Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the European Investment Bank (long-term foreign-currency issuer and senior unsecured debt ratings: AAA/Stable; short-term foreign-currency issuer ratings: S-1+/Stable) on 25 November 2024.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on www.scoperatings.com.

Key rating factors

For the updated rating annex accompanying this review, please see here.

The AAA rating of the European Investment Bank (EIB) reflects its ‘Excellent’ intrinsic credit profile and ‘Excellent’ shareholder support. The EIB’s institutional profile is characterised by a record of excellent governance and an irreplaceable mandate granted by its EU members. The bank has been instrumental in advancing EU policies, including the response to the Covid-19 pandemic, financial support to Ukraine, and closing investment gaps by leveraging the impact of member states’ Next Generation EU funds and the InvestEU programme, as well as catalysing transition to carbon neutrality. In line with shifting EU political priorities, the bank is set to expand support to the EU security and defence industry.

The EIB’s financial profile benefits from its ability to consistently generate and retain capital every year since its inception in 1958, including during the Covid-19 pandemic and energy crisis. The EIB’s excellent asset quality with negligible non-performing loans is underpinned by its conservative lending policies, high asset protection, low exposure to climate-related risks, and a widely diversified portfolio across geographies, sectors and counterparties. The EIB’s strong liquidity profile is supported by prudently managed liquid assets, excellent market access given its global benchmark issuer status, diversified funding base, and unique access to the ECB’s liquidity facilities. Challenges, which are marginal at the AAA level, relate to its high leverage and moderate liquidity buffers compared to peers.

The EIB’s unaudited H1-2024 financial results confirm a solid financial performance, with the CET1 ratio standing at 34.2% and the net result at EUR 1.5bn. The EIB maintains excellent asset quality, driven by its conservative lending policies with overdue payments beyond 90 days totalling EUR 82.4m as of H1-2024 and representing just 0.02% of the portfolio, one of the lowest ratios among peers. Looking at the wider definition of impaired exposures, the EIB’s record is also exceptional, with impaired loans limited to EUR 2.1bn (0.47% of total disbursed loans). The EIB maintains a strong liquidity profile with treasury assets of EUR 78.9bn in H1-2024, covering 91% of projected net outflows for the next 12 months.

The EIB Group Operational Plan 2024-2026 points to planned lending signatures of EUR 73.5bn in 2024 (with +/-10%). Over H1-2024, the EIB signed EUR 25.1bn of new lending out of an annual disbursement orientation of EUR 52.8-58.3bn. As of end-October 2024, borrowings stood at EUR 62.7bn out of the announced borrowing authorisation of up to EUR 65.0bn for the year.

To support the bank’s ability to deliver on its 2024-27 Strategic Roadmap, the EIB’s Board of Governors decided in June 2024 to increase the gearing ratio from 2.5 to 2.9, subject to the EIB’s statute being amended by the Council of the European Union, following the request submitted by the EIB for this purpose in September 2024. Scope estimates that the revised gearing ratio, expected to take effect as early as 2025, could increase the EIB’s potential mandated assets by approximately EUR 123bn, enabling it to better address evolving economic and investment challenges.

Under the 2024-27 Strategic Roadmap, the EIB will continue playing a critical role in advancing the EU’s policy agenda, focusing on climate transition, competitiveness and cohesion, as well as security and defence. The EIB will continue leading the emergence of nature-positive finance in the transition towards net zero, alongside other multilateral development banks, with more than 50% of investments already supporting climate action and environmental sustainability. As the key implementing partner of the InvestEU programme, the EIB will also continue supporting innovation and the deployment of new technologies.

The EIB plans to adapt its lending policy to step up support to Europe’s security and defence industry, including by opening dedicated SME credit lines to companies active in this sector. The bank has been at the forefront of the EU’s response to Russia’s invasion of Ukraine with more than EUR 2.0bn disbursed since 2022 backed by guarantees from the European Union (AAA/Stable).

Finally, the EIB benefits from the strong credit profile of its key members. The six largest EU economies – Germany (AAA/Stable), France (AA-/Stable), Italy (BBB+/Stable), Spain (A/Stable), the Netherlands (AAA/Stable) and Belgium (AA-/Negative) – together account for around 78% of the EIB’s capital. Their weighted average rating of AA- drives Scope’s ‘Excellent’ assessment of shareholder support, which is further supported by the EIB’s high-quality callable capital of about EUR 135.5bn, which covers around 30% of its outstanding mandated assets.

The Stable Outlook reflects Scope’s assessment of the EIB’s financial buffers to withstand external and balance sheet-driven shocks. The rating could be downgraded if: i) the EIB recorded losses over a sustained period; and/or ii) its liquidity buffers significantly reduced.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Supranational Rating Methodology, 21 June 2024) is available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst Thomas Gillet, Director

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