Annual Report 2003 Bank van de Nederlandse Antillen

1
Annual Report 2003Bank van de Nederlandse
Antillen

• Willemstad, July 5, 2004

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Developments in the real sector
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Macro-economic key figures main trading partners

• Further strengthening US economy.
• Further deterioration Dutch and Venezuelan
  economies.

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A regional perspective(2002)
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Economic developmentNetherlands Antilles

• Real growth GDP increased from 0.4 in 2002 to
  1.4 in 2003.
• Inflation increased from 0.4 in 2002 to 1.9 in
  2003.

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Main developments in 2003

• Continuation economic recovery
• Growth export
• Higher consumption (private and government)
• Export growth due to
• Further growth in tourism.
• Favorable performance transportation sector.
  Decline in private investment.
• Decline in activities international financial and
  business services sector.
• Increase in unemployment rate.

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Main developments in 2003 (cont.)

• Increase in inflation
• Increase utility prices due to higher oil prices
• Appreciation euro
• Higher inflation main trading partners USA and
  Venezuela

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Labor market of the Netherlands Antilles

• Increase in unemployment rate because labor
  force grew stronger than employment.
• Increase in labor force due to higher migration
  to the islands and legalization illegal aliens.

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Public sector developments
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Budgetary development General Government (Cash
basis NAf mln)

• Higher expenditures due to goods services,
  interest payments and capital transfers.
• Higher revenues due to transfer dividend tax by
  Dutch government and dividends government-owned
  companies.

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Overview cash operations General
Government (Cash basis NAf mln.)

• Cash deficit first quarter 2004 amounts to NAf
  51 million.

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Composition of revenuesGeneral Government
Share taxes on goods services almost doubled
due to introduction sales tax.
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Composition of expendituresGeneral Government
Decline share personnel costs due to lay-offs
Increase share interest payments due to rising
debt
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Budgetary development Central government (Cash
basis NAf mln.)

• Higher expenditures due to goods services,
  transfers to other levels of government and
  capital transfers.
• Higher revenues due to transfer dividend tax by
  Dutch government.

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Budgetary development Curacao (NAf mln.)

• Higher revenues due mainly to share in transfer
  dividend tax by Dutch government and dividend
  government-owned companies.
• Higher expenditures due mainly to goods
  services and personnel costs (pension premiums).

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Development in total public debt (NAf mln.)

• Total debt 4.4 billion
• 90 of GDP

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Development in total public debt (cont.)(NAf
mln.)

• Share domestic component of 82 in 2003.

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Development in interest payments(NAf mln.)

• Interest payments amounted to NAf 252 million in
  2003 (24 of tax revenues and 17 of
  expenditures).

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Net borrowing of the governments
Note 2003 central government excluding debt
conversion SVB (NAf. 342 million)

• Net borrowing up to June 30, 2004 NAf 197
  million
• Central government NAf 113 million
• Curacao NAf 84 million

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Government bonds maturity scheduleAs per June
30, 2004

• Average annual maturity 2004-2011 NAf 221
  million
• Central government NAf 142 million
• Curacao NAf 79 million

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The external sector
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Balance of payments Transaction basis (NAf mln.)

• Balance of payments surplus of NAf 35 million in
  2004-I.

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Current account balance (NAf mln.)

• Small surplus in 2003 due mainly to higher
  earnings from bunker sales and tourism.

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Foreign exchange revenues from services(NAf mln.)
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Tourism revenues by islandCash basis (NAf mln.)

• Shares in 2003
• St. Maarten 62
• Curacao 34
• Bonaire 4

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Foreign exchange contribution international
financial and business services sector(NAf mln.)

• Higher profit tax in 2003 due to transfer of
  dividend tax by the Netherlands (NAf. 54 million).

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Composition current foreign exchange revenues
2003
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Development in international reserves (1)

• Import coverage on June 25, 2004 2.7 months.

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Monetary
developments
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Development in the money supply(NAf mln.)

• Money supply increased by 8 in 2003 (NDA 8 and
  NFA 9)

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Changes in domestic demand for money by
sector(NAf mln.)

• Monetary expansion by the government and the
  private sector slowed in 2003.

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Development in credit extension Leeward Islands
Total
0
5
-2
4
9
3
33
Development in credit extension Windward Islands
Total
9
3
2
16
9
-1
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Development in domestic interest rates

• Commercial bank rates continued to decline.
• Government bond yield started to increase again.

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The financial sector
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Macro-prudential indicators
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Balance sheet development domestic banks(NAf
mln.)

• Assets increased by 4.8 in 2003
• Increase in lending.
• Increase in cash holdings.
• Increase in assets funded primarily by savings
  and time deposits.
• Capitalization remained adequate.

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P L development domestic banks(NAf mln.)

• Higher operational income in 2003 due to other
  income.
• Slight decline in expenditures.
• Net operating income before taxes improved to NAf
  95.3 million.

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Balance sheet development international
banks(NAf bln.)

• Assets decreased by 5.4 in 2003 due to decline
  in loans.
• Borrowings comprised 55 of total funding.
• Capitalization above international standard of 8.

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Institutional investors
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Solvency insurance sector(NAf mln.)
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Balance sheet domestic life insurance sector(NAf
mln.)

• Total assets increased by 8.3 in 2002.
• 74 of total assets comprises investments.
• Equity position three and a half times more than
  required.

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Balance sheet domestic nonlife insurance
sector(NAf mln.)

• Total assets increased by 75.6 in 2002 reaching
  pre-1999 levels.
• 47 of total assets was invested.
• Capitalization increased and remained well above
  the required solvency margin.

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Net income domestic insurance companiesBefore
taxes (NAf mln.)

• Net result life insurance industry declined to
  NAf 14.0 million (14.1) in 2002 due mainly to
  higher net benefits paid.
• Net result nonlife insurance industry back to
  normal levels 2001 was exceptional due to
• low net claims incurred
• high underwriting profit
• high net investment income

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The End