Another contribution to the IIB paid-in capital: member states support the Bank in global crisis
On April 7, 2020, within the framework of the new capitalization programme approved by the IIB member states in the amount of up to 200 million euros, the Russian Federation transferred 10.64 million euros as a contribution to the paid-up capital of the Bank, bringing its total value to 370.25 million euros. Thus, Russia has become the first IIB shareholder to fully fulfil its obligations for the new round of capitalization due in 2020.
Since the relocation of the IIB headquarters to Europe in mid-2019, the paid-in capital of the Bank has increased by more than 40 million euros, with the volume of IIB loan and documentary portfolio growing by 14% over the same period and surpassing a 1 bn euro mark for the first time in IIB history. The share of European countries in both indicators exceeds 50%.
Active support provided by its member states is one of the key factors for the Bank’s further dynamic development. This has been repeatedly emphasized by international credit rating agencies that assigned the Bank with an average “A” rating last year.
The important role of Russia and Hungary (countries with the first and the second largest share in the paid-in capital) for IIB’s successful transformation into a modern international development bank cannot be undermined. Back in the days, it was the initiative of the Russian Federation that made it possible to preserve and relaunch the Bank. The return of Hungary as a member state five years ago and its continuously active stance on key issues have largely determined the success of the comprehensive “Europeanization” of the Bank. As a result, last year IIB acquired a new home in the Hungarian capital, becoming the only multilateral financial development institution with headquarters in the CEE region.
“The increase in paid-in capital in the midst of a pandemic and global shocks in the financial markets underlines the significance of our operations for the shareholders,” said Nikolay Kosov, the Chairperson of the IIB Management Board, “Under current circumstances, the consistent and timely implementation of the capitalization program 2020-2022 is one of the key factors for continuous investment activities of the Bank.
This is particularly important for the SME sector, which forms the foundation of almost all of our member states economies, and which today finds itself in the most vulnerable position. We intend to undertake every possible effort to support our clients, help them save working places, effectively overcome negative consequences of the crisis, and to be able to quickly restore full-scale operations at the first signs of recovery”.