The Analytical Credit Rating Agency (ACRA) has affirmed the credit rating of the International Bank for Economic Co-operation (IBEC, Bank) on the international scale – A- and on the national scale for the Russian Federation – AAA(RU). The outlook on the affirmed ratings is Stable.
In its official rating release, ACRA emphasizes that IBEC credit rating is based on its high financial performance, strong capital adequacy assessment, satisfactory risk profile assessment, adequate funding and liquidity assessment, as well as moderately strong assessment of the ownership structure and the Bank's support for its member states.
The rating agency notes that the Bank maintains strong capital position, which allows successfully withstand the potential deterioration in asset quality, despite on negative factors caused by the ongoing global COVID-19 pandemic. As of the end of June 2021, the capital adequacy ratio (Tier-1), calculated according to Basel standards, was 40.74%.
At the end of the 1st half of 2021, the total assets of IBEC amounted to EUR 762 million, and the loan portfolio of IBEC amounted to slightly more than half of the total assets of the Bank – about 51%. At the same time, a significant share of outstanding loans is secured by corporate, government or other guarantees. The Bank continues to grow its portfolios and implement effective industry risk management practices focused on ensuring stable availability of liquidity and a substantial fundraising base, maintaining strict credit underwriting criteria and meeting regulatory requirements for treasury operations.
According to ACRA analysts, IBEC liabilities are moderately diversified by funding sources. The total volume of long-term financing at the end of June 2021 reached EUR 223 million, which was about 50% of the Bank's total liabilities. Indicators of net stable funding and liquidity coverage comprised 127 and 408%, respectively. Also, the rating agency notes the expansion of the IBEC credit history. In June 2021 the IBEC tapped another member state market for the first time by placing BGN 68 million in Bulgaria.
“The ACRA rating agency for the second time this year has confirmed the credit ratings of IBEC, including the highest rating on the national scale. Despite the turbulence in the global economy, the Bank continues to develop, while maintaining high credit quality. It was also previously confirmed by the upgrade of the IBEC rating to 'BBB' by Fitch in early March and the change of the outlook on the IBEC rating ('Baa3') from Stable to Positive by Moody's at the beginning of September this year", – noted the Chairman of the Board, Denis Ivanov.
The Bank's loan and documentary portfolio at the end of the 1st half of 2021 amounted to EUR 483 million, an increase of 16.7% compared to the beginning of the year (EUR 414 million).