TUE, JULY 21 2020-theG&BJournal-Fitch said Tuesday that ‘’the Bank’s ‘AAA’ rating is driven by the extraordinary support it receives from its shareholders which it assesses at ‘aaa’. The rating is also supported by the bank’s intrinsic rating, which has been revised down to ‘aa-‘ from ‘aa’ previously.’’
Dr. Akinwumi Adesina, President of the African Development Bank said, “We are delighted with the affirmation of the ‘AAA’ rating of the Bank, with a stable outlook, by Fitch Ratings, despite the global and regional economic challenges from the COVID-19 pandemic. We will continue to strengthen our policy relevance to support regional member countries, especially during and after the period of COVID-19, while ensuring that we maintain our prudential ratios with adequate buffers”.
“The Bank will continue to apply strong risk management. We are positive that African countries’ economies will recover as the pandemic subsides and Africa returns to a positive GDP growth trajectory,” Adesina added.
“The strong support of our shareholders will continue to be critical to allow the Bank to continue to play its leading role in supporting development in Africa,” said Swazi Tshabalala, the Vice President for Finance and Chief Finance Officer at the African Development Bank.
Fitch Ratings assessed “the Bank’s liquidity profile at ‘aaa’, reflecting an ‘excellent’ liquidity buffer and quality of liquid assets”, while “the bank’s capitalization is judged strong reflecting strong equity-to-assets ratio”.
The rating agency “assumes a 125% in subscribed capital from 2021 as per the Bank’s 7th General Capital Increase plan approved in October 2019”, noting that it “expects all non-regional shareholders will make their first payments before October 2021”.
In April 2020, the Bank’s Board of Directors approved a group-wide up to $10 billion COVID-19 Response Facility to be made available to current borrowers to ease the economic impact of the COVID-19 crisis.
The ‘AAA’ rating with a stable outlook of the African Development Bank by Fitch Ratings follows an earlier affirmation of the ‘AAA’ rating of the Bank, with stable outlook, by Standard and Poor’s Global Ratings.
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