Global credit rating agency Fitch Ratings has affirmed the African Development Bank’s (ADB) credit rating at ‘AAA’, with a stable outlook. Fitch said the triple-A rating was driven by the ‘extraordinary support’ of the Bank’s shareholders.
According to Fitch, the Bank’s risk-management policies is ‘conservative’ and ‘excellent’, in line with AAA-rated peers. Further, Fitch says the Bank’s “Concentration risk is ‘low’, and its five largest exposures account for 32% of total banking portfolio as of 2020.” On the Bank’s overall exposure to risks, Fitch assessed it as “’Low’, balancing ‘Moderate’ credit risk with ‘Excellent’ risk management policies, ‘Low’ concentration, and ‘Very Low’ equity and market risks.”
Commenting on the assessment, Bajabulile “Swazi” Tshabalala, ADB’s Vice President for Finance and Chief Finance Officer, said that “The affirmation of the Bank’s triple-A ratings by Fitch, recognizes the very strong shareholder support our institution benefits from, as well as its strong capitalization and risk management capabilities.” He stated that this affirmation underscores the Bank’s public policy mandate, especially “during these very challenging times.”
In response to the Fitch report, Dr. Akinwumi A. Adesina, ADB’s Group President, said welcomed “the affirmation of the Bank’s ‘AAA’ rating, with a stable outlook, despite enormous challenges posed by Covid-19.” He stated that the “Bank will continue to enhance its policy and fiscal relevance in support of regional member countries, as they contend with the global and regional repercussions of the pandemic.” He further said that the Bank will continue to help “African economies reposition their economies in a Covid-19 environment,” while also maintaining its “prudential ratios and adequate buffers.”
The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities including the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). It has presence in 41 African countries with an external office in Japan and contributes to the economic development and the social progress of its 54 regional member states. In the Bank was recognized by Global Capital in 2020, for its highly successful $3 billion Fight Covid-19 social bond, one of the Bank’s many initiatives to alleviate the impact of the pandemic on African lives and economies.
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