ISTANBUL
Fitch Ratings said Wednesday it affirmed the Islamic Corporation for the Development’s (ICD) long-term foreign currency issuer default rating at A+ with a stable outlook.
The rating agency said ICD’s ratings are backed by the support it receives from its key shareholders, Islamic Development Bank and Saudi Arabia, that owned 38% and 24% of ICD’s paid-in capital by the end of 2023, respectively.
ICD, in addition, has continued to make progress in “de-risking its operations” in the past three years, while Fitch expects this trend to continue over the medium-term as ICD continues to refocus its operations back toward its core mandate of lending, rather than more risky equity investments, and toward more highly-rated borrowers.
However, ICD’s solvency is improving, but remains constrained by “high” credit risk, according to Fitch.
“Equity investments as a share of total banking exposures remain ‘high’ at 24% at end-2023, despite falling from 41% in 2017,” it said in a statement. “However, Fitch expects ICD’s equity participations to decline, given its focus on lending operations.”
