Financial Condition of the Export-Import Bank of the United States

GAO examined a statement of the financial condition of the Export-Import Bank of the United States as of September 30, 1979, as well as the statements of income and analysis of reserve for contingencies and defaults and of changes in the financial position for the year then ended. The Bank has a policy of purchasing defaulted commercial loans and payments made under the Exporter Credit and Insurance programs for guaranteed and insured loans rescheduled under countrywide debt consolidations. The Bank stated its income before providing a reserve for losses that may be sustained on loans, guarantees, and insurance. However, it retains accumulated net income after dividends as a reserve for such losses. Although the reserve increased in fiscal year 1979, the risk of incurring possible future losses increased to a larger extent. This was due primarily to increases in loan purchases and outstanding purchase agreements and principle and interest delinquencies. Except for the amount reserved for contingencies and defaults, the financial statements presented fairly the financial position of the Export-Import Bank.