Marginal rise in ECGC profit

Reports over 7% rise in net profit for FY13 at Rs 243 cr

The Export Credit Guarantee Corporation reported an over seven per cent rise in net profit for FY13 at Rs 242.8 crore and said it will soon open its first overseas representative office in London. Describing the financial numbers as "highly satisfactory," Chairman and Managing Director N Shankar told reporters that after making adequate provisions for pending claims and probable claims, the Corporation earned a net income of Rs 242.8 crore and strengthened its balance sheet on rising premium income, besides settling claims worth Rs 548 crore to exporters and banks.

A year ago, the corporation had reported a net profit of Rs 225.2 crore.
 

In FY'12, ECGC had paid Rs 713 crore in claims to banks and exporters, out of which direct payments to banks were around Rs 600 crore. He also said the ECGC would shortly open its first representative office in London, since as much as 23 per cent of its claims are from Europe. The ECGC, which has one of the highest solvency ratios at 9.64 against the regulatory requirement of 1.5, said it would seek government nod to hike its paid-up capital to Rs 5,000 crore from the present Rs 1,000 crore.

Last year, the government had infused Rs 100 crore into the corporation. Set in 1957 by the government to support and increase exports by providing export credit insurance, EGCG is the fifth-largest credit insurer in the world in terms of coverage of national exports.

It settled 475 claims worth Rs 113.42 crore to exporters on 383 buyers in 70 countries under direct policies, and 193 claims worth Rs 396.61 crore, financing banks under the export credit insurance to banks, Shankar said. He also said that major sectors under which claims arose were readymade garments and textiles; gems and jewellery, engineering goods, agro products, chemicals, marine products, cotton, yarn, fabrics and leather, with European importer making most of such claims.

During the year, the ECGC's gross premium rose Rs 1,157 crore, up from 15 per cent over the previous year, he said, adding that as of March end, it had 11,720 short term policies and 497 ECIB covers in force. The Corporation presently covers around 60 per cent of export credit disbursements by banks in the country. As regards policy business, the Corporation now underwrites risks on 237 countries and maintains records of about 1 lakh active buyers across the world.

During FY13, the Corporation added 16,127 new buyers to its database and its gross risk value touched Rs 1,26,100 crore under the short-term policy schemes for exporters during the year. During the year, ECGC took various initiatives to promote exports and improve services to its customers, which included opening three more branches at Faridabad, Tirupur and Hyderabad, taking the overall branch network to 58.