According to the financial statements released on 9 August by the five institutions of the World Bank Group, total commitments to help countries improve their lives and development outcomes are 59.5 per cent. billions of dollars for the 2019 financial year.
These financial statements include the management report of the four World Bank Group institutions engaged in financing development: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the Financial Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
“Today’s four sets of financial statements for fiscal 2019 prove that the World Bank Group has the tools and financial strength to address the challenges its shareholders have asked it to meet through the financial envelope granted in 2018, “said David Malpass, President of the World Bank Group.
IBRD’s commitments
The commitments of the International Bank for Reconstruction and Development amount to $ 23 billion in FY 2019, equivalent to the level of the previous biennium, while disbursements increase by 16 per cent to $ 20 billion. Commitments to low- and middle-income countries account for 54.2% of the total.
The capital increase approved by the Board of Executive Directors in October 2018 will strengthen the institution’s lending capacity and promote the deployment of institutional and financial reforms intended to support the long-term financial viability of the IBRD.
IBRD also continues to strengthen its financial management with the adoption of a financial viability framework and the introduction of an annual sustainable lending limit.
Including loan repayments during the year, net disbursements in support of developing economies amounted to $ 10 billion, bringing the loan portfolio to $ 193 billion – up 5% from the previous year. ‘Previous exercice.
Despite this increase, the equity / loan ratio (which measures the adequacy of IBRD’s capital) remained stable at 22.8%, with the change partly absorbed by payments following the latest increase. capital and $ 831 million in new reserves.
In fiscal year 2019, IBRD raised $ 54 billion in medium and long-term instruments, up $ 15 billion from the prior year. These funds raised on the capital markets financed development loans and increased liquidity. For fiscal year 2019, IBRD reports net income of $ 505 million.
Disposable income (an internal measure used to determine the allocation of net income) stands at $ 1.19 billion, reflecting the progressive impact of the new pricing measures. In addition to financing IDA’s operations, it will serve to increase IBRD’s reserves.
IDA up 31%
- The 18th replenishment of the resources of the International Development Association confirms its start in force, with commitments focusing on countries suffering from fragility, conflict and violence, increased resources available and improved conditions for small states.
- IDA’s commitments stand at $ 21.9 billion for 2019, bringing the cumulative commitments for 2018 and 2019, which correspond to the first two years of the IDA-18 cycle, to 45.9 billions of dollars, almost two-thirds of the authorized commitments and a 31% increase over the same period of IDA-17.
- Net disbursements in fiscal 2019 increased by about one-third, bringing outstanding loans to $ 152 billion.
- As part of its financing activities, IDA proposed its short-term financial market instruments during the year, with a balance of $ 1.9 billion as of June 30, 2019.
- The IDA’s reported net loss for FY 2019 of $ 6.7 billion is largely related to the development grants to IDA members eligible and funded by the contributions of Member States, at $ 7.7 billion.
- As a result of the increase in outstanding IDA loans, the ratio of usable strategic capital (which measures the capital adequacy of the institution) fell by 2 percentage points to 35.3%.
IFC remains strong
- The International Finance Corporation completes fiscal year 2019 with $ 8.9 billion in long-term investments for its own account and approximately $ 10.2 billion raised from other sources of funding, totaling more than $ 19 billion in total compared to $ 23.3 billion last year.
- At $ 872 million, the income from the loan and debt portfolio, net of imputed financing costs, is strong.
- IFC also benefited from a strong $ 476 million increase in cash flow from its treasury portfolio, net of imputed financing costs, largely as a result of the recent US Treasury bond reset.
- In fiscal 2019, IFC raised $ 11 billion in medium and long-term instruments, up from $ 14 billion last year. For its net disbursement and maturing requirements, but also to support the development of financial markets and provide local currency financing in emerging and frontier markets, IFC has used financial markets
- The disposable income for assignments (an internal measure for IDA transfer volume and advisory funding) is $ 909 million for fiscal 2019.
- With the adoption in fiscal year 2019 of a new accounting standard, IFC reports in net income all gains and losses related to its investments in securities. In addition to making it more difficult to compare the financial results for 2018 and 2019, this has increased the volatility of net income.
- Net income for fiscal 2019 was $ 93 million compared to $ 1.7 billion last year (on a comparable basis). This decrease is due mainly to a lower performance of the portfolio of equity investments, loans and debt securities compared to the 2018 financial year, which was only partially offset by the good performance of the cash, largely underpinned by the recovery of US Treasuries.
- The ratio of usable strategic capital (which measures the institution’s capital adequacy) stands at 11.6% at the end of the 2019 fiscal year, compared to 8.7% last fiscal year. This increase is largely explained by changes in the book value of the equity investment portfolio.
MIGA Agency increases its portfolio
- The Multilateral Investment Guarantee Agency provides political risk insurance and credit enhancement services to support foreign direct investment in emerging economies. In fiscal year 2019, it raised $ 9.3 billion in support of development financing through the issuance of $ 5.5 billion in guarantees – twice as many as six years ago.
- At $ 23.3 billion, outstanding gross commitments reached a record level, again at twice the level of 2013.
- MIGA reports net income of $ 82.4 million for fiscal 2019, an increase of $ 41.5 million from last year mainly due to higher investment income.
- Despite the increase in MIGA’s portfolio, the capital utilization ratio (which measures the capital adequacy of the institution) remains stable at 47%, thanks to the constant reinforcement of its reinsurance capacities for the private sector. in order to manage its capital, with the sale of 64% of its gross outstanding at the end of the 2019 financial year.
