BUSINESS REPORTER
Ratings agency S&P Global on Friday affirmed its ‘AAA/A-1+’ long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook.
The ratings agency assessed the bank’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support and adequacy of its governance and management.
“We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” S&P Global said in a statement.
The ratings agency noted the bank’s US$115bn capital increase, approved by shareholders in October 2019, and the replenishment to the African Development Fund, AfDB’s concessional window, in December 2019.
“The stable outlook reflects our expectation that, over the next two years, AfDB will prudently manage its capital while maintaining solid levels of high-quality liquidity assets and robust funding,” S&P Global said.
The ratings agency expects that “shareholders will remain supportive by providing timely capital payments”; the bank “will continue benefiting from preferred creditor treatment; and “prudently manage growth in private-sector lending in a way that’s aligned with its mandate”.
It said the continental bank will “play a key role in supporting the region, particularly in the context of COVID-19”.
AfDB approved an up to US$10bn relief package for 2020, of which US$6.9bn will be financed by AfDB and the remainder through its concessional lending window.
AfDB president Akinwumi Adesina said the rating “reflects the bank’s very strong financial position and risk management, as well as our sound governance”.
“We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic,” Adesina said.
