IIB’s loan portfolio to exceed €1bn by end of 2019

IIB’s loan portfolio to exceed €1bn by end of 2019
Agreement signed on relocation of IIB's HQ to Budapest in February by chairman Nikolai Kosov and Finance Minister Mihaly Varga.
By bne IntelliNews November 26, 2019

The International Investment Bank (IIB) increased its loan portfolio by 11% or by €98mn in the six months since relocating its headquarters to Budapest, chairman Nikolai Kosov said at a press conference in Budapest on November 26. 

The value of outstanding loans will exceed €1bn by the end of the year. The balance sheet total was €1.35bn at the end of October, compared to €1bn at the end of 2018.

Of the 21 projects evaluated in the autumn, 19 were approved for a total value of €373mn. The IIB, with nine shareholders including Hungary, expects that investments will be made in all member states in the coming period. The key sectors include infrastructure, energy, automotive, pharmaceutical, agriculture, food and tourism. IIB focuses primarily on financing small and medium-sized projects.

The relocation of the headquarters allowed IIB to expand its investor base, which includes 170 entities from pension funds, banks and insurance companies from Austria, Bulgaria, Croatia, the Czech Republic, Germany, Hungary, Moldova, the Netherlands, Romania, Russia and the UK. 

After the IIB moved to Hungary, it successfully issued bonds in Hungary, Romania and the Czech Republic to the tune of €275mn, which is about 30% of the total long-term funds received by the bank since 2014, when its issued its first bonds, Kosov added.

The bank said that it observed a sharp decrease in the cost and an increase in the maturity of short-term borrowings thanks to favourable yields at bond issues.

The share of green bonds in the IIB treasury portfolio is constantly increasing and 40% of the treasury portfolio is in sustainable bonds.

"This fall, IIB actively held high-level meetings with leading financial institutions of Hungary, where spheres and instruments of cooperation were discussed. These negotiations allow us to state a clearly positive reaction of the Hungarian business community to the bank’s move to Europe, as it is directly interested in the growing importance of Budapest as an international financial centre," underlined Kosov.

The activities of IIB, the only international development bank with headquarters in the Central and Eastern Europe region, contribute to this in every way, he added.

The bank's new strategy from 2023 focuses on economic development, expanding the bank's international partner network, attracting new shareholders and strengthening media relations, said Imre Laszloczki, recently appointed Hungarian vice president and head of the strategic division of the board of governors.