Moody’s Ratings confirmed on July 23 the Baa1 rating of the West African Development Bank (BOAD), as well as its senior unsecured foreign currency obligations. The junior subordinated debt rating remains at Baa3. The outlook remains stable.
The agency highlights the strengthening of the regional bank’s financial structure, supported by the increase in equity and the improvement in asset quality. The risk-adjusted capital ratio reached 23.8% in 2025, up from 21.5% in 2024. Usable equity has increased by 73% since 2021, following the capital increase in 2022.
The financial institution has also increased its use of hybrid instruments and risk transfer mechanisms. Hybrid debt accounted for approximately 14% of usable equity at the end of 2025, while non-payment insurance and securitization covered about a quarter of the loan portfolio.
Still High Sovereign Exposure
The non-performing loan ratio decreased to 2.1% at the end of 2025, down from 2.7% in 2021. However, exposure to UEMOA member states remains high, at about three-quarters of the total credit exposure. Moody’s believes that the current capital reserves would allow the development bank to absorb potential losses related to a deterioration in regional sovereign risk.
Available liquidity covered 97.1% of expected net outflows over the next 18 months. The institution also has legal access to refinancing from the BCEAO, which held 36% of its subscribed capital at the end of 2025.
The confirmation comes as the multilateral bank prepares its strategic plan for 2026-2030, which is intended to support an acceleration of its operations. Moody’s believes that the strength of capital, risk reduction tools, and shareholder support should enable BOAD to maintain its resilience despite persistent political, security, and sovereign risks in West Africa.
