Managing Returns

Managing Risk

Achieving Intermediation

Selected IBRD Financial Data

Financial &
Operational Results

Money Fiscal 2001

IBRD Operations

IDA Operations

IBRD Financial Results

Managing Returns to Maintain Strength

• As a cooperative institution, IBRD does not seek to maximize profit but to earn a return on assets sufficient to ensure its financial strength and sustain its development activities on an ongoing basis.
• IBRD achieves a net return on assets of about 1 percent per annum. In fiscal 2001, an increase in loan loss provision reduced net return on assets, to under 1 percent.
  (In fiscal 2001 IBRD adopted Statement of Financial Accounting Standard No. 133 and International Accounting Standard No. 39, which required that derivative instruments be reported at fair value. Without adoption of these standards, the ratio would have been 0.78.)

Managing Risk

• Consistent with its development mandate, IBRD’s main risk is the credit risk of its loan portfolio. This risk is closely managed.
• IBRD keeps its exposure to market risk quite limited. Market risk arises due to movements in market variables, such as interest rates and exchange rates.
• IBRD’s equity-to-loans ratio is a summary measure of its risk-bearing capacity. The ratio is conservatively managed in light of IBRD’s financial and risk outlook.

Achieving Efficient Intermediation

• IBRD’s high credit rating (AAA) allows the Bank to borrow for long maturities at favorable terms. The Bank borrows globally in multiple markets and currencies.
• Outstanding debt after swaps reached 76 percent of average total earning assets, as of June 30, 2001.
• As of June 30, 2001, the liquid asset portfolio was $24.2 billion, composed of liquid investments.

† Outstanding borrowings, net of swaps.