0
MULTILATERAL
DEVELOPMENT BANKS
PART 2 OF 2: AN INTRODUCTION
TO MULTILATERAL DEVELOPMENT BANKS

LONDON

WASHINGTON DC

SING...
INTRODUCTION
 GBRW Consulting has been analysing the major Multilateral Development
Banks (International Bank for Reconst...
 The first slide shows the Total Assets of each bank.
 After a flat period between 2003 and 2007, they have grown signif...
MDB Total Assets ($million)
400,000
350,000
300,000
250,000
200,000

150,000
100,000
50,000
0
IBRD
2006

IADB
2007

2008

...
 The next slide compares the loans made by each MDB.
 Loans are the largest component of Development Related Exposure (D...
MDB Total Loans ($million)
160,000
140,000

120,000
100,000
80,000
60,000
40,000
20,000
0
IBRD
2008

IADB
2009

ADB
2010

...
 Total Development Related Exposure for each bank is shown next.
 This provides the most comprehensive way of comparing ...
Total Development Related Exposure
(DRE) ($ million)
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
IBRD

IAD...
 The breakdown of Development Related Exposure which follows again
shows the predominance of lending in the banks’ develo...
What does DRE involve?
100%
90%
80%
70%
60%

Loans

50%

Equity investments

40%

Guarantees

30%
20%
10%
0%
IBRD

IADB

A...
 By looking at the relative composition of the banks’ balance sheets, the
size of their investment portfolios (“Liquid as...
Comparison of balance sheets: Assets
100%
90%
80%
70%
60%
Liquid assets

50%

Total DRE

40%

Other Assets

30%
20%
10%
0%...
 The banks’ investment portfolios are shown as a percentage of their
Development Related Exposure in the following slide....
Investment portfolio as % of DRE
120%
100%

80%
60%
40%
20%

0%
IBRD

IADB

ADB

EBRD

AfDB

IFC
 An important factor underpinning MDBs’ “AAA” credit ratings is their
callable capital, which represents an obligation by...
Equity and Callable Capital ($ million)
250,000
200,000
150,000
100,000
50,000
0

IBRD

IADB
Equity

ADB

EBRD

Callable C...
 It is important not to confuse the lending activities of the MDBs, which are
generally done at commercial interest rates...
MDBs and “Soft lending” affiliates
(total balance sheets, $ billion)
350
300
250
200

MDB
150

Concessional

100
50
0

IBR...
FURTHER INFORMATION
 GBRW regularly provides training on the role of MDBs in international
financial markets to delegates...
PROFILE AND CONTACTS


Paul Rex,
Managing Director



 You can find out more about GBRW
Consulting by visiting our webs...
Upcoming SlideShare
Loading in...5
×

Multilateral development banks part 2

1,891

Published on

GBRW Consulting has been analysing the major Multilateral Development Banks - International Bank for Reconstruction & Development, or World Bank; International Finance Corporation; Inter-American Development Bank; African Development Bank; Asian Development Bank and European Bank for Reconstruction and Development- since the late 1990s.
This is the second of two presentations available on SlideShare. It illustrates some of the main characteristics of the financial statements of this very specialised group of institutions, which we refer to as MDBs.

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,891
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Multilateral development banks part 2"

  1. 1. MULTILATERAL DEVELOPMENT BANKS PART 2 OF 2: AN INTRODUCTION TO MULTILATERAL DEVELOPMENT BANKS LONDON WASHINGTON DC SINGAPORE GLOBAL EXPERIENCE, PRACTICAL EXPERTISE
  2. 2. INTRODUCTION  GBRW Consulting has been analysing the major Multilateral Development Banks (International Bank for Reconstruction & Development, or World Bank; International Finance Corporation; Inter-American Development Bank; African Development Bank; Asian Development Bank and European Bank for Reconstruction and Development) since the late 1990s.  We provide analysis, training and consultancy for Government shareholders and other interested parties on issues which include strategy, governance, communication with stakeholders and capital adequacy.  This is the second of two presentations available on SlideShare. It illustrates some of the main characteristics of the financial statements of this very specialised group of institutions, which we refer to as MDBs.
  3. 3.  The first slide shows the Total Assets of each bank.  After a flat period between 2003 and 2007, they have grown significantly in the past six years.  Data used in the following slides are based December 2012 year end accounts (for the Inter-American Development Bank; African Development Bank; Asian Development Bank and European Bank for Reconstruction and Development) and June 2013 accounts (for International Bank for Reconstruction & Development and International Finance Corporation).
  4. 4. MDB Total Assets ($million) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 IBRD 2006 IADB 2007 2008 ADB 2009 EBRD 2010 AfDB 2011 2012 IFC 2013
  5. 5.  The next slide compares the loans made by each MDB.  Loans are the largest component of Development Related Exposure (DRE), the term used to describe the development financing activities of each of the banks.  The other elements of DRE are equity investments by the banks (mainly IFC and EBRD) and guarantees issued by them on behalf of borrowers.
  6. 6. MDB Total Loans ($million) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 IBRD 2008 IADB 2009 ADB 2010 EBRD 2011 2012 AfDB 2013 IFC
  7. 7.  Total Development Related Exposure for each bank is shown next.  This provides the most comprehensive way of comparing the development financing activities of each bank.
  8. 8. Total Development Related Exposure (DRE) ($ million) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 IBRD IADB ADB EBRD AfDB IFC
  9. 9.  The breakdown of Development Related Exposure which follows again shows the predominance of lending in the banks’ development financing.  Guarantees represent less than 2% of total DRE, even though many parties believe that MDB guarantees represent a highly effective means of leveraging additional private sector financing.  IFC’s and EBRD’s activity as providers of equity financing is clearly illustrated.
  10. 10. What does DRE involve? 100% 90% 80% 70% 60% Loans 50% Equity investments 40% Guarantees 30% 20% 10% 0% IBRD IADB ADB EBRD AfDB IFC
  11. 11.  By looking at the relative composition of the banks’ balance sheets, the size of their investment portfolios (“Liquid assets”) in relation to their DRE can be seen in the following slide.  Interest rate and currency swaps are an important feature of the MDBs’ fund raising operations. Their contractual rights to receive payments under swap contracts are included in the “Other Assets” balances (the Liabilities & Equity side of of each MDB’s balance sheet similarly shows its obligation to make payments under swap contracts).  The IBRD and AsDB show the highest levels of entries under this heading, which increases their balance sheet totals when compared to the other MDBs.
  12. 12. Comparison of balance sheets: Assets 100% 90% 80% 70% 60% Liquid assets 50% Total DRE 40% Other Assets 30% 20% 10% 0% IBRD IADB ADB EBRD AfDB IFC
  13. 13.  The banks’ investment portfolios are shown as a percentage of their Development Related Exposure in the following slide.  In the case of the EBRD and AfDB, liquid assets are respectively 78% and 65% of DRE; the IFC has liquid assets exceeding 100% of its assets used in development financing.
  14. 14. Investment portfolio as % of DRE 120% 100% 80% 60% 40% 20% 0% IBRD IADB ADB EBRD AfDB IFC
  15. 15.  An important factor underpinning MDBs’ “AAA” credit ratings is their callable capital, which represents an obligation by shareholders to pay in additional capital if this is ever required.  The size of this callable capital for each bank can be seen in the next slide. The slide also shows each bank’s equity, or shareholders’ funds, which consists of paid in capital and retained profits.  IFC (which is a member of the World Bank Group) is the only MDB not to have callable capital.
  16. 16. Equity and Callable Capital ($ million) 250,000 200,000 150,000 100,000 50,000 0 IBRD IADB Equity ADB EBRD Callable Capital AfDB IFC
  17. 17.  It is important not to confuse the lending activities of the MDBs, which are generally done at commercial interest rates, with those of their concessional, or “soft lending” affiliates.  The concessional arm of the World Bank group, the International Development Association, or IDA, is the longest established. The Asian, African and Inter-American Development Banks have the Asian Development Fund, African Development Fund and Fund For Special Operations. (No fund is shown against the IFC as it is also part of the World Bank group.)  The EBRD is the exception; although it has a number of special trust funds, it does not have a concessional arm because of its mandate to focus on the private sector. The relative sizes of the MDBs and their concessional funds are shown in the next slide.
  18. 18. MDBs and “Soft lending” affiliates (total balance sheets, $ billion) 350 300 250 200 MDB 150 Concessional 100 50 0 IBRD IFC IADB AsDB EBRD AfDB
  19. 19. FURTHER INFORMATION  GBRW regularly provides training on the role of MDBs in international financial markets to delegates from major development institutions (contact us for a course outline).  The major ratings agencies (Fitch, Standard & Poor’s and Moody’s) produce credit analyses on the MDBs which are available on their websites.  Copies of the MDBs’ annual financial statements can be downloaded from the MDBs’ own websites.  For discussion of some of the general issues relating to MDBs, please see Part 1 of this presentation on Slideshare.
  20. 20. PROFILE AND CONTACTS  Paul Rex, Managing Director   You can find out more about GBRW Consulting by visiting our website on http://www.gbrw.com   Visit my LinkedIn profile at http://www.linkedin.com/in/paulrexgbrw and feel free to connect  Email us at mail@gbrw.com Paul is the Managing Director of GBRW and began his career with 18 years of lending, credit and management experience at senior level with Chemical Bank (now JP Morgan Chase) and Crédit Agricole. He has been involved in international development finance consulting for the past 20 years and has worked on assignments in more than 20 countries, including Bahrain, Bangladesh, Belize, China, Egypt, Mongolia, Poland, Russia, Serbia, Sierra Leone, Singapore, Uganda, Ukraine, and West Bank/Gaza. Paul has an MA from the University of Oxford, is a Fellow of the Academy of Experts, a Freeman of the City of London and a member of the Worshipful Company of International Bankers.
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×