the EU bank

The EIB's Board of Governors, which comprises the Finance Ministers of the EU Member States, has held its annual meeting in Luxembourg.

The EIB's President, Philippe Maystadt, summarised the Bank's activities in 2004:

• Total lending increased by 2.1% to EUR 43.2 billion, of which 92% within the EU-25.
• To finance its lending, the Bank raised EUR 50 billion on the international capital markets (2003: EUR 42 billion).
• The good overall results were achieved while further improving the quality of the loan portfolio.
• The profit and loss statements closed with a net profit of EUR 1 381 million, down 3% from a year earlier.

Focus on EU priorities

The EIB's support for economic and social cohesion within the European Union remained the core lending objective. EUR 28 billion, or 70% of total lending within the EU, was devoted to financing investment in assisted areas. Support for the European Action for Growth was maintained. Lending for research, development and innovation totalled EUR 7 billion. In addition, the Bank signed EUR 8 billion in new loans for TEN projects, mainly in the transport sector.

The protection and improvement of the natural and urban environment accounted for a third of total lending within EU-25, and a set of new initiatives has been taken, particularly in the area of renewable energy.

To further the EU's development and cooperation policy in Partner Countries, the Bank reinforced its presence in the southern and eastern Mediterranean, providing EUR 2.2 billion in loans. The Bank also established an EUR 30 million Trust Fund and set up a Special FEMIP Envelope for risk-sharing operations.

To promote project quality and accelerate the absorption of funds, external regional EIB offices have been established: two in the MED countries (Tunis, Cairo), and three in the ACP countries (Dakar, Nairobi and Pretoria).

In Europe the Bank continued its support for the development of the Acceding Countries (Bulgaria and Romania) and the Candidate Countries (Croatia and Turkey). The EIB will soon start to lend EUR 500 million under the new mandate for Russia, Ukraine, Belarus and Moldova.

Corporate governance

President Maystadt drew attention to the progress made in consolidating corporate governance principles based on transparency and accountability, in accordance with best international practice. For example:

• Management Committee members now have to sign a declaration of financial interest;
• Conflicts of interest reported by members of the Board of Directors are disclosed publicly;
• A Compliance Office has been created;
• A statement on corporate and social responsibility has been published.

Innovation and quality

The EIB's watchwords are innovation and quality. Innovation is to be sought through new forms of collaboration with the banking sector, in new financial instruments, and new ways of serving small and medium-sized enterprises.

Quality means further increasing the EIB's value added, on the basis of three criteria: the specific contributions of a project to EU policy objectives; the quality and soundness of projects; and the particular financial advantage for the user of EIB funds.

Innovation and greater value added will lead to a gradual increase in risk. The Bank will take on risks not easily absorbed by the market, within strict limits and with appropriate controls. The trend towards a higher risk profile, initiated by the Bank's governing bodies at the beginning of the decade, will continue. By taking on greater risk if and when justified, the EIB will aim to be a pathfinder in the financing of projects implementing EU policies.

In the Partner Countries outside the EU, the EIB will focus on increasing the developmental impact of the investment being financed. The EIB envisages greater cooperation with all concerned in this field.