THE Fiji Development Bank has recorded a $2.5million profit for the 2011 year, a year which it described as challenging.
The achievement is an improvement of 6.23 per cent when compared to the 2010 financial year.
However, the bank's gross portfolio declined by 20.08 per cent to $349.93m in the 2011 financial year because of early exit of a few large corporate accounts and bad loan write-offs.
The bank also noted a slow growth in new business.
The increase in profit was attributed to an increase in income by 25.49 per cent and a decrease in borrowing expenses by 7 per cent.
"Through effective controls, the bank was also able to maintain the operating expenses within the approved budget," the bank's recently released annual report said.
The total operating expense for the 2011 financial year was $10.5million.
The report said the bank took advantage of the increase in liquidity within the banking system by redeeming high cost bonds with low rate bonds much earlier.
For the financial year, the bank approved a total of 599 projects valued at $35.99m. Of this, at least 28.59 per cent or $17.31m were for the agriculture sector.
"Improving rural livelihoods and quality of life are the basis of such loans," the report said.
"The bank encourages subsistence farmers to take advantage of opportunities created by the local market demand as well as processing and export demands to increase their production from semi commercial to commercial loans."
Loans under the agriculture sector also focused on forestry and logging and other resource-based activities.
About $11.19m worth of loans were approved for the manufacturing sector. The bank explained that lending to the sector was encouraged because manufacturing and value adding local resources would spur economic growth, particularly where import substitution could be realised.
The FDB loaned $4.87m to the transport, communication and storage sector.
Meanwhile, this week is the last to hand in entries for the FDB's Small Business Awards.