Read untitled text version

Ontwerp/layout: I.D. Graphics Foto's: Hubert Hermelijn, I.D. Graphics CTP en druk: Leo Victor N.V.




Hakrinbank is a dynamic, innovative bank that provides its clients with a comprehensive range of high-quality, customised financial services. Our highly skilled employees work together as a team to maximise client satisfaction.

The staff party held in Hotel Torarica to celebrate the 70th anniversary of Hakrinbank.

28 JUNE 1936

28 JUNE 2006


On 28 June 2006 it was exactly 70 years since Hakrinbank started providing services to the community of Suriname. The bank began as a family business under the name of O.R.G.Vervuurts Banking Corporation and grew steadily over the subsequent years. In 1943, it amended its Articles of Association and changed its name to Vervuurtsbank N.V. The bank's healthy growth over the years meant that the original head office on Keizerstraat had become too small by 1971. It was consequently decided to move the head office to Dr. Sophie Redmondstraat 11-13. This office building, which is majestic by the standards of Suriname, is still the highest in Paramaribo. In the same year, the bank decided to restructure. This restructuring included a number of well-known foreign banks and the government of Suriname acquiring shares in the bank, as well as the bank's name being changed to Handels- Krediet- en Industriebank N.V. or Hakrinbank for short. At the same time, the bank installed its first computer and was at that time the only bank in the country to have an automated administration system. In the first half of the 1980s, all the bank's shares once again came into Surinamese ownership. Thanks to the efforts of all its employees, both now and in the past, and the support and trust of all its clients and relationships, Hakrinbank has been able to establish a solid and lasting place for itself in our society. The services we provide as a leading banking institution comprise a wide range of financial products.We are rightly proud of the prominent role we play in product innovation, as witnessed, for example, by the fact that we were the first bank, in early 2004, to introduce internet banking to Suriname.

It is now 2007 and our bank is facing a series of major challenges as a result of the rapid and far-reaching changes in both the national and international arenas. These changes include the increasing competition resulting from developments in the Surinamese banking market and the country's continuing economic integration into Caricom and other economic alliances, as well as tighter regulations and the increasing compliance requirements. Clients are also becoming more critical and expect high-quality services and modern banking products. These developments are making it increasingly difficult for smaller banks to fund the rising level of hardware and software investments that are needed. Such banks are consequently increasingly seeking to merge or acquire other organisations in order to achieve the required critical mass. The efforts and commitment of our employees will ensure that we respond effectively to these challenges and continue providing services to the community of Suriname so that our bank develops and flourishes, our employees' welfare remains assured and we achieve a return for our shareholders and thus also help to promote the further development of Suriname. We are proud that Hakrinbank has been able to celebrate its seventieth anniversary in such good economic health, with various growth and profitability records being achieved in this anniversary year. The celebrations of this anniversary are very much a dominant theme of this annual report. Our head office in illuminations can be seen on the front cover, while various aerial photographs of the celebrations can also be found on the inside pages. Hakrinbank owes a great debt of gratitude to all those who have helped and supported it over the years.


From left to right: Harold Liu Hung Chung (Assistant Managing Director Operations), Jim Bousaid (Chief Executive Officer), Mariette Tjon A Ten (Chief Operations Officer) and Gerard Raghoenathsingh (Assistant Managing Director Commercial).




Hakrinbank N.V. - 70 years in action




Key consolidated figures 2002 ­ 2006


Report of the Supervisory Board


Report of the Executive Board Looking back at the year under review Economic developments in 2006 Business of the bank Nationale Trust- en Financierings Maatschappij N.V. Financial developments of the bank Auditors' report

13 13 15 29 41 42 49

Financial statements 2006 Consolidated balance sheet Consolidated profit and loss account Company balance sheet Company profit and loss account Notes to the financial statements Other information Curricula vitae and details of ancillary positions of members of the Supervisory Board and Executive Board of Hakrinbank Addresses Appendix I: Suriname: Key macro-economic data

51 52 53 54 55 56 62

62 65 66


Organogram as at 31 December 2006



Assistant Managing Director Operations

Assistant Managing Director Commercial

Human Resources & General Affairs

Information & Communication Technology

Internal Audit




Administration & Management Information (Accounting)

Nationale Trust & Financierings Mij. N.V.

Credit Administration


Administration & Management Information (Financial Controlling)

Affiliates (Credits)

Foreign Transfers

Affiliates (Operations)

Treasury & Securities

Compliance & Legal

Maintenance & Technical Support

Risk Management


As at 31 December 2006

SUPERVISORY BOARD A.K.R. Shyamnarain - Chairman R.A. Mac Donald - Deputy Chairman H.B. Abrahams Ms G. Lie Sem-Nawikromo H.R. Ramdhani M.M. Sandvliet J.J.F. Tjang-A-Sjin

EXECUTIVE BOARD J.D. Bousaid Ms M.M. Tjon A Ten DEPUTY DIRECTORS H.S.K. Liu Hung Chung - Assistant Managing Director Operations G.M. Raghoenathsingh - Assistant Managing Director Commercial - Chief Executive Officer - Chief Operations Officer

Ms M.M. Tjon A Ten Human Resources & General Affairs M. Naarendorp, Head of Department N. Samoedj Insurance R. Tjon A Kon, Head of Department Credit Administration I. Loenersloot, Head of Department Compliance & Legal M. Schaap Maintenance & Technical Support R. Tjokro, Head of Department Foreign Transfers M. Lie A Njoek, Head of Department (until 31-12-2006) A. Hagens, Interim Head of Department (from 1-1-2007) L. Karg, Deputy Head of Department Information & Communication Technology T. Sanches, Head of Department R. Mahabier A. Semoedi T. Csaba Domestic M. Tjon, Head of Department J. Legiman Cash A. Budel-Samiran, Head of Department Affiliates Branchmanagers - Tourtonne V. Ramtahalsing - Nieuwe Haven N. Elshot-Chelius - Latour R. Wimpel - Flora R. Mohamatsaid

J.D. Bousaid Credits Account Managers C. Halfhide-Chou S. Kisoensingh-Jhauw S. Jadoenathmisier L. Venloo P. Quintius E. Frangie Treasury & Securities P. Tjon Kiem Sang, Head of Department R. Amirkhan Nationale Trust & Financierings Mij. N.V. H. Vijzelman, Head of Department R. Sitaram, Deputy Head of Department G. Jong Administration & Management Information R. Liesdek, Accounting R. Sheorajpanday, Financial controlling Internal Audit B. Jewbali, Head of Department Risk Management S. Shair-Ali, Head of Department Affiliates Branchmanagers - Nickerie R. Mangala, Head of Department A. Anandbahadoer, Deputy Head of Department - Tamanredjo S. Resomardono

Assets & Liabilities Management Committee



(in thousands of SRD)

2006 Balance sheet Cash and cash equivalents Clients Other assets Total assets Savings Other funds Shareholders' equity Total liabilities Results Operating income Operating expenses Provision for credit risks Operating profit before tax Taxes Net result Cash dividend Stock dividend Ratios (%) Efficiency ratio Return on average equity Return on average assets Capital ratio BIS ratio Share information*) Number of shares issued Net earnings per share Dividend per share Dividend percentage Payout ratio Net asset value (tangible) Market price of share Market capitalisation (x SRD 1,000) Number of employees Number of branches





104,159.4 306,449.0 195,854.6 606,463.0 239,200.9 334,024.4 33,237.7 606,463.0

97,240.7 229,730.0 144,708.6 471,679.3 185,265.1 265,183.5 21,230.7 471,679.3

104,589.0 161,942.5 133,074.3 399,605.8 121,691.3 262,371.4 15,543.1 399,605.8

68,977.0 95,350.4 87,195.8 251,523.2 81,220.0 158,331.4 11,971.8 251,523.2

64,498.2 60,123.8 56,401.5 181,123.5 61,063.3 13,689.0 6,271.2 181,123.5

49,096.1 27,708.4 1,439.3 19,948.4 7,181.4 12,767.0 4,657.0 -

36,659.5 21,690.5 1,725.9 13,243.1 4,767.5 8,475.6 2,731.8 -

27,500.6 17,405.2 1,515.9 8,579.5 3,088.5 5,491.0 1,862.8 -

22,012.8 13,989.0 1,240.7 6,783.1 3,120.2 3,662.9 1,076.9 11.6

15,664.4 12,120.1 1,196.8 2,347.5 845.1 1,502.4 317.5 5.3

56 46.90 2.37 5.48 11.31

59 46.10 1.95 4.50 10.01

63 39.91 1.69 3.89 10.19

64 40.16 1.69 4.76 11.68

77 26.41 1.01 3.46 9.74

465,696 27.41 10.00 6,666.67 36.48 71.37 136.00 63,335 254 7

465,696 18.20 6.07 3,910.67 32.23 45.59 124.00 57,746 247 7

465,696 11.79 4.00 2,666.68 33.92 33.38 106.00 49,364 238 7

465,696 1) 9.431 4) 2.804 2) 1,850.002 2) 29.402 25.71 79.20 36,883 235 7

388,0801) 4.2613) 0.9132) 600.0022) 21.132 16.16 61.00 23,673 216 7

*) x SRD 1. The amounts have been adjusted for the purposes of comparison and are based on a nominal value of SRD 0.15 per share. 1) Calculated on the number of shares before the stock dividend 3) Including shares in share premium reserve of SRD 0.00075 2) Excluding shares in share premium reserve 4) Including shares in share premium reserve of SRD 0.0015



From left to right: Harold Ramdhani, Roy Shyamnarain (Chairman), Johan Tjang-A-Sjin, Milton Sandvliet, Ghamie Lie Sem-Nawikromo, Richard Mac Donald (Deputy Chairman) and Enrico Abrahams.



To the shareholders

General We are pleased to present our report on our activities in the 2006 financial year, in which the celebrations of the bank's seventieth anniversary played an important part. In this report we also discuss the activities of the Audit Committee and the Remuneration and Nomination Committee. We have also included our recommendation that the financial statements for the year and the proposed appropriation of profit be adopted. Activities of the Supervisory Board The Supervisory Board held eleven ordinary meetings and fifteen extraordinary meetings during 2006. Ordinary meetings are held monthly in the presence of the Executive Board, while extraordinary meetings depend on the subjects to be discussed and are normally attended only by members of the Supervisory Board. Our supervision focused primarily on the company's results and strategy, and included regular discussions of the figures showing the results achieved to date, as presented by the Executive Board, and approval of the 2007 Policy Memorandum, together with the accompanying Operational and Investment Budget for 2007. Other subjects on the meeting agendas included corporate governance, risk management, the possibility of introducing a system of performance management for the Executive Board, adopting a new pension scheme for the Executive Board, a proposal to amend the pension scheme for some former members of the Executive Board, details of the working relationship between the Audit Committee and key officers in the bank's internal control organisation, devising a proposal for reviewing the remuneration of members of the Supervisory Board and various other subjects. Some of these issues are discussed in greater detail below. Corporate governance In June 2006, the chairman of the board and those of the Audit Committee attended the launch and inaugural meeting of the Caribbean Association of Audit Committee Members (CAACM) on behalf of the Supervisory Board. This Committee was set up by the Caribbean Association of Indigenous Banks

(CAIB), an alliance of regional banks of which our Chief Executive Officer, Jim Bousaid, is a Board member. Being a member of CAACM enables us to share in the knowledge and experience gained by other regional banks in the area of corporate governance and in devising strategies benefiting the work of our Audit Committee. The Supervisory Board intends to play an active role in the activities of both CAIB and CAACM wherever it considers such involvement to be necessary and effective. The chairman of the Supervisory Board and the Executive Board consequently attended CAIB's annual meeting in Port of Spain in November 2006, at which various issues relating to corporate governance, risk management and the implementation of the Basel II guidelines for banks in the region were discussed. Activities relating to the Executive Board The Supervisory Board asked an external consultant for advice in 2006 on devising and implementing a system of performance management for the Executive Board and on an accompanying bonus scheme for the individual members of the Board.We have since received the consultants' advice and are considering how best to implement the proposed performance management system. By introducing a related bonus system, the Supervisory Board is seeking to establish an effective and efficient link between the appraisal of performance and remuneration of the individual Executive Board members. Our primary goal in this respect is to encourage and inspire the Executive Board to make even more efforts to achieve the organisation's objectives. The Supervisory Board also gave further consideration to the existing pension arrangements for the Executive Board and concluded that these arrangements needed to be amended in order to bring them into line with the changed circumstances in the market. We have since adopted a new pension scheme, following advice from external specialists. We reported last year that the Executive Board would be expanded to include a Finance Director (Chief Financial Officer) within the foreseeable future. We duly started the appointment process in this respect on January 1st, 2007.


Activities of the Audit Committee In June 2006, the chairman of the Supervisory Board together with the chairman of the Audit Committee attended the launch and inaugural meeting of the CAACM. More information on this meeting can be found in the section on corporate governance above. In October 2006, the Audit Committee held a plenary meeting with all key officers in the bank's internal control organisation. The meeting included detailed discussions of existing relationships at work, relationships with the Executive Board, job descriptions and authorisations and staffing. A meeting, which was also attended by the Executive Board, was held in November 2006 with the external auditors to discuss the management letter for 2005. Agreements were reached for more intensive contact between the Executive Board, the Audit Committee and the internal and external auditors to discuss issues such as the management letters, the audited annual figures and other relevant financial reporting. In February 2007, the external auditors discussed ways of managing the risk of fraud with the Audit Committee, the Executive Board and the relevant bank officers. The Audit Committee reported on its activities at the ordinary meetings of the Supervisory Board throughout the year. Activities of the Remuneration and Nomination Committee The Remuneration and Nomination Committee focused in 2006 on formulating proposals for amending the pension schemes of the Executive Board and certain former members of the Executive Board. After advice on this subject had been obtained from external specialists, proposals were submitted to the Supervisory Board and have since been approved. The Committee was also advised by external consultants on proposals for introducing a system of performance management for the Executive Board and a linked bonus scheme. More information on this can be found in `Activities relating to the Executive Board' above. The Committee also contributed to the discussions within the Board on finalising the position of the CFO. More information on this is also provided above. The Committee reported on its activities at the ordinary meetings of the Supervisory Board throughout the year.

Independence and composition of the Supervisory Board The Supervisory Board believes that all its members comply with the requirements for independence as referred to in the Hakrinbank N.V. corporate governance code. Information on the individual Board members and their ancillary positions can be found elsewhere in this report. There were no changes in the Supervisory Board during the year under review, and the Board continues to have seven members. Mr. J.J.F. TjangA-Sjin and Mr. H.B. Abrahams are the next supervisory board members scheduled to resign by rotation. Both have confirmed that they wish to be considered for reappointment, and we recommend that they be reappointed. Remuneration of Supervisory Board members The Supervisory Board has for some time been considering how best to formulate a proposal for reviewing the remuneration paid to members of the Supervisory Board. The general principle in these discussions has been that members of the Board should be properly remunerated for their work. Account also has to be taken of the bank's corporate governance policy as proper performance of the Board's supervisory activities requires individual members of the Board to be closely involved in these activities of the bank. This inherently requires the members' responsibility for their work to be more clearly defined.And this in turn will ultimately result in a higher quality of supervision. The efforts to establish an appropriate level of remuneration take account in the first instance of the individual member's relevant expertise and the amount of time required to perform the activities pertaining to his or her position on the Board. The fees set should also take account of any representative tasks performed and any logistic and support facilities provided. Financial statements and proposed appropriation of profit The Supervisory Board is pleased to present the bank's financial statements for the 2006 financial year. These financial statements comprise the |company balance sheet as at 31 December, the company profit and loss account, the consolidated balance sheet as at 31 December, the consolidated profit and loss account and the accompanying notes. The financial statements have been audited by the external auditors, as provided for in the bank's


Articles of Association. This report includes the auditors' report and unqualified approval of the financial statements. The operating result is essentially the outcome of the realization of the policy objectives defined in the 2006 Policy Memorandum which were conscientiously implemented by the Executive Board. This year, too, the operating result was boosted to some degree by the continuing positive developments in Suriname's macro-economic environment. Prudent financial management by the government, together with the favourable prices on the world market for commodities such as oil, gold and alumina, has also undoubtedly played a role in this. It is interesting to note in this respect that much of 2006 was dominated by public discussions of whether we as a country are earning enough from our natural resources, which are largely owned by foreign multinationals. These discussions high-lighted the community's deep sense of involvement in and commitment to this subject and the need for the government's policy on developing our natural resources, to be transparent. This transparency is particularly important in respect of the revenues that we as a community generate from our natural resources and the way in which these revenues are used. There also seems to be public consensus on the need for reviewing the way in which we as a country have to date dealt with our natural resources. This may provide support for the government in its forthcoming negotiations on the bauxite operations in Western Suriname and the goldmining activities in the Nassau mountain area. Profit before tax amounted to SRD 19.95 million, with a net profit after tax of SRD 12.77 million. We propose appropriating SRD 4.66 million of this for dividend pay-out to the shareholders and transferring SRD 8.11 million to the general reserve. This means a dividend of SRD 10 per share of SRD 0.15 nominal value in our anniversary year of 2006. This dividend will be paid in cash. An amount of SRD 1.40 per share was previously distributed as an interim dividend in October 2006, which means a final dividend of SRD 8.60 per share of SRD 0.15 nominal value. We recommend that you, our shareholders, adopt these financial statements and thus ratify the Executive Board's management and the Supervisory Board's supervision of the bank in the year under review. We also recommend that you approve the proposed distribution of the profit for the year.

Vote of thanks for the good results The Supervisory Board would like to express its gratitude for the way in which the Executive Board represented the company's interests during the year under review and specifically its efforts and the strategic choices that produced the good operating result for the year. We would also like to thank the management and other employees for the way in which they have individually contributed to a successful year for the bank and to express our recognition of the vital role that they have played in achieving the objectives set. We would also like to thank our clients and all the other parties who demonstrated their trust and confidence in Hakrinbank N.V. during the year and provided such a good basis for a mutually beneficial relationship. Last but not least, we would like to thank you, our shareholders, for the support that you provide us in our work. This inspires us as an organisation to continue striving for excellence in everything we do. Paramaribo, 10 April 2007 Supervisory Board

A.K.R. Shyamnarain - Chairman R.A. Mac Donald - Deputy Chairman H.B. Abrahams Ms G. Lie Sem-Nawikromo H.R. Ramdhani M.M. Sandvliet J.J.F. Tjang-A-Sjin



Looking back at the year under review

Our bank recorded an excellent performance in 2006, the year in which it also celebrated its seventieth anniversary. Total assets in the consolidated balance sheet rose by almost 29% to SRD 606.5 million, while the profit before tax increased by over 50% to close to SRD 20 million.All the key performance ratios improved, with the return on assets rising from 1.95% to 2.37% and the return on equity increasing from 46.1% to 46.9%. The efficiency ratio improved from 59% to 56%, while the non-performing loans ratio decreased from 3% to 2%. The healthy development in the bank's operations is the result of a combination of factors, including the benefits that have accrued from the favourable macro-economic environment of low inflation, stable exchange rates and higher levels of economic growth. This also meant a good level of lending, with total lending increased with 33.4% which was higher than budgeted. An element of saturation was seen in the consumer credit market, while the foreign currency market was calm as a result of supply and demand essentially being in equilibrium at the prevailing exchange rates. The Minister of Finance stated in his Financial Memorandum for 2007 that the favourable economic developments were primarily a result of the "strict and disciplined implementation of the budgetary policy, underpinned by the favourable international economy and prudent monetary policies." Government finances improved considerably, with a small cash budget surplus being achieved for the first time in years. The budget policy and consistently strict monetary policy pursued by the Central Bank of Suriname resulted in the rate of inflation falling, while the Surinamese dollar remained stable against the US dollar, our most important trading currency. The favourable prices on the world markets for our mineral exports had a positive effect on the government's finances, the balance of payments and the monetary reserve. For the first time in years, there was a surplus on the current account, while the

monetary reserve rose substantially to reach an internationally acceptable level of import coverage of close to three months. Positive trends were also seen in the mining sector, as well as in the building and construction sector, the banana industry, aquaculture and the dairy and the water and soft drinks industries. Significant developments were also seen in the services sector, specifically in tourism and telecommunications. Suriname's National Planning Office is forecasting real growth of 5.8% in the country's GDP, and we regard this as realistic. The national debt also decreased during the year. The improved management of state debt and improved international debt servicing were two of the main reasons why the international rating agency Standard and Poor's decided towards the end of the year to increase Suriname's sovereign credit rating by one notch. This is the first upgrade in the country's rating since Suriname started working with the renowned rating agencies in 1999. The rating outlook also changed for the better, from stable to positive and this is often a precursor of an upgrade. Suriname is seeking to achieve an investment-grade rating in the medium term, and we also regard this as feasible. The IMF's Article IV consultation mission, which conducted its annual examination in early 2007, commented very favourably on the Surinamese policymakers' performance, which exceeded expectations. It was disappointing on the other hand to see the limited extent of progress achieved in Public Sector Reform, which is of such importance for the sustainable and balanced development of the country. The current favourable developments in the macro-economy mean this PSR programme can, however, succeed. The benefits of the economic growth are also not yet sufficiently visible in society as a whole. Our bank has benefited from the favourable economic environment of the year under review. The company policies pursued by the Executive Board have also proved successful and translated into good results for the year. The main business objectives in


2006 were to achieve sustainable growth, improve our profitability and balance sheet, increase our efficiency and reinforce our risk management policies and customer relationships. Other objectives included increasing the level of job satisfaction and social corporate citizenship. These objectives were largely achieved. A multi-disciplinary working group was set up during the year to develop a Balanced Score Card (BSC) for the bank as a whole. This card will also be extended in due course to departmental and individual levels, and will be an important tool for monitoring our operational performance. The Hakrinbank corporate governance code was introduced during the year under review and will serve as a basis for the bank's activities. The Supervisory Board also decided to set up an Audit Committee and a Remuneration and Nomination Committee during the year. In order to improve corporate governance, we established an independent Risk Management department during 2006. The primary aim of this department is to assess and manage risks within the limits set by the bank management and to optimise the balance between risk and return. Our subsidiary, Nationale Trust- en Financierings Maatschappij N.V., also had a reasonable financial year. Its total assets increased by 28%, while its profit rose by 16%. These growth rates were slightly below budget as a result of a certain element of

saturation in some categories of the consumer credit market and also the increased levels of competition. The price of Hakrinbank N.V. shares rose by 10% to reach SRD 136 at the 2006 year-end. The cash dividend proposed for the 2006 financial year amounts to SRD 10 per share of SRD 0.15 nominal value. This comprises the normal dividend of SRD 9 per share mark the bank's seventieth anniversary. An interim plus an additional amount of SRD 1 per share to dividend of SRD 1.40 per share was previously paid in October 2006, which means a final dividend of SRD 8.60 per share. This corresponds to a dividend percentage of 6,667% and a dividend pay-out ratio of 36.5%. In our view, this represents an attractive return for shareholders and translates into a favourable price/earnings ratio. More information on the economic developments in the year under review that are relevant to our bank's performance can be found elsewhere in this report. This report is more detailed than is customary in the banking sector because we decided that the limited availability of and access to up-to-date statistical information for large parts of the society justified our devoting extra attention to these aspects in our report. We also discuss various developments within Hakrinbank and Nationale Trust- en Financierings Maatschappij in this report, as well as the bank's financial development and the proposed appropriation of profit.


Economic developments in 2006

This section of the annual report discusses various economic developments in 2006 and includes a description and analysis of the government's finances, the national debt, monetary and exchange rate policies, the balance of payments and the monetary reserve, as well as information on developments in the real sector. Government finances The National Assembly approved the amended draft government budget for the financial year in September 2006. This was later than originally planned because the government, which took office in September 2005, first had to complete the handling of its Multi-Annual Development Programme, of which the budget of 2006 forms a part. The budget approved for the year was as follows: Budget for 2006 financial year (in millions of SRD)* Description Current account Capital account Total current and capital account

* Source: Financial Memorandum 2007

Expenditure on the current account totalled SRD 1,342.8 million, which was SRD 48.2 million, or 3.5%, lower than initially budgeted. This was primarily the result of lower spending on goods and services. Actual current expenditure was as follows (in millions of SRD): Wages and salaries Goods and services Subsidies/Government grants Interest on state debt Total current expenditure 652.9 280.3 307.9 101.7 1,342.8

Expenditure 1,391.0 445.9 1,836.9

Income 1,283.5 221.2 1,504.7

Difference (107.5) (224.7) (332.2)

As % of GDP (2) (4) (6)

As the Flash Report for 2006 shows, the actual figures on a cash basis were ­ as in the previous three years ­ significantly better than initially budgeted. Thanks primarily to higher than forecast direct tax revenues and dividend payments by state-owned companies (mainly State Oil Company), together with lower than budgeted capital expenditure, the country actually recorded a small surplus of SRD 49.2 million. This can be regarded as quite an achievement. Income on the current account totalled SRD 1,523 million, which was SRD 239.5 million, or 18.7%, higher than budgeted. The total amount can be broken down as follows (in millions of SRD): Direct taxes 563.5 Indirect taxes 610.8 Non-tax revenues 348.7 Total income 1,523.0

Wages and salaries in 2006 rose by around 30%, which was higher than budgeted. Expenditure on purchases of goods and services fell from the peak seen around the time of the parliamentary elections in 2005, while interest payments and subsidies rose by around 5%. Capital expenditure came out substantially lower than budgeted at around SRD 160 million because of the limited capacity available for the execution of projects. The deficit on the capital account totalled SRD 131 million. Net unforeseen income and expenditure resulted in an overall budget surplus of SRD 49.2 million instead of the deficit of SRD 332.2 million that had been budgeted. This surplus was used to repay foreign loans and some of the advances granted by the Central Bank of Suriname. Previous annual reports consistently referred to the weak structure of the government's finances and the threat that this represented for monetary and financial stability and,


therefore, for the economy as a whole. Calls were made for a properly planned Public Sector Reform Programme. It is regrettable therefore that, despite the good intentions expressed in this respect, no meaningful steps have yet been taken. And this in an environment in which the conditions for success are certainly present. In other words, the economy is growing and the outlook is favourable. The government's financial position has clearly improved, and there is consequently more scope for funding restructuring programmes. More attention needs therefore to be devoted to programmes of this nature, which are of such importance for the sustainable development of Suriname.

Developments in state debt The extent and nature of Suriname's domestic and foreign state debt are shown below. It should be noted that the definition of state debt used in the State Debt Act differs from the definition widely used in international circles. According to the Surinamese definition, state debt includes undrawn amounts under committed loan facilities and also state guarantees that have not been called, whereas the international markets do not normally include these items. It would be sensible, therefore, to consider revising the definition used in the State Debt Act. Consideration should also be given as to whether the statutory debt ceiling of 60% of GDP is perhaps rather high, given the government's repayment capacity.

Type of lender Domestic debt by lender (x SRD 1000) Owed to the Central Bank of Suriname Owed to banks Owed to private individuals Total domestic debt State guarantees Committed loans and guarantees Total domestic debt including committed loans and guarantees Foreign debt by lender (x USD 1000) Multilateral lenders Bilateral lenders Commercial lenders Total foreign debt State guarantees Committed loans Total foreign debt including committed loans

* Provisional figures Source: Government Debt Management Office

31 Dec. 2006*) 31 Dec. 2005 31 Dec. 2004

326,007 206,395 118,366 650,768 19,540 63,551

412,760 198,710 82,823 694,293 18,379 89,943

324,962 158,009 56,219 539,190 16,549 120,411




63,672 319,804 5,077 388,553 922 101,934 491,409

54,768 317,052 15,744 387,564 3,208 96,557 487,329

55,629 313,348 13,077 382,054 9,601 125,268 516,923


The state debt developed well in 2006, with domestic debt falling by slightly over 6% to SRD 650.8 million, while foreign debt remained essentially unchanged. The rise in the value of the euro resulted in an increase in euro-denominated debt when converted into US dollars. The foreign debt ratio (i.e. foreign debt as a percentage of GDP) decreased to around 20%, which compares very well to other countries in the region. The reduction in domestic debt is the result of repayments of floating-rate loans provided by the Central Bank of Suriname. There was little change in the amounts owed to banks because no new treasury paper was issued. Some of this short-term paper is expected to be repaid in 2007 because of the state's improved financial position. In recent years Suriname has generally complied with its repayments commitments to multilateral and commercial lending institutions, and this was also the case in 2006. During the year, the bilateral loans from Japan, Germany and Italy were either repaid in full or restructured. Some repayments of amounts owed to Brazil and the United States are, however, overdue, and these loans need to be restructured as soon as possible. There are some indications that Suriname will be able to count on an element of debt-forgiveness.

The improved management of state debt and the country's improved compliance with its international debt repayment commitments were two of the main reasons why the international rating agency Standard and Poor's decided to increase Suriname's creditworthiness by one notch to `B' for international creditworthiness and `B+' for domestic loans. Another important aspect is the "positive outlook" in the rating as this is often a precursor of a rating upgrade. Assuming the current policies continue, we expect to see a further improvement in Suriname's credit rating during 2007. Monetary developments The Central Bank of Suriname relaxed its tight monetary policy to some extent in 2006. At the start of the year, for example, the cash reserve requirement that has to be held in Surinamese dollars was reduced from 30% to 27% of the reserve base. The latter comprise all the balances held by third parties in SRD at the country's banks. This was one of the reasons prompting the commercial banks to cut their lending rates by an average of two percentage points. The percentage of the compulsory cash reserve that may be used for long-term, low-interest housing loans was increased from 8% to 9% of the reserve base.

The following table shows the changes in the money supply in the Surinamese economy (M2, in millions of SRD): 2006*) 1. Liquidity created for the state 2. Lending to the private sector 3. Other liquidity created Total domestic liquidity created 4. Liquidity from abroad Total increase in M2 Liquidity ratio (M2 : Nominal GNP market prices)

*) Provisional figures 1) Own estimates Source: Central Bank of Suriname

2005 25.4 71.5 (59.9) 37.0 57.4 94.4 18.8

2004 103.3 23.2 (64.5) 62.0 109.5 171.5 20.1

(31.5) 58.8 (88.2) (60.9) 262.7 201.8 21.11)


Domestic M2 liquidity, which is an important measure of the effects of monetary policy, rose in 2006 by SRD 201,8 million to SRD 1,082 million. This increase of 22.9% was wholly attributable to inflows from abroad as the net effect of various domestic factors was a reduction in the money supply. Gross lending to the real sector added SRD 58.8 million to the money supply, while the government cash surplus reduced it by SRD 31.5 million. The growth in the money supply resulted in a rise in the liquidity ratio, which is the domestic M2 measure of liquidity as a percentage of GNP. This measure currently remains just below the long-term average of around 25%, which suggests that the monetary and real sectors of the economy are reasonably in equilibrium. It should, however, be noted that the ratio takes no account of the effect of the dollarisation of the economy. The reserve requirements for foreign currencies remained unchanged in 2006 at 33.3% of the relevant reserve base. Banks are permitted to hold part of their compulsory cash reserves in highquality, liquid assets that are likely to generate a reasonable return on investment. On 2 January 2007, the domestic currency reserve requirement was further reduced from 27% to 25% of the reserve base. This was a responsible move, given the stable macro-economic and monetary

environment. The percentage of the reserve base allowed to be used for low-interest housing loans was increased at the same time from 9% to 10%. The reduction in the SRD cash reserve was one of the reasons why the commercial banks were able to reduce their SRD annual lending rates further to around 12% - 13%. Rates have fallen considerably in recent years as a result of the falling inflation rate. On 1 January 2007, the interest on 6-month Republic of Suriname treasury paper was also reduced further from 10% to 8% a year, while the rate charged on advances by the Central Bank fell to 10% a year. The monetary policy pursued in 2006 is expected to continue in 2007. We are once again, however, forecasting fairly substantial inflows from abroad, and it is important to ensure that these do not result in inflationary pressure within the country's domestic economy. Exchange rate It was calm on the exchange rate front throughout 2006 thanks to the prudent budgetary and monetary policies pursued. The inflows of foreign currency (primarily from the mining sector) also contributed to this calmness. Supply and demand on the currency market were clearly in equilibrium at the prevailing pricing levels. The following chart shows the movements in the US dollar in 2006.

USD buying and selling rates in 2006

2.82 2.80 2.78 2.76 2.74 2.72 2.70

Buying Selling


2.746 2.800


2.750 2.805


2.746 2.800


2.742 2.800


2.747 2.800


2.747 2.800


2.747 2.800


2.747 2.800


2.753 2.800


2.753 2.800


2.750 2.800


2.753 2.800


As the chart shows, the average USD selling rate in 2006 was SRD 2.80, which was less than 1% above the Central Bank of Suriname's target rate and within the agreed bands. On 3 April 2006, the Central Bank increased its USD selling rate from SRD 2.77 to SRD 2.78. The euro strengthened significantly against the US dollar during the year in response to various international economic and political developments. Given that the SRD is linked to the USD and consequently floats against the euro, the latter currency became considerably more expensive during the year. The Central Bank of Suriname's selling rate rose from SRD 3,298 to the euro at the 2005 yearend to SRD 3,672 at the end of 2006. In other words, an increase of almost 12%. In view of the policies that the monetary authorities will continue to apply and the continuing favorable developments on relevant international markets, we expect the exchange rate to remain stable in 2007. Balance of payments The favorable prices in the world markets for our most important mineral exports in 2006 resulted in a significant increase of 28% to USD 931.1 million in the value of our exports. The completion of various large projects in 2005 meant that the mining sector required lower levels of imports in the year under review, and overall imports consequently rose less rapidly. This in turn resulted in a trade surplus of USD 140.7 million. The deficit on the services account was substantially lower than in 2005. The various developments referred to above had a beneficial impact on the current account, with a positive balance of USD 94.3 million being achieved for the first time in years. The movements on the various sub-accounts that make up the balance of payments resulted in the monetary reserve increasing to USD 258.9 million. The outlook for 2007 is good, which means that the trend seen in 2006 can be expected to continue.

Balance of payments on cash basis (in millions of US dollars)

2006*) 2005*) Goods Services Primary incomes Income transfers


140.7 (91.2) 40.5 (30.7) (147.7) (129.7) (51.6) (40.4) (62.9) 35.9 22.1 13.7

Current account 94.3 (257.2) (138.4) Capital account (239.9) 42.3 (13.1) 1) 232.3 231.8 188.6 Items still to be classified Net non-monetary sectors 86.7 16.9 37.1

* Provisional figures 1) Movements in residents' foreign currency accounts. Source: Central Bank of Suriname

One of the winners of the colouring competition arranged to mark the launch of the Anansi savings account comes to collect her prize.


Monetary reserve Net foreign currency assets rose in 2006 by USD 96.3 million, or 59.2%, to USD 258.9 million. This translates into around 2.8 months' coverage of imports of goods and services.

Development of the monetary reserve (in millions of USD)

Year-end Description 1. Monetary authorities a. Gold reserves b. IMF special drawing rights c. IMF reserve position d. Foreign exchange receivables e. Foreign exchange owed to residents f. Secured foreign exchange obligations Total 1 2. Currency banks a. Foreign exchange receivables b. Foreign exchange owed to residents c. Foreign exchange owed to non-residents Total 2 Total 1 +2 3. Amounts owed in SRD to non-residents Net foreign exchange assets

* Provisional figures Source: Central Bank of Suriname




23.0 1.3 9.2 235.5 (28.8) (0.6) 239.6

16.0 2.0 8.8 138.4 (22.5) (0.6) 142.1

8.9 2.1 9.5 118.0 (22.1) (1.2) 115.2

303.5 (253.7) (24.3) 25.5 265.1 (6.2) 258.9

242.9 (211.2) (5.3) 26.4 168.5 (5.9) 162.6

202.5 (165.7) (4.2) 32.6 147.8 (5.6) 142.2

Despite the significant increase, the monetary reserve is still slightly below the internationally accepted standard of at least three months' import coverage. It is also, therefore, below the more conservative norm that includes foreign currency liabilities repayable within one year. It should, however, be noted that the mining companies operating in Suriname do not use our currency

reserves for their imports. In recent years, importers have also been looking to the exchange bureau in Suriname to meet their needs for foreign currency. The monetary reserve is expected to continue growing in 2007, and this will help reinforce public confidence in the external value of the Surinamese dollar.


Surinamese Stock Exchange

The following table provides an overview of trade on the Surinamese Stock Exchange in 2006


Nom. value Turnover per share (number of shares) 0.10 0.01 0.025 0.01 0.15 0.01 0.01 5.00 0.10 0.10 0.01 151,604 16,575 11,845 3,995 1,574 862 100 10,333 196,888 272,856 469,744

Effective turnover

Opening price Jan. 2006 6.25 6.10 7.68 1.60 124.00 5.20 9.30 51.00 27.00 9.00 21.00

Closing price Dec. 2006 11.60 6.80 9.00 1.80 136.00 5.20 8.60 73.00 39.00 9.00 21.50

Assuria C.I.C. De Surinaamsche Bank Elgawa Hakrinbank Margarine & Vettenfabriek Self Reliance Surinaamse Brouwerij Torarica Varossieau VSH-United Total shares Torarica rights issue Total general

Stock market index as at 31 December 2006: 1,480.6 Source: Securities Trading Association of Suriname

404,760.40 110,467.00 99,498.00 76,409.65 13,625.90 33,187.00 950.00 217,793.00 958,690.95 811,275.50 1,769,966.45

For the Surinamese Stock Exchange, the year 2006 was another year of considerable growth, with effective turnover increasing by over 114% to SRD 1.77 million. The highest trading volumes were in Assuria, VSH-United and Consolidated Industries Corporation (C.I.C.) shares, which accounted for 42.4%, 22.7% and 11.5% respectively of the total equities turnover on the exchange. The Torarica Hotel's rights issue also contributed significantly to overall turnover levels, with most of this trading resulting from the government's decision not to exercise its rights. The most active brokers were DSB Bank, Assuria Beleggingsmaatschappij and Hakrinbank. The stock exchange index rose in the year under review by 296.9 points to 1,480.6. In other words, an increase of 25%. This rise was well above the rate of

inflation for 2006, which means that the average investment in shares generated a good return in real terms during the year. Various companies, including Assuria and Hakrinbank, converted their shares during the year and set a new nominal value for them in Surinamese dollars. This exercise resulted in changes in the share prices. On 1 January 2006, VSH-United Holding Co. was launched on the stock exchange and opened at an initial price of SRD 21.00 per share of SRD 0.01 nominal value. Fatum Investments was officially admitted to the exchange as a broker in 2006, but did not pursue any activities during the year.


Banking sector in Suriname The Surinamese banking sector had a good year in 2006. This can be seen in the following table, which provides information on various recent developments in the country's commercial banking sector. Total consolidated assets rose by 26%, while

lending increased by around 23%. Funds available for lending were 29% higher than in 2005, which meant an increase in the credit availability. The capital ratio I fell slightly, while the capital ratio II improved.

Key figures of the general banking sector in Suriname (in millions of SRD)

Year-end Total assets Funds available for lending and cash/cash equivalents Funds on current accounts (Compulsory cash reserve)

2006*) 2,871.0

2005 2,276.6

2004 2,004.5

539.7 (179.4)66) 360.3

443.4 (179.0)4 4) 264.4 252.3 94.3 131.0 742.0 661.33 3)

412.4 171.62 2) 240.8 207.8 76.5 105.7 630.8 496.11 1)

Savings Term deposits Capital and reserves Total funds available for lending and cash/cash equivalents Lending and investments Key ratios Capital ratio I (capital and reserves as % of total assets) Capital ratio II (capital and reserves as % of lending)

1. Excluding provision for bad and doubtful debts of SRD 25.7 million. 2. Excluding cash reserve of SRD 21.5 million for housing loans. 3. Excluding provision for bad and doubtful debts of SRD 26.5 million. 4. Excluding cash reserve of SRD 51.3 million for housing loans. 5. Excluding provisions for bad and doubtful debts of SRD 36.1 million. 6. Excluding cash reserve of SRD 76.8 million for housing loans. * Provisional figures Source: Central Bank of Suriname

311.8 126.5 157.3 955.9 765.555)

5.48 20.55

5.75 19.81

5.27 21.31


Previous annual reports discussed the increasing US dollarisation of bank balance sheets and the implications of this in detail. The Central Bank of Suriname and the commercial banks' executive boards have pursued policies aimed at reversing this trend. The following chart shows the development of US dollarisation within the banking sector and the fact that this increased during 2006. US dollarisation in 1996 ­ 2006 as a percentage of total deposits and lending

60 50 40 30 20 10 0












Foreign currency deposits as % of total deposits held by commercial banks Foreign currency lending as % of total lending by commercial banks to the private sector

Year As the chart shows, the share of total deposits denominated in foreign currencies increased only marginally, while the extent to which lending was in dollars rose substantially. This development is remarkable, given that the difference between interest rates in SRD and those in foreign currencies actually decreased during the year under review. Low inflation and the stable exchange rate may, however, have prompted clients to opt for loans in foreign currencies that had lower rates of interest in absolute terms. In early 2007, the SRD lending rates fell further, and this could result in the extent of dollarisation slowing down. During its Article IV consultation mission in early 2007, the IMF concluded that "bank soundness indicators improved in 2006, but non-performing loans and financial (US) dollarisation remain high." Consumer price index The following table shows the inflation figures for 2002 - 2006 compiled by the General Office of Statistics. These reflect the changes in the price of a fixed, representative basket of 240 consumer goods and services.

Average Year-end inflation (%) inflation (%) 15.5 23.0 9.1 9.5 11.3 28.4 13.1 9.1 15.8 4.7

2002 2003 1) 2004 2) 2005 2006 3)

1) Extrapolated from figures for January ­ June 2003 2) Estimated on the basis of figures for March ­ December 2004 3) Provisional figures

As the above table shows, consumer prices rose by an average of 11.3% in 2006, while inflation calculated using the year-end method (i.e. 31 December 2006 compared with 31 December 2005) was 4.7%. Price changes are recognised more quickly in the latter method, which means that the rate of inflation has slowed down. In 2005, it was the rises in energy and oil prices that pushed inflation up. In 2006, however, inflation was driven more by `cost push' (i.e. increases in costs) than `demand pull' (i.e. increases in spending), given the reasonable degree of equilibrium in the government's finances and the limited extent of monetary financing. It is


interesting to note that inflation has had no effect on the external value of the Surinamese dollar in recent years. It consequently remains important to keep control of macro-economic spending and to ensure that wage and salary increases remain moderate. We therefore fully support the public appeal by the Governor of the Central Bank of Suriname for the trade unions to adopt a moderate stance on their wage negotiations so as not to endanger the country's economic stability. Under the current system of payroll and income tax, inflation has an impact on tax revenues. In an environment in which the value of money is declining and with a resultant rise in the nominal tax base, progressive rates of tax lead to an unintentional increase in the tax burden. This in turn has implications for the purchasing power of salaried employees and in results in businesses being subjected to taxes on illusory profits. These consequences can fully justify corrective measures by the legislator. Average inflation is expected to fall in 2007, while year-end inflation will be slightly lower. Developments in important production sectors The vast majority of developments in the real sector of the economy in 2006 were positive, specifically the stable macro-economic environment and the favourable international climate, which boosted both production and exports. According to estimates by the National Planning Office, the country achieved real GNP growth of 5.8%, much of which was attributable to the mining, building and construction and trading sectors. The world market prices for our main exports (i.e. alumina, oil and gold) rose substantially during the year, just as they did in the previous three years. Prices are expected to continue developing favourably in the near future. These sectors are attracting the interest of investors, particularly from abroad. And this in turn means we can expect significant levels of investment in the near future. Substantial investments were also made in other sectors, which means that economic growth can be expected to remain at a good level in the future. The bilateral investment protection agreement between Suriname and the Netherlands came into force in early September 2006. This agreement,

which was signed on 31 March 2005, provides for foreign investors to be treated as national investors and for investment-related payment transfers abroad to be made in a freely convertible currency, while also giving investors protection against illegal expropriations of property and allowing disputes to be submitted to international arbitration. Neither of the countries is permitted to amend the agreement unilaterally. Various important developments in Suriname's main production and export sectors are discussed in detail below. Bauxite sector The bauxite sector had a significantly better year in 2006 than in 2005, when both alumina production and exports fell by 4%. This was despite the increase in alumina refining capacity to 2.2 million tons a year. Alumina production in the year under review totalled 2,132,800 metric tons, representing an increase of 10% on the total for 2005. Exports were also higher, with an increase of 9.3% to 2,127,200 metric tons. The refinery had a very good capacity utilisation rate of almost 97%. The total value of these exports amounted to USD 642.5 million, representing an increase of almost 44%. The price per metric ton rose in 2006 by 31.6% to USD 302. Some USD 234.4 million of the total exports accrued to Suriname in the form of local payments for oil product sales (including the amounts paid to State Oil Company). This was USD 37 million, or 18.7%, higher than in 2005. A total of USD 144.2 million was transferred to State Oil Company, while USD 44.6 million was paid in taxes (approximately USD 2 million less than in 2005). Investments in 2006 totalled around USD 150 million. We expect alumina prices to be maintained in 2007 because of the continuing high levels of demand in the world market and various evelopments on the supply side of the market. Negotiations are due to start shortly between the government of Suriname and the bauxite companies BHP-Billiton and Alcoa/Suralco on the opportunities for bauxite mining in the Bakhuys area of Western Suriname. The companies have expressed their interest in mining bauxite and processing it into alumina in the Paranam refinery. Suriname would like to see an integrated bauxite industry in the west of the country, providing this is technically and economically feasible. These negotiations are


particularly important for the country, and the momentum to achieve results is excellent. It is crucial, therefore, to ensure a highly competent team is appointed to conduct the negotiations. It would also seem sensible to consider a range of business models, including some non-traditional ones, in order to ensure that Suriname's interests are properly safeguarded. Oil sector Our State Oil Company had another year of excellent operating results, with record sales and profits. These were primarily due to the rise in world market prices and the increased levels of production. Gross sales in 2006 came out at USD 263.5 million, which represented an increase of USD 62.2 million, or 31%, on the figure for 2005. The average price of Saramacca crude oil rose from USD 38.57 per barrel in 2005 to USD 46.43 in 2006. Profit before tax totalled USD 153.1 million and was, therefore, 46% higher than in 2005. A total of USD 106.9 million was contributed to the Treasury in the form of taxes and dividends, while the balance of payments was boosted to the tune of USD 114.7 million. Total crude oil production for the year amounted to 4.8 million barrels, which was around 10% higher than in 2005. Much of this increase is attributable to improved results from existing wells, while a total of 98 new wells also became operational during the year. The oil refinery was able to achieve a high capacity utilisation rate and processed a total of 2.5 million barrels of oil into heavy vacuum gas oil, diesel and heating oil and asphalt (bitumen). Most of the production was sold to Suralco. Over the coming years, State Oil Company will start focusing also on generating electricity. Its 15 MW electricity power station at Tout Lui Faut became operational in July 2006. For the first time in the country's history, Repsol YPF and its partners conducted a three-dimensional seismic survey of the oil reserves along Suriname's coastline in 2006. As a result of this survey, the companies decided to drill two exploratory wells. These will be drilled in the first quarter of 2008. The USD 100 million contract for this drilling work was signed with the US company Trans Ocean in October 2006. Maersk Oil and Occidental Petroleum Inc. also continued their own two-dimensional

seismic survey along the Surinamese coast during the year. The international tender round for blocks 15, 36 and 37 resulted in a tender being submitted for each block. Paradise Oil Company N.V., a wholly owned subsidiary of State Oil Company was established in early 2006. The intention is to use this subsidiary as a vehicle for participating in joint ventures with third parties and conducting exploratory programmes. The first activity will be to perform on-shore explorations in Uitkijk and Coronie in collaboration with the Irish company Tullow Oil. The outlook for our oil industry is very promising. Gold sector Suriname's gold sector continued to develop well in 2006, largely thanks to developments in the world market. Investments in explorations were higher than in 2005, while the trend of rising gold prices on the world market, which started back in mid-1999, continued throughout the year. The rise between 10 March and 12 May 2006 was particularly striking, with an increase from USD 535 to USD 725 per troy ounce (= 31.1035 grams). The average gold price on the London Metal Exchange in the year under review was USD 603.46 per troy ounce, which was 35.7% higher than in 2005. This rise was primarily the result of the growing political and financial uncertainty in the world and the concerns about the value of the US dollar in particular, which were prompted by the twin American budget and trade deficit. Investments in gold have traditionally provided a safe haven for money in times of uncertainty. Demand for gold in emerging economies such as China and India is also rising sharply in response to the increased scope for industrial applications and the growth in the countries' prosperity. These developments will continue to put upward pressure on prices in the near future. The largest goldmining company in Suriname, Rosebel Goldmines N.V., which is a subsidiary of the Canadian mining company Cambior Inc., recorded another set of excellent operating results in 2006, with production of around 300,000 troy ounces (9,400 kg). A detailed exploratory survey resulted in proven reserves rising by 19% to over 3.8 million troy ounces (approximately 118,000 kg). This in turn resulted in the Rosebel mine's remaining economic life being extended by two years to around


twelve years. A total of around USD 5.5 million will be invested in more detailed explorations in 2007. In November 2006, Cambior Inc. was taken over by IAMGOLD, a listed Canadian company. The acquisition price of almost USD 1.2 billion was over 30% above Cambior's stock market value. Following this acquisition, IAMGOLD is now the tenth largest goldmining company in the world, with annual production of over one million troy ounces from eight mines in Africa and the Americas. According to a rough estimate, the gold production of the many small-scale producers, most of whom are individual pork nokkers, fell to around 10,000 kg, with a total value of around USD 180 million. This decrease is primarily attributable to the exhaustion of the richer mining areas, the lower numbers of new finds and the sharp rise in operating costs. The largest Surinamese goldmining company, Sarakreek Resource Corporation, also achieved good operating results, and there are plans to expand its activities.

The joint venture partners Alcoa/Suralco LLC and Newmont Mining Corporation, which is the world's largest goldmining company, continued their intensive explorations near the Nassau mountain in Marowijne district in 2006. The survey has to date produced promising results, and these have further increased the chances of mining activities in the area. The company has since announced that it is looking to sign a Memorandum of Understanding with the Surinamese government on the possibility of mining these gold deposits. Agricultural sector Rice The developments in the rice sector are very important for the economy, particularly the economy of Nickerie. Farmers and rice-processors have for many years been facing a wide range of problems, mainly of a structural nature, and these have had an adverse impact on production. Nothing essentially changed in this respect in 2006. Various key figures showing the developments in the sector over the past five years can be seen in the following table.

2006*) Under cultivation (hectares) Production of dry paddy (Mt) Average production per hectare (Mt) Export volumes (USD 1,000) Export value (USD 1,000) Export price of cargo rice (USD/mt ton) Export price of white rice (USD/mt ton)

Source: Ministry of Agriculture, Animal Husbandry and Fisheries * Provisional figures

2005 45,563 163,955 3.59 35,877 8,913 220 301

2004 49,020 174,490 3.56 51,830 11,891 190 268

2003 54,425 193,685 3.69 41,949 9,097 191 273

2002 40,050 157,105 3.92 71,812 14,175 191 286

44,266 198,162 4.48 38,617 10,690 236 297

The total area of rice fields under cultivation fell slightly during the year. The volumes sown by the larger growers have been on the low side for some years, primarily because of the decision by rice growers on the left bank of the Nickerie river and Stichting Machinale Landbouw (SML) to stop cultivating.A slight increase in sowing was, however, seen among the smaller growers in 2006.

The increase in the average overall production per hectare from 3.6 to 4.5 metric tons of wet paddy was a positive factor during the year. As a result of these factors, paddy production rose by 16% to over 198,000 metric tons. Export volumes were 8% higher than in 2005, partly because of the exports of rice harvested at the end of 2005. Export prices were slightly higher because of developments on both the supply and demand sides of the world market.


In both the spring and autumn growing seasons rice farmers received refunds of diesel duty paid, and this refund of SRD 112.50 per hectare under cultivation helped to improve the sector's profitability. The agreement signed in 2003 between the European Commission and the Cariforum in support of the rice sectors in the Cariforum countries resulted in 9,255,000 being made available for Suriname's rice sector. This will be used as follows: 1. 2. 3. 4. Technical assistance Training Restructuring of water facilities Lending facilities 1,815,000 140,000 3,800,000 3,500,000

This involved drawing up a short list of investors, identified through market research. Unfortunately the uncertainties surrounding the European Union's policy for this market meant that none of these potential investors submitted a bid. Since then, however, a cooperation agreement has been signed with the French Agrisol/Katope group, and it has been decided to restart the privatisation process in 2008. Palm oil production After a long period of preparations, the Chinese China Zhong Heng Tai consortium provided the Surinamese government with the required bank guarantee of USD 16 million in mid-2006, and this meant that the large-scale production of palm oil at Patamacca in the Marowijne district could begin. The business plan assumes that a total area of 400 km2 will in due course be cultivated, with ultimate production of 700,000 tons of palm oil a year. The total investments over a 10-year period will be around USD 116 million. The start of production has unfortunately been delayed as a result of concerns among the local population about the possible effects on their surroundings. They are worried about an inflow of Chinese workers working for low wages and also about the impact that the plantations may have on the local population's land rights. We hope that the problems will be able to be resolved through dialogue since this project is very important for the development of Eastern Suriname, now that the bauxite industry there will soon come to an end. Aquaculture In mid-2006 Suraq N.V. started creating a modern shrimp-farming business in Nickerie. The land has now been cleared and the issue of drainage addressed. Cultivation ponds started being constructed in early 2007, while the rest of the work will be completed in the second half of the year. The business will involve total investments of around USD 17 million and will be farming black tiger prawns, all of which will be for export. This nvestment is very important for the development of the Nickerie economy. Outlook for 2007 The macro-economic outlook for 2007 is promising. The IMF concluded during its country review in early 2007 that "the macro-economic outlook for 2007 is broadly favourable. Confidence is expected

The lending facilities will be made available via Landbouwbank N.V. A programme has been established to improve the sector's quality and reduce the cost price. This programme, which will run until 2010, started being implemented in early 2007. The aim of this and various other restructuring programmes, which are still to be arranged, is to return the whole rice sector to the strong position it enjoyed in the past. Banana industry The European Union's trade policy on banana imports improved significantly in 2006, thanks in part to the relevant authorities' willingness to listen to Suriname. The principle of `First Come, First Served' applied to 81% of the EU's import quota of 775,000 tons for the ACP countries in 2006, which meant in effect that Suriname had to purchase licences for or pay import duties on 19% of its exports. This cost the country a total of around 3 million. The outlook for further improvements in 2007 and subsequent years is good. A total of 46,368 tons of bananas, with an FOB value of USD 14 million, were exported in 2006, compared with 39,472 tons and an FOB value of USD 12 million in 2005. At the end of the year under review, SBBS had a total of 1,925 employees and also indirectly provided work to many other companies on the supply side in the sector. Preparations to privatise Surland N.V. started in January 2003, while the process itself started in 2005 in the form of an open international bidding round.


to remain strong, aided by continued favourable external conditions and the commitment to a stable exchange rate and low inflation. Against this background, real GDP is projected to expand by 5 - 51/2 per cent, driven mainly by the non-mining sector, while inflation would stay in the range of 3 - 6 per cent. The external current account surplus could fall to about 2 percent of GDP." The government will need to ensure a balanced budget if it is to achieve these objectives. In the longer term, a successful Public Sector Reform (PSR) programme must be executed to maintain and increase financial stability and to promote economic growth. We believe that the favourable outlook provides the right conditions for a successful PSR programme. It is also important in this respect to improve the macro economic monitoring of the country's economy and to strengthen key institutions so as to improve the overall quality of public governance.

Important negotiations will be held with various multinationals in 2007 on using our natural resources. The challenge is to devise a business model that will be acceptable to all stakeholders and will benefit the country as a whole. We will need to ensure that sufficient amounts are invested in our negotiating position. The Caricom single market was officially launched in January 2006, and the intention is to create a single economy by 2009. This far-reaching process of regional integration will have significant consequences for the investment climate and Suriname's business sector, and our strategic planning will have to take this into account. We firmly believe that Suriname is well positioned to achieve further accelerated and sustainable development, but we will have to ensure that we adopt the right stance and approach.

One of the events held to mark our bank's 70th anniversary was a bicycle trip to White Beach.


Business of the bank


Excellent operating results were once again recorded in the year under review. The bank continued to grow and its operating returns improved. We also continued to give priority to improving our governance structures and to ensuring that our operating processes are properly and effectively managed. Risk management is increasingly becoming a common thread in this respect. Management is based on task-setting budgets, with objectives being quantified wherever possible. These objectives are recorded in the annual plan, which is part of the bank's strategic plan. It is pleasing to note that the business objectives set for 2006 were comfortably achieved, and that the strategic objectives will consequently not need to be revised. Considerable energy will be devoted in 2007 to preparing a new strategic plan for the coming years. Our main business objectives for 2006 were to achieve sustainable growth, to improve profitability and assets and liabilities management, to increase productivity and to improve risk management and customer relationships management. Other important objectives included achieving an increase in the levels of employee satisfaction and demonstrating a clear commitment to the community of which we are a part by actively sponsoring various community projects. Total consolidated assets rose by 28.6% to SRD 606.5 million in 2006, which is a higher increase than in 2005. Consolidated lending rose by 33.4%, which was over 3.4 percentage points above the budget. The extent of US dollarisation in the lending portfolio increased slightly, but remained within the short-term target. The ratio of nonperforming loans continued falling to 2%, which is also satisfactory from an international perspective. Hakrinbank's share of the country's lending market increased slightly. The bank's assets and liabilities management improved in comparison to 2006 and also when compared with local benchmarks. This in turn had a positive effect on operating results, with the profit before tax rising by 50.6% to SRD 19.95 million.

One of the bank's main operational objectives in 2006 was to improve overall productivity by achieving a better efficiency ratio. This ratio improved from 59% to 56% during the year, and we will strive to achieve further improvements in the future. In addition, the return on assets increased from 1.95% to 2.37%, while the return on equity rose from 46.10% to 46.90%. During the year under review, the bank's corporate governance code was approved and is now being used as the basis for our activities. This code, the contents of which can be viewed on our website, sets out a series of principles and rules for proper corporate governance. We officially presented the code to the President of the Republic of Suriname in May 2006, when we also took the opportunity to call for a national corporate governance code to be compiled and implemented. Compliance ­ in other words, seeking to promote the bank's reputation for integrity, together with that of its management and employees, as a means of managing risks and preventing damage to our reputation by adherence to strict rules of conduct ­ is a high priority within our bank. We also have an integrity code, which all our employees have signed. During the year under review we arranged AntiMoney-Laundering (AML) courses for our staff and also worked on a compliance handbook, which includes a manual on anti-money-laundering.We also invested in AML software, which will be installed in 2007. Almost all transactions performed by a financial institution involve an element of risk. Effective risk management is consequently crucial for the success of any bank, which is why we attach such a high priority to it within our organisation. The primary objectives of risk management is to assess and manage risks within the limits set by the bank. It is also important to ensure a balance between risk and return. During the year under review we set up a separate Risk Management department and appointed a manager to run it. The aim in due course is to bring all the bank's risk management activities within the scope of this department. The department's main activities in 2006 involved formalising and tightening up the bank's credit risk policy and performing credit risk assessments. In due course, responsibility for monitoring and managing other risks, such as market, liquidity and operational risks, will be assigned to this department.


Managing customer relationships is of fundamental importance to a bank as no bank can survive without satisfied clients. We consequently strive to provide the highest quality of professional services to our customers, with their needs and wishes running as a common thread through our activities. In the year under review we once again spent time training our employees in customer relations management and communication skills. We also simplified our procedures for dealing with customer complaints and made the process more accessible. Our policy is to treat all complaints seriously because they arise as a result of concerned but loyal clients drawing our attention to possible imperfections in our services and giving us the opportunity to take corrective action. Our preparations to establish a full-service marketing department continued in 2006. This department will become operational in early 2007, and we will also be appointing a manager to run it. Over the past few years we have made donations and provided sponsoring as a way of demonstrating our commitment to the community of which we are a

part and which we serve. Every week we receive many requests for sponsoring. All of them are dealt with carefully, but we are unfortunately unable to grant them all. Most of the projects sponsored by Hakrinbank are in the areas of sport, education, healthcare and culture. Our budget for sponsoring community projects was somewhat higher in 2006 because of its being the bank's seventieth anniversary year. The most significant project for which we provided sponsoring during the year was the creation of an endowed chair in Money, Credit and Banking at Anton de Kom University's Faculty of Graduate Studies. The professor occupying the endowed chair will be Dr. A.R. Caram, who has a proven track record in this field. We also provided funds to enable the Medical Sciences Institute to purchase a spectrophotometer and related equipment that will improve the quality of the institute's education and research. The most important developments within the various departments of the bank and its subsidiary Nationale Trust- en Financierings Maatschappij N.V in 2006 are discussed in more detail below.

Our Chief Executive Officer Jim Bousaid and the Deputy Chairman of ADEK, A. Li Fo Sjoe, signing the letter of intent to establish the endowed chair in Money, Credit and Banking at Anton de Kom University.


Corporate Governance Banks were not involved in the major accounting scandals that affected various well-known listed companies in the United States and Europe around 2002 and caused major financial losses. The fact that these scandals could occur is attributable to failures of corporate governance. In other words, the way in which companies are managed. Proper corporate governance is particularly important for banks, given that they play such a major role in economic stability and development. This means that, here in particular, good checks and balances, together with proper and effective internal control of processes, are essential. Effective governance is a precondition for retaining public confidence. Given its importance, it is not only regulators, parties operating in the market and other stakeholder organisations that are continually seeking to set new standards for ensuring proper corporate governance. Institutions themselves are also increasingly accepting that they have a role to play in this process. And Hakrinbank is no exception in this respect as we are continually striving to apply best practices in our corporate governance so that we improve our operating performance and increase our accountability.

During the year under review we implemented the corporate governance code drawn up in 2005. This demonstrates our commitment to corporate governance in practice. As far as we know, Hakrinbank is the first Surinamese-owned company to compile a formal corporate governance code and to use it as the basis for its activities. This code, which can be found on our website, contains guidelines for the Executive Board, Supervisory Board and shareholders. The issues of integrity and transparency, which are important preconditions for good corporate governance, have a prominent place in the code. We officially presented the code to the President of Suriname and the Governor of the Central Bank in May 2006, when we also took the opportunity to call for a national corporate governance code that could be used as the basis for ensuring good governance throughout the country's business sector. The activities involved in implementing the code included the decision during the year to set up two specialised committees within the Supervisory Board. The tasks, powers and responsibilities of these committees ­ the Audit Committee and the Remuneration and Nomination Committee ­ have been laid down in separate sets of regulations. Each committee currently has three members, all of whom are members of the Supervisory Board.

Presentation of Hakrinbank's corporate governance code to the President of Suriname, Runaldo Ronald Venetiaan.


The main task of the Audit Committee is to help the Supervisory Board monitor the integrity of the bank's financial reporting and its compliance with legislation and regulations and to ensure that the bank's internal and external auditors are independent and function properly and effectively. The Remuneration and Nomination Committee makes recommendations to the Supervisory Board on proposed appointments and reappointments to the Executive and Supervisory Boards, on succession planning for members of the Executive Board, on management development and on the remuneration of the Executive Board members. More details of the committees' work can be found in the Supervisory Board's report elsewhere in this annual report. The Supervisory Board's report also contains information on the Caribbean Association of Audit Committee Members, which was established in St. Lucia in 2006 and of which Hakrinbank was a founding member. The new Executive Board and Supervisory Board regulations also came into force during the year under review. Our decision to set up a separate Risk Management department should also be seen against the background of our wish to strengthen our governance structure, as was the decision to switch from rulesbased to risk-based auditing principles from the 2007 financial year onwards. Over the coming years, efforts to improve our corporate governance will be a priority within our bank. This is also because

we firmly believe there to be a high degree of correlation between effective risk management and a good operating performance and the creation of sustainable value for stakeholders. Performance indicators and benchmark analysis Against the background of the establishment of the Caricom single market on 1 January 2006 and the intended development into a single economy in 2009, we consider it important to compare Hakrinbank's performance with that of larger banks in the Caribbean. We do this by conducting an annual benchmark survey. The most important indicators that we use to measure and monitor our operating performance are: - Return on Assets - Non-performing ratio (this measures the quality of our main asset, the lending portfolio) - Return on Equity - Efficiency ratio (this measures our general efficiency). Our bank's performance in the benchmark survey for 2006 compared favorably with that of our peer group, which consisted of NCB Jamaica Ltd., Republic Bank Ltd., RBTT Financial Holdings Ltd., Scotiabank Trinidad & Tobago Ltd., Barbados National Bank Inc. and Republic Bank Guyana Ltd. We also conduct benchmarking against the results of the larger banks in Suriname.

Results of benchmark survey in 2006 (%)





Efficiency ratio 59.87 58.00 58.00 42.00 51.33 56.70 54.20 56.34

Non-performing ratio 3.66 3.40 2.70 1.30 3.58 4.28 p.m. 2.00

NCB Jamaica Ltd. Republic Bank Ltd. RBTT Financial Holdings Ltd. Scotiabank Trinidad & Tobago Ltd. Barbados National Bank Ltd. Republic Bank Guyana Ltd. DSB Bank N.V. Hakrinbank N.V.

Source: External annual reports

2006 2006 2006 2006 2006 2006 2006 2006

2.65 1.92 2.40 3.70 2.31 1.63 1.71 2.37

23.96 14.79 22.10 25.05 19.91 24.22 24.61 46.88


Return on Assets (RoA) We were pleased by the significant improvement in our RoA. This rose from 1.95% at the 2005 year-end to 2.37% in 2006, which is reasonable compared with the peer-group average. The RoA of the peer group varies between 1.63% and 3.70%. The main factors contributing to the improvement in this ratio were the more active balance sheet composition, the improvement in the quality of our lending portfolio and the strong rise in other income, while the reduction of 3 percentage points in the percentage of cash reserves required to be held in SRD with effect from 4 January 2006 also helped. The more active composition of our balance sheet is the result of stricter Assets and Liabilities Management, which is designed to optimise the share of incomegenerating assets in our balance sheet. Our main income-generating assets (i.e. receivables from clients) rose from 48.70% of total assets at the 2005 year-end to 50.53% at the 2006 year-end. The ratio of receivables from clients/funds entrusted to us also rose from 54.24% in 2005 to 57.77% at the end of 2006. This can be regarded as relatively good, given the cash reserve percentages applying at the yearend and the need to retain prudent levels of liquid reserves. Return on Equity (RoE) Our RoE increased slightly from 46.10% in 2005 to 46.90% in 2006. This was largely attributable to the sharp rise of 56.6% in shareholders' equity as a result of the retained earnings dotated to the general reserve and the periodic revaluation of property. If the effects of this revaluation are excluded, the RoE in 2006 would have been close to 50.5%. This is very good in comparison with that of our peer group, where the RoE varies between 14.79% and 25.05%. Efficiency ratio Our efficiency ratio improved, with a reduction from 59% in 2005 to 56% at the end of 2006. The reason that this was slightly higher than the target for 2006 of 55% was the higher than expected increase in certain expenditure items. In view of the forecast slowdown in our rate of growth on the income side and given our ambition of achieving a further reduction to around 53% in this ratio in 2007, we will have to attach greater priority to managing our costs and analysing and improving our operating processes than has been the case in previous years. Our ratio is reasonable in comparison with the average for the peer group, where the efficiency ratios vary between 42% and 60%.

Non-performing ratio Our non-performing ratio improved from 3.0% at the 2005 year-end to 2.0% at the end of 2006, with most of this improvement being attributable to the consumer credit sector. The latter figure is an indicator of the good quality of the lending portfolio and compares very favourably with that of our peer group. The ratio is also better than our own internal norm of a maximum of 3%. The nonperforming ratio within the peer group varies from 1.30% to 4.28%. We are pleased by the improvement in our non-performing ratio as a low ratio has a beneficial effect on our profitability. On the one hand, it is beneficial from a perspective of interest income continuity, which is certainly important in a period of falling interest rates and margins, while on the other hand it reduces the need to make specific provisions for bad and doubtful debtors. More information on Hakrinbank's financial performance can be found in the section financial development of the bank further in this annual report. Credits department Despite the fierce competition in the market, our lending to corporate and consumer clients rose in the year under review by SRD 76.7 million, or 33.4%, to SRD 306.5 million. This increase was higher than the growth figure of 23% for the banking sector as a whole, which means that our market share increased slightly. The rise was also higher than the budgeted rise of 30% in consolidated lending. The growth in Hakrinbank's lending was well above budget, while the reverse was the case for our subsidiary, Nationale Trust- en Financierings Maatschappij. The growth was achieved by combining a consistently commercial approach with competitive rates. Most of the growth in lending was attributable to the trade, housing construction, industry and fishing sectors, as well as consumer credit. Our Nationale Trust- en Financierings Maatschappij subsidiary is a dominant player in the consumer credit market. More information on its activities can be found elsewhere in this report. Total lending to sectors directly involved in production has been on an upward trend for several years, thanks to the improved investment climate that is reflected in the higher levels of investment in these sectors.


Investments in treasury promissory notes were slightly lower at SRD 32.1 million. In view of the Central Bank of Suriname's policy of gradually reducing the amounts of these investments held by commercial banks in favour of institutional investors, we have to assume that these investments' share of our portfolio will successively fall over time. The return on these investments has decreased as a result of the Central Bank's decision to cut rates from 12.5% to 10% at the start of 2006. On 1 January 2007, the interest on treasury paper was reduced further to 8% a year. As indicated above, the quality of the lending portfolio remained good. Effective credit management meant we were able to improve the non-performing ratio from 3.0% to 2.0% in 2006, with our longer-term aim being to keep the ratio consistently below 3%. An overview of our lending to the various sectors can be found below. This overview has been compiled in line with the classification model used by the Central Bank of Suriname.

The SRD base lending rate was cut by 2 percentage points to 14% in February 2006, partly in response to the reduction from 30% to 27% in the SRD cash reserve requirement set by the Central Bank. The latter was further reduced to 25% in early 2007. In response, the banks cut their annual lending rates in February 2007 to between 12% and 13%. The percentage of the cash reserve requirement to be used for long-term, low-rate housing loans was increased from 8% to 9% of the reserve base in early 2006, and this created scope for extra lending. On 2 January 2007, this percentage increased further to 10%. The base rate for foreign currency lending remained unchanged during the year. The difference between the SRD and foreign currency base lending rates has been narrowing further during the year under review. Although this could have been expected to result in less dollarisation in the lending market, this unfortunately did not occur.

Lending by sector (in thousands of SRD)

Year-end 2006 Agriculture Fishing Forestry Mining Industry Construction and installation Electricity, gas and water Total direct production sectors Trade Transport, storage and communications Services Housebuilding Other Total other sectors Total commercial lending Treasury promissory notes (government) Total general lending 22,462.7 12,717.6 183.9 2,206.4 31,594.9 6,496.7 30.7 75,692.9 86,939.6 3,095.1 20,746.6 53,015.7 66,959.1 230,756.1 306,449.0 32,104.0 338,553.0

in % 7.3 4.2 0.1 0.7 10.3 2.1 24.7 28.3 1.0 6.8 17.3 21.9 75.3 100.0

Year-end 2005 22,065.2 4,192.6 112.2 2,228.9 20,489.6 5,753.4 26.8 54,868.7 71,555.8 2,624.0 14,798.8 38,411.8 47,470.9 174,861.3 229,730.0 32,850.3 262,580.3

in % 9.6 1.8 1.0 8.9 2.5 23.8 31.2 1.2 6.4 16.7 20.7 76.2 100.0


Although the extent of dollarisation fell in 2005 to 45.8% of our total lending, it returned to 47.9% by the end of 2006. This increase may be the result of low inflation and the stable exchange rate, which may have prompted clients to opt for loans in foreign currencies that had lower rates of interest in absolute terms. Doing so, however, results in a foreign currency risk for clients whose income is in Surinamese dollars. It should, however, be noted that the degree of US dollarisation is still below the short-term guideline that we have defined of a maximum of 50% of consolidated lending. We will seek to reduce the extent of US dollarisation in 2007 by offering interest incentives designed to encourage lending in local currency. Hakrinbank complied with all the requirements of the Loan Classification and Provisioning regulations in 2006 and also with all the other regulations applied by the Central Bank of Suriname as part of its supervision of the general banks. Owing to the growth in our lending portfolio and our stricter loan portfolio management, we decided to recruit an additional account manager during the year. In 2006, we started implementing the organisational change within the Credits department that we had announced in our previous year's annual report. This change will result in account management handling all aspects of the lending process, and we expect to complete the process in mid-2007. This will make our lending more efficient and make the account managers fully responsible for ensuring that lending requests are handled quickly. The Credit Administration department will remain responsible for providing administrative support. We will be evaluating various software packages in 2007 in an effort to further optimise the credit process and reduce the time taken to handle loan applications. The Social Entrepreneurship Programme (SEP) set up in the fourth quarter of 2004 in conjunction with the Chamber of Commerce and the InterAmerican Development Bank (IDB) as a means of encouraging entrepreneurship among selected graduates or students soon to graduate from Anton de Kom University has not yet produced the desired results. A total of 85 new entrepreneurs have so far received training under this programme, which provides expert help in preparing a business plan for a new, usually small, business. A committee, whose members come from a wide range of disciplines,

selects the best projects. These are then eligible for a Hakrinbank loan on very favourable terms and conditions. The extent of lending under this programme has, however, been lower than expected. The Chamber of Commerce, IDB and Anton de Kom University will shortly be evaluating the programme, and steps will be taken to make it more effective. The emphasis in Hakrinbank's future lending activities will remain on achieving growth in volumes, with the quality of our services, a commercially responsible approach and a pro-active policy on pricing being essential ingredients in this process. Growth is crucial if we are to maintain our profitability, both in the short and longer term. Risk Management department Banks are exposed to more and more risks, primarily as a result of the pressure of competition, the increasing complexity of banking products, specifically many of the newer ones, and the need to protect their reputation. As poor risk management may have far-reaching consequences for banks and also because of stricter regulations, many banks have decided to introduce Enterprise Risk Management (ERM) into their organisations. ERM comprises programmes that provide a sustainable way of managing risks in various areas in which a bank may be active. The most significant risks that financial institutions have to face are credit, market, liquidity, operational and legal risks and reputational risk. ERM is also very important within Hakrinbank, where we devote considerable attention to risk management structures and processes. This included the setting-up in mid-2006 of a separate Risk Management department. The bank's policy is for this department to play a central role in managing risks throughout the bank. This compares with the current situation, in which risk management is the responsibility of various department managers. The Risk Management department's activities during the year under review focused primarily on examining the credit risk policy and assessing the credit risks in loan applications. In 2007 it will be working on a Credit & Risk manual and on various risk management reports. Enterprise Risk Management also involves implementing the Risk-Based Audit project in


conjunction with our external auditors and consultants from Deloitte & Touche. The ultimate aim in this respect is to establish procedures for internal control that are derived from risk-based rather than the current rules-based principles. This means examining operating processes from a perspective of risk and then managing the risks identified. Risks at a process level obviously have to be assessed within the bank's risk management framework. In the first phase of this project, which began in November 2006, we conducted a risk assessment at a strategic level, while also seeking to increase the awareness of risk. A pilot project will be conducted in a department during 2007. Treasury and Securities department The most important activities of this department are managing our liquidity position, buying and selling foreign currencies, conducting currency swap transactions and acting as an intermediary in securities transactions on the stock exchange. The department's work is increasing and we consequently decided to recruit an additional officer in late 2005. We monitored our liquidity positions during the year very closely, and this resulted in the bank's liquidity position consistently remained satisfactory. We used a large investment bank to invest some of our foreign currencies in the international capital market, and these investments generated satisfactory returns. We will be seeking to improve our liquidity management further in 2007, particularly in respect of foreign currencies. Foreign currency trading and swap transaction volumes were below the department's budget in the first half of 2006. However, after reassessing the position in the second half of the year, we adopted a more aggressive approach to the market and also approached new clients. These efforts proved successful, which meant that we were ultimately able to achieve the department's targets for 2006 just before the year-end. More information on the results of our securities activities can be found in the section on the Surinamese Stock Exchange elsewhere in this annual report. During 2006 we completed the process of automating our open custody administration, and this will improve the efficiency and quality of our services.

Administration & Management Information (AMI) department Accounting We devoted special attention in the year under review to increasing our operational efficiency. The measures we took included starting electronically exchanging interbank payment transactions and updated our general ledger accounts system. We also updated our manual on expense and income accounts. Financial control This department's activities are determined to a large extent by our corporate governance objectives, which are specifically designed to achieve further improvements in our operating processes and greater accountability to our Supervisory Board and shareholders. The department also increased the number of management reports it produces. From 2006 onwards, task-setting budgets will be set and periodic overviews of results compiled for all departments in order to improve the overall management of the bank. We also started preparing half-year figures and having them assessed by the external auditors. Half-year figures will be published from 2007 onwards. Information & Communication Technology (ICT) department The ICT Department is responsible for providing relevant, reliable and timely management information that enables us to identify and monitor risks, to manage our operating activities and to take the correct decisions. ICT is also becoming an increasingly important activity in view of our efforts to improve the efficiency of the bank's operating processes. Given the high reliance on ICT in our day-to-day activities, we regularly perform EDP reviews to test the reliability and continuity of our data-processing. In the fourth quarter of 2006, Hiralal Lutchman & Co. once again conducted an EDP review with the support of Deloitte & Touche Netherlands Antilles and Aruba. This time the review focused primarily on our ICBS banking administration software and the Alliant Branch Teller (ABT) cash system. We have since started implementing the various recommendations. By upgrading our AS/400 computer in 2006 from an 820 model to a 520 model, we improved its performance and avoided the need to buy new computers. The first phase of the project to provide


e-mail and internet access from the individual workstations was completed in December 2006. As security is such an important element in these communication systems, we have appointed a specialised external company to deal with security, maintenance and management. Domestic department / Cash department Promoting electronic payments is a priority for these two departments. Hakrinbank N.V., RBTT Bank (Suriname) N.V., DSB Bank N.V. and Surinaamse Postspaarbank all participate in Banking Network Suriname (BNETS) N.V. Since July 2005, these banks' customers have been able to use the other banks' ATMs, while they have also been able to use their cards in all the participating banks' point-of-sale (POS) terminals since May 2006. To date, however, the extent to which customers have been making use of these new opportunities has fallen short of expectations, despite intensive advertising. Most payments are still being made in cash. We will therefore continue to look at ways of encouraging people to use the 900 or so POS terminals linked via BNETS. Our total number of accounts increased by an average of around 10% in 2006, which was in line with the increases seen in previous years. A total of four ATMs were installed in 2006, and we expect a similar number to be added in 2007. The number of our POS terminals also rose during the year. In addition, we launched our new savings product, the Anansi savings account, which pays an attractive rate of interest on savings for and by children. Once a child reaches the age of fourteen, the account will automatically be converted into a student account or into an ordinary savings account once they become adults. Colouring and essaywriting competitions for various age categories and with a range of attractive prizes were held to mark the launch of this new product. The Customers Identification Act for service providers, which came into force in late 2002, requires us to investigate clients' identity when we perform banking transactions for them. We consequently worked closely together with the compliance officer in 2006 to screen our client database and establish whether all the files contain the required documentation. We then wrote to any clients on whom we were

lacking information and requested them to provide the required items. In December 2006 we signed a cooperation agreement with Surpost that will allow Dutch bank account holders to use their cards at our capital city and district branches to draw euros from their Dutch accounts. If necessary, the euros can then be converted into local currency. Maintenance & Technical Support (MTS) department The building work involved in restructuring our Cash department was one of the reasons why the MTS department had to be relocated within our head office. This move also improved the quality of the relevant employees' working environment. The building work will create additional office space for the Cash department and enable us to implement various measures to improve the safety of our security transports. We will start renovating our Nieuwe Haven branch in the first half of 2007, while the other branches in Paramaribo are also due for renovation. We made a special client area available at the Flora branch in 2006 in order to improve the quality of the services we provide to clients there. In due course we will be renovating the whole branch, but this special area will guarantee our clients' privacy in the meantime. The client area at our Tourtonne branch was also expanded during the year. The new signboard on our head-office roof was illuminated for the first time on 28 June 2006 to mark the bank's seventieth anniversary. Seeing our name in lights looks particularly impressive in the evening. Our MTS department performed excellent work setting up and installing the 1.5 meter high letters. Foreign Transfers department Both the number of incoming and outgoing foreign payments increased during the year in response to the higher levels of economic activity in Suriname. We discussed the issue of the declining numbers of letters of credit we were being asked to open for imports in previous annual reports. This trend continued in the year under review, with the vast majority of importers opting for ordinary (clean) payments, despite the greater security provided by a letter of credit. This is because payment under a letter of credit will be made only once certain


documents, such as a bill of lading, have been provided. Our request to join the MasterCard organisation was approved in September 2006. We expect to complete the various formalities involved in issuing these credit cards by late 2007. Hakrinbank clients choosing to use this product will then be able to use their card in all the countries that accept MasterCard. We started using the Swift Payment Router (SPR) software in October 2006. This has made our international payment administration more straightforward and faster. Once outgoing transactions have been entered into SPR and authorised, they are automatically processed in our administration and converted into a SWIFT message. Compliance & Legal department Hakrinbank operates in accordance with professional standards when providing its services to clients. These standards ensure that we can be worthy of the confidence and trust that our stakeholders have vested in us. Compliance ­ in other words, seeking in the widest sense to promote the bank's reputation for integrity, together with that of its management and employees, by adhering to strict rules of conduct as a means of managing risks and preventing damage to our reputation ­ is a high priority within our bank. The bank will consequently not be a party to transactions that contravene the spirit of the law or do not accord with the ethical standards that the bank has set for itself. Our integrity code sets standards for all employees' conduct, with the aim of preventing money laundering and conflicts of interest, protecting clients' privacy and ensuring compliance with legislation and regulations. We also spent time during the year compiling a compliance handbook, which also includes an antimoney-laundering manual. In addition we purchased a new software package that will be installed in the first half of 2007. This will enable us to monitor transactions online and compile various risk profiles for clients. Making all our employees more aware of compliance is one of our priorities. It is important that all our employees deal with applicable legislation professionally and so readily recognise instances of improper conduct if they occur. We are consequent-

ly devoting considerable amounts of time to staff training. Human Resources and General Affairs As a business in the services sector we are expected to provide a high standard of quality, and that means we need qualified, motivated and committed employees. Changing customer requirements, technological developments and greater competition demand a professional culture and a focus on results and clients. We consequently devote substantial time and energy to selection and training so as to ensure that we have the right people in the right place within the organisation. This also means ensuring that our remuneration policy reflects the extent to which an employee achieves targets. Performance management is, therefore, an important issue within the bank. Employee numbers We had a net increase of seven employees in 2006. This meant our workforce rose from a total of 247 to 254, of whom 143 are women and 111 are men. A total of twenty new employees joined the bank, including two at management level. Thirteen employees left the bank either voluntarily or because they had reached retirement age, while two of our employees died during the year. Lives remembered We were very shocked by the sudden death in February 2006 of our much valued employee Lothar van Kanten, who was due to complete 25 years of service for the bank in the following October. We were also upset to hear of the completely unexpected death in September 2006 of Ivy MyrKromopawiro, who worked in our Foreign Transfers department. For Ivy, 2006 was also an anniversary year as she completed 12.5 years of service in April. Awards The celebrations marking the seventieth anniversary of Hakrinbank also included three employees being recommended for awards conferred by the President of the Republic of Suriname. Jim Bousaid (CEO), Mariette Tjon A Ten (COO) and Marijke Lie A Njoek (Head of Foreign Transfers) were all appointed as an Officer or Knight of the Honorary Order of the Palm. Anniversaries A total of 38 employees, of whom 35 work in Paramaribo and three in Nickerie, celebrated


anniversaries in 2006. Sixteen employees celebrated 12.5 years of service for the bank, while six completed 25 years of service and seven celebrated 30 years of working for the bank. Eight employees completed 35 years of service, while one employee has now worked for us for 40 years. We owe these employees a great deal of thanks and gratitude for their loyal service over the years. Education and training Employees underwent training in client-orientation, leadership and communication skills during the year in order to develop their skills and improve their levels of professional knowledge. Courses were also arranged to upgrade the computer skills of our administrative staff. Personnel activities The anniversary committee and staff association worked together to arrange a number of highly successful events to mark the bank's 70th anniversary. Two day centres in Vierkinderen, near Colakreek, also became available during the year for holiday use by employees.

Miscellaneous Sale of Latour site Despite all the efforts to achieve a sale, it has not yet proved possible to find a buyer for the site Hakrinbank owns at the junction of Latourweg and Indira Gandhiweg.We will continue intensifying our efforts to dispose of this asset as the sale proceeds will play an important part in funding future investments, specifically in the Saramaccastraat premises that we purchased in 2005. Renovation of Saramaccastraat premises In 2005 we purchased the property at Saramaccastraat 20 (the `Brandon' building). This property, which can be regarded as a monument, is adjacent to the Hakrinbank head office and so fits in with our plans to expand our office space. We are currently planning to renovate and expand the building in line with our business needs for more space. Renovation was on the agenda for 2006, followed by expansion in 2007 and subsequent years.

Our annual fun run.


We will be drawing up an investment and funding plan that will cover a period of several years and obviously take account of the Central Bank of Suriname's rules that require investments to be funded from shareholders' equity. The plan in due course is for Nationale Trust- en Financierings Maatschappij and various other Hakrinbank departments to move to the new location and thus reduce the pressure on office space at the head office. Part of the site will be used as a car park so as to alleviate some of the current parking problems at the head office. We have so far cleared and resurfaced the site and erected a wall around it, and it is now being used as a car park. Progress has, however, been delayed by the bureaucracy involved in obtaining the permits required for the partial demolition and subsequent expansion of the building.At the time of writing, the required permits had still to be received. Marketing Various activities were undertaken in the year under review to improve our knowledge and understanding of existing and potential clients' needs and wishes so that we can tailor our services more accurately. These included various successful marketing campaigns, while we also provided our employees with additional training in commercial skills and customer relations management. In 2006, we completed the preparations to establish a fully equipped marketing department able to coordinate all the bank's marketing activities. The intention is for this department to start work in early 2007 under the leadership of a newly appointed marketing specialist. These activities will then be able to be more systematic and effective than in the past. Caribbean Association of Indigenous Banks (CAIB) In November 2006, Hakrinbank, which was represented by our CEO Jim Bousaid, attended the annual meeting of CAIB in Port of Spain, Trinidad. During this meeting our bank was reappointed to the Board of Directors of CAIB for a further two years. Hakrinbank and First Citizens Bank of Trinidad & Tobago will together represent the countries and islands in the southern Caribbean on the CAIB Board. The CAIB, which many Caribbean banks have now joined, currently has 51 members. Its primary objectives are to promote contacts and cooperation among members and to represent

their common interests. More information on the organisation can be found on The CAIB was actively involved in establishing the Caribbean Association of Audit Committee Members (CAACM) in 2006. This can be seen as part of its efforts to promote good corporate governance in banks and other businesses. The meeting establishing the association was held at Castries, St. Lucia in June 2006. Hakrinbank is a founder member of CAACM and also proposed the appointment to the Board of M. Brahim, who is chairman of the Executive Board of the Fernandes group.

The start of the 10 km run held around the time of Hakrinbank's anniversary.


Nationale Trust- en Financierings Maatschappij N.V.

of this growth. The signs of saturation seen in this market and the increasingly fierce competition were the reasons for our failing to reach our production targets. Personal loans Volumes of personal loans rose by over 30% to SRD 13.0 million, which was above the budget. Our branches played a major part in achieving this increase. It is noticeable that individuals' freely disposable income is coming under pressure because they sometimes have several personal loans to repay. Our prudent policies on risk management mean that this situation will have consequences for the numbers of new clients we seek to acquire in this market. We have therefore budgeted for only a modest increase in this product category in 2007. Asset management (private banking) Third-party assets under management rose by almost 20% in the year under review, with most of these funds being invested in mortgages denominated in foreign currencies. The rate of growth was below that of 2005 and also slightly below budget. The favourable risk and return profile meant a good level of assets being available for management. We are seeking to expand the range of investment opportunities for our clients by creating opportunities for them to invest in, for example, the international capital market.

Our subsidiary Nationale Trust- en Financierings Maatschappij (NTFM) had a reasonable year in 2006. Total assets rose by 28%, while profit was up by 16%. These percentages were below budget because of a certain amount of market saturation and competition, which meant that the levels of growth budgeted in a number of product categories were not able to be achieved.Various measures were taken during the year to improve operating efficiency and the collection of problem debts. We will also be installing new software in 2007 to improve the speed and efficiency of the company's lending activities. Mortgage loans Mortgage lending rose by 32% to SRD 36.6 million in 2006. The main reason why the company was unable to achieve the growth target for the year was because it reached the 7% ceiling for housing loans funded from the bank's cash reserve before the yearend. The Central Bank subsequently increased this ceiling from 8% to 9% of the reserve base. Vehicle financing The volume of term loans increased by over 9% to SRD 22.6 million, with loans to fund purchases of cars and mopeds accounting for most


Financial development of the bank

Hakrinbank had another successful financial year in 2006, thanks in part to the improved management of our operating processes and also the positive effect that the favourable macro-economic environment had on our business. Our total assets increased, while our balance sheet ratios improved and operating results rose. We comfortably achieved the main financial objectives that we set ourselves in our 2005 ­ 2007 Strategic Policy Plan, in which we forecast annual real growth in income of at least 15% 20% and a real growth in profits of at least 10%. Despite a few expense items coming out higher than forecast we very nearly achieved our operational objective of an efficiency ratio of 55%. Score card

Total assets (in millions of SRD)

700 600 500 400 300 200 100 0 181.0 399.6 471.7 606.5


Objective 2006 Financial targets Real growth in income Real growth in profits Operational targets Efficiency ratio 15-20% > 10% 55%

Actual 2006 20,3%* 35,3%* 56%






* Real growth is nominal growth adjusted for average inflation of 11.3%

Most of the increase on the assets side of the balance sheet is attributable to Receivables from clients and Receivables from credit institutions. The increase in these items contributed to the rise in interest income. Cash and cash equivalents and Tangible fixed assets also rose, while the value of investments in treasury paper fell slightly. The increase in Receivables from clients was substantial, with a rise from SRD 229.73 million in 2005 to SRD 306.45 million in 2006. The SRD 76.72 million increase in lending, representing a rise of 33.40% from the previous year, was attributable to both Hakrinbank and Nationale Trust- en Financierings Maatschappij. It related to loans in local currency and also to loans denominated in foreign currencies. Most of the increase in receivables was attributable to lending in the trade, housing construction, industrial and fishing sectors, while the volumes of consumer credit loans provided by our subsidiary also rose significantly. Receivables from credit institutions increased in the year under review by SRD 46.03 million to SRD 172.69 million as a result of the rise in the foreign-currency credit balances held for third parties and invested in part at foreign banks. Some of the increase in this item is also attributable to the euro's rise against the Surinamese dollar.

A detailed analysis of the main items in the balance sheet and the consolidated results of Hakrinbank can be found below, followed by information on the proposed appropriation of the profit. Consolidated balance sheet Total assets at the 2006 year-end amounted to SRD 606.46 million. This represented an increase of SRD 134.78 million, or 28.6%, compared with the previous year. This percentage is higher than the increase of 18% achieved in 2005.


Cash and cash equivalents rose by 11.9% to SRD 72.06 million, in part because of the increase in funds entrusted to us. This latter increase correlates to the growth in the domestic money supply. Tangible fixed assets were also SRD 4.76 million higher at SRD 20.66 million, mainly because of the revaluation of fixed assets. Under the Central Bank of Suriname's rules, such revaluations are permitted only once every three years. This revaluation has dispensed with the hidden reserves relating to property in the balance sheet. The items on the liabilities side of the balance sheet can be divided into three main groups: Amounts owed to third parties (specifically Amounts owed to clients), Provisions and Shareholders' equity. Amounts owed to clients, which represent our most important source of funding, rose by SRD 106.89 million, or 25.24%, to SRD 530.42 million. Savings, which include long-term investments, rose slightly more (29.11%) than Other debts, which include credit balances on checking accounts. This development reflects our policy of seeking to attract more long-term funding in order to maintain a healthy funding structure. This policy is underpinned by the current stable macro-economic environment, in which private individuals and businesses are increasingly prepared to invest money for longer periods. The item Amounts owed to credit institutions rose by SRD 7.35 million to reach SRD 22.07 million at the year-end. This item relates to the daily clearing of amounts owed to and by other banks in the interbank market and is simply the position on the last day of the year. Provisions rose by a total of SRD 3.09 million to SRD 7.23 million, primarily because of employeerelated liabilities. Shareholders' equity rose by SRD 12.0 million, or 56.55%, to reach SRD 33.24 million by the year-end. The main reasons for this were the transfer of SRD 8.11 million of net profit to the general reserve ­ which brought this to a total of SRD 23.58 million at the year-end ­ and the increase of SRD 3.90 million in the revaluation reserve, which now totals SRD 9.59 million. The rise in shareholders' equity has reinforced the bank's solidity and has also had a positive effect on its business activities in that it is now able to consider applications for larger loans.

Off-balance sheet items, such as guarantees provided and letters of credit opened, which have an impact on the bank's solvency position because of the element of risk they contain, rose by SRD 19.09 million to SRD 22.76 million in 2006. Consolidated results Once again, the consolidated results improved significantly, albeit at a lower rate in percentage terms than in the previous year. Operating result before tax (in thousands of SRD)

22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 0 2002 2003 2004 2005 2006 2,347.5 6,783.1 8,579.5 13,243.1 19,948.4

The bank earned a net profit before tax of SRD 19.95 million in 2006. This increase of SRD 6.71 million, or 50.63%, on the profit in 2005 was well above the target set for the year of a real increase (i.e. adjusted for inflation) of at least 10%. The net profit after tax totalled SRD 12.77 million, compared with SRD 8.48 million in 2005. The rise in the profit is the result of income increasing by SRD 12.44 million, or 33.92%, to SRD 49.10 million and expenses rising by SRD 5.73 million, or 24.48%, to SRD 29.15 million. Income As stated above, total operating income rose s ignificantly. This increase was attributable both to interest income and other (i.e. non-interest) income. The increase in the share of non-interest income from 21.3% to 24.5% of the total was a particularly important development. Our policy is to aim to increase this latter income to a structural level of around 35% of the total. It should, however be


emphasised that some of this income is of a volatile nature and so will require careful and alert management. Interest income currently accounts for 75.5% of total income. We comfortably achieved our overall target of real growth in income of 15% - 20%. Interest income Net interest income rose in the year under review by SRD 8.22 million to SRD 37.06 million. This was the result of growth in the lending portfolio and the rise in international capital market interest rates. The reason why income from investments in Republic of Suriname treasury paper was lower than in 2005, despite an unchanged level of investment, was because of the annual interest rate on these investments being reduced from 12.5% to 10% during the year. Although the increasing competition had an impact on our margins, the growth in lending volumes meant we were nevertheless able to improve our profitability. The growth in lending volumes was accompanied by tighter credit and assets and liabilities management, specifically of our liquidity position. This meant that our net interest margin remained satisfactory, despite the slight fall referred to above. Thanks to the decision to upgrade the relevant management information system, our overall liquidity position could be closely monitored on a daily basis and managed profitably. Tighter management of our foreign-currency liquidity position also contributed to the improvement in this result. Non-interest income Fee and commission income and other income increased by SRD 1.58 million to SRD 9.35 million, primarily because of earnings from domestic payment services, treasury activities and lendingrelated income such as arrangement fees and guarantee commission. Our insurance activities also made a positive contribution to this increase in income. The result of financial transactions improved significantly in 2006, with an increase of SRD 2.64 million, whereas the year 2005 had seen a decrease. The increase in 2006 was primarily the result of the appreciation of the EURO and USD vis a vis the Surinamese Dollar. The euro rose by 11.81% against our local currency in 2006, while the USD rose by only a modest 0.37%. In addition, the policy we adopted in 2005 of using a large investment bank to

invest part of our foreign currencies in the international capital markets generated a satisfactory return. We will therefore be pursuing this policy more intensively in the future. Expenses Operating expenses rose by SRD 6.02 million, or 27.74%, to SRD 27.71 million in 2006, with most of this increase being attributable to employee-related costs. The various provisions required were one of the reasons why this item rose by SRD 4.33 million, or 31.47%, to SRD 18.09 million. The staff provisions relate to provisions for pensioners' rights, including medical provisions. Other operating expenses also rose considerably, with the increase in this case being by SRD 1.38 million, or 24.16%, to SRD 7.07 million. Although some of these higher expenses are of an incidental nature, such as the costs of the activities arranged to mark the bank's seventieth anniversary, the majority is of a structural nature, including, for example, the costs of postage and security. The increase in operating expenses was higher than budgeted.We will therefore be seeking to redress this by improving our costs management and increasing our overall efficiency. A total of SRD 1.44 million was transferred to specific provisions for bad and doubtful debtors. This transfer, which was slightly lower than in 2005, is the result of the improved quality of the lending portfolio and the very prudent policies we apply when assessing credit quality. Ratios Solvency The most important solvency ratios are the capital ratio and the BIS ratio. The capital ratio, which is the ratio of tangible shareholders' equity to total assets, is a standard solvency ratio, while the BIS ratio is more tailored to the banking sector. The BIS ratio relates shareholders' equity to the sum of the various risk-weighted assets and is a better way of assessing the solvency of a bank. The capital ratio at the 2006 year-end was 5.48%, which represented an increase of 0.98 percentage points. Tangible shareholders' equity as a percentage of Receivables from clients was 10.85%, compared to 9.24% in 2005. The increase was attributable to the


rise of around 57% in shareholders' equity in 2006, which exceeded the increase in the lending portfolio. The bank's BIS ratio at the year-end was 11.31%, compared with 10.01% at the end of 2005. As usual, we comfortably complied with the solvency standards set by the Central Bank of Suriname. These are in essence based on the Basle I Capital Accord, which specifies a minimum ratio of 8%. BIS ratio (%)

14 12 10 8 6 4 2 0 9.74 11.68 10.19 10.01

Return on equity (%)

50 45 40 35 30 25 20 15 10 26.4 40.2 39.9 46.1 46.9


5 0 2002 2003 2004 2005 2006

The sharp rise in shareholders' equity had as a consequence that the RoE improved only marginally, despite the significant increase in profit. The RoA rose by 3 percentage points thanks to more active assets and liabilities management, an improvement in the quality of our lending portfolio, the strong growth in other income and the reduction in the SRD cash reserve requirement. The ratio was also boosted by the increase to 9% in the percentage of the compulsory cash reserve permitted to be used for long-term housing loans on favourable terms. Return on assets (%)

2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 2002 2003 2004 2005 2006 1.01 1.69 1.69 1.95 2.37






Profitability The most important indicators of our profitability are the RoE and RoA, which are discussed in detail in the `Business of the bank' section of this report. Both these ratios improved thanks to the operating results achieved for the year

Our policy is designed to achieve further improvements in these ratios.


Operations The most important operational or productivity ratio is the efficiency ratio. Efficiencyratio (%)

90 80 70 60 50 40 30 20 10 0 77 64 63

and liabilities management, increasing our earning capacity and implementing various cost-saving measures. Hakrinbank share Our policy is to pay an attractive dividend representing one third of the net profit for the year. This policy also takes account of our solvency, profitability and growth objectives. More information on the Hakrinbank share and its performance over the years can be found below. The developments in the share price reflect the favourable development of our business over the years, with both profits and dividends per share on a rising trend. The price/earnings ratio indicates that Hakrinbank shares are a good investment. For the purposes of comparison, the previous years' figures have been converted to reflect the exchange of 20 old shares of SRG 7.50 nominal value for each new share of SRD 0.15 nominal value that took place in 2006. Development of share price (in SRD)








The efficiency ratio, which is the total expenses less provisions expressed as a percentage of total income, is a good measure of operating efficiency. The lower this ratio is, the more efficient the operations are. The downward trend in this ratio continued in the year under review. Thanks to the fact that the increase in income exceeded the increase in expenses, our ratio improved from 59% in 2005 to 56% in 2006. However, the sharper than expected rise in certain expense items meant we were unable to achieve our target of 55%. We will therefore be implementing various efficiency measures in 2007 in an effort to reduce this ratio to around 53% by the year-end. Our efforts to achieve further reductions in the efficiency ratio will focus on improving our assets

150 140 130 120 110 100 90 80 70 60 50 2002 61.0 2003 2004 2005 2006 79.2 106.0 124.0 136.0

Key figures showing development of Hakrinbank share (in SRD) 2006 Price at year-end Net asset value at year-end Market capitalisation (x SRD 1,000) Net earnings per share Dividend per share Dividend yield (%) Price/Net asset value (%) Price/Earnings ratio at year-end 136.00 71.37 63.335 27.41 10.00 7.4 190.6 5.0 2005 124.00 45.59 57.746 18.20 6.07 4.9 272.0 6.8 2004 106.00 33.38 49.364 11.79 4.00 3.8 317.6 9.0 2003 79.20 25.71 36.883 9.43 2.80 3.5 308.8 8.4 2002 61.00 16.16 23.673 4.26 0.91 3.5 377.5 14.3


Appropriation of profit for the 2006 financial year As the above figures show, the net earnings of SRD 27.41 per share were 51% higher than in 2005. The improved underlying result and the bank's reasonable solvency position mean we are able to propose a cash dividend to the General Meeting of Shareholders that is 65% higher than in 2005. The proposed increase in the dividend demonstrates the importance we attach to generating value for our shareholders. The additional amount included to mark the bank's seventieth anniversary means the proposed dividend is higher than the one third of net profit normally paid out. We propose appropriating the profit as follows: 1. Payment of a cash dividend of SRD 10.00 per share of SRD 0.15 nominal value, which amounts to a dividend percentage of 6,666.67%. This includes the extra amount of SRD 1.00 per share paid to mark Hakrinbank's seventieth anniversary. An amount of SRD 1.40 per share was distributed as an interim dividend in October 2006, which means a total amount of SRD 4.66 million being distributed for the year and a pay-out ratio of 36.48%. 2. Transfer of the remaining profit of SRD 8.11 million to the General Reserve. The proposed appropriation of profit will further reinforce the bank's shareholders' equity. This will increase the bank's solidity and improve its potential for growth, while also ensuring we can comply with the Central Bank of Suriname's requirement for investment programmes to be funded by shareholders' equity. Improving our solvency is also important in anticipation of a possible tightening of the solvency requirements. Outlook for 2007 We expect the favourable economic trends seen in recent years to continue in 2007. We are assuming a stable macro-economic environment, falling inflation, stable exchange rates and economic growth of around 6%. There will be substantial investments in various sectors of the economy, while the government's financial position and the monetary reserve will both continue to improve. Hakrinbank will benefit from the external economic environment. We are expecting to achieve increased volumes of business, which will in turn boost the bank's growth and profitability. The

growth rates we have budgeted for the year are admittedly lower than in 2006 because of the falling inflation and the effect that the increasing competition in the market will have on our margins. We will therefore be seeking to introduce more innovative products and to diversify the range of financial services we offer as a means of improving our profitability. Our employees put in another excellent performance in 2006, our anniversary year, and this forms the basis of the impressive results achieved by our business activities. Productivity improved, as did the level of service our employees provide, and these factors both played a major part in boosting the already good image enjoyed by Hakrinbank. The hard work and efforts of all our employees helped our bank to establish various new records for growth and profitability in its seventieth anniversary year. We are very grateful to them for the commitment and loyalty they have demonstrated. We should also like to take this opportunity to thank all the members of the Supervisory Board for their active involvement in our activities and the tremendous efforts they made during the year. We are obviously also particularly grateful to our many and valued clients ­ both consumer and commercial ­ for their business and the trust and loyalty they have shown to Hakrinbank N.V. and its subsidiary, Nationale Trust- en Financierings Maatschappij.

Paramaribo, 10 April 2007

Executive Board Hakrinbank N.V. Jim D. Bousaid, Chief Executive Officer


Employees at work in traditional dress on the day of the bank's anniversary.



To: the Board of Supervisory Directors of Hakrinbank N.V.

We have audited the accompanying financial statements of Hakrinbank N.V. ("the Company") in Paramaribo which comprise the consolidated balance sheet at December 31, 2006, the consolidated profit and loss account for the year then ended, the company balance sheet at December 31, 2006 and the company profit and loss account for the year then ended and the notes to these financial statements. Management's responsibility Management of the company is responsible for the preparation and fair presentation of the financial statements, in accordance with generally accepted accounting principles. Management's responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with generally accepted Standards on Auditing. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above give a true and fair view of the financial position of Hakrinbank N.V. at December 31, 2006, and of its result for the year then ended in accordance with generally accepted accounting principles.

Paramaribo, April 10, 2007

Hiralal Lutchman & Co An independent correspondent firm of Deloitte Touche Tohmatsu





comprising: - Consolidated balance sheet - Consolidated profit and loss account - Company balance sheet - Company profit and loss account - Notes



2006 ASSETS Cash and cash equivalents Treasury paper Receivables from credit institutions Receivables from clients Securities Participating interest Tangible fixed assets Prepayments and accrued income


72,055,445 32,103,968 172,692,670 306,449,015 95 168,000 20,656,739 2,337,078 606,463,010

64,390,355 32,850,327 126,666,969 229,730,032 95 168,000 15,895,748 1,977,784 471,679,310 14,725,404 185,265,134 238,272,824 6,080,054 1,961,856 4,143,349 450,448,621 69,854 916 5,693,677 15,466,242 21,230,689 471,679,310 2,574,201 1,100,601 3,674,802

LIABILITIES Amounts owed to credit institutions Amounts owed to clients: - Savings - Other debts Other liabilities Accruals and deferred income Provisions

22,072,559 239,200,868 291,222,248 10,959,113 2,537,188 7,233,350 573,225,326

Authorised share capital 120,000 Issued and paid-in capital Share premium reserve Revaluation reserve General reserve

69,854 916 9,590,657 23,576,257 33,237,684 606,463,010

Liabilities relating to indemnities and guarantees Liabilities relating to irrevocable documentary credits

19,234,844 3,527,142 22,761,986

Paramaribo, 10 April 2007

Supervisory Board A.K.R. Shyamnarain - Chairman R.A. Mac Donald - Deputy Chairman H.B. Abrahams Ms G. Lie Sem-Nawikromo H.R. Ramdhani M.M. Sandvliet J.J.F. Tjang-A-Sjin

Executive Board J.D. Bousaid - CEO Ms M.M. Tjon A Ten - COO



2006 OPERATING INCOME Interest margin Fee and commission income Result of financial transactions Other operating income


37,061,187 9,326,575 2,684,064 24,280 49,096,106

28,842,891 7,758,114 48,781 9,720 36,659,506

OPERATING EXPENSES Employees Depreciation Other operating expenses Provision for credit risks

18,090,462 2,546,749 7,071,223 1,439,274 29,147,708

13,760,660 2,234,629 5,695,216 1,725,902 23,416,407 13,243,099 4,767,516 8,475,583


19,948,398 7,181,423 12,766,975

Paramaribo, 10 April 2007

Supervisory Board A.K.R. Shyamnarain - Chairman R.A. Mac Donald - Deputy Chairman H.B. Abrahams Ms G. Lie Sem-Nawikromo H.R. Ramdhani M.M. Sandvliet J.J.F. Tjang-A-Sjin

Executive Board J.D. Bousaid - CEO Ms M.M. Tjon A Ten - COO



2006 ASSETS Cash and cash equivalents Treasury paper Receivables from credit institutions Receivables from clients Securities Participating interest Tangible fixed assets Prepayments and accrued income


72,055,445 32,103,968 172,692,670 234,229,665 95 71,645,235 20,567,778 2,089,398 605,384,254

64,390,355 32,850,327 126,666,969 171,292,529 95 57,371,679 15,849,233 1,607,235 470,028,422 14,725,404 184,867,130 238,047,670 5,188,077 1,826,103 4,143,349 448,797,733 69,854 916 5,693,677 15,466,242 21,230,689 470,028,422 2,574,201 1,100,601 3,674,802

LIABILITIES Amounts owed to credit institutions Amounts owed to clients: - Savings - Other debts Other liabilities Accruals and deferred income Provisions

22,072,559 238,852,238 291,018,006 10,013,242 2,957,175 7,233,350 572,146,570

Authorised share capital 120,000 Issued and paid-in capital Share premium reserve Revaluation reserve General reserve

69,854 916 9,590,657 23,576,257 33,237,684 605,384,254

Liabilities relating to indemnities and guarantees Liabilities relating to irrevocable documentary credits

19,234,844 3,527,142 22,761,986

Paramaribo, 10 April 2007

Supervisory Board A.K.R. Shyamnarain - Chairman R.A. Mac Donald - Deputy Chairman H.B. Abrahams Ms G. Lie Sem-Nawikromo H.R. Ramdhani M.M. Sandvliet J.J.F. Tjang-A-Sjin

Executive Board J.D. Bousaid - CEO Ms M.M. Tjon A Ten - COO





Operating income Operating expenses Profit before tax Corporate income tax PROFIT AFTER TAX

43,022,991 25,179,335 17,843,656 5,076,681 12,766,975

32,720,303 21,286,370 11,433,933 2,958,350 8,475,583

Paramaribo, 10 April 2007

Supervisory Board A.K.R. Shyamnarain - Chairman R.A. Mac Donald - Deputy Chairman H.B. Abrahams Ms G. Lie Sem-Nawikromo H.R. Ramdhani M.M. Sandvliet J.J.F. Tjang-A-Sjin

Executive Board J.D. Bousaid - CEO Ms M.M. Tjon A Ten - COO



General Unless stated otherwise, assets and liabilities are shown at face value. Receivables and debts in foreign currencies are converted at the Central Bank of Suriname's buying rate for bank notes on the balance sheet date (2006: USD 1 = SRD 2.71 and EUR 1 = SRD 3.559 / 2005: USD 1 = SRD 2.70 and EUR 1 = SRD 3.138). Receivables from clients are shown net of specific provisions for credit risks. The movement in these provisions is taken to the profit and loss account for the year. The corporate income tax shown in the profit and loss account is calculated on the commercial profit for the year (less the result from participating interests). Any difference between this figure and the actual tax due is taken to the provision for deferred taxation liabilities. Properties are shown at replacement value, with buildings being depreciated on a straight-line basis over their useful economic life. Changes in value are taken to the revaluation reserve, less any tax due on the changes. The revaluation reserve is shown as a separate element of shareholders' equity, less any deferred taxation. Deferred taxation is calculated on the present value, assuming a tax rate of 36%. The consolidated financial statements contain the figures of the bank and its wholly owned subsidiary, Nationale Trust- en Financierings Maatschappij N.V. Unless stated otherwise, the following notes refer to the consolidated figures for the year. All amounts are in Surinamese dollars.



2006 ASSETS Cash and cash equivalents This item comprises cash, credit balances available on demand from the Central Bank of Suriname and the cash reserve of SRD 42,668,099 (2005: SRD 49,648,637) held in SRD at the Central Bank of Suriname and not freely available to Hakrinbank N.V. Treasury paper This item comprises investments in treasury promissory notes of the Republic of Suriname. These notes have maturities of 6 months and pay interest of 10% per annum (2005: 12.5%). Receivables from credit institutions This item comprises receivables owed by domestic and foreign credit institutions, together with the foreign currency cash reserve of SRD 88,567,137 (2005: SRD 68,050,581) required by the Central Bank of Suriname, held at foreign banks and not freely available to Hakrinbank N.V. Receivables from clients This item comprises receivables owed as a result of lending, net of any provisions deemed necessary. Securities This item comprises shares in Nationale Ontwikkelingsbank N.V. These shares are shown at cost. Participating interest (in company balance sheet) This item comprises a participating interest of 100% in the capital of SRD 5,000 of Nationale Trust- en Financierings Maatschappij N.V. This is shown at net asset value, while the receivable is shown at face value. It also includes the participating interest in the capital of BNETS N.V. of SRD 168,000, which is shown at cost. 72,055,445














2006 Tangible fixed assets Properties: Balance sheet as at 1 January Investments Adjustments Revaluations Depreciation Balance sheet as at 31 December Replacement value Cumulative depreciation


11,770,562 326,003 (2,468) 10,408,413 (5,979,342) 16,523,168 31,096,153 14,572,985 16,523,168

10,840,708 1,444,688 ­ ­ (514,834) 11,770,562 20,364,205 8,593,643 11,770,562

Machinery, equipment and vehicles: Balance sheet as at 1 January Investments Adjustments Depreciation Balance sheet as at 31 December Cost Cumulative depreciation

4,125,186 2,003,822 ­ (1,995,437) 4,133,571 11,764,202 7,630,631 4,133,571

3,645,029 2,291,548 (91,596) (1,719,795) 4,125,186 9,760,380 5,635,194 4,125,186 15,895,748



Prepayments and accrued income This item comprises investments in progress, prepayments of expenses attributable to future years and amounts earned, but not yet collected.




2006 LIABILITIES Amounts owed to credit institutions This item comprises amounts owed to banks. Amounts owed to clients (Savings) This item comprises: Deposits and savings certificates Balances on savings accounts and in savings books 22,072,559



13,868,057 225,332,811 239,200,868

13,196,019 172,069,115 185,265,134 238,272,824

Amounts owed to clients (Other debts) This item comprises liabilities relating to the bank's operating activities that are not included in savings or amounts owed to credit institutions. Other liabilities This item comprises liabilities not able to be included under any other heading. Accruals and deferred income This item comprises prepayments received of income attributable to future years and amounts still to be paid in respect of expenses attributable to previous years. Provisions This item comprises: Deferred taxation liabilities Provision for pensions Provision for medical expenses and bonuses/extras for pensioners Maintenance fund Provision for insurance excess (`own risk')






1,760,562 1,282,407 3,405,506 649,375 135,500 7,233,350

811,034 1,125,330 1,619,610 452,375 135,000 4,143,349

Issued and paid-in capital The shares have a nominal value of SRD 0.15. Balance sheet as at 1 January Balance sheet as at 31 December Share premium reserve Balance sheet as at 1 January Balance sheet as at 31 December

69,854 69,854

69,854 69,854

916 916

916 916


2006 Revaluation reserve Balance sheet as at 1 January Added as a result of revaluations of tangible fixed assets less deferred taxation liabilities Balance sheet as at 31 December General reserve Balance sheet as at 1 January Addition of net profit Balance sheet as at 31 December Liabilities relating to indemnities and guarantees This item comprises bank guarantees issued on behalf of third parties. Liabilities relating to irrevocable documentary credits This item comprises irrevocable and confirmed documentary credits issued.


5,693,677 3,896,980 9,590,657

5,749,866 (56,189) 5,693,677

15,466,242 8,110,015 23,576,257 19,234,844

9,722,432 5,743,810 15,466,242 2,574,201





2006 Interest margin This item comprises the positive difference between interest income from lending, investments and other assets on the one hand and interest expense on funds borrowed by or entrusted to the bank on the other hand. Fee and commission income This item comprises fees and commission received in return for services provided. Result of financial transactions This item comprises the results of currency transactions, currency translation differences and movements in the value of securities. Other operating income This item comprises income not relating to the bank's core activities. Employees This item comprises wages, salaries, bonuses, social security expenses and other staff provisions. Depreciation This item comprises the depreciation on tangible fixed assets. Other operating expenses This item comprises accommodation, office and computer expenses and the like. Provision for credit risks This item comprises the transfer to specific provisions in respect of lending activities. Corporate income tax This item comprises the corporate income tax calculated on the gross profit shown in the profit and loss account. Appropriation of profit Cash dividend Transfer to the general reserve 37,061,187

2005 28,842,891

















4,656,960 8,110,015 12,766,975

2,731,773 5,743,810 8,475,583



Curricula vitae and details of ancillary positions of members of the Supervisory Board and Executive Board of Hakrinbank

Supervisory Board A.K.R. (Roy) Shyamnarain Chairman Age: 56 Mr Shyamnarain trained as a tax lawyer, with supplementary training in general law at the University of Leiden. He is a partner in Tjong A Hung Tax Advisers and has also worked for the tax authorities in the Netherlands and as an adviser to the Minister of Finance in Suriname. He is also chairman of the Foreign Currency Control Board and a member of the IFONS Supervisory Committee.

R.A. (Richard) Mac Donald Deputy Chairman Age: 64 Mr Mac Donald graduated in Food Sciences from the Higher Agricultural Institute in Wageningen and is currently director of the Medical Sciences Institute of the University of Suriname. He has extensive experience in business and was for many years managing director of Varossieau N.V. He is a member of the State Council of Suriname and the Supervisory Board of Jetzza International N.V.

M.M. (Milton) Sandvliet Member Age: 36 Mr Sandvliet graduated in General Economics from Anton de Kom University and has a Master's degree in International Business from the University of the West Indies. He is Head of Economic and Administrative Services at the Civil Aviation Safety Authority of Suriname, has been a director of STPO and has been a senior civil servant focusing on international economic relations at the Ministry of Trade and Industry.


Mrs G. (Ghamie) Lie Sem-Nawikromo Member Age: 36 Mrs Lie Sem-Nawikromo's educational background is in government accounting, with additional training in financial management and marketing. She is a deputy head at the Ministry of Social Affairs (AMZ), has worked in various government accounting positions and has been head of the General Retirement Provision Fund.

H.B. (Enrico) Abrahams Member Age: 64 Mr Abrahams graduated in General Economics from the Erasmus University in Rotterdam in 1969. He is the Managing Director of the Government Debt Management Office and has also been Head of Economic and Social Planning at Suriname's National Planning Office and managing director of Melkcentrale N.V.

H.R. (Harold) Ramdhani Member Age: 62 Mr Ramdhani has a Master's degree in Business and is the director/owner of RAMSHOLDING. He is a member of the State Council of Suriname, chairman and deputy director of Stichting Experimentele Landbouwbedrijven Prins Bernhard Polder (seed crops) and Baboenhol and Tibiti (live stock), as well as being a member of the National Air Transport Negotiating and Advisory Board.

J. J.F. (Johan) Tjang-A-Sjin Member Age: 67 Mr Tjang-A-Sjin graduated in Business Economics from the Erasmus University in Rotterdam in 1971. He is a director of N.V. Comfish and for many years was also a member of the executive board of Fernandes Concern Beheer N.V. He is deputy chairman of N.V. Self Reliance Assurantie Maatschappij, a member of the IFONS Supervisory Committee and a business development consultant.


Executive Board J.D. (Jim) Bousaid Chief Executive Officer Age: 50 Jim Bousaid studied General Economics at the Erasmus University in Rotterdam, where he specialised in Money, Credit and Banking and also in Public Finances. Since joining Hakrinbank in 1984 he has worked in various commercial and financial management positions and was appointed CEO on 1 August 2002. From March 2005 ­ March 2007 Mr Bousaid was chairman of the Surinamese Bankers Association and is also on the Board of Directors of the Caribbean Association of Indigenous Banks.

Ms M.M. (Mariette) Tjon A Ten Chief Operations Officer Age: 54 Mariette Tjon A Ten graduated in Law from the University of Leiden in 1977. She joined Hakrinbank in May 1981 and has since worked in various positions for the bank and its subsidiary NTFM. She was appointed to the Executive Board on 1 August 2002. Since March 2007 she has been the secretary of the Surinamese Bankers Association.

H. S.K.G. (Harold) Liu Hung Chung Assistant Managing Director Operations Age: 58 Harold Liu Hung Chung has an educational background in accounting and ICT. He has worked for Hakrinbank since 1969 in a wide range of positions. He was appointed to the position of Assistant Managing Director Operations on 1 August 2001.

G.M. (Gerard) Raghoenathsingh Assistant Managing Director Commercial Age: 43 Gerard Raghoenathsingh graduated in Business Economics and also has a Master's degree in Business Administration from the Maastricht School of Management, where he specialised in Corporate Strategy and Economic Policy. He has worked for Hakrinbank since 1991 in various different roles. He was appointed to the position of Assistant Managing Director Commercial on 1 August 2001. Since June 2006 he has been secretary of the Surinamese Association for Securities Trading.




HEAD OFFICE Dr. Sophie Redmondstraat 11-13 Tel.: (597) 477722 Fax: (597) 472066 ­ (597) 475073 P.O. Box 1813 Paramaribo E-mail: [email protected] Website: Swift code: HAKRSRPA BRANCHES Nieuwe Haven Havencomplex Tel.: (597) 401836 Tel./Fax: (597) 402466 Flora Mr. Jagernath Lachmonstraat 164 Tel.: (597) 497875 Fax: (597) 499357 Tourtonne Hk.Anamoestraat/Plutostraat Tel.: (597) 451977 Fax: (597) 551362 Latour Hk. Indira Gandhiweg/Latourweg 10 Tel.: (597) 481802 Tel./Fax: (597) 481856 Tamanredjo Hadji Iding Soemitaweg 471 Tel.: (597) 0356446 Fax: (597) 0356447 Nickerie G.G.Maynardstraat 49 Tel.: (597) 0231176, 0231711, 0231750 Fax: (597) 0231931 SUBSIDIARY Nationale Trust- en Financierings Maatschappij N.V. (NTFM) Dr. Sophie Redmondstraat 11-13 Tel.: (597) 410000 Fax: (597) 479874 E-mail: [email protected]


Appendix I SURINAME: Key macro-economic data






Production Nominal GDP market prices (x SRD millions) Real growth in GDP (%) Oil production (millions of barrels) Alumina (1000 m. tons) Gold (kg) Rice production (m. tons) Inflation (%) Consumer price index (average) Consumer price index (year-end) Balance of payments (cash) Export of goods (x USD millions) Import of goods (x USD millions) Current account (x USD millions) Balance of non-monetary sectors (x USD millions) Monetary reserve (x USD millions) Import coverage (months) Exchange rate Average official exchange rate (USD) Average free exchange rate (USD) Government debt Domestic government debt (x SRD millions) Foreign government debt (x USD millions) Monetary and financial sector M1 money supply (x SRD millions) M2 money supply (x SRD millions) Domestic liquidity (%) Weighted average nominal deposit rate (%) Weighted average nominal lending rate (%) Government finances Receipts on ordinary account (x SRD millions) Expenditure on ordinary account (x SRD millions) Financing surplus/(deficit) (mln. SRD) Financing surplus/(deficit) (% of GDP)

5,142.5 5.8 4.8 2,133 21,960 198,162

4,675.2 5.5 4.4 1,940 21,700 163,955

3,908.3 8.1 4.1 2,014 21,586 174,490

3,178.4 6.0 4.3 2,005 11,710.9 193,685

2,432.4 2.6 4.5 1,903 n.a. 157,105

11.3 4.7

9.5 15.8

9.1 9.1

23.0 13.1

15.5 28.4

931.1 790.4 94.3 86.7 258.9 2.8

677.7 768.9 (257.2) 16.9 162.6 1.7

633.3 592.8 (138.4) 36.9 143.0 1.5

487.3 448.1 (148.2) (126.2) 107.0 2.0

369.3 321.9 (131.0) (19.8) 104.5 2.6

2.78 2.80

2.77 2.80

2.76 2.72

2.58 2.73

2.30 2.64

650.8 388.6

695.7 387.2

539.2 382.8

410.4 394.3

294.5 334.0

941.3 1,082.0 21.1 6,6 15,5

772.9 879.8 18.8 7.8 17.2

699.5 787.8 20.1 8.1 19.1

547.1 614.4 19.3 8.5 21.0

538.4 591.1 24.3 8.4 21.3

1,523.0 1,342.8 49.2 1.0

1,286.5 1,247.6 -98.2 -2.0

1,087.8 1,160.0 -72.2 -1.9

858.4 835.5 2.9 -0.1

628.1 788.8 -160.7 -6.7

Sources: National Planning Office of Suriname, Central Bank of Suriname, Ministry of Finance, Ministry of Agriculture, Animal Husbandry, Government Debt Management Office, General Office of Statitistics, International Monetary Fund and own estimates. *) Provisional figures




70 pages

Report File (DMCA)

Our content is added by our users. We aim to remove reported files within 1 working day. Please use this link to notify us:

Report this file as copyright or inappropriate


Notice: fwrite(): send of 208 bytes failed with errno=104 Connection reset by peer in /home/ on line 531