On May 18, 2020, the Analytical Credit Rating Agency (ACRA) announced that the International Bank for Economic Co-operation was assigned a credit rating on the international scale - A- with a stable outlook and AAA (RU) on the national scale for the Russian Federation, with a stable outlook. In accordance with the national ACRA rating scale, AAA (RU) is the highest rating for the Russian Federation.
In its release, the rating agency emphasizes that the IBEC credit rating is due to its high financial performance, strong assessment of capital adequacy, satisfactory assessment of the risk profile, and adequate assessment of funding and liquidity, as well as assessments of the ownership structure and degree of support provided for the Bank by its member states at A-.
The Agency highlights the restart of the Bank in 2018, where the key aspect was the personnel update – the arrival of a new team of highly professional top managers with international experience. The Bank made significant changes to the management structure, reformed the personnel selection system, moving from the state quota system to the international competition.
Agency analysts emphasize the Bank’s strong capital position. So, as of the end of 2019, the capital adequacy ratio (Tier – 1), calculated according to Basel standards, was 50.4%. During 2019, the Bank's assets grew by more than a third, to 651 million euros. IBEC loan portfolio at the end of 2019 amounted to about 43% of all assets; two thirds of which are loans provided. At the same time, 79% of outstanding loans are secured by real estate, machinery and equipment, as well as financial assets, or corporate and state guarantees. The Bank's balance sheet has no impaired assets – they were fully written off (39 million euro at the time of the resumption of IBEC activities in 2018). Currently, the Bank is introducing proven risk management measures aimed at ensuring stable availability of liquidity buffer and a substantial reserve of financial resources, maintaining strict underwriting criteria for credit and compliance with regulatory requirements for treasury operations.
Assessing the Bank’s position in terms of liquidity and funding, ACRA noted a moderate diversification of liabilities in terms of funding source. As of the end of 2019, the indicators of net stable funding (NSFR) and liquidity coverage (LCR) were 124 and 139%, respectively. The aggregated volume of long-term borrowings is 112 million euros, most of which is accounted for by the debut issue of IBEC bonds, placed on the Russian market in 2019 in the amount of 7 billion rubles (about 100 million euro at the time of placement) with maturity of 10 years.
The Agency as a whole highly appreciates the level of significance of the Bank's operations for the IBEC member states.
“In the context of the global pandemic caused by COVID-19 and the economy crises erupted in many states, the ACRA assessment confirms once again the Bank's high financial stability, solvency and credit quality. The assigned rating will be a strong signal for the Russian capital market and will contribute to further successful development of our debt program,” - said Denis Ivanov, Chairman of the IBEC Board.