BAKU, Azerbaijan, May 17
By Zeyni Jafarov - Trend:
The European Bank for Reconstruction and Development (EBRD) recorded a net profit of 290 million euros after having posted a 1.4 billion euro profit in 2019, the EBRD’s financial report said, Trend reports on May 17.
According to the report, this profit was achieved in the context of extremely challenging economic and financial conditions affecting all of the regions in which the Bank operates, stemming from the impact of the COVID-19 pandemic. However, even against the pandemic context, the equity investments of the bank were a sustainable income factor, the report noted.
The EBRD recorded net interest income of 800 million euro, like in 2019, but the deterioration of the risk environment led to a 500 million euro provisioning charge on the bank’s loan investments becoming the main driver of the reduction in profitability compared to 2019, the report further pointed out.
The above reduction was predominantly caused by an increase in non-performing loans (NPLs) partly driven by the pandemic, but also due to other specific factors. The proportion of NPLs increased to 5.5 percent from 4.5 percent in 2019.
Allowing for income allocations of 115 million euros and changes recorded in the statement of other comprehensive income, the Bank’s reserves increased by 100 million euros to 17.9 billion euro at the end of 2020, added the report.
The EBRD continues to be rated AAA (stable) by Standard & Poor’s, Aaa (stable) by Moody’s, and AAA (neg.) by Fitch.
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