APICORP Posts 2021 Financial Results, Recording a Net Income of USD 99.6MN

The Arab Petroleum Investments Corporation (APICORP), a multilateral financial institution, today announced that its Board of Directors recommended to the General Assembly the approval of its financial results for the full year ended December 31, 2021. 

APICORP’s performance marked a year of notable financial and operational achievements despite a backdrop of a reduction in reference rates and significant volatility in financial markets that persisted throughout the year. At year-end of 2021, the Corporation recorded a net income of USD 99.6mn and saw its balance sheet grow by 1.3% y-o-y to reach USD 8bn. Total comprehensive income for the year also reached just under USD 112.9mn  – up from USD 90.6mn in 2020.

Growth in Corporate Banking

APICORP’s Corporate Banking portfolio reached USD 4.6bn, representing a 19% y-o-y increase. This was partly due to the Corporation having actively sought to disburse its USD 500 million countercyclical support package to its Member Countries and strategic partners, which was launched in 2020 to mitigate the impact of the COVID-19 pandemic and oil price fluctuations.

Moreover, the Corporation increased its capital adequacy from 31% in 2020 to 32% and reduced its key leverage ratio from 2.2x to 2.1x in 2021. Return on assets and return on equity at year-end were 1.3% and 3.9%, respectively, while non-performing loans fell from 0.59% to 0.55% over the period. Notably, it also retained its ‘Aa2’ credit rating from Moody’s and ‘AA’ credit rating from Fitch during the year.

Commenting on the results, Dr. Aabed Al-Saadoun, Chairman of the APICORP Board, said: “APICORP has consistently delivered improvements in its balance sheet over recent years, and 2021 was no exception. It is a testament to the Corporation’s structural and strategic resilience that it delivered exceptional growth in corporate banking in a year marred by global economic uncertainty. It was also a year that saw the Corporation lead the energy transition through the issuance of green bonds and an ESG framework that is transforming the very nature of our region’s energy landscape.”

A notable achievement for APICORP in 2021 was its successful debut green bond issuance in September, which came on the heels of a significant uptick in its green portfolio which increased by witnessed a five-fold increase over the past 5 years -- approximately USD 600mn. The benchmark USD 750mn green bond was nearly three times oversubscribed, garnering USD 2.2 billion in orders from more than 80 institutional and sovereign investors, 63% of whom were strictly ESG-focused investors. Moreover, the green bond issuance recorded the lowest-ever interest rate for an APICORP benchmark issuance. 

Dr. Al-Saadoun added: “We are immensely proud to close yet another successful year for APICORP. Despite having moved through a period of continued uncertainty in world markets, the Corporation delivered extraordinary corporate banking asset growth and led the development of a truly transformative green bond issuance that was three times oversubscribed. Our member countries have navigated a difficult period by renewing their commitments to the energy transition in a way that provides great scope for innovation and enterprise across the sector and provides the wider investor community with enormous scope for involvement in the ESG investment landscape of tomorrow.”

Business Line Highlights

Corporate Banking
APICORP increased its corporate banking assets by 19% y-o-y in 2021 to reach USD4.6 bn. Corporate banking also achieved a remarkable increase in drawdowns that reached USD 2.4 bn as pent-up demand for project financing from 2020 was released in 2021. 

Investments

The performance of the Corporation’s equity investment portfolio made a better-than-expected contribution to the bottom line due to the materialization of a few exits. 

Treasury & Capital Markets

The treasury and capital markets portfolio was reduced in size in 2021 to mitigate the impact of the volatility in the financial markets and to also take advantage of liability optimization for APICORP. The equity investment portfolio was largely at the same level to the previous year with some exit opportunities materializing during 2021.