LONDON, Feb 27 (Reuters) - The European Bank for Reconstruction and Development saw its profits slump by almost 25 percent last year, results from the London-based organisation showed on Tuesday.
The development bank, whose work spans from Morocco to Mongolia, said its net profit dropped to 772 million euros ($944.39 million) from almost 1 billion euros in 2016.
“The reduction was primarily due to lower gains on equity investments in 2017 of 332 million euros, versus 423 million euros,” it said in a statement.
The statement did not provide details on which countries the drop was most pronounced. This came as its spending on investments, financing and other types of support projects inched up toward the 10 billion euro mark.
There was also an improvement in the bank’s stock of non-performing loans which fell to 3.9 percent of its total loans from 5.5 percent in 2016. It was partly due to some write-offs but also repayments and the return of some loans to performing status.
“We are in a very good position,” said EBRD Chief Financial Officer Andras Simor.
Set up by governments in 1991 to invest in the ex-communist economies of eastern Europe and owned mainly by developed countries, the EBRD has expanded its mandate in the last decade to now operate in more than 30 countries.
Turkey remained its number one market last year with 1.5 billion euros of investment across 51 projects. But the lira fell 18 percent versus the euro meaning it will take a hit where ‘mark-to-market’ accounting rules are used.
The rouble was a similar story. Even though the bank has not been lending in Russia since the 2014 Ukraine crisis, it still has around a 3 billion euro portfolio of Russian investments. The rouble fell almost 7 percent against the euro..
Other major markets included Egypt, where it doubled its financing to 1.4 billion euros, and Ukraine, where, despite concerns about reform fatigue, investments rose to 740 million euros from 581 million.
Poland meanwhile, which has faced increased criticism from the European Commission over some of its recent legal changes, saw its figures drop to 659 million euros from 776 million. That amount was almost matched by Greece where 614 million euros was loaned. ($1 = 0.8175 euros) (Reporting by Marc Jones; editing by Diane Craft)