Jorge Andrade Avecillas chairs the Board of Directors of the National Financial Corporation (CFN) since November 2022, has a career in the public and private sectors, has been part of Banco de Machala for 41 years, and is recently the National Legal Mayor of the General Supervision of Banks. He explains CFN’s achievements as a milestone in investments, that it has improved its indicators and that it has financing agreements with multilaterals in the amount of 600 million dollars. Also comment on your goals, at least until December of this year.
What has CFN’s investment portfolio been like these years?
We have exceeded one billion dollars in investment. As of December 2020, there were $549.19 million in investments. By December 2021, already in the administration of President Guillermo Lasso, we reached $779.62 million, and by 2022 the investment portfolio was set at $932.6 million. As of April 2023, we are at $1.069 million.
Investments come from bank deposit balances as well as what is returned from the portfolio. It should be remembered that we came with a very complicated portfolio, there were many bad loans. There is a $400 million portfolio due, which was why President Lasso closed the Tier 1 loans.
What is the arrangement of those 1069 million dollars of investments, what were these funds invested in?
This year we invested $30 million in pension bonds, $500 million in banks and $487 million in government bonds, and we also invested ($10 million) in the real sector. Profitability is good, bonds according to the issue 4.5% and 5%. They also pay.
Now, how are CFN’s second-tier bank loans progressing?
Last month we just signed a contract with the IDB in the amount of 300 million dollars, and with the World Bank we aim to be able to sign another contract in the amount of 300 million dollars more in June. Those 600 million dollars come from the trust of multilaterals thanks to the good management of the Government and CFN. It is the government that provides the sovereign guarantee.
How much has been delivered so far in this administration in loans and resources such as tier two banking?
Last year alone, $219 million was delivered on the second floor, which the bank has already placed in 3,300 operations, of which 62% were for women’s initiatives. We hope to deliver $600 million from the multilateral in the time we have. What banks need most are loans. Banks are already looking for us. In the first floor of loans, we provided 71 million dollars, but that stopped.
But what about the portfolio that you say was difficult to recover?
We have a portfolio inherited from previous governments worth $427 million that is already unproductive. Because of this, we made a provision for more than $500 million and it was written off ($240 million). The portfolio is now fully insured. Now we have been reducing that loss of 240 million dollars, and it is already 84 million dollars, and we hope to pay it off this year.
However, we continue to fight for the recovery of that portfolio, through coercive means. We have also completed more than 300 refinancings and restructurings for clients that are viable for recovery. We currently have a problem with that process because of laws like humanitarian aid, and especially because of the protective actions that everyone takes to avoid accusations. It’s already 24 in 22 months. However, this week CFN is preparing to submit a request to the Election Commission of the Constitutional Court to give instructions so that first-instance judges do not indicate how debts should be collected.
How many millions are involved in these 24 actions?
We’re talking about millions, seven million, eight million, nine million dollars each. Among the debtors are companies from Quito and Guayaquil. We have serious problems in Manta, and we are talking about loans of 30 million dollars.
President Lasso at one point mentioned a $100 million loan that was in the swap.
We had a loan of 90 million dollars, which was La Clementina, but we already received it as a repayment date. We are selling it now, but the auction is not out yet. We share it because it is too big a farm. This is in Babahoyo Municipality; However, the previous administration did not sign, I have to go talk to the mayor this week. But it’s almost ready.
How do you deal with delinquency?
In December, we managed to lower it to 25 percent, it was at 29 percent. But in January there was a conversion that went from 60 days to 30 days for declaring the portfolio due and therefore the delay increased. We are regulating it and aiming to end this month at 27%. Since we no longer provide the first floor, we have concentrated our workforce on three things: collections ($400 million late due to a difficult portfolio), but we also have $900 million to collect. We have to be very careful about all this. Another goal is the optimization of the second floor group, which we will devote ourselves to. The third group is administration, in general. CFN has good indicators: it is a solvent entity, with good assets. For example, in April 2022, the capital was $1,153 million, while in April 2023, it grew to $1,310 million.
What are the goals in the next months?
Our goal is to improve the risk rating, which is now A, to AA. We also request an external audit opinion without objection or reservation. This can happen in December. We also want to get the ISO 37.001 certificate for the fight against corruption and bribery by December.
Source: Eluniverso

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