For those who thought 2020 was a difficult year, how about 2021? While it is fortunate that the situation—though still serious—has improved globally from a COVID-19 standpoint, the year that is about to close brought more challenging market conditions, concerns, and hurdles to clear, including for us in the financial sector.
As the year unfolded, market sentiment evolved rapidly, and at times abruptly, from a situation where almost everyone thought that interest rates would remain around zero for years to come, to one where everybody is concerned with inflation and strong signs indicating higher rates. For us at the Asian Infrastructure Investment Bank (AIIB) Treasury Department, presiding over a multi-billion-dollar portfolio, this meant facing down the danger of wild valuation swings through intense discussions and deep thinking on how to best preserve AIIB’s capital.
However, it is not as bad as it may sound as many positive things also happened in 2021, including the closure of important projects:
- Working closely with many other Bank departments, in May, we launched the Sustainable Development Bond Framework, which aims to position AIIB as a sustainable issuer in the capital markets.
- In October, during our Sixth Annual Meeting, we published AIIB’s first Impact Report. This report presents the many positive effects of AIIB’s investment projects to our bond investors in language that is easy to digest. I am very proud of this work which got support from a lot of our colleagues.
- We just completed the 2021 funding campaign and raised USD8.52 billion of debt capital through a variety of public and private transactions on quite attractive terms. This helps put AIIB on a very solid and comfortable liquidity position for the time ahead.
- We launched our third externally managed liquidity portfolio. This is Treasury’s first time to incorporate environmental, social and governance (ESG) guidelines which clearly reference our environmental and social (E&S) policies in how we screen possible investments.
As we move into 2022, AIIB plans to scale up its human resources in order to continue to support its clients. We are currently recruiting for the Treasury team and the vast amount of CVs I have screened speaks of a strong and diversified candidate pool aspiring to join the Bank: people from peer multilateral development banks, commercial and investment banks, corporates, investment funds, financial institutions, public sector—you name it. I have spoken to an incredible amount of talented people who are excited about AIIB’s mandate and mission and look forward to more candidates.
Before I close, I want to pay tribute to all my teammates in Treasury who stepped up to the challenge and covered for any gaps we experienced over the year.
Let’s see what is in store for 2022: Treasury is prepared.
