Summary

GAO examined the statements of financial condition of the Export-Import Bank (Eximbank) as of September 30, 1982 and 1981, and the related statements and changes in financial position for the years then ended.

GAO found that, although Eximbank retains accumulated net income after dividends as a reserve for losses, a net loss in fiscal year 1982 caused the reserve to decrease, and it is likely that Eximbank will incur further reductions. The reductions will result from increased loan purchases, outstanding purchase agreements, and principal and interest delinquencies. GAO also noted that: (1) losses incurred by Eximbank on purchases of defaulted commercial loans are also charged to the reserve; and (2) the reserve is also subject to impairment because the current funding rates of Eximbank are higher than its lending rates. GAO concluded that, subject to the effects on the financial statements of the amount reserved for contingencies and defaults, the financial statements of Eximbank presented fairly its financial position at September 30, 1982 and 1981, in conformity with generally accepted accounting principles applied on a consistent basis.