The European Bank for Reconstruction and Development (EBRD) made a net profit of €290mn in 2020, an 80% drop from the €1.432bn profit in 2019, as the coronavirus (COVID-19) pandemic hit equity valuations and loan performance.

The multinational development bank guided that this year would also be difficult. “The economic impact of the crisis could result in depressed profitability for the bank in 2021 due to both downward pressure on the bank’s equity valuations and increases in loan impairment,” the EBRD said in a statement on May 17.

The bank made equity gains of €0.3bn in 2020, down from gains of €1.1bn gain in 2019, amid significant volatility.

Net interest income was €0.8bn, in line with 2019, but the EBRD took a €0.5bn provisioning charge on the bank’s loan investments, while no significant charge was recorded in 2019. Non-performing loans (NPLs) increased to 5.5% of total loans, from 4.5% in 2019.

The EBRD invested in 411 projects in 2020, down from 452 in 2019.

These projects were in 37 economies in 2020, broken down into: €2.1bn in the southern and eastern Mediterranean (SEMED); €1.9bn in Eastern Europe and the Caucasus; €1.8bn in South-Eastern Europe; €1.7bn in Turkey; €1.4bn in Central Europe and the Baltic states; €1.1bn in Central Asia; and €0.9bn in Cyprus and Greece combined.

In terms of sectors, annual bank investment was €4.4bn in the financial sector, with the majority of financing directed via partner banks to small and medium-sized enterprises (SMEs), to environmental sustainability projects, to facilitating international trade and to projects developing capital markets. A further €3.9bn was invested in the sustainable infrastructure sector and €2.7bn in diversified corporate sectors.

Annual investments (commitments) totalled €10.995bn, up from €10.092bn in 2019, while gross disbursements reached €7.6bn in 2020, above the €7.2bn disbursed in 2019.

Operating assets were €33.3bn at end-2020, up from €31.8bn at end-2019. The bank’s portfolio of investment operations (including undrawn commitments) increased from €46.1bn in 2019 to €48.4bn by the end of 2020.