ACTIVITIES

Targets & Activities 2009-11

FAF-DC aims to be a leading financial company in terms of profitability and growth. For 2009 and the years to come it will experience an average return on equity, higher than the current one and exceeding the average growth of banking system in Albania.

Nevertheless, FAF-DC will operate in a more competitive environment. In the projections of 2009-11, the competitive risk of FAF-DC will face the competition of 18 licensed commercial banks in Albania, with a total network of 171 regional offices, branches, and agencies.

In spite of this, still none of the banks has a rural lending presence.

The recent sound performance is likely to have an influence on approval of the following financing to FAF:

 

	Institution Loan size Repayment period Grace period Interest rate IFAD USD 4 000 000 40 years 10 years 1% fixed rate OFID USD 750 000 20 years 5 years 3.25 % fixed rate CEB EUR 5 000 000 10 years 5 years Euribor + 0.32
	The projected balance sheet and income statement are based on the information above:
	Financial Position Projections [USD]:
	Balance Sheet and Capital Structure:
	Balance Sheet Items 2011 2010 2009 2008 2007 Cash 1 025 774 575 376 338 693 1 379 316 317 964 Loans 24 854 395 23 164 040 21 476 635 17 856 045 16 685 189 Fixed Assets 460 000 460 000 460 000 461 928 465 572 Total Assets 26 340 169   150.78% 24 199 416     138.53% 22 275 328          127.51% 19 697 289     112.76% 17 468 725                100% Current Liabilities 170 000 150 000 145 000 124 400 1 950 Non Current Liabilities 10 422 748 9 319 539 8 216 330 6 268 628 5 038 706 Total Liabilities 10 592 748   210.14% 9 469 539   187.63% 8 361 330   165.87% 6 393 028     126.83% 5 040 656   100%             Equity 15 747 421   126.09% 14 729 877   118.52% 13 913 998   111.96% 13 304 261   107.05% 12 428 069   100
	Income Statement Projections [USD]:   Income Statement 2011 2010 2009 2008 2007 Income 4 486 430 4 183 555 3 842 892 3 568 997 2 998 001 Expenses 3 468 886 3 367 676 3 233 155 2 692 805 2 352 155 Net Operating Income 1 017 544 815 879 609 737 876 192 645 846

The projections of Balance Sheet and Income Statement items are adjusted according to conservatively moderate growth forecasting scenarios, and yet it provides interested investors with a financially attractive and viable option. The growth of total assets in 2011 are 1.51 times higher than 2007, the total liabilities are 2.10 times higher and equity capital is increased for 1.26 times. The average growth of capital is 116%.

 All forecasts are based mainly on second and third time borrowers, who represent major elements of non-farm production, and the majority share of outstanding loans portfolio will be 60-70% for ‘non-agriculture and livestock’ loans.

The process of diverting loans from farm projects into industrial processing lines projects appears to be an appropriate future option.