Moody’s Investors Services upgraded Moscow-based multilateral development bank International Investment Bank (IIB) long-term rating to A3 with a stable outlook on April 30, the bank said in a statement.
“The main drivers for the rating upgrade are IIB’s improvement in asset quality, more robust risk management systems, an increasingly diversified loan book and funding strategy and the strengthened credit quality of its treasury portfolio,” Moody’s said in a press release.
Moody’s said that IIB’s new medium-term strategy will likely maintain these improved credit features, including the Bank’s ability to contain the current low level of non-performing loans (NLPs), diversification of loans between all member countries and new approach to risk management.
The agency also notes that IIB’s capital and leverage ratios remain “relatively strong,” which together with the improvements in asset quality “drives Moody’s decision to raise its assessment of the bank’s capital adequacy to “medium” from “low”.
“Moody’s upgrade gives a clear signal of the solidity of the Bank’s strategic focus”, Chairman of IIB Board Nikolay Kosov commented, “IIB has shown significant improvement in every direction of its activities: from loan portfolio expansion to continuous decrease in the cost of borrowings and record for the Bank investor base diversification levels. The fact that latest credit rating upgrades have been granted to IIB in a difficult geopolitical environment proves the Bank’s steady position in the MDB community”.
“This is a sixth positive credit rating action on IIB in the past 18 months“, IIB Chief Economist and Head of Ratings Elliott Auckland said, “we are satisfied that the Bank’s progress in finding the optimal operational model has been recognised by Moody’s”.
Moody’s said the bank would probably receive another upgrade if, “the bank’s expansion were to be supported through additions to paid-in capital, further progress in containing asset quality pressure and diversifying its loan portfolio were made, in addition to achieving its medium-term objective of continuing to strengthen the quality of its treasury assets”.
IIB’s strategy for 2018-2022 underlines continuous growth backed by new shareholder capital.
