The Analytical Credit Rating Agency (ACRA) affirms ‘BBB+’ to the International Bank for Economic Co-operation, outlook Stable, under the international scale, ‘AAA(RU)’, outlook Stable, under the national scale for the Russian Federation, and ‘AAA(RU)’ to IBEC bonds series 001Р-02 (RU000A101RJ7).
ACRA’s official press release emphasizes that the credit rating of IBEC is based on assessments of rating factors, including strong capital adequacy, adequate assessment of funding and liquidity. The Agency also draws attention to the vulnerability of the business profile and weak risk profile assessment, which in the current environment is a natural consequence of the period of reorientation to new markets and updating the strategy. At the same time, the average quality of assets remains quite high, while the share of NPL90+ is low.
IBEC capital adequacy remains at a high level, allowing the Bank to withstand potential risks of a significant deterioration in asset quality. According to the results of the 1st half of 2023, capital adequacy, calculated in accordance with the ACRA methodology, amounted to about 64%. According to the Rating Agency, the gradual recovery of the Bank’s business volumes will lead to a significant decline in capital adequacy, however, in the medium term, this indicator will remain in the range of strong values.
In addition, ACRA believes that the loss incurred by the Bank in 2022 due to sanctions and restrictions imposed on Russia is of a one-time nature and will not affect the Bank’s ability to deliver positive financial results in the future. IBEC profit received in the first half of 2023, confirms the validity of this assumption.
The Agency notes the fairly strong liquidity of the Bank at the end of the first half of 2023. The amount of highly liquid assets significantly exceeds the volume of short-term liabilities, while the share of highly liquid assets in the balance sheet amounted to more than 20%. ACRA still assesses the overall diversification of liabilities as moderate. The share of funds raised from other banks amounted to less than 20% of the total amount of IBEC liabilities.
Under the current conditions, IBEC maintains its focus on promoting the development of the economies and facilitating foreign trade relations of the member countries and pays special attention to the geographical diversification of its activities by entering new markets.