ACRA affirms the highest rating of IBEC under the national scale

Analytical Credit Rating Agency (ACRA) affirms the credit rating of the International Bank for Economic Co-operation under the national scale for the Russian Federation – ‘AAA(RU)’, outlook Stable, and ‘AAA(RU)’ to bond issue series 001P-02.

In its official rating release, ACRA emphasizes that the credit rating of IBEC is driven by its strong capital adequacy, reasonable assessment of funding and liquidity, vulnerable business profile, and weak risk profile assessment. At the same time, the factor of support from the Bank’s member countries does not influence the final rating of IBEC.

Capital adequacy of IBEC remains high, despite a significant reduction in the Bank's capital due to geopolitical events occurred in the first half of the last year, which still allows the Bank to withstand the potential risks of a significant deterioration in asset quality and a reduction in funding volumes. As of the end of 2022, the adequacy of paid-in capital calculated according to ACRA’s methodology stood at around 50%.

The Agency notes that the Bank had rather strong liquidity indicators as of the end of 2022. Highly liquid assets significantly exceeded short-term liabilities, while the share of highly liquid assets in the balance sheet amounted to more than 20%. According to the estimation of the Rating agency the overall diversification of liabilities remains moderate, while the share of funds raised from other banks amounted to just over a quarter of IBEC’s total liabilities.

Also, IBEC’s credit rating was downgraded under the international scale by one notch from ‘A-’, outlook Negative (earlier, in March 2022, the outlook was changed from Stable to Negative due to the risks associated with a possibility of five EU countries withdrawing their stakes from IBEC) to ‘BBB+’, and the outlook was changed to Stable. The downgrade of the credit rating on the international scale is due to the deterioration in the assessment of the Bank's business profile, caused by the withdrawal of the EU countries from the Bank.

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