The New Development Bank (NDB), the multilateral development financier set up by Brazil, Russia, India, China and SA (Brics), said profit fell more than 24% in the first nine months of 2021.
The Shanghai-headquartered bank, which was often referred to as the Brics bank previously in honour of its founding nations, said profit in the nine months ended September 30 fell to $96m, down from $124m in the corresponding period the previous year, according to a statement posted on the stock exchange news service (Sens) on Monday.
While the NDB grew its interest income to $196m in the first nine months of 2021, up from $185m in the corresponding period the previous year, an almost doubling of its interest expenses over that time frame whittled away its net interest income. The NDB’s interest expenses rose more than 87% in the first nine months of 2021 to $88m, trimming total net interest income to $108m from $138m in the same period the previous year.
The NDB issued a series of new debt instruments in 2021, which would have boosted its debt payment obligations during the reporting period. These included a RMB5bn three-year note issued in March 2021 in Chinese renminbi, which is equivalent to about $767m, paying a fixed annual coupon, or interest rate, of 3.22%.
In April 2021 the bank also issued a five-year $1.5bn instrument maturing in 2026, which pays a fixed coupon of 1.125%, as part of its euro medium-term note programme. By July 2021 it tapped into the euro medium-term note programme again, issuing four instruments with par values of $50m, $50m, £35m and HK$500m. These debt instruments were issued as private placements with maturities ranging between 2023 and 2026 and paying fixed coupons of between 0.38% and 1%.
In July, the NDB again issued a debt instrument as part of its euro medium-term note programme with the sale of a $2.25bn three year note maturing in 2024, which pays a fixed coupon of 0.625%. That was followed by another debt issuance in Chinese currency to the value of RMB2bn, or the equivalent of $310m, with the instrument maturing in September 2026 and paying a fixed coupon of 3.02% annually.
The NDB almost doubled the size of its loans and advances in the first nine months of 2021 to $11.97bn. That’s up from the $6.61bn in loans and advances reported at the end of 2020, a year in which the bank expanded loans to help its member nations cope with the financial effects of Covid-19.
Though the NDB began as a development financier for the so-called Brics nations in 2015, it has since expanded its membership to include Bangladesh, the United Arab Emirates (UAE), Uruguay and Egypt.
Finance minister Enoch Godongwana was appointed one of the NDB’s governors in August. SA owns just less than one fifth of the issued share capital of the NDB.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.