Morningstar DBRS Confirms the European Investment Bank's Long-Term Issuer Rating at AAA, Stable Trend

DBRS Ratings GmbH (Morningstar DBRS) confirmed the European Investment Bank's (the EIB or the Bank) Long-Term Issuer Rating at AAA and Short-Term Issuer Rating at R-1 (high). The trend on both credit ratings is Stable.

KEY CREDIT RATING CONSIDERATIONS
Morningstar DBRS rates the EIB based on an Intrinsic Assessment (IA) and a Support Assessment (SA), which are both equivalent to AAA. The Stable trends on the long-term and short-term credit ratings reflect Morningstar DBRS' view that the Bank is resilient to downside risk, which has been evident in recent years amid multiple geopolitical, economic, and financial headwinds. In particular, Morningstar DBRS considers the EIB's very strong policy mandate and capitalisation, as well as its low risk profile and consistent earnings generation capacity. The Bank also benefits from sound funding and liquidity levels.

Morningstar DBRS' credit ratings are underpinned by the EIB's key role as the bank of the European Union (EU; rated AAA with a Stable trend by Morningstar DBRS). As such, the EIB works closely with EU institutions to implement EU policies and to best represent the interests of the EU member states. In addition, Morningstar DBRS also considers the EIB's role as the EU climate bank, providing key support to the EU's objectives in terms of climate action and environmental sustainability. The EIB continues to integrate climate risk as a key component of its institutional, strategic, and risk management frameworks. The EIB borrows funds from capital markets to support projects mainly through loans and guarantees that contribute to EU growth, employment, digitalisation, climate transition, and energy security.

Morningstar DBRS also views as positive that the EIB's primary role for the EU member states has been reinforced since 2020. After being a pillar of the EU's COVID-19 response through the European Guarantee Fund of EUR 24.4 billion, the Bank has been playing a key role in the implementation of InvestEU, with EUR 9.3 billion of new financing signatures expected in 2025. In addition, to reduce the EU's energy dependency on Russia's fossil fuels, the EIB is contributing to a key EU sovereignty initiative, REPowerEU+, which adds EUR 45 billion of financing volumes at the group level for the 2023-27 period. Recently, the Bank also expanded its eligibility criteria for financing Europe's security and defence sector, enabling it to continue its support of EU priorities in a changing geopolitical environment.

CREDIT RATING DRIVERS
The credit ratings could be downgraded if a combination of the following occur: (1) there is a marked deterioration in the creditworthiness of a single core shareholder, particularly if Germany's credit rating (AAA, Stable) is downgraded, or if the deterioration in creditworthiness reflects a material weakening of the cohesion of core member states or of the strength of their political commitment to the EIB; and (2) there is a substantial weakening of the EIB's Intrinsic Assessment, particularly through a substantial deterioration in the risk profile or capitalisation.

CREDIT RATING RATIONALE
Strong Policy Role With Key EU Mandates Underpins a Very Strong Franchise
With total assets of EUR 556 billion (equivalent to Special Drawing Rights - SDR 450 billion), the EIB is the world's largest multilateral financial institution, owned by the 27 members states of EU. In Morningstar DBRS' view, the Bank's strong and widening mandate as well as the significant size of its operating market of more than 160 countries around the world are key elements underpinning the very strong franchise. The Bank's signed loan book is large, totalling EUR 587.2 billion at the end of 2024, up from EUR 575.6 billion at the end of 2023, of which 83.4% is dedicated for projects within the EU (2023: 83.3%). Following an EIB Statute change approved by the Council in March 2025, the EIB's lending capacity was reinforced by an increase in the gearing ratio from 250% to 290%, which leaves room for further expansion of the loan book, subject to risk management considerations. The Bank has demonstrated a solid track record in helping finance large- and small-scale investment projects that support the EU's policy objectives, with more than EUR 1 trillion invested since its inception in 1958. This is further evidenced by the reinforcement of EIB's role as the "EU bank" through the implementation of the European Fund for Strategic Investments since 2015, as well as the InvestEU programme since 2022, although the latter will imply lower volumes from the EIB Group. Finally, the EIB Group is responsible for managing 75% of the InvestEU budget guarantee of EUR 26.2 billion, which is expected to mobilise public and private investments above EUR 372 billion.

Strong Earnings Power Supported by Stable and Recurrent Earnings
Given its public policy mandate, the EIB is not considered a profit maximiser. As such, the Bank's profitability is modest as illustrated by a return of average assets of 0.52% in 2024 as calculated by Morningstar DBRS. Nevertheless, Morningstar DBRS considers the EIB's overall earnings power to be strong, given its demonstrated capacity to generate solid and resilient revenues as well as its ability to generate stable and recurring returns. Morningstar DBRS also notes that the Bank has demonstrated a strong ability to control expenditure and has recorded only profits since its inception in 1958. Provisions have historically been very low, indicating strong risk management practices, the preferred creditor status on the EIB's sovereign exposures to EU member states, and the relatively conservative nature of the Bank's loan book.

The EIB reported net income of EUR 2.9 billion in 2024, up from EUR 2.3 billion in 2023 and well above the 2019-21 average. This was mainly driven by higher revenues that offset some operating expense growth and higher provisions for loans and guarantees. Revenues were driven by higher net interest income as well as higher income from securities and commissions. The Bank's cost base has remained relatively low, with operating costs representing only 0.25% of total assets in 2024 and the cost-to-income ratio (CIR) standing at 31% in 2024, compared with 34% in 2023. In its operational plan (OP) for 2025-27, the EIB expects to maintain its CIR (excluding provisions for pensions and healthcare schemes) slightly below 35% on average in the 2025-27 period. Whilst the value adjustments in respect of loans and advances and provisions for contingent liabilities were up 11.1% in 2024 at EUR 192.8 million, broadly due to financial stress in the automotive sector, they remained low, reflecting the EIB's conservative risk profile.

Low Risk Profile Supported by Diversified Exposures; Very Solid Asset Quality Metrics
The EIB's risk profile remains very strong with very sound asset quality metrics. Whilst the loan book is expected to grow following the rise in the gearing ratio, Morningstar DBRS does not expect this to significantly affect the Bank's risk profile. The EIB also has a long track-record of strong credit risk management, with very low defaults. At the end of 2024, impaired loans represented only 0.6% of the Bank's total portfolio, slightly higher than 0.4% recorded in 2023, reflecting the EIB's strong risk management practices and its large share of secured loans. Although Morningstar DBRS anticipates that nonperforming loans could increase temporarily in the current environment marked by geopolitical and trade tensions, the EIB's asset quality metrics are expected to remain very strong. Morningstar DBRS' assessment of the EIB's risk profile incorporates the assumption that the Bank's loans to EU member states will continue to benefit from its preferred creditor status. In addition, the majority of the EIB's disbursed exposures to projects outside the EU, excluding the United Kingdom of Great Britain (UK; rated AA with a Stable trend by Morningstar DBRS) at around EUR 43 billion at year-end 2024, benefit from a specific guarantee from the EU budget or directly from member states. The EIB's exposure to riskier private- and public-sector assets remained limited at EUR 16.1 billion in 2024, compared with EUR 16.5 billion in 2023 (on a consolidated financial statements basis), representing only 3% of total disbursed and undisbursed loans. In addition, the increase in higher-risk activities and activities outside the EU, as initiated in the EIB Group's OP for 2022-24 and confirmed in its 2025-27 OP, could also weigh on the EIB's asset quality, even though its portfolio is supported by strong credit enhancements. Nevertheless, Morningstar DBRS expects conservative risk and liquidity management practices as well as strong credit enhancements covering 67.3% of the Bank's portfolio to mitigate the impact of the current economic and financial context on its financials.

The EIB Continues to Benefit From a Very Sound Liquidity Profile and a Diversified Funding Profile
Morningstar DBRS notes that the EIB efficiently manages its liquidity and funding profiles, and the credit ratings incorporate the Bank's well-diversified funding mix, in terms of currencies, investor types, and geographies. In addition, Morningstar DBRS also considers that the EIB is one of the largest sustainability-oriented multilateral bond issuers, with a strong focus on sustainability funding (enabled by eligible assets). Moreover, the EIB has been, since April 2021, leading the way in innovative digital bond issuances for multilateral institutions. The EIB does not have a deposit base, which implies that its lending activity is normally covered by international capital market funding, and as the loan book increases, so does the borrowing.

The Bank also reports strong liquidity metrics which, in Morningstar DBRS' view, provide a high ability to withstand a stressed environment. The EIB reported a total liquidity ratio of 60.3% at the end of 2024, compared with 62.6% at the end of 2023, well above the minimum requirement of 25%. In addition, the Bank had EUR 67.5 billion of treasury assets at the end of 2024, compared with EUR 73.0 billion at the end of 2023, and reported a liquidity coverage ratio of 724.9%, well exceeding the 100% regulatory minimum. The net stable funding ratio was also above the regulatory requirements at 122.2% at the end of 2024. Importantly, the EIB is an eligible counterparty in the Eurosystem's monetary policy and therefore has access to the main refinancing operations of the European Central Bank, which would provide additional protection in circumstances of extreme liquidity tensions.

Very Strong Capital Position with a Large Cushion to Absorb Shocks
The Bank's capital adequacy is very strong, as reflected by Morningstar DBRS' capital adequacy ratio of 27.2% in 2024 as well as a solid capital generation capacity, supported by low funding costs but also reflecting the low nominal capital base. Whilst the EIB, as a supranational institution, is not required to comply with the EU's banking regulations such as CRD/CRR, the Bank maintained a very high CET1 capital ratio of 31.7% at the end of 2024, slightly down from 33.1% at the end of 2023, under the EU Capital Requirements Regulation as applicable to the EIB and based on the EIB Financial Statements under the EU Accounting Directives. This was driven by an increase in new lending and equity business at a higher risk, although partly offset by retained earnings. In addition, the Bank reported a strong leverage ratio of 12.3% at the end of 2024, which is fairly stable when compared with 12.1% at the end of 2023. Following the UK's withdrawal from the EU on January 31, 2020, the replacement of the UK's paid-in capital share (EUR 3.5 billion) was funded through the EIB's existing reserves, while the callable capital (EUR 35.7 billion) was distributed on a pro rata basis amongst the remaining EU members. In Morningstar DBRS' view, capital disruption related to Brexit for the EIB has remained well contained.

Support Assessment Reflects Core Shareholders' Credit Quality and Support Commitment of, as Well as Additional Support Stemming From AAA Governments Outside the Core Group
The EIB's credit ratings benefit from a SA equivalent to AAA. This is primarily based on the overall credit quality of its core members and the credibility of their commitment to support the Bank. The EIB's core member group is composed of Germany (rated AAA with a Stable trend), the Republic of France (France; rated AA (high) with a Negative trend), the Kingdom of Spain (rated A (high) with a Stable trend), and the Republic of Italy (rated BBB (high) with a Positive trend). Morningstar DBRS views these countries as core members for the institution because they represent the four largest EIB members, with an individual share of capital subscription more than double that of the next-largest members, namely the Kingdom of the Netherlands (rated AAA with a Stable trend) and the Kingdom of Belgium (rated AA with a Stable trend). The core group together represents around 68% of the EIB's subscribed capital and accounted for around 46% of the geographical distribution of the Bank's stock of signed loans at the end of 2024.

The weighted median credit rating of the core group stands at AA (high), which is in line with France's credit rating. However, in Morningstar DBRS' view, the strong commitment of EU member states towards the EIB as well as the additional support stemming from AAA-rated governments outside the core group provide an additional uplift. These AAA governments include the Kingdom of the Netherlands, the Kingdom of Sweden, the Kingdom of Denmark, the Republic of Austria, and the Grand Duchy of Luxembourg. In addition, a potential future downgrade of France, one of the EIB's core members, could be relevant to the SA, as it could trigger a potential one-notch downgrade of its core shareholders' weighted median credit rating. However, in Morningstar DBRS' view, this could be mitigated by the strong credibility of Euro area member states' commitment towards the institution, combined with the additional diversification benefits stemming from AAA governments outside the core guarantor group, provided that cohesion amongst core guarantors or their political commitment does not weaken materially. Morningstar DBRS continues to view as very likely that EU member states would provide timely support to the EIB, if necessary. Finally, Morningstar DBRS considers that the EIB's very strong IA would also offset a negative credit rating action on France (see "Very Strong Intrinsic Assessment for the EIB, EIF and ESM Compensates for Negative Credit Rating Action on France" at https://dbrs.morningstar.com/research/450721).

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental, Social or Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (16 May 2025) at https://dbrs.morningstar.com/research/454196.

RATING COMMITTEE SUMMARY
The main points discussed during the Rating Committee include the EIB's governance, the EIB's 2024 financial performance, the EIB Group's operational plan for 2024-2026 including its contribution to InvestEU and REPowerEU, the EIB's risk profile and the EIB's climate risk approach.

Notes:
All figures are in euros unless otherwise noted.

The principal methodology is the Global Methodology for Rating Supranational Institutions (23 June 2025), https://dbrs.morningstar.com/research/456695. In addition, Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings, https://dbrs.morningstar.com/research/454196 in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The sources of information used for these credit ratings include the European Investment Bank's annual financial reports from 2019 to 2024, the mid-term review of the EIB Group Climate Bank Roadmap (November 2023), the EIB Group Operational Plan 2025-2027, EIB Group's 2024-2027 Strategic Roadmap (June 2024), the EIB's Investor Presentation (May 2025), the EIB Group's Corporate Governance 2022 Report (September 2023), the International Monetary Fund's World Economic Outlook, and Macrobond. Morningstar DBRS considers the information available to it for the purposes of providing these credit ratings to be of satisfactory quality.

With respect to FCA and ESMA regulations in the United Kingdom and European Union, respectively, these are unsolicited credit ratings. These credit ratings were not initiated at the request of the issuer.

With Rated Entity or Related Third-Party Participation: YES
With Access to Internal Documents: NO
With Access to Management: NO

Morningstar DBRS does not audit the information it receives in connection with the credit rating process, and it does not and cannot independently verify that information in every instance.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' outlooks and credit ratings are under regular surveillance.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

The sensitivity analysis of the relevant key credit rating assumptions can be found at: https://dbrs.morningstar.com/research/458131.

These credit ratings are endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Arnaud Journois, Senior Vice President, European Financial Institution Ratings
Rating Committee Chair: Thomas R. Torgerson, Managing Director, Global Sovereign Ratings
Initial Rating Date: 1 August 2014
Last Rating Date: 14 June 2024

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