(OTTAWA) - March 09, 2011

Export Development Canada (EDC) today announced it facilitated a total business volume of $84.6 billion in 2010, of which a record $24.7 billion was undertaken in emerging markets.

“Canadian exporters increased their use of EDC’s products, services and matchmaking abilities in emerging markets by 32 per cent in 2010, with China, Brazil and India leading the way,” said Stephen Poloz, President and CEO of EDC.  “This is encouraging not only because Canadian companies are actively diversifying, but it also shows they have a longer term strategy for these markets. 

“Canadian companies are expanding their reach in response to growing opportunities in emerging markets, but the real dividends will play out as global economic health improves.”

Of EDC’s volumes in emerging markets, $11.4 billion facilitated exports to Brazil, Russia, India, China and Mexico. EDC-supported trade in Asia increased by 21 per cent in 2010, indicating a much higher penetration into a traditionally challenging market for Canadian companies, but one that is expected to lead world growth.

The amount of Canadian Direct Investment Abroad (CDIA) facilitated by EDC in 2010 reached a total of $4.7 billion, a 12 per cent increase over 2009. The number of CDIA transactions undertaken by EDC reached 573, which is 79 more than last year. CDIA transactions include loans to help companies open facilities in new markets or participate in joint ventures, as well as insurance for Canadian-owned foreign affiliates.
 
EDC’s increased on-the-ground presence in these markets is contributing to this growth. In 2010, EDC expanded its international network to 16 representations with the addition of Istanbul, Panama City and Dusseldorf. This expansion provides EDC with more opportunities to identify and connect Canadian companies to both international business opportunities and large global supply chains. Similarly, EDC counts 17 regional offices across Canada to allow it to connect more easily with exporters nationally.

Both domestically and internationally, more than 60 per cent of EDC’s transactions were in partnership with banks and other financial intermediaries.

During the credit crunch of 2009, the Government of Canada asked EDC to increase the availability of domestic credit to Canadian businesses for a period of two years. In 2010, EDC’s domestic activities totaled $3.4 billion, working with 143 exporting companies in Canada. In its financing activities, EDC worked with 15 companies from the extractive sector for a total of $1.2 billion; 13 companies from the resources sector for a total of $308 million; and 10 companies from the light manufacturing sector for a total of $81 million. EDC’s bonding activities reached $1.2 billion, predominantly used by the infrastructure and information/communications technology sectors.

EDC’s strong financial results for 2010 are a reflection of an improving economic climate.  EDC’s net income for 2010 was $1.5 billion, an increase of $1.3 billion from 2009. The increase in net income was attributable to lower requirements for provisions for credit losses and lower claims-related expenses.  Income before provisions and claims-related expenses was $874 million, very similar to the 2009 level of $905 million.

The reduced provisioning requirements were the result of improvements in credit quality within the portfolio in 2010 (as opposed to credit deterioration in 2009), refinements made to EDC’s provisioning methodology in addition to changes in the composition of EDC’s loan portfolio.

Claims-related expenses declined significantly from 2009 because of a 50 per cent reduction in claims paid by EDC and an actuarial decrease in the allowance for claims as a result of the improved economic conditions.

Other key financial results include:

• EDC’s assets, which are primarily denominated in United States dollars, decreased by three per cent to $31.9 billion from December 31, 2009, as a result of a stronger Canadian dollar (had the Canadian dollar remained unchanged from December 31, 2009 total assets would have been $33.1 billion, an increase of four per cent); 
• the total allowance for loan-related losses and insurance claims was $2.3 billion as of December 31, 2010; 
• total paid-in capital, retained earnings (including accumulated other comprehensive income) and allowances as of December 31, 2010 were $10.4 billion; 
• impaired loans as a percentage of gross loans receivable decreased from 3.4 per cent at the end of 2009 to 2.6 per cent as of December 31, 2010; 
• the number of insurance claims paid was 1,552, a 34 per cent decrease from 2009, and the dollar value of those claims was $126 million compared to $258 million in 2009; and 
• EDC’s administrative expenses totaled $279 million, an increase of 13 per cent over 2009.   The increase was primarily due to temporary staffing related to the financial crisis and some pension-related increases.

EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC’s knowledge and partnerships are used by more than 8,200 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and a recognized leader in financial reporting and economic analysis.