The flags of Brics nations China, SA, India, Brazil and Russia. Picture: AFP
The flags of Brics nations China, SA, India, Brazil and Russia. Picture: AFP

The New Development Bank (NDB),  also known as the Brics Development Bank, has received the highest possible credit rating from the Japan Credit Rating agency (JCR), with a stable outlook.

JCR gave the NDB the rating on Tuesday, citing high-quality risk management and liquid assets sufficient to cover a year of liquidity requirements.

“Although NDB’s lending is expanding rapidly against the backdrop of strong funding needs in the member countries, JCR holds that it can maintain its financial health through conservative financial management and appropriate risk control,” wrote JCR analysts Atsushi Masuda and Hiroshi Tonegawa.

JCR said, however, that as many of the infrastructure projects handled by NDB are of a large size, it is important for the bank to establish co-operation on co-finance with other financial institutions.

Brazil, Russia, India, China and SA established the bank in 2015 to fund infrastructure and sustainable development projects in the emerging economies.

The NDB has three projects in SA related to environmental protection and renewable energy, with loans to SA totaling $1.4bn as of April 2019.

The bank also has AA+ ratings from S&P Global Ratings and Fitch Ratings — their second highest ratings.

“The AAA international rating is a significant milestone for the bank that is fully owned and led by developing countries,” said NDB CEO Leslie Maasdorp in a statement. “Given its international credit ratings, NDB is well positioned to raise capital at competitive rates through the bond markets and ensure competitive loan pricing to our clients.”

gernetzkyk@businesslive.co.za