Moody says APICORP’s ‘Aa2’ Rating is Stable Despite Current Economic Conditions
- APICORP continues to be the only Aa2-rated financial institution in MENA region
- Rating reaffirmation based on strong capital adequacy, high asset quality and strong asset performance
- Very strong liquidity and diversified funding structure enhance financial standing
- APICORP demonstrates resilience in challenging operating environment due to portfolio diversification and strong quality of management
Dammam, Saudi Arabia, The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, announced that its ‘Aa2’ rating with a ‘stable’ outlook was reaffirmed by Moody’s Investor Service despite current economic and market shocks.
According to Moody’s, “The credit profile of Arab Petroleum Investments Corporation (APICORP) reflects its high capital adequacy, supported by moderate leverage, robust asset quality, low levels of nonperforming assets, and a very strong liquidity and funding profile, underpinned by diversified funding sources and increased availability of liquid resources to cover upcoming net cash outflows. APICORP’s shareholder support is derived from the presence of callable capital and creditworthy shareholders. The coronavirus outbreak and the related oil price shock pose risks to asset performance, but [APICORP’s] track record of resilience to shocks and strong quality of management mitigate some of these risks.”
Dr. Ahmed Ali Attiga, CEO of APICORP, commented, “APICORP’s concerted efforts to diversify the asset portfolio both sectorally and geographically, coupled with our already strong financial position, have been key in maintaining our status as the only financial institution in the MENA region with an ‘Aa2’ rating, even against the current backdrop of global market challenges.”
“Moreover, APICORP maintains very strong partnerships in the energy sector and enjoys Preferred Creditor Status in its Member Countries. These factors, alongside strong underwriting standards, resilient financing structures and prudent provisioning policies, ensure the continued integrity of the institution’s balance sheet position and robustness of its profitability,” Dr. Attiga added.
APICORP recently announced that it posted strong financial results for the year ended 2019, including a 17% Y-O-Y increase in net recurring income to USD112 million, up from USD96 million at year end 2018. This was driven by Corporate Banking and Treasury and Capital Markets, whose gross income increased 32% and 24% Y-O-Y to reach USD201 million and USD80 million, respectively. Moreover, APICORP recently announced a landmark increase in callable capital to USD8.5 billion, as well as a significant increase in authorized and subscribed capital, further bolstering its financial sustainability and resiliency.