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.
