MANILA — The Asian Development Bank (ADB) has published a comprehensive report detailing its sovereign default and loss rates over a 34-year period. This report is made in keeping with ADB’s commitment to data transparency and shows the remarkable credit performance of loans to its developing member countries (DMCs).
The report reveals that ADB has not lost principal, interest, or fees on the more than $250 billion of loans it has extended in its sovereign operations since 1990.
The report indicates that the average default rate on the ordinary capital resources sovereign portfolio is 0.54%. It further demonstrates that ADB experienced zero new defaults from 2010 to 2021. The low default rate confirms the strength of ADB’s relationship with its DMCs and the preferred creditor treatment accorded to ADB.
“The average default rate of the sovereign operation is comparable to that of an investment grade portfolio. Compiling and making these data points available to the public will help build a better understanding of emerging market debt originated by multilateral development banks (MDBs),” ADB Vice-President for Finance and Risk Management Roberta Casali said. “It will also allow external parties to make more accurate assessments of the risks involved in investing through or with us.”
ADB regularly contributes credit data to the Global Emerging Markets Risk Database Consortium (GEMs). The consortium, which includes data from 25 MDBs and development finance institutions, provides insights into the risks associated with investing in emerging markets. The transparency efforts of ADB and GEMs are in line with the recommendations from the Independent Expert Panel commissioned by the G20. These recommendations aim to enhance data transparency as part of an overall effort to optimize balance sheets and increase the lending capacity of MDBs.
ADB continuously explores ways to effectively manage its capital to help the region address simultaneous crises. In 2023, it unlocked $100 billion in additional lending capacity over the next decade by updating its Capital Adequacy Framework. ADB is working with its development finance partners to mobilize investments in emerging markets through innovative solutions, including risk sharing and structured approaches.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.
