JANUARY 11, 2013

SOVEREIGN & SUPRANATIONAL

CREDIT ANALYSIS

IBRD (World Bank)

Supranational

Table of Contents: SUMMARY RATING RATIONALE 1 ORGANIZATION STRUCTURE AND STRATEGY 2 ASSET/LIABILITY MANAGEMENT AND LIQUIDITY 4 CAPITAL ADEQUACY 4 ASSET QUALITY 6 PROFITABILITY 8 RATING HISTORY 9 ANNUAL STATISTICS 10 MOODYS RELATED RESEARCH 14 RELATED WEBSITES 14 Analyst Contacts:
NEW YORK Steven A. Hess Senior Vice President steven.hess@moodys.com +1.212.553.1653 +1.212.553.4741

Summary Rating Rationale

Moodys rates the International Bank for Reconstruction and Development (IBRD), more commonly known as the World Bank 1, Aaa for long-term bond issues and Prime-1 for the short-term discount note program; the outlook is Stable. The key factors supporting the ratings are: (1) a strong capital base and support from its highly- rated shareholders; (2) its proven status as a preferred creditor; and (3) its sound financial management. Prudent financial policieswith the Bank having consistently remained well within its internal borrowing and lending limitationsare reflected in the IBRDs healthy capital adequacy and liquidity ratios. As a result of its conservative practices and its preferred creditor status, the Bank has weathered relatively smoothly periods of global financial uncertainty and has maintained its fundamental strengths both in terms of its own historical record and in comparison to many other financial institutions. The biggest risk to the Banks financial position would come if more than one large borrower were to enter into nonaccrual status. The Banks preferred creditor position provides substantial protection against such an event, and Moodys believes it remains unlikely that there would be a significant number of large borrowers in nonaccrual at the same time. The Banks strong liquidity position, the ability to reduce lending activity if necessary, and the availability of other sources of funds, make a resort to a call on capital only the last line of defense. This is a highly unlikely scenario, even in the event of a major increase in nonaccruals. Still, in a worst case scenario, where a number of large borrowers are unable or unwilling to make payments, bondholders are ultimately protected by the large amount of callable capital available to the IBRD.

Annette Swahla +1.212.553.4037 Analyst annette.swahla@moodys.com Bart Oosterveld +1.212.553.7914 Managing Director-Sovereign Risk bart.oosterveld@moodys.com

This Analysis provides an in-depth discussion of credit rating(s) for IBRD (World Bank) and should be read in conjunction with Moodys most recent Credit Opinion and rating information available on Moody's website.

IBRD, the World Bank and the Bank are used interchangeably in this document.

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The IBRD has never suffered any loss on principal in relation to loans made to borrowing countries and it did not experience any increase in loan arrears as a result of the last emerging markets crisis. This record was tested again during the global crisis but the Banks exceptional risk management policies and practices ensured that no loans entered nonaccrual status despite the unprecedented financial and economic turmoil during the FY2008-FY2010 period. Its preferred creditor status ensures that the sovereign debt owed to it is excluded from all debt restructuring efforts undertaken by official borrowers and that resources are made available to service the debt due to the Bank. As part owners of the IBRD, the borrowing countries recognize the importance of maintaining the Banks financial soundness and premier credit status in order to minimize its lending charges and to maximize the benefits that they ultimately reap from the organization. The support from the shareholders of the IBRDbe it in the form of timely loan repayment and/or capital contributionsconfers tangible benefits to all member countries, and protects the Aaa rating. The ongoing and protracted European sovereign debt crisis is unlikely to impact the strong financial standing of the IBRD. The top 11 shareholders, who as of June 30, 2012, subscribed 57.15% of total capital, are geographically diverse relative to other multilateral development banks (MDBs). Among them are only three euro area sovereigns (Germany, France, and Italy) and the rest includes the U.S., Canada, Japan, China, and Saudi Arabia. As such, recent sovereign downgrades in Europe have not substantially reduced the strength of member support that Moodys incorporates in the IBRDs Aaa rating. In addition, the Banks lending activity is minimally exposed to Europe, with the top ten borrowing countries including only two Eastern European countries -- Poland and Romania, at 4.1% and 2.6% of the total portfolio, respectively. While there is a degree of concentration risk in the loan portfolio, it remains geographically diverse relative to other MDBs. The World Bank Group (including the IFC) is the only global MDB, the others having regionally-focused operations. Lastly, the Banks financial strength, independent of member support, includes healthy capital and liquidity buffers against longer- and shorter-term adverse developments. Funding risks are minimal, as evidenced by the continued strong demand during 2012 for IBRD bonds as investors sought safety amid the sovereign turmoil (the US debt ceiling and fiscal uncertainty and European sovereign debt turmoil).

Organization Structure and Strategy

The IBRD is one part of the larger World Bank Group, which also includes: the International Development Association (IDA), the groups soft-loan window; the International Finance Corporation (IFC), a vehicle for lending to or investing in private companies in emerging markets without the benefit of host country government guarantees; the Multilateral Investment Guarantee Agency (MIGA), which insures certain investments against political risks in emerging markets; and the International Centre for Settlement of Investment Disputes. The United States is the single largest shareholder of the IBRD, with 16.5% of subscribed capital, followed by Japan with 9.7%, as of June 30, 2012. The IBRDs main functions are to supplement the domestic savings of borrowing countries with loans and to serve as a catalyst for additional external financial flows to those countries through co-financing arrangements. The Bank finances both investment projects and development policy programs in support of policy reforms alongside borrowing governments, official aid agencies, and private financial institutions. The IBRD lends exclusively to member countries that meet eligibility requirements, or to

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borrowers in those jurisdictions under the guarantee of the member states. The Bank does not aim to maximize profits, although it earns a significant net income. The IBRDs financial policies are comparable toand are often more conservative thanaccepted private sector practice. During FY2012 the IBRD introduced a new lending instrument called Program-for-Results. The instrument links the disbursement of funds directly to the achievement of defined, verifiable results. One of the main goals of the new instrument is to help member countries improve the design and implementation of their development programs and increase accountability. During the fiscal year, $300 million in commitments were made under the new instrument.
Capital Increase Impacts Voting Power and Supports Growth in Lending Operations In March 2011, the Board of Governors approved the capital increase that had been proposed the previous year. The increase includes a general component as well as a selective component that together raised the total subscribed capital by $86.2 billion. The general component amounted to $58.4 billion, of which $3.5 billion will be paid-in and the remainder callable. The selective component amounted to $27.8 billion (of which $1.6 billion will be paid-in) and increased the voice and participation of developing and transition countries by 4.59% since FY2008 to a total voting power of 47.19%. Complementing the selective capital increase was the creation of a third chair on the Board of Executive Directors for Africa; this Voice Reform began in 2008 with the long-term goal of equitable voting power between developed and developing member countries.

As of June 30, 2012, subscriptions received and paid-in related to the general increase amounted to $15,278 million. For the selective increase, the amount was $917 million. Overall, the capital increase supports the Banks elevated level of lending after the global crisis as it continues to serve as a counter-cyclical force and leaves it able to respond again should the European sovereign debt crisis spill over to the global real economy.
LTIP Liquidated During FY2012 to Support Elevated Lending Operations To increase its expected operating income over the long term, during FY2008 the IBRD approved a new investment portfolio called the Long-Term Income Portfolio (LTIP), which commenced in FY2009. $1 billion was invested in a diversified risk asset portfolio (developed market public equities and developed market fixed-income investments). The first three years of the program were very successful with annual returns of the LTIP between 10% and 13%, compared to roughly 1% annual returns on its liquid asset portfolio over the same period. LTIP returns during FY2012 were much lower at around 3% due to low equity returns.

The creation of the LTIP marked a shift in the Banks strategy with regard to deployment of its equity capital, which had previously been used only to support loans. After its creation, equity deemed in excess of what was required to support loans was used to support additional risk assets that the Bank acquired under the LTIP with the objective of enhancing income generation to further its development goals. In April 2012, the Bank decided to liquidate the LTIP in order to maximize its lending capacity to borrowing members. As with many MDBs, the global crisis, and actions by the IBRD to act as a counter-cyclical force or fill in where private sector lenders had retrenched, reduced the amount of excess capital it was holding.

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Asset/Liability Management and Liquidity

The aim of IBRDs asset/liability management framework is to provide adequate funding for each loan and liquid asset at the lowest available cost and to manage the portfolio of liabilities supporting each loan and liquid asset within the prescribed risk guidelines. The liability portfolios are monitored and adjusted for currency composition, maturity profile and interest rate sensitivity as needed. To minimize exchange rate risk, IBRD matches borrowings in any one currency with assets in the same currency (as mandated by its Articles) and also undertakes currency conversions to match the currency composition of its equity to that of its outstanding loans.
Equity Duration Extension Strategy Reduces Interest Rate Sensitivity During FY2008 the Bank implemented an equity duration extension strategy with the goal of reducing the interest rate sensitivity of its operating income by taking a greater exposure to long-term interest rates. The need for this arose as the loan portfolio shifted from pool loans to floating LIBORbased loans, which increased the sensitivity of IBRDs operating income to changes in market interest rates. The strategy was executed by entering into interest rate swaps with a 10-year ladder repricing profile to extend the duration of equity from three months to roughly five years. The strategy has proven successful as interest income from the swaps has offset the fall in interest income from equityfunded loans. Liquidity Position Historically Exceeds Strong Policy Requirements The goal of IBRDs liquidity management is to ensure cash flows are available to meet all of the Banks financial commitments. In accordance with the Banks liquidity policy (which was last revised during FY1997), liquid assets must equal at least the highest consecutive six months of anticipated debt service plus one-half of the anticipated net loan disbursements over the coming fiscal year (if positive). The prudential minimum for FY2013 is $22 billion, which is $1 billion higher than for FY2012; in general, the liquid asset portfolio should not exceed 150% of the prudential minimum liquidity level 2.

Historically, the Banks actual liquidity has tended to be comfortably above the minimum set by policy, and is conservatively managed to protect the principal amount of the investments while generating a reasonable return. At the end of the last financial year, liquidity was $34.2 billion, an increase of $6.0 billion from the previous year.

Capital Adequacy
The steady expansion of IBRDs capital resources over the years, combined with strict lending limitations, means that the Bank has sufficient capital to cope with its above-average business risk. The Bank realizes that by having enough resources of its own to absorb risks it protects members from a possible capital call. The Bank judges its capital adequacy as the ability of its equity to generate future net income to support normal loan growth and respond to a potential crisis without having to resort to a call on capital. There are various safeguards used to protect capital adequacy. The statutory lending limit is defined by the IBRD charter, which stipulates that the total amount outstanding of disbursed loans, participations in loans, and callable guarantees may not exceed the total value of subscribed capital, reserves, and surplus. As of June 30, 2012 the Banks total exposure to borrowing countries amounted to 59% of this limit, minimally changed from 60% the previous fiscal year (which was the highest level since the
2

The IBRD may exceed 150%, from time to time, to provide flexibility in timing its borrowing transactions and to meet working capital needs.

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first half of the 1990s). The Banks leverage has increased, but remains moderate, with borrowings through debt issuance accounting for about 62% of subscribed capital, reserves and surplus. The 10 percentage point increase in this ratio in both FY2010 and FY2009 (FY2008=40%) was to support higher lending needs to respond to the global crisis. Since the crisis has eased IBRDs increased borrowing needs have eased as well, with this ratio posting only minimal increases since 2010.
Equity-to-Loans Ratio Falls to the Top of the Target Range The Bank also uses the equity-to-loans ratio (ETL) as one of its primary measures of risk-bearing capacity. The ETL ratio allows the Bank to monitor the adequacy of its risk-bearing capacity in relation to its predominant risk asset. In FY2012 it fell for the third year in a row, to 27.0% (net of relevant accumulated provisions and deferred loan income in the fiscal year), from 28.6% and 29.4% in FY2011 and FY2010, respectively. The fall over the past three years was primarily due to increased lending, although the most recent fiscal year also experienced a decrease in usable equity. The ratio is now at the top end of the 23-27% target risk coverage range. Before the Banks response to the global crisis, the ratio had climbed steadily from 29.4% in 2004 to 37.6% in 2008, well above the target. IBRD Scores Well on Our Risk Asset Coverage Ratio Moodys believes that reference to a more focused measurethe risk asset coverage ratiomay provide further value in assessing the strength of the IBRDs capital base. At fiscal year-end 2012, the Banks usable capital (hard-currency paid-in capital plus reserves) plus the callable capital pledged by Aaa/Aa-rated member countries equaled 354% of what Moodys regards as its high risk assets (i.e., loans outstanding to countries that Moodys considers to be less than investment grade). This figure continues to grow even after reaching a historical high in FY2011, as a result of the capital increase, which offset some of the credit rating downgrades of euro area members (Italy, Slovenia, and Spain). Conversely, credit rating upgrades lowered the amount of loans qualifying as risky, the most notable of which was Indonesias upgrade to Baa3. Strong Capital Position Allowed Aggressive Response to the Global Crisis As a result of its large capital base, the IBRD was able to aggressively respond to the global crisis to help mitigate the negative impact on developing countries. New loan commitments increased by 5.0%, 144.4%, and 34.3% in FY2008, FY2009, and FY2010, respectively. In those same years, gross loans outstanding increased by 1.3%, 6.7%, and 13.6%, respectively (following a 5-year period of declining oustandings). The Banks initiatives were tailored to the specific circumstances of the borrowing country but in general helped to create jobs, ensured delivery of essential services and infrastructure, established safety net programs for the vulnerable, and restored confidence in financial markets. As the global crisis eased, the Bank started scaling back the significant increase in operations. In FY2012 new loan commitments decreased by 23.0% although gross loans outstanding increased by 2.9%. with No Adverse Impact on Financial Health The IBRD performed the above-detailed response by deploying its existing capital. While some capital adequacy ratios deteriorated, it was not significant, and there was no stress on its financial strength or the Aaa rating. Despite this, to ensure that its capital adequacy supports continued growth in outstanding loans, the Bank enhanced its financial capacity by increasing the capital base through a capital increase totaling $86.2 billion (of which $5.1 billion will be paid in). In addition, the Bank has

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increased pricing, introduced premiums for longer maturity loans3, and worked with relevant member countries to convert existing but not fully usable capital into fully-usable paid-in capital.
Members Callable Capital Complements IBRDs Own Resources If the Bank were unable to service its own debtan event Moodys considers as being extremely remote as reflected in its Aaa ratingit has the option of making capital calls on all member countries in proportion to their subscribed shares. About 62% of the Banks callable capital represents the obligations of Aaa/Aa-rated shareholders. The callable capital is an unconditional and full faith obligation of each member country, the fulfillment of which is independent of the action of other shareholders. Should one or more of the member countries fail to meet this obligation, successive calls on the other members would be made until the full amounts needed were obtained. However, no country would be required to pay more than its total callable subscription.

The United States has in place legislation (including the Bretton Woods Agreements Act) that allows the Secretary of Treasury to pay up to $7.7 billion of the $31.8 billion in callable capital pledged to the IBRD without any requirement of further congressional action. The Bank has never made a capital call and is highly unlikely to need to resort to such an action in the future.

Asset Quality
Total assets at the end of FY2012 amounted to $338.2 billion, with net loans outstanding representing 39.7% of that total. The IBRD limits its exposure to individual borrowers based on its risk-bearing capacity. The single-borrower exposure limit for FY2012 was $17.5 billion for India and $16.5 billion for the other largest borrowing countries deemed to be the most creditworthy by the IBRD; the Board reviews and approves this figure every year and has left it unchanged for FY2013. There also is an equitable access limit of 10% of IBRDs subscribed capital, reserves and unallocated surplus ($23 billion at end-FY2012). The overall country limit for the largest and most creditworthy borrowing countries is the lower of the single-borrower limit and the equitable access limit. In FY2003 the IBRD instituted a policy whereby it could continue to lend to a country that had reached its concentration limit, provided arrangements were made so that IBRDs net exposure to the borrower would not increase. As of June 30, 2012, China was the only country with which the Bank had such an arrangement, and since it was below the limit the agreement had not been activated.

In early FY2010, the IBRD increased the contractual interest spread for new loans by 20 basis points to 50 basis points. During FY2011, the Bank introduced a new loan pricing structure by restoring the average maturity limits for new loans and guarantees to the pre-2008 level of 12 years and allowing borrowing members an option to extend the average loan maturity from 12 years to 18 years by paying an annual maturity premium of 10 to 20 basis points.

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FIGURE 1

IBRD Top Ten Borrowers Ranked By Share Of Total Loans Outstanding

FY 2010 Country US$, bn. (%) Country FY 2011 US$, bn. (%) Country FY 2012 US$, bn. (%)

China Brazil India Mexico Turkey Indonesia Colombia Argentina Poland Ukraine Total

12.9 11.3 10.8 10.5 10.2 7.6 7.2 5.3 3.8 3.2 82.8

10.7 China 9.4 Turkey 9.0 Mexico 8.7 India 8.5 Brazil 6.3 Indonesia 6.0 Colombia 4.4 Poland 3.2 Argentina 2.7 Romania 68.9 Total

13.0 12.9 12.2 11.4 10.4 8.9 7.5 5.6 5.4 3.3 90.5

9.8 Mexico 9.8 China 9.2 Turkey 8.6 India 7.9 Brazil 6.8 Indonesia 5.6 Colombia 4.2 Poland 4.1 Argentina 2.5 Romania 68.4 Total

13.6 13.1 12.7 11.7 10.1 9.9 7.5 5.6 5.6 3.6 93.2

10.0 9.6 9.3 8.6 7.4 7.3 5.5 4.1 4.1 2.6 68.4

As is suggested by the table above, change in the composition of principal borrowers is a slow process. Seven of the top ten borrowers in FY2012 were among the top ten a decade earlier, and over that time the top ten borrowers have consistently accounted for approximately two-thirds of all loans outstanding. Thus, there is a degree of concentration risk in the portfolio.
Problem Loans Remain Miniscule Since FY2008 when Cote DIvoire and Liberia cleared all of their overdue principal, interest, and charges due to IBRD, Zimbabwe has been the only country with loans in nonaccrual status.

The Bank does not reschedule its loans. It has never written off a loan and continues to seek recovery on all arrears. Loans in nonaccrual status (overdue by 180+ days) amount to approximately $462 million or 0.3% of total gross loan outstanding. This amounts to less a fifth of the $3.5 billion in nonaccrual loans recorded in FY2005.
and More-than-Adequately Covered The loans in nonaccrual status are amply covered by accumulated loan loss provisions of $1.7 billion. Furthermore, general reserves total $26.3 billion, and were further increased with the addition of the $390 million allocation from the FY2012 net income. In the event of a major increase in nonaccruals, aside from the portfolio of liquid assets, the Bank also has the options of reducing lending activity, increasing borrowings from capital markets and conceivably also from member governments or their central banks. As a result of all these factors, Moodys considers a resort to callable capital to be highly unlikely.

In order to minimize the risk that future large and protracted nonaccruals might disrupt normal lending operations, the IBRD uses an internal stress test of the equity-to-loans ratio to monitor and to evaluate its risk-bearing and financial capacities, resulting in an upward trend in general reserves in recent years. In keeping with its mission as a development organization, the Bank does not seek to maximize profits, and consequently shapes its financial policies to reduce risk while meeting its minimum profitability requirements.

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Profitability
The IBRDs profitability has been low relative to historical averages. However, for developmentmandated institutions our primary consideration of profitability is not the magnitude, rather, that operating results do not contribute to the erosion of the capital base (via large and protracted losses).
Focus of Our Analysis is on Operating Income Rather than Net Income Starting in FY2009, the IBRD reports all instruments in the investments, borrowings, and asset/liability management portfolios as well as loans with embedded derivatives at fair value. As such, the Bank reports changes in fair value resulting from fluctuations in interest rates or the Banks credit spreads as net unrealized gains or losses which is reflected in net income. The Bank reported a net loss of $676 million in FY2012 (after also taking into account the effects of Board of Governors approved transfers), a return to loss after the previous fiscal years net income of $930 million.

However, since the instruments in these portfolios are held to maturity, Moodys considers operating income to be a more relevant measure of the Banks financial health in that it better reflects underlying trends in the Banks core operations. Operating income has been positive every year since Moodys first rated the Bank in 1993 and averaged approximately $1,264 million during the FY2006-12 period. IBRD still reports its loan portfolio at amortized cost, creating an asymmetry that affects variations in net income.
FY2012 Operating Income Results Operating income fell to $783 million in FY2012 from $1,023 million in FY2011, which is low compared to the historical average. Contributing to the results was higher net interest income, as loan income increased mildly4 while borrowing costs continued to fall. More significantly, there was a $189 provisioning charge compared to a $45 million release of provisions during the previous fiscal year; income from the LTIP was lower 5; and administrative expenses rose.

Over the medium term, the outlook for the Banks profits is fundamentally positive. Growth in operating income will be supported by robust loan volume and pricing, and the equity duration extension that will reduce the sensitivity of the Banks operating income to changes in short-term market interest rates (discussed in more detail in the Assets/Liability Management and Liquidity section above).
Support Build-Up of Reserves and Contribution to IDA Out of FY2012 net income, the Bank allocated $390 million toward increasing the general reserve in order to increase its risk-bearing capacity. In turn, the Banks build-up of reserves is expected to support earnings by growing the contribution of free funds to overall returns.

In December 2010, the Bank announced that it would once again participate in the IDA replenishment. For the IDA16 Replenishment (2011-2014) the IBRD has promised $1.825 billion, subject to adequacy of reserve retention, to help the 79 poorest countries in the world. In FY2012, the Bank recorded as an expense $650 million of transfers from FY2011 net income approved by the Board of Governors. The IDA received $520 million from unallocated net income and the Trust Fund

4 5

A result of the new loan pricing terms approved in FY2010 and an increase in loan volume. Due to lower returns from the equity portfolio.

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for Gaza and West Bank and the South Sudan Transition Trust Fund received $55 million and $75 million, respectively, from surplus.

Rating History
Issuer Rating Long-term Short-term Senior Unsecured Outlook Date

Rating Assigned Outlook Assigned Rating Assigned Rating Assigned

--Aaa --

P-1 ----

---Aaa

-Stable ---

Aug-10 March-97 December-94 March-93

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Annual Statistics
IBRD (World Bank)
2005 ASSETS, LIABILITIES AND CAPITAL (US$ Mil.) ASSETS Total Cash o/w Unrestricted Cash Investments Derivative Assets Gross Loans Less Loans Approved But Not Yet Effective Less Undisbursed Balance of Effective Loans Equals Gross Loans Outstanding Accumulated Loan Loss Provision Deferred Loan Income Net Loans Outstanding Other Assets LIABILITIES Total Total Borrowings Derivative Liabilities Other Liabilities CAPITAL AND RESERVES Total Total Subscribed Capital Less Total Callable Capital (CC of Aaa/Aa members) [1] (CC of IG members) [2] (CC of members below IG) [3] Equals Paid-in Capital Less net amounts required to maintain value of currency holdings under capital subscriptions Less amounts subject to restrictions Equals Usable Paid-in Capital Plus Total Reserves, incl. unallocated net income and accumulated loan loss provision o/w General Reserve o/w Special Reserve o/w Accumulated Net Income -- Unallocated Equals Usable Equity Surplus Other TOTAL LIABILITIES, CAPITAL AND RESERVES 29,355 22,222 293 3,831 38,387 448 311 222,008 23,762 22,912 293 -1,739 32,887 360 3,165 212,326 26,990 23,948 293 817 36,264 43 3,209 207,900 28,754 24,859 293 2,232 38,650 0 2,678 233,311 31,447 25,670 293 3,852 41,330 595 -1,864 275,420 27,277 25,670 293 -239 37,587 257 -1,212 281,835 29,235 25,951 293 1,442 40,544 227 50 314,211 28,308 26,351 293 -26 40,270 172 -2,523 338,178 -58 2,509 9,032 -102 2,460 9,125 -236 2,448 9,274 -853 2,443 9,896 -240 1,848 9,883 -150 1,332 10,310 -862 1,273 11,309 -488 944 11,962 38,588 189,718 178,235 103,735 140,242 37,993 11,483 36,474 189,718 178,235 103,735 140,834 37,401 11,483 39,796 189,801 178,315 105,628 141,288 37,027 11,486 41,548 189,801 178,315 105,796 141,288 37,027 11,486 40,037 189,918 178,427 105,652 141,288 37,139 11,491 36,261 189,943 178,451 111,507 145,503 32,948 11,492 39,683 193,732 182,012 118,751 149,811 32,201 11,720 36,685 205,394 192,976 118,883 159,599 33,377 12,418 183,420 101,297 77,742 4,381 175,852 95,835 74,877 5,140 168,104 87,759 75,191 5,154 191,763 87,402 96,731 7,630 235,383 110,040 115,642 9,701 245,574 128,577 110,615 6,382 274,528 135,242 130,429 8,857 301,493 145,339 144,837 11,317 222,008 1,177 505 26,733 85,889 138,145 9,822 23,922 104,401 3,009 482 100,910 7,299 212,326 758 65 25,672 78,483 137,942 9,082 25,856 103,004 2,296 487 100,221 7,192 207,900 765 41 23,054 81,436 133,245 10,566 24,874 97,805 1,932 440 95,433 7,212 233,311 890 122 25,213 102,833 137,226 11,779 26,397 99,050 1,370 412 97,268 7,107 275,420 3,044 2,380 41,012 123,065 156,823 21,558 29,567 105,698 1,632 409 103,657 4,642 281,835 1,803 1,581 35,960 121,823 183,677 20,796 42,778 120,103 1,553 446 118,104 4,145 314,211 2,462 2,312 32,598 144,711 196,894 19,430 45,005 132,459 1,549 440 130,470 3,970 338,178 5,806 5,682 33,466 160,814 199,241 13,372 49,544 136,325 1,690 426 134,209 3,883 2006 2007 2008 2009 2010 2011 2012

[1] Member countries viewed by Moody's as having credit standing of Aaa/Aa. [2] Member countries viewed by Moody's as having investment grade credit standing (Baa or above). [3] Member countries viewed by Moody's as having below investment grade credit standing (below Baa).
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IBRD (World Bank)

2005 2006 2007 2008 2009 2010 2011 2012

INCOME STATEMENT SUMMARY (US$ Mil.) Total Gross Income Income from Loans Interest Commitment Fees Investment Income Other Total Gross Expenses Borrowing Expenses Interest on Borrowings Other borrowing expenses Administrative Expenses Provision for Loan Losses Contribution to Special Programs Other Net Operating Income Plus Board of Governors-approved transfers Plus net unrealized gains (losses) on non-trading portfolio Equals Net Income 5,053 4,155 4,084 71 627 271 3,733 3,037 2,942 95 1,021 -502 173 4 1,320 -642 2,511 3,189 6,235 4,864 4,791 73 1,107 264 4,495 3,987 3,882 105 1,059 -724 173 0 1,740 -650 -3,479 -2,389 7,012 5,467 5,391 76 1,281 264 5,353 4,519 4,427 92 1,066 -405 171 2 1,659 -957 -842 -140 6,863 5,497 5,426 71 1,066 300 4,592 4,017 3,934 83 1,082 -684 176 1 2,271 -740 -40 1,491 5,037 3,835 3,789 46 603 599 4,465 2,739 2,664 75 1,244 284 197 1 572 -738 3,280 3,114 4,206 2,491 2,458 33 367 1,348 3,406 1,750 1,750 -1,519 -32 168 1 800 -839 -1,038 -1,077 4,377 2,470 2,449 21 367 1,540 3,354 1,687 1,687 -1,564 -45 147 1 1,023 -513 420 930 4,389 2,585 2,572 13 219 1,585 3,606 1,652 1,652 -1,631 189 133 1 783 -650 -809 -676

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IBRD (World Bank)

2005 2006 2007 2008 2009 2010 2011 2012

FINANCIAL RATIOS Performance Statistics (%) Return on Total Assets (operating income) Return on Earning Assets Return on Equity Return on Usable Equity Interest on Loans/Loans Outstanding Interest Coverage Ratio (x) Capital Adequacy Ratios (%) Usable Equity as % Risk Assets [1] Usable Equity + CC of Aaa/Aa Members/Risk Assets [1] Usable Equity + CC of IG Members/Risk Assets [1] Liquidity Ratios (%) Liquid Assets (less restricted cash)/Total Assets Liquid Assets (less restricted cash)/Borrowings Liquid Assets (less restricted cash) as % of Principal Payments due next five years Total Liquid Assets/Undisbursed Effective Loans Maturity of Outstanding Borrowings (% of total) One Year Two to Five More than Five Reserves to Loans Ratio (%) Total Reserves/Loans Outstanding Loans To Usable Equity (X) Loans Outstanding/Usable Equity Lending Limitation (%) [2] Loans and Callable Guarantees Outstanding/Subscribed Capital and Reserves 47.4 47.0 44.0 45.0 49.0 55.0 60.0 59.0 2.7 3.1 2.7 2.6 2.6 3.2 3.3 3.4 28.1 23.1 27.6 29.0 29.8 22.7 22.1 20.8 15.9 43.6 40.6 16.5 41.3 42.2 25.4 33.5 41.1 28.1 31.9 40.0 28.4 35.4 36.2 26.4 40.8 32.8 19.6 51.3 29.1 15.2 59.0 25.8 46.5 116.7 50.2 102.2 43.5 95.8 46.4 98.9 61.8 149.0 43.4 88.3 36.4 77.9 36.3 79.3 12.3 26.9 12.1 26.9 11.1 26.3 10.9 29.0 15.8 39.4 13.3 29.2 11.1 25.8 11.6 26.9 61.4 227.5 285.9 53.3 221.4 281.5 62.1 243.2 304.3 65.6 245.0 305.2 66.6 236.8 294.3 68.0 269.6 331.0 75.2 295.4 353.0 89.6 354.3 444.9 0.6 1.0 3.5 3.8 3.9 1.4 0.8 1.3 4.6 4.9 4.7 1.4 0.8 1.3 4.5 4.8 5.4 1.4 1.0 1.8 5.8 6.1 5.6 1.6 0.2 0.4 1.4 1.4 3.7 1.2 0.3 0.5 2.0 2.0 2.2 1.5 0.3 0.6 2.6 2.6 2.0 1.6 0.2 0.5 1.9 1.9 1.9 1.5

[1] Risk assets defined as loans to countries considered by Moody's to be below investment grade. [2] World Bank charter limits commitments on loans and guarantees to 100% of subscribed capital and reserves.

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Capital Subscriptions and Voting Power (US$ Mil.)

(as of June 30, 2012)
Par Value of Shares Per Cent of Total Total Paid-in Callable Voting Power Per Cent of Total

United States Japan Germany France United Kingdom China, People's Republic Russian Federation Canada India Italy Saudi Arabia Others Total

16.51 9.72 4.84 4.33 4.33 3.46 2.63 3.10 2.97 2.63 2.63 42.85 100.00

33,921 19,958 9,946 8,890 8,890 7,101 5,404 6,359 6,098 5,404 5,404 88,019 205,394

2,116 1,222 616 552 571 437 334 392 375 335 335 5,134 12,418

31,805 18,736 9,331 8,339 8,320 6,664 5,070 5,966 5,723 5,069 5,069 82,885 192,976

15.63 9.21 4.60 4.12 4.12 3.29 2.51 2.95 2.83 2.51 2.51 45.72 100.00

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Moodys Related Research

Credit Opinions:

IBRD (WB) International Finance Corporation

Analysis: International Finance Corporation, November 2012 (146849)

To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available. All research may not be available to all clients.

Related Websites
IBRD (WB) International Finance Corporation

MOODYS has provided links or references to third party World Wide Websites or URLs (Links or References) solely for your convenience in locating related information and services. The websites reached through these Links or References have not necessarily been reviewed by MOODYS, and are maintained by a third party over which MOODYS exercises no control. Accordingly, MOODYS expressly disclaims any responsibility or liability for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on any third party web site accessed via a Link or Reference. Moreover, a Link or Reference does not imply an endorsement of any third party, any website, or the products or services provided by any third party.

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Report Number: 148642

Authors Steven A. Hess Annette Swahla

Production Associate Steven Prudames

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