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SERVICIOS FINANCIEROS QUADRUM S.A. THIRD QUARTER REPORT, 1993

 MEXICO CITY, Mexico, Oct. 28 /PRNewswire/ -- During the third quarter ended September 30, 1993, Servicios Financieros Quadrum, S.A., (NASDAQ-NMS: QDRMY), generated net income of NPs 7.3 million, an increase of 161 percent over the same period of 1992 net income of NPs 2.8 million.
 Third quarter 1993 earnings per ADS were NPs 1.26, an increase of 83 percent over third quarter 1992 earnings per ADS of NPs 0.69. The weighted average number of shares equivalent to ADS outstanding during the third quarter of 1993 5,821,192 compared with 4,102,189 before the combined offering. Year to date earnings were NPs 21,858,582 equivalent to NPs 3.23 per ADS.
 During the nine months ended September 30, 1993, the company generated net income of NPs 21.9 million, an increase of 81 percent over nine months ended September 30, 1992, net income of NPs 12.1 million.
 The nine months ended September 30, 1993, earning per ADS were NPs 4.68, assuming a weighted average number of shares equivalent to ADS outstanding during the period of 1993 of 4,675,190.
 Income from financial operations for the first nine months of 1993 expressed as an annualized percentage of average portfolio increased from 8.8 percent in 1992 to 11.1 percent in 1993.
 Portfolio
 The company's average portfolio during the third quarter of 1993 was NPs 766.8 million which represents a 32 percent increase over the average portfolio during the third quarter of 1992, which was NPs 579.3 million. Portfolio growth during the third quarter was limited to a substantial degree by management's strict policy of subordinating portfolio growth objectives to the maintenance of asset quality. During this period, particularly strict credit standards were applied to the extension of credit.
 The past due portfolio declined during the period from 4.7 percent to 4.4 percent. Allowance for doubtful accounts were NPs 7.9 million, an increase of 132 percent over the amount recorded in the third quarter of 1992, which was NPs 3.4 million. The increase was attributable to the growth in average portfolio and the desire to maintain prudent accounting practices in the context of improving asset quality. The provisions were of a general nature and not recorded with respect to specific accounts.
 The distribution of past-due loans may be summarized as follows:
 9/30/93 6/30/93 9/30/92
 Current 95.6 pct. 95.3 pct. 96.4 pct.
 0 - 30 1.0 pct. 0.5 pct. 0.5 pct.
 31 - 60 0.5 pct. 1.5 pct. 0.6 pct.
 61 - 90 0.4 pct. 0.3 pct. 0.2 pct.
 over 90 2.5 pct. 2.4 pct. 2.3 pct.
 Total 100.0 pct. 100.0 pct. 100.0 pct.
 Administrative Expenses
 Administrative expenses as a percentage of average portfolio were 4.8 percent for the third quarter of 1993 compared with 4.3 percent for the third quarter of 1992. (Ferroquadrum not included in order to continue with a comparable basis).
 Balance Sheet
 The company's risk asset capitalization ratio grew from 12.4 percent to 22.1 percent during the period principally as a consequence of net proceeds of NPs 76.5 million.
 The following table reflects the composition of the company's interest bearing liabilities:
 9/30/93 6/30/93 9/30/92
 NPs Pct. NPs Pct. NPs Pct.
 Commercial Bank Debt 83.5 13.8 251.5 40.9 288.6 55.3
 Development Bank Debt 198.0 32.6 138.4 22.5 33.2 6.4
 Public Debt 325.0 53.6 225.0 36.6 200.0 38.3
 Total 606.5 100.0 614.9 100.0 521.8 100.0
 Banking License
 During early September, the Ministry of Finance and Public Credit issued a national banking license to the company. This event was particularly significant because banking licenses are seldom granted in Mexico. There are currently less than 25 commercial banks operating with Mexican charters. The company's license and other three licenses issued simultaneously were the first national banking licenses to be issued in over twenty years. The company intends to utilize this banking charter in order to continue its strategy of extending credit to certain clearly defined and specialized segments of the market and in order to further improve its cost of and access to funding. As such, the company expects its banking operation to be specialized and focused in nature and to differ substantially from that of other participants in the Mexican banking Sector.
 The company expects to start operating its banking entity by early 1994. Certain start up expenses will be realized during the fourth quarter of 1993 and during early 1994, although the company expects to minimize these through the use of existing operational infrastructure, they are expected to have an effect upon earnings.
 Outlook
 In accordance with past experience management expects significant portfolio growth during the fourth quarter of 1993, although this will continue to be temperate by the relatively low level of activity prevailing in the Mexican economy and the company's ongoing policy of exercising great caution with respect to the extension of credit. Net spreads are not expected to vary significantly.
 SERVICIOS FINANCIEROS QUADRUM, S.A.
 Combined Income Statements
 (Stated in Thousands of New Mexican Pesos)
 Prepared According to U.S. GAAP
 Third Quarter Three Quarters
 1993 1992 1993 1992
 Financial income
 Interest income
 Factoring portfolio 26,603 21,972 82,490 59,009
 Financing lease receivables 18,024 12,598 55,809 29,702
 Other 2,852 1,721 5,148 5,293
 Operating leases
 net of depreciation
 52,748 37,010 153,076 97,351
 Financial expenses
 Interest expense 26,620 24,619 84,547 59,041
 Other 2,789 1,957 9,868 4,528
 29,409 26,576 94,415 63,569
 Income from financial operations 23,339 10,434 58,661 33,782
 Provision for doubtful accounts 2,422 975 4,527 1,863
 Income from financial operations
 after provision for doubtful
 accounts 20,917 9,459 54,134 31,919
 Administrative services 11,369 6,160 26,332 17,895
 Income before provision for
 income taxes 9,548 3,299 27,802 14,024
 Provision for income taxes 2,088 486 5,801 1,963
 Income before minority interest 22,001 12,061 22,001 12,061
 Minority interest 142 0 142 0
 Net income 7,318 2,813 21,859 12,061
 Proforma earnings per ADS
 (average shares) 1.26
 SERVICIOS FINANCIEROS QUADRUM, S.A.
 Combined Balance Sheets
 (Stated in Thousands of New Mexican Pesos)
 September 30, June 30,
 1993 1992 1993 1992
 ASSETS:
 Cash and cash equivalents 2,609 1,182 2,458 3,116
 Government securities at cost
 which approximates market 35,859 44,447 22,031 26,202
 Financing lease receivable,
 net 261,341 180,197 255,430 157,092
 Factoring portfolio, net 456,737 366,071 376,589 351,397
 Other receivables 18,842 3,952 6,677 4,454
 Assets under operating leases
 and held for lease, net 81,859 33,628 51,394 34,417
 Real-estate, furniture and
 equipment, net 27,345 25,826 24,660 22,960
 Other assets
 Deferred charges, net 16,027 11,689 8,641 6,060
 Other 1,986 703 2,013 703
 902,605 667,697 749,893 606,401
 Liabilities
 Loans from banks and
 other institutions 281,449 321,836 358,697 263,900
 Notes payable and
 subordinated debentures 325,000 200,000 225,000 200,000
 Other deposits and
 obligations 83,296 68,027 66,551 66,587
 Accounts payable to suppliers
 of equipment held for lease 1,822 1,872 1,395 2,035
 Other liabilities 33,503 12,648 12,698 13,326
 725,070 604,383 664,341 545,848
 Stockholder's Equity
 Capital stock, NPs par value 112,228 35,788 35,788 35,789
 Retained earnings
 Appropriated 4,176 2,182 2,182 2,182
 Unappropiated 52,905 25,342 47,582 22,582
 Minority interest 8,166 0 0 0
 177,533 63,312 85,552 60,553
 Total liabilities and
 stockholder's equity 902,605 667,695 749,893 606,401
 -0- 10/28/93
 /CONTACT: Jose Ortiz of Servicios Financieros Quadrum S.A., 011-525-596-9388, or Cathleen Mayrose of Dewe Rogerson, 212-688-6840/
 (QDRMY)


CO: Servicios Financieros Quadrum S.A. ST: IN: FIN SU: ERN

LD -- NY144 -- 8285 10/28/93 22:09 EDT
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Date:Oct 28, 1993
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