Profits surge at World Bank lender

Profits at the World Bank's private sector lending division have tripled to $528m in the year to June 2003, thanks to stronger developing world economies.

The International Finance Corporation's (IFC) improved performance also reflected a wider spread of investments than last year, the organisation said.

In the 12 months to June 2002, the lender made a profit of just $161m as Argentina's debt default, and the resulting switch of trade financing from reluctant lenders to the IFC, took its toll.

"Despite spots of volatility, the emerging markets still represent major long-term opportunities for investors," said IFC chief Peter Woicke.

Gains

Overall, the bank's lending rose 11.5% on the year to $16.8bn, the IFC reported.

The biggest commitments were in Europe and central Asia - where $1.2bn came from the IFC and another $190m came from syndicated loans - Latin America, and the Caribbean.

The latter two regions, where the IFC lend $1.26bn and arranged financing worth another $918m through syndicated loans, showed a diversification in lending after the previous year's focus on the battered economies of Argentina and Brazil.

East Asia showed a fall in lending, although the bank is now looking to ramp up its operations in the region, starting with a move to arrange up to $300m in loans for the Philippines denominated for the first time in pesos rather than dollars.

And in South Asia, the IFC lent $386m on its own account, and another $37m in syndicated loans.

Stagnation

But despite rising commitments, the Middle East and Africa account for no more than a fraction of the IFC's overall portfolio, with both regions showing little economic progress.

In the Middle East and North Africa, lending rose 26% to $279m.

Sub-Saharan Africa, in contrast, received just $140m directly and $26m through syndicated loans.

Still, the IFC said it was pushing new lending projects with the World Bank's lowest-cost financing division, the International Development Association, aimed at helping develop sustainable small and medium-sized businesses.