Tuesday, December 22 2020 18:34

ArmInfo. The Eurasian  Development Bank (EDB) has summed up the preliminary results for  2020.

According to the press service of the EDB, the current investment  portfolio of the Bank by the end of the year is expected to reach 4  billion 415 million US dollars, an increase relative to the results  of 2019 may reach 2.2% (93 million US dollars). The balance sheet  portfolio by the end of the year is expected to be USD 2 billion 929  million, an increase relative to the results of 2019 may reach 2.5%  (USD 73 million).  Profit for the year is planned at USD 29 million.

At the same time, as noted, the final values of the indicators may be  significantly affected by the currency revaluation of positions in  national currencies against the US dollar. In 2020, 14 new agreements  on investment projects were signed for a total amount of USD 1  billion 274 million.

In the country structure of the current investment portfolio of the  Bank, projects in Russia (37.8%) and Kazakhstan (36.6%) prevail,  22.9% falls on Belarus, 1.5% - in Kyrgyzstan, 1.2 - in Armenia. The  dedollarization process observed in most of the Bank's shareholder  countries is reflected in the structure of the investment portfolio.  The share of projects financed in rubles and tenge has increased 1.6  -fold over 5 years and is 51% in relation to projects financed in  dollars and euros. The increase in lending in national currencies led  to an increase in demand for related operations: letters of credit,  opening and maintaining accounts (for servicing loan obligations,  collateral accounts), cross-border transfers and conversion  transactions.  The financial stability of the EDB is confirmed by  high ratings from rating agencies.

International Ratings: Moody's: Baa1, Fitch: BBB +, Standard &  Poor's: BBB, ACRA: A- 

National scale ratings: Fitch: AAA (KAZ), ACRA: AAA (RU) The quality  of the Bank's portfolio is at a good level, also due to the fact that  its risks were initially not concentrated in those sectors of the  economy that were most affected by various kinds of lockdowns and  other forms of restrictions.  Thus, as of November 30, 2020, the  share of loans on which interest and principal payments were overdue  by 90 days or more (NPL 90+) in the Bank's portfolio amounted to 1.1%  (as of December 31, 2019 - 1, 2%).  There is also a noticeable  decrease in the share of risk in the Bank's portfolio, which was  classified, according to the requirements of IFRS 9, as of the third  stage: financial instruments for which there are some signs of  impairment. Their share as of November 30, 2020 was 4.8% versus 8.8%  as of December 31, 2019. The indicator improved due to the full  repayment of a large risk. At the same time, the risk remaining in  the third stage is almost half provided by the sovereign guarantee of  one of the Bank's member states.

Nevertheless, the EDB expresses its understanding that the current  situation with the spread of COVID-19 is dynamic and there is  considerable uncertainty about how it will develop. In this regard,  the Bank regularly conducts portfolio stress tests, in which the  risks of each of the counterparties are assessed on an individual  basis. The baseline scenarios for such stress tests indicate that the  quality of the EDB's portfolio should not change.

EDB performs settlement and clearing operations in the interests of  clients. The most important feature of the EDB settlement and  clearing system is the ability to use it for settlements in the  national currencies of the member states, bypassing the conversion of  funds transferred into currencies of third countries.  As of November  30, 2020, 155 accounts were opened, including 107 current  (settlement) accounts, 4 collateral and 44 savings accounts  (deposits) for 61 companies. The amount of customer account balances  amounted to USD 343 million.  As of November 30, 2020, 205 LORO  accounts were opened for 61 respondents - 56 banks from all 6  countries - members of the EDB, representatives of the exchange  infrastructure of the EAEU countries.  LORO account balances are  equivalent to USD 45 million.  The EDB platform, without making  significant changes, can be used to carry out other cross-border,  including interstate, settlements. EDB is stepping up its efforts to  diversify funding sources. In 2020, the Bank attracted an equivalent  of USD 537 million. In addition to attracting funding through classic  bond issues, in 2021 the Bank plans to increase the volume of  transactions within the framework of tied financing, bilateral loans  and within the framework of transactions for the issuance of green  and social bonds. At the same time, the Bank focuses not only on  expanding the list of instruments, but also on expanding the  geography of investors. In 2021, the Bank will continue to borrow in  national currencies, about 10 billion rubles and 50 billion tenge  through the issue of debt instruments, as well as in world currencies  through bilateral loans or bonded loans.

On June 30, 2020, the Council of the Bank established the Digital  Initiatives Fund of the Eurasian Development Bank. To date, the Fund  has held a Competition for the best digital solutions to counter the  spread and overcome the negative consequences of the COVID-19  pandemic in the Eurasian space. Within the framework of the  competition, the Bank received 163 applications from companies from  all countries participating in the EDB. At the final stage, 4 winners  were determined.  The Fund has worked and initiated the issue of  creating a mobile application "Traveling without COVID- 19". Together  with the Ministry of Digital Industry of Russia, the Fund is  developing the project "Work in the EAEU". The project is intended to  ensure the receipt of state and commercial services by labor migrants  using a mobile application.  "In the coming year, we intend to focus  our activities on the implementation of" cross-cutting "integration  projects - projects that will create inextricable economic ties with  our countries. The second area of work in the new period will be to  promote the digital transformation of our countries through the  active work of the Digital Initiatives Fund. We also intend to expand  the range of our analytical products in the field of macroeconomics.  We plan to reflect all this in a new strategy, which we expect to  adopt by the summer of 2021, "said Nikolay Podguzov, Chairman of the  EDB Board.  The Eurasian Development Bank (EDB) is an international  financial organization that promotes the integration and development  of the participating countries: Armenia, Belarus, Kazakhstan,  Kyrgyzstan, Russia and Tajikistan. The authorized capital of the EDB  is $ 7 billion. The bank was established in January 2006 by Russia  and Kazakhstan, with headquarters in Almaty. The main share in the  EDB portfolio is occupied by projects with an integration effect in  the areas of transport infrastructure, energy, chemical and mining  industry and mechanical engineering.