968
415.215.966.590
793.670.510.763
842.057.290.830
829.207.193.695
42.389.821.579
908.018.606.538
950.408.428.117
34.757.612.111
146.907.598.730
181.665.210.841
18.923.350.973
240.875.810.376
259.799.161.349
2.835.300.145
58.926.682.796
61.761.982.941
53.202.957.842
99.821.784.164
153.024.742.006
72.660.563.356
170.773.197.307
243.433.760.663
224.769.606.006
1.625.323.679.911
1.850.093.285.917
236.902.861.569
91.832.497.864
89.599.443.474
40.506.046.780
69.291.391.735
26.959.747.239
555.091.988.661
41.220.554.227
278.123.415.796
672.285.012.321
67.673.968.140
159.506.466.004
22.158.744.837
210.100.424.305
299.699.867.779
(39.900.706.430)
217.685.844.459
258.191.891.239
(196.429.908.298)
71.404.707.000
140.696.098.735
12.328.643.271
402.252.398.027
429.212.145.266
(185.778.384.603)
0,47%
1,33%
0,08%
¢
1.010.337.896.158
1.565.429.884.819
284.663.401.098
(Continues)
Within the gap report (rate-sensitive assets and liabilities) in local currency, a total difference of
asset recovery less maturity of liabilities as of March 31, 2016, for ¢1.305.551.162.675
(¢1.200.593.975.815 and ¢829.207.193.695 in December and March 2015, respectively) while in
foreign currency the same difference is of ¢503.179.925.281 (¢428.159.780.931 and
¢284.663.401.098 in December and March 2015, respectively), being an improved inference in the
balance sheet due to positive changes in interest rates, since the entity presents more assets than
liabilities in both currencies. Regarding to term matching (sum of liquidity of assets and liabilities)
as of March de 2016, the total amount in local currency was of ¢333.922.472.635 (¢388.092.973.713
and ¢374.359.460.331 in December and March 2015, respectively), while in foreign currency, the
collected data for the compliance of obligations was ¢176.139.503.989 (¢120.570.798.120 and
¢106.736.935.188 in December and March 2015, respectively), which shows the necessary solvency
to meet the liquid liabilities of the Organization.
(g)
Foreign exchange risk
Banco de Costa Rica uses two indicators to manage the foreign exchange risk: matching assets and
liabilities denominated in foreign currency and value at risk (VaR).
The upper limit to the net position in foreign currency exposed to unexpected exchange rate
variations at US$75 million as of March 31, 2016 and -4% of the daily dollarized equity as a floor
(-US$32 million). To improve the matched terms in dollars and the Liquidity Coverage Ratio (ICL,
for its acronym in Spanish), the Treasury Management Department had to accumulate dollars in the
market, surpassing the established limit, reaching US$161 million (US$47 million as of December
30, 2015), which increases the exchange rate losses from the valuation of such dollars at the
exchange rate calculated by the BCCR.
The Bank has established a risk appetite of 1,5% for the VaR to the open position in foreign currency.
In 2015, the volatility of the exchange rate was very stable, causing the daily VaR to fall to 0,36%,
which is very loose as compared to the established limit.
The open position is US$161 million (including provisions and other accounting reserves), the
capital requirement for exchange risk is ¢96,503 million, adding 0,39% % to the equity adequacy of
the institution, significantly higher that the contribution made in December 2015, which was e
0,15%.
(Continues)
Assets and liabilities in US dollars are detailed as follows:
March
2016
Assets:
Loan portfolio
Accounts and interest receivable
Other assets
Total assets
US$
Liabilities:
Other financial obligations
Other accounts payable and provisions
Other liabilities
Total liabilities
Net position
US$
December
2015
March
2015
445.665.439
668.955.363
3.516.619.141
5.524.016
19.173.073
4.655.937.032
429.488.548
645.891.847
3.404.356.684
4.675.154
16.473.830
4.500.886.063
648.321.963
605.016.539
3.197.503.268
4.279.697
17.588.252
4.472.709.719
2.328.751.606
2.007.213.838
26.475.897
19.860.242
40.105.405
4.422.406.988
2.274.754.634
2.016.281.618
26.044.192
18.542.789
40.104.830
4.375.728.063
2.291.235.233
1.998.748.774
27.033.635
40.644.159
40.100.150
4.397.761.951
233.530.044
125.158.000
74.947.768
The valuation of monetary assets and liabilities in foreign currency is carried out with reference
to the purchase exchange rate set by the BCCR the last business day of each month. As of March
31, 2016, it was ¢529,59 per US $1,00 (¢531,94 and ¢527,36 per US$1,00 in December and
March 2015, respectively).
The net position is not covered with any instrument; however, the Bank considers it remains at
an acceptable level for buying and selling US dollars in the market at the time it is considered as
necessary.
(Continues)
The following table shows the possible annual profit (loss) if there are variations of 5 percentage
points in the exchange rates, respectively:
The following table shows the possible annual profit (loss) if there are variations of 5 percentage points in the exchange rates, respectively
Net position
Closing exchange rate
5% increase in exchange rate
Profit
US$
¢
March
2016
233.530.044
529,59
26,48
6.183.875.565
December
2015
125.158.000
531,94
26,60
3.329.202.800
March
2015
74.947.768
527,36
26,37
1.976.372.642
March
2016
233.530.044
529,59
(26,48)
(6.183.875.565)
December
2015
125.158.000
531,94
(26,60)
(3.329.202.800)
March
2015
74.947.768
527,36
(26,37)
(1.976.372.642)
Sensitivity to a decrease in the exchange rate
Net position
Closing exchange rate
5% decrease in exchange rate
Profit
US$
¢
(Continues)
Assets and liabilities in Euros are detailed as follows:
March
2016
Assets:
Other assets
Total assets
Liabilities:
Other financial obligations
Other accounts payable and provisions
Other liabilities
Total liabilities
Net position (surplus assets on
monetary liabilities )
EUR€
EUR€
December
2015
March
2015
6.245.678
600
6.246.278
6.928.515
600
6.929.115
6.511.070
3.254.608
9.765.678
4.392.376
709.749
349.129
6.217
5.457.471
4.867.177
765.599
18.734
6.217
5.657.727
5.599.392
3.845.634
9.244
9.454.270
788.807
1.271.388
311.408
(Continues)
As of March 31, 2016, in compliance with SUGEF’s regulations, the term matching of the most important US dollar (US$) accounts
is as follows:
Assets
Loan portfolio
Interest on loans
Liabilities
entities
US$
At sight
184.893.246
150.267.919
366.998
25.220.335
360.748.498
1 to 30 days
25.560.907
46.114.310
782.833
198.823.487
7.614.338
278.895.875
31 to 60 days
26.088.821
89.307.522
3.184.665
103.414.284
476.118
222.471.410
US$
1.036.450.760
188.492.643
193.612.188
123.213.844
273.463.064
166.292.300
339.298.511
US$
227.318.427
152.790
1.263.921.977
(903.173.479)
212.838.866
2.216.116
403.547.625
(124.651.750)
89.913.616
2.068.513
285.594.317
(63.122.907)
82.848.218
1.980.606
208.042.668
(69.776.896)
273.803.519
5.680.005
552.946.588
(191.434.065)
260.160.509
2.262.770
428.715.579
(21.432.659)
851.557.396
2.399.731
1.193.255.638
1.685.004.688
US$
11.940.095
31.953.332
6.945.123
34.203.482
42.448
66.006
118.445.328
294.579.578
892.778
710.125
138.265.772
361.512.523
50.000
12.064.670
2.846.449
124.415.184
362.311.875
45.983
1.168.935
270.265.384
2.507.356.686
491.699
4.526.381
407.282.920
2.878.260.326
More than 30 days
past due
19.881.403
1.301.643
21.183.046
21.183.046
Total
184.943.246
260.722.193
663.664.494
5.290.870
3.537.986.485
16.013.082
4.668.620.370
2.320.823.310
1.998.440.551
16.760.531
4.336.024.392
332.595.978
(Continues)
As of December 31, 2015, in compliance with SUGEF’s regulations, the term matching of the most important US dollar (US$)
accounts is as follows:
Assets
Loan portfolio
Interest on loans
Liabilities
entities
US$
At sight
175.601.867
136.580.701
329.953
6.426
25.845.997
338.364.944
1 to 30 days
43.236
23.864.473
69.214.864
366.579
126.800.971
7.024.780
227.314.903
31 to 60 days
18.534.795
75.461.876
253.806
205.086.704
881.802
300.218.983
US$
973.874.193
178.042.996
150.692.624
111.135.876
365.656.256
161.697.260
325.714.823
US$
215.050.688
94.338
1.189.019.219
(850.654.275)
154.446.402
2.129.778
334.619.176
(107.304.273)
72.332.002
11.635.468
234.660.094
65.558.889
91.658.847
1.216.999
204.011.722
(83.453.787)
206.200.838
2.720.763
574.577.857
(172.979.721)
414.080.203
2.386.120
578.163.583
(213.505.929)
847.836.694
2.483.307
1.176.034.824
1.560.239.020
US$
61 to 90 days 91 days to 180 days 181 to 365 days More than 365 days
204.179
14.132.705
44.779.452
12.956.985
2.790.260
29.436.633
70.207.476
100.717.049
297.975.566
60.998
1.192.227
14.720
653.675
76.581.868
284.562.114
250.463.908
2.430.187.678
345.731
856.867
504.992
4.462.486
120.557.935
401.598.136
364.657.654
2.736.273.844
More than 30 days
past due
28.430.201
332.277
28.762.478
28.762.478
Total
175.849.282
253.639.371
643.343.417
2.548.431
3.427.959.441
14.408.935
4.517.748.877
2.266.814.028
2.001.605.674
22.666.773
4.291.086.475
226.662.402
(Continues)
As of March 31, 2015, in compliance with SUGEF´s regulations, the term matching of the most important US dollar (US$) accounts
is as follows:
Assets
Loan portfolio
Interest on loans
Liabilities
entities
US$
At sight
395.575.796
130.844.165
77.913
24.538.922
551.036.796
1 to 30 days
15.522
30.094.564
94.879.576
881.054
199.752.270
5.833.484
331.456.470
31 to 60 days
19.408.181
63.471.596
2.187.265
71.270.300
586.669
156.924.011
US$
1.009.290.625
223.525.205
146.180.164
139.831.368
332.954.870
223.679.283
207.634.402
US$
298.351.556
810
1.307.642.991
(756.606.195)
165.027.459
2.144.953
390.697.617
(59.241.147)
88.892.651
1.524.210
236.597.025
(79.673.014)
61.602.339
1.394.014
202.827.721
(90.065.545)
171.473.425
6.370.863
510.799.158
(166.263.770)
296.434.460
2.777.344
522.891.087
(140.304.790)
908.394.145
2.543.437
1.118.571.984
1.468.425.896
US$
61 to 90 days
91 days to 180 days
15.247.582
37.232.138
7.438.863
72.507.239
115.066
245.444
89.403.341
233.658.429
557.324
892.138
112.762.176
344.535.388
392.262
19.318.505
193.248
141.427.605
231.871.687
87.059
858.943
221.078.994
2.349.581.119
674.134
4.100.621
382.586.297
2.586.997.880
More than 30 days
past due
24.646.470
1.480.713
26.127.183
-
Total
395.983.580
252.338.383
611.674.479
4.374.831
3.213.929.845
14.125.083
4.492.426.201
2.283.095.917
26.127.183
1.990.176.035
16.755.631
4.290.027.583
202.398.618
(Continues)
- 165 BANCO DE COSTA RICA Y SUBSIDIARIAS
Notas a los Estados Financieros Consolidados
The Bank faces this kind of risk when the value of its dollar-denominated assets and liabilities is
affected by exchange rate variations, which is recognized in the income statement.
As of March 31, 2016 and 2015, the financial statements show a net foreign exchange loss of
¢441.129.651 and a net profit of ¢701.682.460, respectively.
(h)
Operational risk management
According to previous statements in compliance with the guidelines developed in the agreements
of the Basel Committee and the intentions of the Supervisor, operating or operational risk is defined
as the risk of loss resulting from inadequate use or unforeseen failure of processes, personnel and
internal and even automated systems or due to external events. This definition includes
technological and legal risks, according to the generalized definition and the Basel Committee, but
excludes the strategic and reputational risk.
The objective of BCR Financial Conglomerate in operational risk management is to minimize the
financial losses and eventual damages to the reputation of the Conglomerate, as well as achieving
efficiency and effectiveness in the execution of processes and optimize its Internal Control System.
Essentially, the model of management and control of operational risk in the Conglomerate
comprises a set of qualitative and quantitative techniques and tools that allow determining the risk
level in the substantive processes; this from the estimate of the probability of occurrence of
identified relevant events and their impact. It also includes the assessment of effectiveness of
existing management measures, as well as the implementation of risk management plans.
As part of the actions taken, the Bank also defined:











Aspects about the proper segregation of duties, including independence in authorizing
transactions.
Requirements on adequate monitoring and reconciliation of transactions.
Compliance with regulatory and legal requirements.
Documentation of controls and processes.
Monthly report on operation losses and proposals for the solutions of the same.
Use of ethical standards in the business.
Development of activities to mitigate the risk, including security policies.
Communication and implementation of corporate conduct guidelines.
Reduced risk impact through insurance as appropriate.
Comprehensive planning for the recovery of activities, including plans to restore key
operations and internal and external support to ensure the provision of services.
Staff training.
The qualitative and quantitative assessments of the operational risk complements the development
of a robust database which reflects loss events from operating risks, such as natural disasters,
vandalism, fraud, fines, convictions, robbery or assaults as well as replacement costs of impaired
assets.
There are various operating risk indicators, including legal risks and TI risks, which results are
regularly informed to the General Board of Directors and the Corporate Risk Committee. These
indicators are constantly reviewed to put the theory into practice, and in this sense, to reflect the
efforts of the Institution to comply with regulations to strengthen operating risk management.
Regarding the IT risk management, there is an availability and implementation of an annual risk
assessment plan in accordance with provisions established by SUGEF 14-09. These exercises
identify and analyze the main risk events that might affect the smooth operation of the technological
platform to develop management plants for a proper control.
Moreover, there is a monitoring of the risk indicators related to the most relevant or critical activities
of the Conglomerate resulting in mitigating actions for deviations from the acceptability parameters.
At the same time, quantitative evaluation is carried out through the “Exponential Smoothing”
methodology, with which loss projections for operational risk are performed, based on the historical
record and thus establishing a maximum limit for losses due to operational risk with respect to the
Bank´s Net Worth, which result has remained within the established appetite or limit of institutional
risk.
Regarding the calculation of regulatory capital, the BCR uses the basic method authorized by
SUGEF; however, it has been proposed to soon start the project to evolve to the standard method
proposed by the Basel Committee. (I think this paragraph must be amended or deleted because it had
been already included by the ICAAP project and was deleted.)
Consistent with the importance and relevance of the operating risk management for the Institution,
the priority in the operational risk management continues to focus on prevention and mitigation in
the relevant processes.
It is important to point out that the Bank has a system of IT and business continuity management
(based on Standard 22301:2012), which includes contingency plans and an expert group for IT
continuity, consisting of a logistics plan designed by the Organization, which allows to detect
undesired incidents in relevant services, as well as, ensure the recovery and restoration of interrupted
services within a given time, under the coordination of the Corporate Crisis Committee.
The Business Continuity Plan or BCP is a logistics plan designed and proven by the organization to
detect an undesirable event in the relevant services and ensure the reestablishment and recovery of
the partially or totally interrupted service within a pre-established term. The BCP can show to its
stakeholders (stockholders, customers, competitors, etc.) how the entity has properly made
preparations, thereby strengthening its brand and creditworthiness in the market.
During the first quarter of 2016, the Business Continuity Plan continued using the work Schedule
established by the Business Continuity Management System, particularly in the Business Continuity
Plan (BCP).
Finally, it must be pointed out regarding the management of the risks of money laundering and
terrorism financing, it has been reinforced as a relevant duty at an institutional level, with tools to
identify, assess, monitor, and manage such risks under the following core areas: customers, products,
services, channels, and geographical zones.
(39)
Financial information of the Development Financing Fund
The Bank presents the following financial information as manager of the Development Financing
Fund (DFF):
DEVELOPMENT FINANCING FUND
BALANCE SHEET
As of March 31, 2016 and December and March 2016
Financial information
(In colones without cents)
March
2016
ASSETS
Cash
Loan portfolio
Current loans
Past due loans
Loans on legal collection
Interest receivable
(Allowance for loan impairment)
Accounts and commissions receivable
(Allowance for impairment)
Other assets
Other assets
TOTAL ASSETS
LIABILITIES
Other liablities
Other liablities
Deferred income
TOTAL LIABILITIES
¢
5.903.802.000
5.903.802.000
11.846.504.894
9.366.600.003
2.442.489.044
216.459.263
96.078.859
(275.122.275)
61.960
(61.960)
4.113
4.113
¢ 17.750.311.007
March
2015
4.634.939.747
4.634.939.747
11.042.495.625
9.264.219.032
1.727.409.850
230.814.394
95.179.054
(275.126.705)
30.980
61.960
(30.980)
15.677.466.352
4.071.928.785
4.071.928.785
10.607.753.380
8.722.862.496
2.065.506.640
129.116.199
105.394.774
(415.126.729)
14.679.682.165
4.788.766
4.788.766
67.052.861
250.000
66.802.861
71.841.627
1.129.112
1.129.112
53.597.020
53.597.020
54.726.132
5.638.847
5.638.847
38.781.974
38.781.974
44.420.821
STOCKHOLDERS' EQUITY
Contributions from Banco de Costa Rica
¢ 12.949.406.764
Accumulated results from previous years
4.433.431.942
Results of the current period
295.630.674
TOTAL STOCKHOLDERS' EQUITY
¢ 17.678.469.380
TOTAL LIABILITIES STOCKHOLDERS' EQUITY¢ 17.750.311.007
11.189.308.279
3.217.040.383
1.216.391.558
15.622.740.220
15.677.466.352
11.189.308.279
3.217.040.383
228.912.682
14.635.261.344
14.679.682.165
Own debit memoranda accounts
¢
December
2015
¢
¢
17.273.608
329.259
490.216.590
536.807.409
326.897.766
DEVELOPMENT FINANCING FUND
INCOME STATEMENT
For the year ended March 31, 2016 and 2015
March
2016
Financial income
Loan portfolio
Total financial income
Financial expenses
Loss on foreign exchange differences
Total financial expenses
Allowance for asset impairment
Recovery of assets and decrease in allowance
FINANCIAL INCOME
Commissions for services
Total other operating income
Total other operating expenses
INCOME OF THE PERIOD
¢
¢
March
2015
March
2016
March
2015
272.908.249
272.908.249
294.999.884
294.999.884
272.908.249
272.908.249
294.999.884
294.999.884
2.229.125
2.229.125
3.752.154
3.752.154
2.229.125
2.229.125
3.752.154
3.752.154
30.980
16.807.739
287.455.883
72.168.916
502.770
219.581.584
30.980
16.807.739
287.455.883
72.168.916
502.770
219.581.584
189.256
8.334.296
8.523.552
177.930
9.205.953
9.383.883
189.256
8.334.296
8.523.552
177.930
9.205.953
9.383.883
348.761
348.761
295.630.674
52.785
52.785
228.912.682
348.761
348.761
295.630.674
52.785
52.785
228.912.682
Loan Portfolio of the Development Financing Fund
The information contained in notes a) through f) below corresponds to financial information.
March
2016
Sector
Agriculture, livestock, hunting and
related services
Manufacturing
Mining and quarrying
Trade
Services
Transportation
Real estate, business activities
and rental
Construction, purchase and repair
of real estate
Consumption
Hotels and restaurants
Education
¢
Plus: interest receivable
¢
December
2015
March
2015
3.038.374.712
11.284.215
2.595.840.031
75.186.439
67.209.898
5.187.054.080
609.577.893
2.527.911.369
13.415.267
2.521.502.893
78.405.556
6.301.388
5.031.742.934
607.734.037
2.360.738.877
18.588.662
2.430.598.443
85.133.743
5.474.547
5.012.353.003
628.599.679
44.587.381
46.111.288
50.029.022
180.321.995
160.859.629
55.252.037
12.025.548.310
96.078.859
(275.122.275)
11.846.504.894
205.791.914
11.031.750
116.701.602
55.793.278
11.222.443.276
95.179.054
(275.126.705)
11.042.495.625
147.830.869
20.250.156
49.853.311
108.035.023
10.917.485.335
105.394.774
(415.126.729)
10.607.753.380
b) Loan portfolio by arrears:
March
2016
Up to date
1 to 30 days
31 to 60 days
61 to 90 days
91 to 120 days
121 to 180 days
More than 180 days
¢
¢
9.366.600.003
1.254.315.977
757.548.813
98.492.658
241.904.318
69.018.739
237.667.802
12.025.548.310
December
2015
March
2015
9.264.219.032
1.056.932.530
251.906.895
153.895.510
140.234.441
60.899.343
294.355.525
11.222.443.276
8.722.862.496
1.291.071.453
372.024.809
145.739.658
1.636.068
85.719.268
298.431.583
10.917.485.335
c) Past due loans
Past due loans, including loans in accrual status, for which interest are recognized on a cash
basis, and unearned interest on past due loans, are as follows:
Number of operations
Past due loans in non accrual status
of interest
Past due loans for which
interest is recognized
Total unearned interest
March
2016
December
2015
March
2015
21
21
59
¢
237.667.802
294.355.525
298.431.583
¢
¢
2.421.280.505
31.179.338
1.663.868.719
26.123.546
1.896.191.256
25.172.874
As of March 31, 2016, loans on legal collection are as follows:
# operations
14
Percentage
1,80%
Balance
216.459.263
¢
As of December 31, 2015, loans on legal collection are as follows:
# operations
13
Percentage
2,06%
¢
Balance
230.814.394
As of March 31, 2015, loans on legal collection are as follows:
# operations
11
Percentage
1,18%
¢
Balance
129.116.199
d) Interest receivable on loan portfolio
Interest receivable is as follows:
March
2016
Current loans
Past due loans
Loans of legal collection
¢
¢
40.639.698
43.393.082
12.046.079
96.078.859
December
2015
46.655.767
35.734.283
12.789.004
95.179.054
March
2015
58.245.053
40.040.647
7.109.074
105.394.774
e) Allowance for bad loans
The movement in the allowance for bad loans is as follows:
Opening balance 2016
¢
Less:
¢
275.126.705
¢
Plus:
Allowance charged to profit or loss
Less:
Reversal of allowance against income
¢
343.468.974
¢
Plus:
Allowance charged to profit or loss
Less:
Reversal of allowance against income
¢
(4.430)
275.122.275
241.725.613
(5.303)
(310.062.579)
275.126.705
343.468.974
72.168.916
(8.391)
(502.770)
415.126.729
f)
Loan portfolio by type of guarantee:
The loan portfolio by type of guarantee is as follows:
March
2016
Guarantee
Fiduciary
Mortgage
Chattel
Others
¢
¢
60.296.294
1.508.644.915
5.039.633.592
5.416.973.509
12.025.548.310
December
2015
March
2015
1.630.969.403
4.584.031.382
5.007.442.491
11.222.443.276
1.568.126.527
4.533.750.713
4.815.608.095
10.917.485.335
g) Financial instruments of the Development Financing Fund with credit risk exposure are
detailed as follows:
Principal
Interest receivable
¢
Carrying amount
¢
Loan portfolio
Total balances:
A1
A2
B1
B2
C1
C2
D
E
¢
Minimum allowance
Carrying amount
Allowance (surplus) deficit
on minimum allowance
¢
6a
¢
March
2016
12.025.548.310
96.078.859
12.121.627.169
(275.122.275)
11.846.504.894
December
2015
11.222.443.276
95.179.054
11.317.622.330
(275.126.705)
11.042.495.625
March
2015
10.917.485.335
105.394.774
11.022.880.109
(415.126.729)
10.607.753.380
9.415.164.625
137.871.311
845.746.177
175.467.016
232.804.860
42.078.493
201.388.122
1.071.106.565
12.121.627.169
(241.841.440)
11.879.785.729
9.251.104.666
119.286.000
422.955.808
142.761.230
146.988.772
97.482.795
120.270.253
1.016.772.806
11.317.622.330
(239.358.328)
11.078.264.002
8.773.660.369
336.652.544
725.953.235
175.761.394
179.908.408
63.891.373
767.052.786
11.022.880.109
(415.126.722)
10.607.753.387
12.121.627.169
(241.841.440)
11.317.622.330
(239.358.328)
11.022.880.109
(415.126.722)
(33.280.835)
11.846.504.894
(35.768.377)
11.042.495.625
(7)
10.607.753.380
The assessed loan portfolio including allowance is detailed as follows:
Loan portfolio
A1
A2
B1
B2
C1
C2
D
E
Loan portfolio
Up to date
1 - 30 days
31 - 60 days
Up to date
1 - 30 days
31 - 60 days
61 - 90 days
91 - 180 days
More than 180 days
Principal
¢
Covered balance
Overdraft
Allowance
9.415.164.625
137.871.311
9.553.035.936
8.543.803.417
113.469.479
8.657.272.896
871.361.208
24.401.832
895.763.040
21.654.879
317.104
21.971.983
845.746.177
175.467.016
232.804.860
42.078.493
201.388.122
1.071.106.565
2.568.591.233
12.121.627.169
702.156.423
168.337.540
172.193.981
42.078.493
188.348.224
828.460.290
2.101.574.951
10.758.847.847
143.589.754
7.129.476
60.610.879
13.039.898
242.646.275
467.016.282
1.362.779.322
8.794.493
1.100.124
15.825.959
96.781
10.213.124
183.838.976
219.869.457
241.841.440
Covered balance
Overdraft
7.716.162.647
788.123.557
904.547.750
92.450.415
36.562.500
15.189.068
8.657.272.897
895.763.040
Allowance
19.559.858
2.293.096
119.029
21.971.983
Principal
8.504.286.204
996.998.164
51.751.568
9.553.035.936
902.953.497
217.887.749
772.564.845
101.376.626
322.974.111
250.834.405
2.568.591.233
12.121.627.169
766.165.104
183.579.778
608.078.734
55.903.945
274.038.618
213.808.771
2.101.574.950
10.758.847.847
136.788.392
34.307.971
164.486.112
45.472.681
48.935.493
37.025.633
467.016.282
1.362.779.322
57.307.335
2.516.756
55.390.308
17.571.884
49.565.782
37.517.392
219.869.457
241.841.440
Loan portfolio
A1
A2
B1
B2
C1
C2
D
E
Loan portfolio
Up to date
1 - 30 days
Up to date
1 - 30 days
31 - 60 days
61 - 90 days
91 - 180 days
More than 180 days
Principal
¢
Covered balance
Overdraft
Allowance
9.251.104.666
119.286.000
9.370.390.666
8.097.560.123
94.884.168
8.192.444.291
1.153.607.042
24.401.832
1.178.008.874
18.502.334
238.572
18.740.906
422.955.808
142.761.230
146.988.772
97.482.795
120.270.253
1.016.772.806
1.947.231.664
11.317.622.330
341.244.024
142.761.230
143.966.672
97.482.795
120.270.253
779.289.740
1.625.014.714
9.817.459.005
81.731.598
3.022.100
237.400.753
322.154.451
1.500.163.325
4.769.068
285.522
1.043.458
194.966
240.541
214.083.867
220.617.422
239.358.328
Covered balance
Overdraft
7.448.179.488
991.165.406
744.264.803
186.843.468
8.192.444.291
1.178.008.874
Allowance
16.878.690
1.862.217
18.740.907
Principal
8.439.282.394
931.108.272
9.370.390.666
871.592.405
138.999.717
257.505.550
159.009.359
209.569.836
310.554.797
1.947.231.664
11.317.622.330
785.028.861
81.450.374
241.213.927
95.479.258
193.051.955
228.790.339
1.625.014.714
9.817.459.005
86.583.358
57.549.344
16.291.623
63.530.100
16.517.881
81.682.145
322.154.451
1.500.163.325
8.016.432
44.840.680
4.913.227
63.721.059
16.903.985
82.222.038
220.617.421
239.358.328
Loan portfolio
A1
A2
B1
B2
C1
D
E
Loan portfolio
Up to date
1 - 30 days
Up to date
1 - 30 days
31 - 60 days
61 - 90 days
91 - 180 days
More than 180 days
Principal
¢
Covered balance
Overdraft
Allowance
8.773.660.369
336.652.544
9.110.312.913
8.054.582.558
312.237.625
8.366.820.183
719.077.811
24.414.919
743.492.730
9.651.026
370.318
10.021.344
725.953.235
175.761.394
179.908.408
63.891.373
767.052.786
1.912.567.196
11.022.880.109
594.637.455
165.618.917
157.497.783
62.180.813
375.791.205
1.355.726.173
9.722.546.356
131.315.779
10.142.477
22.410.625
1.710.560
391.261.582
556.841.023
1.300.333.753
7.219.890
1.196.428
5.775.904
1.351.319
389.561.837
405.105.378
415.126.722
Covered balance
Overdraft
8.054.582.558
719.077.811
312.237.625
24.414.919
8.366.820.183
743.492.730
Allowance
9.559.086
462.258
10.021.344
Principal
8.773.660.369
336.652.544
9.110.312.913
702.680.021
393.078.705
381.299.222
150.297.925
93.448.728
191.762.595
1.912.567.196
11.022.880.109
547.432.956
299.512.508
331.095.840
130.097.096
27.442.195
20.145.578
1.355.726.173
9.722.546.356
155.247.065
93.566.197
50.203.382
20.200.829
66.006.533
171.617.017
556.841.023
1.300.333.753
76.195.245
83.594.189
2.874.375
5.193.314
65.609.079
171.639.176
405.105.378
415.126.722
Risk category:
A1
A2
B1
B2
C1
C2
D
E
Loans receivable from clients
Gross
Net
¢
¢
Risk category:
A1
A2
B1
B2
C1
C2
D
E
9.393.509.746
137.554.207
836.951.684
174.366.892
216.978.901
41.981.712
191.174.998
887.267.589
11.879.785.729
Gross
Net
¢
¢
Risk category
A1
A2
B1
B2
C1
D
E
9.415.164.625
137.871.311
845.746.177
175.467.016
232.804.860
42.078.493
201.388.122
1.071.106.565
12.121.627.169
9.251.104.666
119.286.000
422.955.808
142.761.230
146.988.772
97.482.795
120.270.253
1.016.772.806
11.317.622.330
9.232.602.331
119.047.428
418.186.740
142.475.708
145.945.314
97.287.830
120.029.713
802.688.938
11.078.264.002
Gross
Net
¢
¢
8.773.660.369
336.652.544
725.953.235
175.761.394
179.908.408
63.891.373
767.052.786
11.022.880.109
8.764.009.342
336.282.226
718.733.344
174.564.966
174.132.504
62.540.054
377.490.951
10.607.753.387
(40)
Situation of the Development Credit Fund
The Bank presents the following financial information as manager of the Development Credit
Fund (DCF):
DEVELOPMENT CREDIT FUND
BALANCE SHEET
As of March 31, 2016 and December and March 2015
ASSETS
Central Bank of Costa Rica
Available-for-sale
Interest receivable
Loan portfolio
Current loans
Interest receivable
(Allowance for impairment)
Accounts and commissions receivable
Deferred income tax and income
tax receivable
TOTAL ASSETS
LIABILITIES
At sight
Other liabilities
Deferred income
TOTAL LIABILITIES
¢
March
December
March
2016
2015
2015
848.462.093 ¢
887.313.216 ¢
1.682.735.235
848.462.093
887.313.216
1.682.735.235
136.911.759.740
132.149.939.561
155.087.629.475
136.020.387.347
131.380.981.968
153.708.026.777
891.372.393
768.957.593
1.379.602.698
2.142.254.135
1.202.666.667
2.141.791.488
1.200.000.000
5.401.190
2.666.667
(4.938.543)
45.887.828
45.887.828
-
45.887.828
45.887.828
¢ 139.948.363.796 ¢ 134.285.807.272 ¢ 156.770.364.710
¢ 139.633.519.605 ¢ 133.538.427.752 ¢ 156.271.826.740
139.633.519.605
133.538.427.752
156.271.826.740
251.270.861
267.270.325
248.068.437
251.270.861
267.270.325
248.068.437
41.146.859
17.973.000
41.146.859
17.973.000
¢ 139.925.937.325
133.823.671.077
156.519.895.177
STOCKHOLDERS' EQUITY
Equity adjustments
¢
(51.712.518)
104.479.369
160.675.839
Adjustment for valuation of available-for-sale
investments
(51.712.518)
104.479.369
160.675.839
Income of the current period
74.138.989
357.656.826
89.793.694
TOTAL EQUITY
¢
22.426.471
462.136.195
250.469.533
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
¢ 139.948.363.796 ¢ 134.285.807.272 ¢ 156.770.364.710
Own debit memoranda accounts
2.865.240.000
1.800.000.000
-
DEVELOPMENT CREDIT FUND
INCOME STATEMENT
For the year ended March 31, 2016 and 2015
Financial Information
March
2016
Financial income
Loan portfolio
¢ 1.083.970.244
14.856.051
1.420.059.748
-
35.257.032
1.134.083.327
18.881.341
1.438.941.089
383.075.468
13.493.957
396.569.425
527.880.171
26.904.144
554.784.315
4.938.543
732.575.359
884.156.774
5.858.685
3.191.065
24.390
9.074.140
16.859.187
22.052
16.881.239
3.911.219
3.991.985
7.903.204
733.746.295
327.731
2.773.338
3.101.069
897.936.944
¢
659.607.306
74.138.989
808.143.250
89.793.694
¢
659.607.306
808.143.250
74.138.989
89.793.694
733.746.295
897.936.944
Profit from available-for-sale financial instruments
Total financial income
Financial expenses
Losses in exchange rate differences
Total financial expenses
Allowance for asset impairment
FINANCIAL INCOME
Exchange and arbitration, foreign currency
Service commissions and fees
Total other operating income
Exchange and arbitration, foreign currency
Total other operating expenses
Profits transferred to the National
Development Trust
INCOME FOR THE PERIOD
PROFIT SHARING
Profits transferred to
National Development Trust
Management fees of
Development Credit Fund
March
2015
¢
Investments in financial instruments of the Development Credit Fund (DCF) are detailed as
follows:
Available for sale
Interest receivable on available-for-sale
investments
Available for sale:
Local issuers:
Government
State-owned banks
Foreign issuers:
Government
Private banks
March
2016
¢ 136.020.387.347
December
2015
131.380.981.968
March
2015
153.708.026.777
891.372.393
¢ 136.911.759.740
768.957.593
132.149.939.561
1.379.602.698
155.087.629.475
March
2016
December
2015
March
2015
Fair value
Fair value
Fair value
56.356.776.934
77.812.822.981
134.169.599.915
50.936.247.414
76.181.597.380
127.117.844.794
79.930.209.198
57.308.737.621
137.238.946.819
1.850.787.432
¢ 136.020.387.347
1.857.438.491
2.405.698.683
131.380.981.968
16.469.079.958
153.708.026.777
¢
As of November 27, 2014, after Law No. 9274 was reformed (Comprehensive Reform of the
Development Banking System,), as per article 36, the managing bank will receive a commission
of maximum 10% of the earnings, set by the Governing Board, to cover operation costs, services
and any other costs arising from managing the investments (15 % in 2014).
Loan Portfolio of the Development Credit Fund
The information contained in notes a) through d) below corresponds to financial information.
March
2016
Sector
Manufacturing
Service
¢
157.963.332
1.983.828.156
2.141.791.488
5.401.190
(4.938.543)
2.142.254.135
¢
December
2015
1.200.000.000
1.200.000.000
2.666.667
1.202.666.667
March
2015
-
b) Loan portfolio by arrears:
March
2016
Up to date
¢
¢
2.141.791.488
2.141.791.488
December
2015
1.200.000.000
1.200.000.000
March
2015
-
c) Interest receivable on loan portfolio
Interest receivable is detailed as follows:
March
2016
Current loans
¢
¢
5.401.190
5.401.190
December
2015
March
2015
2.666.667
2.666.667
-
d) Loan portfolio by type of guarantee:
The loan portfolio by type of guarantee is as follows:
March
2016
Guarantee
Mortgage
Other
¢
¢
1.733.828.155
407.963.333
2.141.791.488
December
2015
1.200.000.000
1.200.000.000
March
2015
-
e) Financial instruments of the Development Credit Fund with credit risk exposure are detailed
as follows:
Principal
Interest receivable
¢
Carrying amount
¢
Loan portfolio
Total balances:
A1
¢
Minimum allowance
¢
Carrying amount
Allowance (surplus) deficit
on minimum allowance
6a
¢
March
2016
2.141.791.488
5.401.190
2.147.192.678
(4.938.543)
2.142.254.135
December
2015
1.200.000.000
2.666.667
1.202.666.667
1.202.666.667
March
2015
-
2.147.192.678
2.147.192.678
(4.938.543)
2.142.254.135
1.202.666.667
1.202.666.667
(2.405.333)
1.200.261.334
-
2.147.192.678
(4.938.543)
1.202.666.667
(2.405.333)
-
2.142.254.135
2.405.333
1.202.666.667
-
The assessed loan portfolio including allowance is detailed as follows:
Loan portfolio
Covered balance
Overdraft
Principal
A1
¢
Loan portfolio
Up to date
2.147.192.678
2.147.192.678
Principal
2.147.192.678
2.147.192.678
-
Allowance
2.147.192.678
2.147.192.678
4.938.543
4.938.543
Covered balance
Overdraft
2.147.192.678
2.147.192.678
Allowance
4.938.543
4.938.543
Loan portfolio
A1
Loan portfolio
Up to date
Risk category:
A1
Covered balance
Overdraft
Principal
¢
1.202.666.667
1.202.666.667
-
Principal
1.202.666.667
1.202.666.667
Allowance
1.202.666.667
1.202.666.667
2.405.333
2.405.333
Covered balance
Overdraft
1.202.666.667
1.202.666.667
Allowance
2.405.333
2.405.333
Loan receivable from clients
Gross
Net
¢
¢
2.147.192.678
2.147.192.678
2.142.254.135
2.142.254.135
Risk category:
A1
Loan receivable from clients
Gross
Net
¢
¢
1.202.666.667
1.202.666.667
1.200.261.334
1.200.261.334
Upon request by the private banks for a change as to operate in accordance with provisions
contained in subparagraph ii) of N.1644, Organic Law of the National Financial System, the
Governing Body of Development Banking, it authorizes the managing banks to transfer the funds
of the Development Credit Fund, whose refund would be done in monthly installments during a
maximum period of six months. The detail of the amounts transferred is as follows:
BAC San José
Banco BCT
Banco Improsa
¢
¢
March
2016
1.952.012.990
589.474.951
918.750.656
2.541.487.941
December
2015
38.457.266.652
1.364.393.992
1.364.393.992
39.821.660.644
March
2015
-
(41)
Transition to the International Financing Reporting Standards (IFRSs)
Through various resolutions, CONASSIF (the Board) agreed to partial adoption, starting January
1, 2004, of IFRSs promulgated by the International Accounting Standards Board (IASB). In order
to regulate application of those Standards, the Board issued the Terms of the Accounting
Regulations Applicable to Entities Regulated by SUGEF, SUGEVAL, SUPEN, and SUGESE
and to Non-financial Issuers and approved a comprehensive revision of those regulations. On
March 17, 2007 the Board adopted a comprehensive reform of the “Accounting standards
applicable to supervised entities by SUGEF, SUGEVAL, SUPEN and SUGESE and nonfinancial
issuers.”
On May 11, 2010, the Board issued private letter ruling CNS 413-10 to revise the Accounting
Regulations Applicable to Entities Regulated by SUGEF, SUGEVAL, SUPEN, and SUGESE
and to Non-financial Issuers (the Regulations), which mandate application by regulated entities
of IFRSs and the corresponding interpretations issued by the IASB in effect as of January 1, 2008,
except for the special treatment indicated in Chapter II of the aforementioned Regulations.
Pursuant to the Regulations and in applying IFRSs in effect as of January 1, 2008, any new IFRSs
or interpretations issued by the IASB, as well as any other revisions of IFRSs adopted that will
be applied by regulated entities, will require the prior authorization of CONASSIF.
On April 4, 2013 C.N.S. 1034/08 was issued, stating that, for the period starting January 1,
2014, IFRS 2011 shall be applied with exception of special treatments referred to in Chapter II
of the rules for regulated financial entities.
Following are some of the main differences between the accounting standards issued by the Board
and IFRSs, as well as the IFRSs or interpretations of the International Financial Reporting
Interpretations Committee (IFRICs) yet to be adopted:
a) IAS 1: Presentation of Financial Statements
New IAS I is effective as from the periods beginning on or after January 1, 2009.
The presentation of financial statements required by the Board differs in some respects
from presentation under IAS 1. Following are some of the most significant differences:
SUGEF Standards do not allow certain transactions, such as clearing house balances, gains
or losses on the sale of financial instruments, income taxes, among others, to be presented on
a net basis. Given their nature, IFRSs require those balances to be presented net to prevent
assets and liabilities or profit or loss from being overstated.
b) IAS 1: Presentation of Financial Statements (revised)
IAS 1 requires an entity to disclose reclassification adjustments and income tax relating to
each component of other comprehensive income. Reclassification adjustments are amounts
reclassified to profit or loss in the current period that were previously recognized in other
comprehensive income.
Revised IAS I changes the name of some financial statements, using “statement of financial
position” instead of balance sheet.
IAS I require an entity to present a statement of financial position as at the beginning of the
earliest comparative period in a complete set of financial statements when the entity applies
an accounting policy retrospectively or makes retrospective restatement.
The financial statements presentation format is determined by the Board and can be different
from the options permitted on certain IFRS and IAS.
c) IAS 7: Statements of Cash Flows
The Board has only authorized preparation of the cash flow statement using the indirect
method. The direct method is also acceptable under IAS 7.
d) IAS 8: Accounting Policies, Changes in Accounting Estimates, and Errors
In some cases, SUGEF has authorized the reporting of notices of deficiencies received from
Tax Authorities against prior period retained earnings.
e) IAS 16: Property, Plant and Equipment
The Standard issued by the Board requires the revaluation of property through appraisals
made by independent appraisers at least once every five years, eliminating the option to carry
these assets at cost or to revalue other types of assets.
Furthermore, SUGEF permits the conversion (capitalize) of the surplus revaluation directly
in equity (only for state banks), without having to relocate previously to retained earnings,
as required by IAS 16
Moreover, under IAS 16, depreciation continues on property, plant and equipment, even if
the asset is idle. The Standard issued by the Board allows entities to suspend the depreciation
of idle assets and reclassify them as realizable assets.
f)
IAS 18: Revenue
The Board has allowed regulated financial entities to recognize loan fees and commissions
collected prior to January 1, 2003 as revenue. Additionally, the Board has permitted the
deferral of the credit fee formalization of 25%, 50%, and 100% of loan fees and commissions
for transactions completed in 2003, 2004, and 2005, respectively. IAS 18 prescribes deferral
of 100% of those fees and commissions over the loan term.
The Board has also allowed deferral of the net excess of loan fee income minus expenses
incurred for activities such as assessment of the borrower’s financial position, evaluation and
recognition of guarantees, sureties, or other collateral instruments, negotiation of the terms
of the instrument, preparation and processing of documents, and settlement of the operation.
IAS 18 does not allow deferral on a net basis of loan fee income. Instead, it prescribes deferral
of 100% of loan fee income, and permits the deferral of only certain incremental transaction
costs, rather than all direct costs. Accordingly, when costs exceed income, loan fee income
is not deferred, since the Board only allows the net excess of income over expenses to be
deferred. This treatment does not conform to IAS 18 and IAS 39, which prescribe separate
treatment for income and expenses (see comments on IAS 39).
Starting as of January 1, 2014 the treatment of loan commissions was implemented as
directed in IAS 18.
g) Revised IAS 19: Employee Benefits
This standard is for application in the periods that begin in or after January, 1, 2013. It
includes changes referring to the benefit plans defined for which it previously required that
the measurements of the actuarial appraisals were recognized in the income statement or in
the other comprehensive income. The new IAS 19 will require the changes in measurements
to be included in other comprehensive income and the cost of services and net interest to be
included in the income statement.
h) IAS 21: The Effects of Changes in Foreign Exchange Rates
The Board requires that the financial statements of regulated entities to be presented in
colones as the functional currency.
i)
IAS 24: Related Party Disclosures
The International Accounting Standards Board revised IAS 24 in 2009 in order to: (a)
simplify the definition of “related parties”, clarify the meaning to be given to this term and
eliminate the incoherencies of the definition; (b) Provide a partial exemption from the
requirement of information disclosed by entities related to the government.
This standard will be applied retroactively for the annual periods starting as from January 1,
2011.
j)
IAS 27: Consolidated and Separate Financial Statements
The Board requires that the financial statements of a parent entity to be presented separately,
measuring its investments by the equity method. Under IAS 27, a parent is required to present
consolidated financial statements. A parent company needs not to present consolidated
financial statements when the ultimate or any intermediate parent of the parent produces
consolidated financial statements available for public use, provided certain other
requirements are also met. However, in this case, IAS 27 requires that investments be
accounted for at cost.
In the case of financial groups, the holding company must consolidate the financial
statements of all of the companies of the group in which it holds an ownership interest of
twenty-five percent (25%) or more, irrespective of control. For such purposes, proportionate
consolidation should not be used, except in the consolidation of investments in joint ventures.
Amended IAS 27 (2008) requires accounting for changes in ownership interests by the Bank
in a subsidiary, while maintaining control, to be recognized as an equity transaction. When
the Bank loses control of a subsidiary, any interest retained in the former subsidiary will be
measured at fair value with the gain or loss recognized in profit or loss. The amendments to
IAS 27 became mandatory for the Bank’s 2010 consolidated financial statements. These
amendments have not been adopted by the Board.
The objective of this standard is to describe accounting treatment and disclosures required
by subsidiaries, joint ventures and associates when the entity presents separate financial
statements.
k) IAS 28: Investments in Associates and Joint Ventures
The Board requires consolidation of investments in companies in which an entity holds
twenty-five percent (25%) or more equity interest, irrespective of any considerations of
control. Such treatment does not conform to IAS 27 and IAS 28.
The objective of this standard is to describe the accounting treatment for Investments in
partners and it determines the requirements for the application of the method of equity
participation when recording investments in associates and joint ventures.
l)
Revised IAS 32: Financial Instruments: Presentation
Revised IAS 32 provides new guidelines clarifying the classification of financial instruments
as liabilities or equity (e.g. preferred shares). SUGEVAL determines whether those shares
fulfill the requirements of capital stock.
m) Amendments to IAS 32: Financial Instruments – Presentation and IAS 1: Presentation of
Financial Statements – Puttable Financial Instruments and Obligations Arising on
Liquidation
The amendments to the standards require puttable instruments and instruments that impose
on the entity an obligation to deliver to another party a pro rata share of the net assets of the
entity only on liquidation to be classified as equity if certain conditions are met. These
changes have not been adopted by the Board.
n) IAS 37: Provisions, Contingent Liabilities and Contingent Assets
SUGEF requires that a provision for possible losses must be booked for contingent assets.
IAS 37 does not allow this type of provision.
o) IAS 38: Intangible Assets
The commercial banks listed in article 1 of Internal Regulations National Banking System
(Law No. 1644) may present organization and installation expenses as an asset in the balance
sheet, however, those expenses must be fully amortized on the straight-line method over a
maximum of five years. Similar procedure and term must be used for the amortization of
goodwill acquired.
Automatic applications should be amortized systematically by the straight line method during
the term which produces economic benefits; such term could not exceed five years. Similar
proceeding applies to obtained goodwill.
IAS 38 allows different methods to distribute an asset amortizable amount during useful life.
Useful life of automatic applications could be longer than five years as stated by CONASIF
standards.
On the other hand, IFRS do not require annual goodwill amortization, only yearly assessment
for impairment is required.
p) IAS 39: Financial Instruments: Recognition and Measurement
The Board requires that the loan portfolio be classified pursuant to SUGEF Directive 1-05
and that the allowance for loan impairment be determined based on that classification. It also
allows excess allowances to be booked. IAS 39 requires that the allowance for loan
impairment be determined based on a financial analysis of actual losses. IAS 39 also prohibits
the recording of provisions for contingent accounts. Any excess allowances must be reversed
in the income statement.
Revised IAS 39 introduced changes with respect to classification of financial instruments,
which have not been adopted by the Board. The revised version includes the following
changes:
 The option of classifying loans and receivables as available for sale was established.
 Securities quoted in an active market may be classified as available for sale, held-fortrading, or held to maturity.
 The “fair value option” was established to designate any financial instrument to be
measured at fair value through profit or loss, provided a series of requirements are met
(e.g. the instrument has been measured at fair value since the original acquisition date.)
 The category of loans and receivables was expanded to include purchased loans and
receivables that are not quoted in an active market.
The Board has also allowed capitalization of direct costs incurred for assessment of the
borrower’s financial position, evaluation and recognition of guarantees, sureties, or other
collateral instruments, negotiation of the terms of the instrument, and preparation and
processing of documents, net of income from loan fees. However, IAS 39 only permits
capitalization of incremental transaction costs, which are to be presented as part of the
financial instrument and may not be netted against loan fee income (see comments on IAS
18).
Regular purchases and sales of securities are to be recognized using the settlement date
accounting only.
Depending on the type of entity, financial assets are to be classified as follows:
a)
Pooled portfolios.
Investments in pooled investment funds, pension and retirement savings accounts, and
similar trusts are to be classified as available for sale.
b) Own investments of regulated entities.
Investments in financial instruments of regulated entities are to be classified as available
for sale.
Own investments in open investment funds are to be classified as held-for-trade financial
assets. Own investments in closed investment funds are to be classified as available for sale.
Entities regulated by SUGEVAL and SUGEF may classify other investments in financial
instruments as held-for-trading investments, provided there is an express statement of intent
to trade them within 90 days from the acquisition date.
Banks regulated by SUGEF may not classify investments in financial instruments as held to
maturity.
The above classifications do not necessarily adhere to the provisions of IAS 39.
The amendment to IAS 39 clarifies the existing principles that determine whether specific
risks or portions of cash flows are eligible for designation in a hedging relationship. The
amendments to IAS 39 became mandatory for 2010 financial statements, with retrospective
application. This amendment has not been adopted by the Board.
q) IAS 40: Investment Property
IAS 40 allows entities to choose between the fair value model and the cost model to measure
their investment property. The Standard issued by the Board only allows entities to use the
fair value model to measure this type of assets, unless clear evidence for determining the fair
value of the assets is unavailable.
r)
Revised IFRS 3: Business Combinations
The revised standard (2008) incorporates the following changes:
 The definition of a business has been broadened, which is likely to result in more
acquisitions being treated as business combinations.
 Contingent consideration will be measured at fair value, with subsequent changes therein
recognized in profit or loss.
 Transaction costs, other than share and debt issue costs, will be expensed as incurred.
 Any pre-existing interest in the acquirer will be measured at fair value, with the related
gain or loss recognized in profit or loss.
 Any non-controlling (minority) interest will be measured at either fair value, or at its
proportionate interest in the identifiable assets and liabilities of the acquirer, on a
transaction-by-transaction basis.
Revised IFRS 3, which became mandatory for 2010 financial statements, will be applied
prospectively. This Standard has not been adopted by the Board.
s)
IFRS 5: Non-current Assets Held for Sale and Discontinued Operations
The Board requires that an allowance be booked for 100% of the carrying amount of assets
that have not been sold within two years. IFRS 5 requires that such assets be recorded and
measured at the lower of cost or fair value, discounting the future cash flows of assets to be
sold in more than one year. Accordingly, assets could be understated, with excess allowances.
t)
Amendments to IFRS 7: Financial Instruments – Disclosures
In March 2009, the IASB issued certain amendments to IFRS 7, Financial Instruments:
Disclosure, which requires enhanced disclosures about fair value measurements and liquidity
risk in respect of financial instruments.
The amendments require that fair value measurement disclosures use a three-level fair value
hierarchy that reflects the significance of the inputs used in measuring fair values of financial
instruments. Specific disclosures are required when fair value measurements are categorized
as Level 3 (significant unobservable inputs) in the fair value hierarchy. The amendments
require that any significant transfers between Level 1 and Level 2 of the fair value hierarchy
be disclosed separately, distinguishing between transfers into and out of each level.
Furthermore, changes in valuation techniques from one period to another, including the
reasons therefor, are required to be disclosed for each class of financial asset.
Furthermore, the definition of liquidity risk has been amended and it is now defined as the
risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset.
The amendments require disclosure of a maturity analysis for non-derivative and derivative
financial liabilities, but contractual maturities are required to be disclosed for derivative
financial liabilities only when contractual maturities are essential for an understanding of the
timing of cash flows. For issued financial guarantee contracts, the amendments require the
maximum amount of the guarantee to be disclosed in the earliest period in which the
guarantee could be called. These amendments have not been adopted by the Board.
u) IFRS 9: Financial Instruments
IFRS 9 deals with classification and measurement of financial assets. The requirements of
this Standard represent a significant change from the existing requirements in IAS 39 in
respect of financial assets. The Standard contains two primary measurement categories for
financial assets: amortized cost and fair value. The Standard eliminates the existing IAS 39
categories of held to maturity, available for sale, and loans and receivables. For an investment
in an equity instrument which is not held for trading, the Standard permits an irrevocable
election, at initial recognition, on an individual share-by-share basis, to present all fair value
changes in other comprehensive income. No amount recognized in other comprehensive
income would ever be reclassified to profit or loss at a later date.
The standard requires that derivatives embedded in contracts with a host contract that is a
financial asset within the scope of the standard not to be separated; instead the hybrid
financial instrument is assessed in its entirety as to whether it should be measured at
amortized cost or fair value.
This standard requires entities to determine whether presenting the effects of changes in the
credit risk of a liability designated at fair value through profit or loss would create an
accounting mismatch based on facts and circumstances at the date on which the financial
liability is initially recognized.
The objective of this IFRS is to establish the principles for the financial information about
financial assets so that it will present useful and relevant information for the users of the
financial statements facing the evaluation of the amounts, schedule and uncertainty of the
future cash flows of the entity. The standard includes three chapters on recognition,
impairment of financial assets and heading instruments.
This standard supersedes IFRS 9 (2009), IFRS 9 (2010) and IFRS 9 (2013). However, for
annual periods beginning in or before January 1, 2018, and entity may elect to apply previous
versions of IFRS 9 if, and only if the corresponding date of the entity initial application is
prior to February 1, 2015.
v) IFRS 10: Consolidated Financial Statements
This Standard provides a revised control definition and application guidance. Therefore, this
IFRS supersedes IAS 27 (2008) and SIC 12, Consolidation - Special Purpose Entities, and is
applicable to all investees.
Early application is permitted. Entities that apply this IFRS earlier must disclose that fact and
apply IFRS 11, IFRS 12, IAS 27 (as amended in 2011), and IAS 28 (as amended in 2011)
simultaneously.
An entity is not required to make adjustments to the accounting for its involvement with an
investee when entities that are previously consolidated or unconsolidated in accordance with
IAS 27 (2008), SIC 12, and this IFRS, continue to be consolidated or continue not to be
consolidated.
When application of this IFRS results in an investor consolidating an investee that is a
business not previously consolidated, the investor:
1) must determine the date when the investor obtained control of that investee on the basis
of the requirements of this IFRS; and
2) will assess the assets, liabilities, and no-controlling interests as if acquisition accounting
had been applied from that date.
If (2) is impracticable, then the deemed acquisition date must be the beginning of the earliest
period for which retroactive application is practicable, which may be the current period.
The standard is effective for annual periods beginning on or after January 1, 2013. Earlier
application is permitted. This standard has not been adopted by the Board.
w) IFRS 11: Joint Arrangements
This standard was issued in May 2011 with an effective date of January 1, 2013. The Standard
addresses the inconsistencies in the accounting for joint arrangements and requires a single
accounting treatment for interests in jointly controlled entities. This standard has not been
adopted by the Board.
The objective of this IFRS is to establish principles for joint arrangements disclosures.
It supersedes IAS 31, Interest in Joint Ventures and SIC 13, Jointly Controlled Entities,
nonmonetary contributions by ventures.
x) IFRS 12: Disclosure of Interests in Other Entities
This Standard was issued in May 2011 with an effective date of January 1, 2013. This
Standard requires an entity to disclose information that enables users of financial statements
to evaluate the nature and financial effects of its investments in other entities, including joint
arrangements, associates, structured entities, and “off balance” activities. This Standard has
not been adopted by the Board.
y) IFRS 13: Fair Value Measurement
This Standard was issued in May 2011 and clarifies the definition of fair value, establishes a
single procedure for measuring fair value, and defines the measurements and applications
required or permitted by IFRSs. This Standard is to be applied for annual periods beginning
on or after January 1, 2013. Earlier application is permitted. This Standard has not been
adopted by CONASSIF.
z) IFRS 15: Revenue from Contracts with Customers
International Financial Reporting standard IFRS 15, Revenue derived from contracts and
clients established principles for presentation of useful information to users of the financial
statements about the nature, amount, schedule and uncertainty of revenue and cash flows
arising from an entity´s contracts with their customers.
IFRS 15 applies to annual periods that begin in or after January 1, 2017. Earlier application
is permitted.
IFRS 15 supersedes:
a. IAS 11: Construction Contracts;
b. IAS 18: Revenue;
c. IFRIC 13: Customer loyalty programs;
d. IFRIC 15: Agreements for the construction of real estate;
e. IFRIC 18: Transfer of assets from customers; and
f. SIC-31 Revenue —Barter transactions involving advertising services.
Revenue is important information for users of financial statements, assessing the situation
and financial performance of an entity. However, the above requirements for the recognition
of revenue on International Financial Reporting Standards (IFRS) differ from accounting
principles generally accepted in the United States of America (US GAAP) and both
requirements sets needed improvement. The requirements for recognition of revenue from
previous IFRS provided limited guidance and, therefore, the two main standards for the
recognition of revenue, IAS 18 and IAS 11, could be difficult to apply to complex
transactions. Furthermore, IAS 18 provided limited guidance on many important issues of
revenue, such as accounting of agreements with multiple elements. Instead, US GAAP
comprised broader aspects in the recognition of revenue, along with numerous requirements
for industries or specific transactions, which resulted in a different accounting of similar
transactions.
Therefore, the International Accounting Standards Board (IASB) and the issuer of national
standards in the United States, the Financial Accounting Standards Board (FASB), initiated
a joint project to clarify the principles for recognition of revenue and to develop a common
standard for revenue to IFRS and US GAAP that:
a. Eliminates inconsistencies and weaknesses of the above requirements on
revenue;
b. Provides a solid framework to address the problems of revenue;
c. Improves comparability of recognition practices of revenue between entities,
industries, jurisdictions and capital market;
d. Provides more useful information to users of the financial statements through
disclosure requirements improved; and
e. Simplify the preparation of the financial statements, reducing the number of
requirements that and entity must refer.
The basic principle of IFRS 15 is that an entity recognizes revenue to represent transfer of
goods or services committed to customers in exchange for an amount that reflects the
consideration to which the entity expects to be entitled to exchange of such goods or services.
An entity recognizes revenue in accordance with the basic principle by applying the
following steps:
a.
Step 1: Identify the contract (contracts) with the client – a contract is an agreement
between two or more parties that creates enforceable rights and obligations. The
requirements of IFRS 15 apply to each contract which has been agreed with a client and
meets the specified criteria. In some cases, IFRS 15, requires an entity to combine
contracts and accounted for as one. IFRS 15 also provides requirements for the posting
contracts changes.
b.
Step 2: Identify performance obligations in the contract – a contract includes
commitments to transfer goods or services to a customer. If goods or services are different,
commitments and performance obligation are accounted for separately. A good or service
different if the client can take advantage of the good or service itself or with other resource
that are available to the customer and commitment of the institution to transfer the good
or service to the customer is separately recognizable from other contract commitments.
c.
Step 3: To determine the transaction Price – the Price of transaction is the amount
of consideration in a contract to which an entity expects to be entitled in exchange for the
transfer of goods or services involved with the client. The transaction price can be a fixed
amount of the consideration for the client, but may sometimes include a variable
compensation in cash or other form. The transaction price is also adjusted by the value of
money over time if the contract includes a significant financing component, as well as any
consideration payable to the customer. If the consideration is variable, an entity shall
estimate the amount of the consideration to which it shall be entitled to the exchange for
goods or services involved. The estimated variable compensation amount is included in
the price of transaction only to the extended that is highly likely that a significant reversal
of the amount of income recognized accumulated to not occur when the uncertainty
associated with the variable compensation was subsequently resolved.
d.
Step 4: Allocate the transaction price between performance obligations of the
contract –an entity usually allocate the transaction price to each performance obligation
based on the relative independent selling prices of each good or service involved in the
contract. If a selling price is not observable independently, an entity shall estimate.
Sometimes, the transaction price includes a discount or a variable amount of the
consideration that relates entirely to a part of the contact. The requirements specify when
an entity assigns the discount or variable consideration to one or more, but not all the
performance obligations (different goods or services) of the contract.
e.
Step 5: Recognize revenue when (or as) the entity satisfies a performance
obligation –an entity recognizes the revenue when (or as) it satisfies a performance
obligation by transferring goods or services committed to the client (which is when the
customer obtains control of that good or service). The amount of income recognized is the
amount allocated to the performance obligation satisfied. A performance obligation can
be met at any given time (usually for commitments to serve the customer). For
performance obligations that are satisfied overtime, an entity recognizes revenue over time
by selecting an appropriate method to measure the progress of the entity toward complete
satisfaction of that performance obligation.
aa) IFRIC 10: Interim Financial Reporting and Impairment
This statement prohibits the reversal of an impairment loss recognized in a previous interim
period, regarding to surplus value, investment in an equity instrument or a financial asset
booked at cost. IFRIC 10 applies to surplus value, investment in equity instruments and
financial assets booked at cost starting from the date the first time the criteria of measurement
of NIC 36 and NIC 39 was applied (i.e. January 1, 2004). The Board allows reversal of
estimates.
bb) IFRIC 12: Services Concession Arrangements
This interpretation provides guidelines for the posting of public service concession
arrangements to a private operator. This interpretation applies both to:
 The infrastructure that the operator builds or purchases from a third party, to be used for
the provision of services agreements; and
 Existing infrastructure to which the operator has access in order to provide the services
established in the agreement.
IFRIC 12 is mandatory for financial statements as of July 1, 2009. This IFRIC has not been
adopted by the Board.
cc) IFRIC 13: Customer Loyalty Programs
This interpretation provides guidance to the entity that grants credits –awards to its customers
for loyalty as part of sales transaction which, subject to compliance with any additional
condition established as a requirement, the customer can redeem in the future in form of
goods, free services or discounts. IFRIC 13 is mandatory for financial statements starting
from January 1, 2011. This IFRIC has not been adopted by the Board.
dd) IFRIC 14, IAS 19: Limit on Defined Benefit Asset, Minimum Finding Requirement and their
Interaction
This interpretation applies to benefits defined for former employees and other long term
benefits for employees. It also considers requirements to maintain a minimum level of
funding to any requirement to fund a benefits plan for former employees or other long term
benefits plans. It also covers the situation where a minimum level of funding may result in a
liability. The IFRIC 14 is mandatory for financial statements starting from January 1, 2011,
which retrospective application. This IFRIC has not been adopted by the Board.
ee) IFRIC 16: Hedges of a Net Investment in a Foreign Operation
This interpretation allows an entity using step considerations to choose an accounting policy
that covers the risk of exchange rate, in order to determine the accumulative adjustment of
currency conversion that is reclassified in results for the disposal of net investments in abroad
business, as if the direct method has been used. The IFRIC 16 is mandatory for financial
statements as of July, 1, 2009. The Board has not adopted his standard.
ff) IFRIC 17: Distribution of Non-Cash Assets to Owners
This interpretation provides guidance for accounting dividends payable distributed using
non- cash assets, at the beginning and the end of the period.
If an entity declares dividends to be distributed through non- cash assets, after the closing of
a reported period but before the financial statements are authorized to be issued, it will
disclose:
a) The nature of the asset to be distributed;
b) The carrying amount of the asset at the closing date; and
c) If the fair values are determined, wholly or partially, by reference to price quotes
published in an active market or are estimated using a valuation method, as well as the
method used to determine the fair value and the assumptions applied when using a
valuation method.
IFRIC 17 is mandatory for financial statements starting from July 1, 2009. This standard has
not been adopted by the Board. Its application is prospective; a retrospective application is
not permitted.
gg) IFRIC 18: Transfer of Assets from Customers
This interpretation offers guidance for accounting of transfers of property, plant and
equipment for entities receiving such transfer from customers, as well as those agreements
in which an entity receives cash from customers and must use the cash amount only for
construction or purchasing property, plant and equipment. This IFRIC is mandatory for
financial statements from July 1, 2009. This IFRIC has not been adopted by the Board.
hh) IFRIC 19: Extinguishing Financial Liabilities with Equity Instruments
This interpretation provides guidance for accounting renegotiated terms of financial liability
and give rise to the entity that issues the equity instruments to extinguish the financial liability
totally or in part. IFRIC 19 is mandatory for financial statements starting from July 1, 2010.
This IFRIC has not been adopted by the Board.
ii) IFRIC 17: Distributions of Non- Cash Assets to Owners
This IFRIC is mandatory for financial statements from July 1, 2009. Its application is
prospective; a retrospective application is not permitted.
jj) IFRIC 18: Transfer of Assets from Customers
This interpretation is mandatory for financial statements form July 1, 2009. This
interpretation is applicable to entities that transfer assets to other entities for goods or services
of different nature, for which an income has to be recognized due to the difference in value.
kk) IFRIC 19: Extinguishing Financial Liabilities with Equity Instruments
IFRIC 19 is mandatory for financial statements starting from July 1, 2010.
ll) IFRIC 21: Levies
This interpretation addresses the accounting of a liability to pay a levy if that liability is
within IAS 37. It also addresses the accounting of a liability to pay a levy where the amount
and maturity are true.
This interpretation does not address the accounting of cost arising from the recognition of a
liability to pay a levy. Entities should apply other standards to decide whether the recognition
of a liability to pay a tax results in an asset or an expense.
The event that triggers the obligation and results in a liability to pay a levy is the activity that
produces the levy payment, as established by law. For example, if the activity that results in
the levy payment is to generate an income from ordinary activities in this period, and the
calculation of this tax is based on income from ordinary activities that took place in an earlier
period, the event that results in the obligation of the levy is the income generation in the
current period. Generating revenue in the previous periods is necessary, but not sufficient to
create a present obligation.
An entity does not have an implied obligation to pay a levy to be generated by future period
operation; as a result, the entity is economically compelled to continue operating in that future
period.
The preparation of financial statements under the going concern assumption does not imply
that an entity has a present obligation to pay a levy to be generated by operations in future
periods.
The liability to pay a levy is recognized progressively if the event results in the obligation
over a period (for example, if the activity that generates the payment of the tax occurs as
established by law, over a period). For example, if the event that results in the obligation is
the generation of a regular income for activities over a period, the corresponding liability is
recognized as the entity produces that income.
An entity shall apply this interpretation for annual periods beginning on or after January 1,
2014.
mm)
Amendments to Existing Standards:
Employee Benefits
(Amendment to IAS19)
This standard is modified to recognized the discount rate to be used corresponding with local
currency bonds.
The transition date is for annual periods that begin in or after January 1, 2016; it may be
applied in advance and disclose that fact. Any application adjustment must be made against
retained earnings at the beginning of the period.
This standard is for application in the periods that begin in or after January 1, 2013. It includes
changes referring to the benefit plans defined for which it previously required that the
remeasurement of the actuarial appraisals were recognized in the income statement or in other
integral results. The new IAS 19 will require changes in the measurements to be included in
other integral results and the cost of services and net interest to be included in the income
statement.
Sales or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28)
Loss of Control
When a controlling company loses control of a subsidiary, the controlling company:
a.
b.
c.
Will derecognize assets and liabilities of former subsidiary of the consolidated
statement of financial position.
Recognizes an investment retained in the former subsidiary at fair value and
subsequently accounted for this investment and the amount owed by or to the former
subsidiary thereof, in accordance with relevant IFRS´s. This retained interest at fair
value is measured again, as described in paragraph B98 (b) (iii) and B99(a). The
value measured again, if applicable, at the date when control is lost, is regarded as
the fair value on initial recognition of financial assets, in accordance with IFRS 9 or
cost on initial recognition of an investment in an associate or joint venture.
Will recognize gain or loss associated with the loss of control of previous controlling
company as specified in paragraphs B98 to B99A.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28),
Issued in September 2014, it amended paragraphs 25 and 26 and added paragraph B99A. An
entity will apply such amendments in a prospective manner to transactions that take places
in annual periods starting as of January 1, 2016. An early application is allowed. If an entity
applied the amendments earlier, this must be disclosed.
Accounting for Acquisition of Interests in Joint Operations
(Amendments to IFRS11)
This IFRS requires the acquirer of an interest in a joint venture whose activity is a business,
as defined in IFRS Business Combinations, to apply all the principles on accounting for
business combinations of IFRS 3 and other IFRS, except those in conflict with the guidelines
of this IFRS. In addition, the acquirer shall disclose the information required by IFRS 3 and
other IFRS for business combinations.
Accounting for Acquisition of Interests in Joint Operations (Amendments to IFRS 11), issued
in May 2014, amended the heading after paragraph B33 and added paragraphs.
If an entity applies these amendments but doesn’t apply IFRS 9, the reference in these
amendments to IFRS 9 shall be read as a reference to IAS 39, Financial Instruments:
Recognition and Measurement. Amendments to IFRS 11, May, 2014. An entity shall apply
those amendments prospectively for annual periods that begin in or after January 1, 2016.
Earlier application is permitted. If an entity applies these amendments for a period beginning
before, it will disclose that fact.
Equity Method in Separate Financial Statements
(Amendments to IAS 27)
Separate financial statements are those presented by a controller (inverter with control on a
subsidiary) or an investor with joint control in an investee or significant influence over it.
Subject to the requirements of this standard, an entity may choose to account for its
investment in subsidiaries, joint ventures and associates at cost, in accordance with IFRS 9,
Financial Instruments, or using the equity method as described in IAS 28, Investments in
associates and joint ventures.
When an entity prepares separate financial statements, it shall account for investments in
subsidiaries, joint ventures and associates:
a. at cost, or;
b. in accordance with IFRS 9; or
c. Using the equity method as described in IAS 28.
An entity shall apply the same accounting for each category of investment. The accounted
investments are registered at cost or using the equity method in accordance with IFRS 5, noncurrent assets held for sale and discontinued operations, in cases where they are classified as
held for sale or for distribution (or included in a group of assets for disposal that are classified
as held for sale or for distribution). Under these circumstances, the measurement of
investments accounted is not amended in accordance with IFRS 9.
The equity method in separate financial statements (Amendments to IAS 27), issued in
August, 2014, amended paragraphs 4 to 7, 10, 11 B and 12. An entity shall apply those
amendments for annual periods beginning on or after January 1, 2016, retrospectively, in
accordance with IAS 8, Accounting Policies, changes in Accounting Estimates and Errors.
Earlier application is permitted. If an entity applies these amendments for a period beginning
before, it will disclose that fact.
Novation of Derivatives and Continuation of Hedge Accounting
(Amendments to IAS 39)
This document established amendments to IAS 39, Financial Instruments: Recognition and
Measurement. These amendments result from proposals of the standard project 2013/2:
Novation of Derivatives and Continuation of Hedge Accounting, and the corresponding
responses received (Proposed Amendments to IAS 39 and IFRS 9) was published in February
2013.
IASB has amended IAS 39 to discontinue exempting the hedge accounting when the novation
of a derivative designed as a hedging instrument meets certain conditions. A similar
exception will be included in IFRS 9, Financial Instruments.
It is effective from annual periods beginning on or after January 1, 2014.
Disclosure of the recoverable amount of non- financial assets
This document establishes the amendments to IAS 36, Impairment of Assets. The
amendments result from proposal of the standard project 2013/1, Disclosure of the
recoverable amount of non- financial assets and corresponding response received (Proposed
Amendments to IAS 36) that was published in January 2013.
In May 2013, paragraphs 130 and 134 were amended as well as the heading of paragraph
138. An entity shall apply these amendments retrospectively for annual periods beginning on
or after January 1, 2014. Earlier application is permitted. An entity shall not apply those
amendments in periods (including comparative periods) in which IFRS 13 is applied.
The changes made in this document along the disclose requirements to IAS 36 with the
original intention of the IASB. For the same reason, the IASB also amended IAS 36 to require
amount of assets that present impairment is based on fair value less cost of disposal,
consistent with the disclosure requirements for impairment assets presented in U.S. GAAP.
nn) Amendments to Standards Established by CONASSIF
The following amendments to the accounting standards applicable to entities supervised by
SUGEF, SUGEVAL, SUGESE, SUPEN and non- financial issuers established by
CONASSIF shall apply from January 1, 2014:
1. Delete the last paragraph of article 8. Therefore, not allowed to commercial state
banks to capitalize total revaluation surplus, but may continue to capitalize
revaluation surplus as permitted by IAS 16, i.e., the part already used of that surplus
(or realized by selling the asset), since on that subject no exception is included by
SUGEF.
2. Delete paragraph two of article 19, IAS 40, Investment Property for rent or goodwill.
Therefore, the adjustments to fair value of investment properties are recognized in
the income statement.
3. Modify paragraph four of the concept of Group 130, Loan portfolio, so the
commissions representing an adjustment to the effective yield should be recorded as
a deferred credit.
4. Add the account of deferred direct cost associated with credit, recognizing the direct
cost incurred by the entity in the formalization of credit and must be repaid by means
of effective interest method.
5. Another important change is that the formats and the scope of the information to be
disclosed in the financial statements will be made mostly based on IAS 1, including
the concept of other comprehensive income, adjusting the statement of changes in
equity, and requiring the presentation criteria, for the intermediate financial
information in accordance with IAS 34.
(42)
Figures for 2014
As of March 31, 2016, financial statement figures have been reclassified for comparison with
those of 2014, per modifications to the Chart of Accounts and SUGEF Directive 31-04:
"Regulation on the financial information of entities, groups and financial conglomerates"
approved by CONASSIF.
In the statement of comprehensive income, losses (net) for foreign exchange differences in the
amount of ¢701.682.460, are included. In the financial statements as of March 31, 2015, the
exchange rate differences were presented as a gain for exchange differences in the amount of
¢28.441.343.644 and losses from foreign exchange difference of ¢27.739.661.184.
(43)
Relevant and subsequent events
As of March 2016, there are relevant and subsequent events to disclose as follows:
On January 14, 2015, according to the latest regulation proposal notified to the Bank by the Tax
Authorities, regarding the items representing a tax contingency from a legal risk point of view
that would mean an eventual confirmation of the payment obligation or future dismissal, and in
order to make the corresponding provision considering the legal risk involved, it is indicated that
the total amount for tax adjustments, interests and penalties as of January 8, 2015 is of
¢5.116.774.222.
The Bank expressed partial disagreement with the proposed regulation and is expecting the
administrative liquidation to be notified, containing concrete facts and legal principles motivating
the differences in the tax bases and tax fees.
As of July 2015, during the negotiations of the IV Labor Collective Agreement, several
agreements were reached, among them:
1. Deletion of article 8, which established the payment of an incentive for productivity
and adopts the presidential directive number 26, as of 2016.
2. Amendment to the payment formula for overtime in accordance with the provisions
set forth in the Labor Code.
3. Amendment to the calculation method for the severance pay because previously it
was done based on a month ( (30 days), and now for employees with less than 20
years of service, it is established by periods, as stipulated in article 29 of the Labor
Code.
4. The possibility of voluntary job mobility based on a transitory article that would apply
a maximum period of 2 months as of the validation of the agreements by the Ministry
of Labor.
As of August 2015, the Ministry of Labor and Social Security validated the IV Collective Labor
Agreement to include a transitional provision authorizing the termination of an employment
agreement by mutual consent:
Transitional Provision I.
With the purpose of strengthening and modernizing the Bank, during a two-month period as of
the day following the validation of this Collective Labor Agreement by the Ministry of Labor, an
employee with more than ten years of service at the Bank can request the termination of his/her
employment agreement by mutual consent with the corresponding severance pay of a month
salary per each year worked or a fraction longer than six months, with a maximum ceiling of
thirty-five months.
The average salary will be calculated in accordance with Article 30 subparagraph b) of the
Labor Code.
From the severance pay, the employer’s contributions to the Employees’ Association will be
deducted for the mandatory pension plan and the labor capitalization fund.
Employees who use this benefit shall be subject to the provisions contained in subparagraph b)
of Article 586 of the Labor Code.
The following persons cannot use this benefit until they are released from the charges or a final
ruling is issued in their favor:
1. People under a preliminary investigation
2. People subject to a disciplinary and/or civil administrative proceeding for an alleged
irregular act
3. People facing a complaint against them for alleged sexual or labor harassment
4. People facing a civil and/or criminal proceeding.
For the purposes of this transitional provision, the years of service in other entities in the public
sector or at the Bank or its subsidiaries with an employment relationship that was previously
terminated cannot be taken into account to calculate the years of service at the Bank.
By virtue of the foregoing, the maximum date to file the request to resort to this transitional
provision expires on October 21, 2015, and this date cannot be postponed.
As of October 21, 2015, about 260 employees were added to the Transitional Provision of this
Collective Labor Agreement.
On February 22, 2016, BCR Sociedad Administradora de Fondos de Inversión S.A. distributed
dividends amounting to ¢2.000.000.000 in accordance with General Extraordinary Stockholders’
Meeting Nº 01-16.
It should be pointed out that the amount of ¢500.000.000 is to be allocated, and this allocation is
being processed at SUGEVAL and the National Registry of Securities because it is related to the
capital stock.
(44)
Date of authorization for issuance of the financial statements
The General Management of the Bank authorized the issuance of the consolidated Financial
Statements on April 29, 2016.
SUGEF might require amendments to the Financial Statements after the date of authorization for
issuance.

Banco de Costa Rica and Subsidiaries Unaudited Consolidated

Transcription

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