World Bank Group commitments to help countries improve living standards and achieve better development outcomes were $59.5 billion in the
The financial results from the fiscal year highlighted the strength of the financial positions of the World Bank Group entities, steady demand for financing, and continued support from shareholders.
These statements include the Management’s Discussion and Analysis of financial results for the four Bank Group institutions engaged in development finance: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).
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“The four sets of FY19 financial statements issued today [09 August 2019] show that the World Bank Group has the tools and financial strength to meet the challenges presented by shareholders in the 2018 capital package,” said World Bank Group President David Malpass.
Malpass continued: “Across IBRD/IDA, IFC, and MIGA, our aim is to effectively address issues central to the core mission of shared prosperity and poverty reduction. We are working to increase our commitments to lower-income countries as they improve their development outlook and to shift resources toward countries suffering from fragility, conflict, and violence.
“We will be improving our effectiveness and budget discipline throughout the year to make more resources available to meet client needs and challenges, including the slowdown in global growth; the severe deficits in clean water, electricity, health, education, jobs, and private sector competitiveness; barriers to the full inclusion of women in economies and societies; the urgency of environmental and climate challenges; the surge in debt that is not bringing true benefits; and the many other challenges in achieving development gains.”
Key highlights from each institution of the financial statements are as follows.
- IBRD’s commitments were on par with the prior year at $23 billion, while disbursements increased by 16% to $20 billion in FY19. Commitments to lower-middle-income countries in FY19 represented 54.2% of the total.
- The capital increase approved by the Board of Governors in October 2018 will provide additional lending capacity along with institutional and financial reforms designed to ensure IBRD’s long-term financial sustainability.
- IBRD further strengthened its financial management by introducing a financial sustainability framework and sustainable annual lending limit.
- Considering loan repayments received, net disbursements to support developing economies were $10 billion in FY19. This increased IBRD’s loan portfolio to $193 billion, 5% above a year ago.
- Despite the portfolio growth, IBRD’s capital adequacy measure, the equity to loans (E/L) ratio, remained stable at 22.8%, partly due to payments from the recent general capital increase and $831 million in new reserves absorbed the impact of loan growth.
- IBRD raised medium- and long-term debt of $54 billion during FY19, a $15 billion increase compared to the previous year. The funds raised from capital markets financed development lending and bolstered liquidity. IBRD reported net income of $505 million for FY19.
- Allocable income, the internal measure that IBRD uses to make net income allocation decisions, was $1.19 billion, which reflects the gradual impact of new pricing measures and will be used to increase reserves and support IDA.
- The implementation of the IDA18 replenishment has been robust, with a strong focus on countries affected by fragility, conflict and violence, and increased resources and enhanced terms for small states.
- IDA commitments were $21.9 billion in FY19, bringing cumulative commitments in FY18 and FY19, the first two years of the IDA18 replenishment, to $45.9 billion, nearly two-thirds of the full commitment authority and a 31 percent increase compared to the same period in IDA17.
- Net disbursements in FY19 increased by almost a third, increasing the outstanding loan balance to $152 billion.
- As part of its funding activities, during the year IDA introduced its short-term debt instruments in the capital markets, with an outstanding balance of $1.9 billion as of June 30, 2019.
- Although IDA reported a net loss of $6.7 billion in FY19, this is driven mainly by the impact of $7.7 billion of development grants provided to IDA’s eligible members, which are funded by member contributions.
- With the increase in IDA’s loan exposures, IDA’s capital adequacy measure, the deployable strategic capital ratio, declined by 2 percentage points, to 35.3%.
- IFC concluded FY19 with $8.9 billion in long-term financing from its own account and mobilised an additional $10.2 billion from other investors, for
a totalprogramme delivery of $19.1 billion, compared to $23.3 billion in FY18.
- Income from the loan and debt securities portfolio, net of allocated funding costs, was solid, at $872 million.
- IFC also saw strong income generated from its treasury portfolio of $476 million, net of allocated funding costs, driven primarily by the recent rally in US Treasuries.
- IFC raised medium- and long-term debt of $11 billion during FY19 (vs. $14 billion in the previous year). IFC used its borrowings from capital markets for IFC’s net disbursements and maturing borrowing needs and to promote capital markets development and provide local currency financing in emerging and frontier markets.
- Income available for designations—the internal measure used by IFC to determine transfers to IDA and funding for Advisory Services—was $909 million in FY19.
- In FY19, IFC adopted a new accounting standard that resulted in IFC reporting all gains and losses on investments in equity securities in net income. This impacted the comparability of IFC’s reported financial results between FY19 and FY18 and introduced additional volatility in net income.
- FY19 net income was $93 million, compared to $1.7 billion on a comparable basis in FY18. The reduction in net income was mainly attributable to a weaker performance in IFC’s equity, loan and debt securities portfolio than in FY18, partially offset by a strong treasury performance that was driven largely by the rally in US Treasuries.
- The deployable strategic capital ratio, IFC’s measure of capital adequacy, was 11.6% at the end of FY19, compared to 8.7% at the end of FY18. The increase was driven primarily by changes in the carrying value of IFC’s equity investment portfolio.
- MIGA provides political risk insurance and credit enhancement to facilitate the flow of foreign direct investment into developing countries. It mobilised $9.3 billion in development financing by issuing $5.5 billion in guarantees, double the amount from six years ago.
- Gross guarantee exposure was a record $23.3 billion, also more than double that from six years ago.
- MIGA reported a net income of $82.4 million in FY19, an increase of $41.5 million from the prior year, attributable primarily to higher investment income.
- Despite the portfolio growth, the capital utilisation ratio (MIGA’s capital adequacy measure) remained stable at 47%. This reflects MIGA’s continued deployment of private sector reinsurance capacity to manage its capital, with 64% of the gross exposure ceded as of end-FY19.
For full versions of the financial statements and management’s discussion and analysis of the four World Bank Group institutions, please visit:
- IBRD FY19 Financial Statements and Management’s Discussion and Analysis
- IDA FY19 Financial Statements and Management’s Discussion and Analysis
- IFC FY19 Financial Statements and Management’s Discussion and Analysis
- MIGA FY19 Financial Statements and Management’s Discussion and Analysis