2022 Report and Financial Statements
2022 REPORT AND FINANCIAL STATEMENTS - BANCO REGIONAL
LETTER FROM THE PRESIDENT
ECONOMIC AND FINANCIAL PERFORMANCE
22
The loan portfolio has been valued at its nominal value plus accrued interest at the end of the financial year, net of allowances, which have been calculated in accordance with the allowances of Board Resolution No.
1, Minute No. 60 of the Central Bank of Paraguay dated September 28, 2007, and its subsequent amendments and additions, to which effect:
a) The debtors were segmented according to the following types: i) Large Debtors; ii) Medium and Small Debtors; iii) Individual consumer debtors or household loans and iv) microcredits.
b) Debtors have been classified into 6 risk categories, based on default and/or the assessment and rating of the payment capacity of a debtor or a group of debtors composed of related persons, in respect of all their
obligations. An amending regulation to Resolution No. 1/2007 requires that category 1 be broken down into three sub-categories for the purposes of calculating allowances (categories "1", "1.a" and "1.b").
c) Accrued interest on performing loans classified as category "1" and category "2" on a subjective basis has been recognized as income in full. The interest accrued and not collected at the closing date on
non-performing loans and/or Performing loans classified in category "2" and above, which has been recognized as an income until they enter into arrears, has been recognized fully allowances for. See note f.1
d) The accrual of interest and recognition of valuation gains on non-performing loans and Performing loans classified in risk category "2" or higher is suspended as soon as they enter into arrears, and they are
recognized as income upon collection, as mentioned in note f.1.
e) Loans that are repayable are deemed to be overdue after 61 days of default on any of their instalments, and fixedterm or single-maturity loans are deemed to be overdue on the day following their maturity.
f) The specific allowances required to cover possible losses that may arise from the non-recovery of the portfolio have been established in accordance with the criteria and parameters established by Central Bank of
Paraguay Board Resolution No. 1, Minute No. 60 dated September 28, 2007, including its amendments.
g) Generic allowances on the Loan portfolio have been recognized in accordance with the criteria and parameters established by Central Bank of Paraguay Board Resolution No. 1, Minute No. 60 dated September
28, 2007; and additional generic allowances defined by the Institution's Management and Board of Directors.
h) Uncollectible loans that are removed from the assets, under the conditions laid down in the relevant BCP regulations, are recorded and disclosed in memorandum accounts.
Transitory and exceptional measures authorized by the BCP
In addition to the criteria mentioned above, the Central Bank of Paraguay exceptionally authorized the following measures:
a) In the 2019 financial year, the Entity has considered the inclusion of certain customer operations under transitional measures to support the productive sector, according to the conditions established in Resolution
No. 21, Minute No. 65 dated September 18, 2019, of the Board of Directors of the Central Bank of Paraguay.
The resolution considers in an exceptional manner the impact on the micro, small, and medium agricultural producers who suffered verifiable losses derived from adverse effects of nature, as well as in particular
those agricultural producers who suffered losses due to the fall in the prices of their products. In this sense, it allows the deferral of the charges generated by the allowances calculated on the balance of the
portfolio that benefited from these transitional measures. These allowances will be gradually recognized in the statement of income within a period not exceeding 36 months. The amounts are disclosed as "Loans -
Transitional exceptions issued by BCP" in note c.6.2.
b) In 2020 and 2021, the Entity has considered carrying out certain operations and rescheduling of customers under exceptional measures to support sectors economically affected by the spread of the coronavirus
(COVID-19), according to the conditions established in the following resolutions issued by the Board of Directors of the Central Bank of Paraguay:
- Resolution No. 4, Minute No. 18 dated March 18, 2020.
- Resolution N° 4, Minute N° 23 dated April 2, 2020, and its partial modification Resolution N° 1, Minute N° 35
- Resolution N° 12, Minute N° 18 dated October 29, 2020.
- Resolution N° 1, Minute N° 17 dated March 25, 2021.
The amounts of loans benefiting from the measures are disclosed as "Loans - Exceptional support measures issued by BCP" in note c.6.2.View entire presentation