Moody’s upgrades outlook on Moscow-based International Investment Bank (IIB) to positive

Moody’s upgrades outlook on Moscow-based International Investment Bank (IIB) to positive
By bne IntelliNews May 10, 2017

Moody’s Investors Service upgraded the outlook on the Baa1 issuer and debt rating of the International Investment Bank (IIB) from stable to positive, the bank said in a press-release on May 10.

The positive rating action is driven by “the increased diversification of the IIB’s loan portfolio and the maintenance of relatively strong asset quality”, as well as “the improved credit quality of the IIB’s treasury portfolio” and “the increased diversification of its funding sources.”

Previously in 2014 Moody’s downgraded the IIB from A3 to Baa1 due to worsening prospects in Russia. In December 2016 Fitch upgraded the outlook on IIB ratings to stable.

The Moscow-based International Investment Bank (IIB) increased its loan portfolio under IFRS by 21% year-on-year to €381mn as of the end of 2016, the bank said on March 20. IIB's assets grew by 9% to €881mn, due to the increase in corporate lending, while the bank's net profit made €0.8mn.

The bank, founded in 1970 and modernised in late 2012, has as its current shareholders Bulgaria, Cuba, Czech Republic, Hungary, Mongolia, Romania, Russia, Slovakia and Vietnam. IIB is rated 'BBB' (outlook stable) by S&P, 'Baa1' (outlook stable) by Moody’s, 'BBB' (outlook stable) by Fitch and 'A' (outlook stable) by Dagong.

In the 2016 IFRS report the bank said its loan portfolio reached "record diversification covering 14 different sectors" and posting an increase year-on-year. The share of Central and Eastern European countries reached 36% in the loan portfolio. Specifically, Russia had a 23% share, Bulgaria 17%, Mongolia 14%, Romania 11%, Czech Republic 6%, Vietnam 5% and Slovakia 2%.

The bank's capital as of the end of 2016 reached €313mn, with Russia's share in the capital at 47.92% and the combined share of the bank's EU shareholders (Czech Republic, Slovakia, Hungary, Romania and Bulgaria) at 48.72%. Tier 1 capital adequacy ratio was 52%.

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