Fitch Ratings, in a press material issued from Dubai on 16 June 2025, has assigned ‘BB’ rating to the State Bank for Foreign Economic Relations of Turkmenistan (TEB).
Here is a summarized version:
Key Rating Factors
ТВЭБ’s ‘BB-‘ IDRs align with Turkmenistan’s sovereign rating (BB-/Stable), reflecting a moderate likelihood of government support, as indicated by ТВЭБ’s ‘bb-‘ Government Support Rating (GSR). This is driven by the sovereign’s robust financial position, with low public debt, substantial external reserves, and ТВЭБ’s critical policy role, full state ownership, and special legal status.
Policy Mandate: As largest bank by assets (20% of the banking system in 2023), ТВЭБ finances major long-term projects in key sectors like oil, gas, chemicals, transport, and agriculture. Policy loans, which are 94% of its loan portfolio, are extended to state-owned entities and backed by government guarantees.
Government Debt Agent: ТВЭБ acts as the government’s intermediary for raising foreign debt to fund strategic investments, with $2.6 billion (30% of liabilities) recorded as government obligations on its balance sheet in 2023.
State Ownership and Oversight: Fully owned by the government, ТВЭБ is closely monitored by senior state officials and the central bank, with high-level government involvement in key decisions.
Asset Quality and Liquidity: Loans accounted for 37% of assets in 2023, with low Stage 3 loans (3%) but notable Stage 2 exposures (12%), suggesting borrower reliance on state support. Liquidity is strong at 61% of assets, primarily in low-risk placements with investment-grade banks and the central bank.
Funding Structure: ТВЭБ relies heavily on interest-free deposits from state-owned companies (68% of liabilities) and government-related external borrowings, reinforcing the likelihood of state liquidity support if needed.
Capital Position: ТВЭБ’s Fitch Core Capital ratio was 48% in 2023, aided by low-risk-weighted assets, though its equity-to-assets ratio was modest at 6.3%. Moderate capital growth is expected, supported by a 13% return on equity and cautious expansion.