EDBI ratings

Published March 15th, 2010 - 09:53 GMT
Capital Intelligence (CI), the international credit rating agency, today announced that it has assigned
Export Development Bank of Iran (EDBI) long-term and short-term foreign currency ratings of BB- and
B, respectively, a Financial Strength rating of BB+ and a support rating of 3. The outlook for the ratings
is Stable.
EDBI’s ratings capture its very strong capital adequacy, business model and access to low-cost official
funding but also take into consideration its weak asset quality, high borrower concentration and
weaknesses in the regulatory and operating environment. The Bank’s support rating indicates a strong
likelihood that sufficient financial assistance would be forthcoming from the government should it be
needed and reflects the Bank’s full government ownership and role as the official export development
bank.
Following an important increase in capital of IRR13.3 trillion in FY2008, EDBI ranks second among
Iranian banks with a capital/total assets ratio in excess of 50%. In FY2009 the Bank returned record
profits based on its high interest differential and excellent cost/income ratio. As a wholesale bank with
33 branches, EDBI’s access to retail deposits is constrained, although the Bank’s liquidity is very strong
given its access to official funding. Given the deterioration in operating conditions in FY2009, the
Bank’s asset quality has worsened and loss reserve cover is low by international standards, although
this is mitigated by a good rate of recoveries, reinsurance with the Export Guarantee Fund of Iran and
strong collateral security.
EDBI was established by Act of Parliament in 1991 in order to promote non-oil exports and develop
business exchanges with Iran’s international trading partners. As per its constitution, the object of the
Bank is to provide trade finance including pre-shipment and post-shipment buyer credit export
financing. The Bank is also the agent in Iran of Islamic Development Bank.

© 2000 - 2019 Al Bawaba (www.albawaba.com)

You may also like