On March 26, 2020, the international rating agency S&P Global affirmed the IIB “A-” long-term rating with a stable outlook.
Among the main factors that contributed to this decision, S&P points out the Bank’s high level of capital adequacy and the effectiveness of the risk management system, which, according to the Agency, will allow the institution to confidently confront the challenges of the current period of high volatility in the global economy.
S&P defines the financial profile of IIB as “very strong” due to high level of capital adequacy, strong funding and liquidity.
The Agency emphasizes that IIB management has cautiously controlled its risks and that the institution is well shielded from the most damaging effects of the global economic downturn.
Among supporting factors S&P also names a strong capital buffer of the Bank augmented by recent contributions to the paid-in capital from member states. Diversified loan portfolio and funding sources also play a crucial role, including a recently registered MTN Programme. A high level of treasury assets also did not go unnoticed.
S&P points to significant progress the Bank has made in positioning itself as a European financial institution, taking into account the relocation of headquarters to Hungary, and increasing European member states’ share in both the loan and documentary portfolio and paid-in capital to 57% and 52% respectively.
Despite the announcement of a pandemic situation related to the spread of coronavirus in March 2020, the Bank did not stop its day-to-day operations, continuing to demonstrate coherence and effectiveness. To ensure the protection of its partners, customers and employees, IIB switched to a remote mode of work and currently performs its functions in full, with all staff available via various communication channels.
The IIB risk management and compliance control systems are in line with best practices implemented by leading international development banks. The IIB risk management methodology, in particular, provides for systematic monitoring of key performance indicators of our partners , whom the Bank is in constant and close contact with.
Meetings of key governing bodies — including the Management Board and major committees — are held on-line in accordance with the established schedule to ensure continuity of the decision – making process.
“Amidst global turmoil in the financial sector and a series of downgrades we have witnessed in the past weeks, S&P’s assessment of IIB is a clear confirmation of our relevance and stability in the multilateral development banks community,” said Nikolay Kosov, the Chairperson of the IIB Management Board, “I consider this an important and positive signal to our broad investor base, as well as allowing the Bank to continue providing support to businesses in the interest of its member states and help economies in our regions overcome this challenging period”.