The EBRD is looking forward to another year of strong investment in 2015, continuing to provide support for countries across its region of operations in the face of persistent economic challenges.
Demand for EBRD finance is expected to remain high, after investment rose to €8.9 billion in 2014 from a previous €8.5 billion, despite mid-year guidance from shareholders that they would not, for the time being, approve any new projects in Russia.
The Bank reported realised profits – primarily generated from net interest income, dividends and the proceeds of exiting equity investments – of €927 million last year, compared with €1.2 billion in 2013.
However, economic weakness in Russia and Ukraine had an impact on unrealised elements of the EBRD’s 2014 financial performance, resulting in a net loss of €568 million, compared with a 2013 net profit of €1.0 billion.
A steep fall in the rouble depressed the value of the Bank’s Russian equity stakes and EBRD provisioning rose in response to the deteriorating economic performance of Ukraine.
Reserves stood at €7.9 billion at the end of 2014 and the EBRD maintains a robust capital position and high levels of liquidity, also enjoying the strong support of its shareholders. The organisation continues to be rated Triple A with a stable outlook by all three major rating agencies.
Following last year’s guidance from shareholders on Russia the Bank reallocated resources to meet high demand for its investments from other EBRD recipient countries. Turkey, where the Bank has been active for only six years, became the largest individual recipient of EBRD financing, with investment of €1.4 billion across diverse sectors of the real economy.
There was a strong increase in activity for Central Asia, particularly in Kazakhstan. Investment also rose in countries of the Balkans, the Caucasus and of eastern Europe, where the EBRD re-engaged in Ukraine after the new administration embarked on a programme of economic reform.
Meeting high market demand, the Bank also saw a strong increase in investment in Poland and had a successful start to its operations in Cyprus.
The EBRD had previously reported a loss of €602 million in 2008 and of €746 million in 2009 at the height of the global financial crisis, during which period its investments rose sharply.