ADB Provides for Doubtful Debtors to Clean up its Credit Portfolio

The year 2010 witnessed a growth in the luxury and in particular the diamond and diamond jewellery industry post economic crisis, but was also marked by anticipated bankruptcies. Noting this, the Antwerp Diamond Bank (ADB), a fully owned subsidiary of the KBC Bank, and also the only bank worldwide that exclusively caters for the diamond and diamond jewellery trade and industry has decided to provide for potential credit losses of an extra 66 million Euro, resulting in a 38 million Euro loss for the year 2010.

The bank had made for additional provisions for previously detected problem files. Management assumes that the past crisis will no longer have a negative impact on the results relating to credit losses. Simultaneously, a special effort was made to improve the sustainability of earnings.

- The commercial margin was maintained while crisis-bound interest income, due to non-conforming use of credit or volatility on financial markets, disappeared.

- Net fee income grew by 16 percent as a result of higher transaction volumes for payment and goods handling services.

The 2010 balance sheet total rose by 19 percent to 1.472 billion Euro owing in part to the appealing use of credit. The rising trend in the debtors portfolio is sustained in Q1 2011, providing ADB with a solid platform to roll out its new commercial action plan for 2011 and 2012. With a Risk Asset Ratio of 10.2 percent, the Bank more than adequately meets the current international obligations.