| 15 Mar 2010 |
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Capital Intelligence Assigns First Time Ratings to Export Development Bank of Iran
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Capital Intelligence (CI), the international credit rating agency, today announced that it has assigned Export Development Bank of IranExport Development Bank of Iran
(EDBIEDBI) 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.EDBIEDBI
'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, EDBIEDBI 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, EDBIEDBI'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.
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EDBIEDBI 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.
Contact:
Chris Nicolaou
chris.nicolaou@ciratings.com
Tel: +357 2534 2300
Zafer M. Diab
zafer.diab@ciratings.com
Tel: +357 2534 2300
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