Ratings agency S&P Global has affirmed its 'AAA/A-1+' long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook.

The ratings agency positively assessed the bank’s “very strong” financial risk profile and said in a statement that the AfDB had “very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support and adequacy of its governance and management”.

“We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” S&P Global stated on June 22.

The ratings agency also noted AfDB’s $115-billion capital increase, which was approved by shareholders in October 2019, and the replenishment to the African Development Fund, the bank’s concessional window, in December 2019.

The stable outlook reflects S&P Global’s expectation that, over the next two years, the AfDB will prudently manage its capital while maintaining solid levels of high-quality liquidity assets and robust funding.

S&P expects that “shareholders will remain supportive by providing timely capital payments”; that the bank “will continue benefiting from preferred creditor treatment" and that it will “prudently manage growth in private-sector lending in a way that’s aligned with its mandate”.

The rating agency’s report further noted that the “AfDB will play a key role supporting the region, particularly in the context of Covid-19”.

The institution approved an up to $10-billion relief package for 2020, of which $6.9-billion will be financed by AfDB and the remainder through its concessional lending window.

Commenting on the rating by S&P, AfDB president Akinwumi Adesina said the bank was “delighted with and welcomed S&P Global’s decision to affirm the Bank’s AAA/A-1+ rating”.

According to Adesina, the rating reflects the bank’s strong financial position and risk management, as well as its sound governance.

“We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the Covid-19 pandemic,” Adesina noted.