Financial Performance Summary
The overall market environment has a significant influence on IFC’s financial performance. The main elements of IFC’s net income and othercomprehensive income, and influences on the level and variability of net income and other comprehensive income from year to year are:

Main Elements of Net Income and Other Comprehensive Income
ELEMENTSSIGNIFICANT INFLUENCES

Net income:Yield on interest earning assets (principally loans)Market conditions including spread levels and degree of competition. Nonaccruals and recoveries of interest on loans formerly innonaccrual status, and income from participation notes on individual loans are also included in income from loans.

Liquid asset income

Realized and unrealized gains and losses on the liquid asset portfolios, in particular the portion of the liquid asset portfolio
funded by net worth, which are driven by external factors such as the interest rate environment and liquidity of certain asset
classes within the liquid asset portfolio.

Income from the equity investment portfolio

Global climate for emerging markets equities, fluctuations in currency markets and company-specific performance for equity
investments. Overall performance of the equity portfolio.

Provision for losses on loans, guarantees, and availablefor-sale debt securities

Risk assessment of borrowers, probability of default, loss given default, and expected balance at default considering prepayment
and disbursement assumption estimates as well as expected utilization rates.

Other income and expenses

Level of advisory services provided by IFC to its clients, the level of expense from the staff retirement and other benefits plans,
the approved and actual administrative expenses, and other budget resources.

Gains and losses on other non-trading financial
instruments accounted for at fair value

Principally, differences between changes in fair values of borrowings, excluding IFC’s credit spread and associated derivative
instruments and unrealized gains or losses associated with the investment portfolio including puts, warrants, and stock options,which in part are dependent on the global climate for emerging markets. These securities may be valued using internallydeveloped models or methodologies, utilizing inputs that may be observable or non-observable.

Other comprehensive income:Unrealized gains and losses on debt securities accounted
for as available-for-sale

Global climate for emerging markets, fluctuations in currency and commodity markets and company-specific performance, andconsideration of the extent to which unrealized losses are considered a credit loss. Debt securities may be valued using internallydeveloped models or methodologies, utilizing inputs that may be observable or non-observable.

Unrealized gains and losses attributable to instrumentspecific credit risk on borrowings at fair value under theFair Value Option

Fluctuations in IFC’s own credit spread measured against reference rate, resulting from changes over time in market pricingof credit risk. As credit spreads widen, unrealized gains are recorded, and when credit spreads narrow, unrealized losses arerecorded.

Unrecognized net actuarial gains and losses andunrecognized prior service costs on benefit plans

Returns on pension plan assets and the key assumptions that underlay projected benefit obligations, including financial market
interest rates, staff expenses, past experience, and management’s best estimate of future benefit cost changes and economic
conditions.

70 IFC ANNUAL REPORT 2023

Net income for FY23 was $672 million compared to a net loss of $464 million in FY22, primarily driven byreversal of mark-to-market losses from the previous year and additional interest income in Treasury, as wellas higher income from loans and debt securities. The $1.1 billion increase in FY23 when compared to FY22 wasprincipally a result of the following factors:

Change in Net Income FY23 vs FY22 (US$ MILLIONS)
1,50056762(25)1,000298500

57

1,136(106)483

1110(500)(500)

TotalIncomefrom Loansand Debt
Securities***

Loss
Provision

URG(L)* on
Loansand Debt
Securities

EquityIncomeURG(L)* on
EquityInvestments

Net
Administrative
Treasury
Expenses &Income**Pensions

URG(L)* onBorrowings

Others***Change inNet Income

Unrealized gains (losses).

** Total income from loans and debt securities and net treasury income are net of allocated charges on borrowings.
*** Others mainly represents foreign exchange gains/losses, service fees, and net advisory service expenses.

Equity investment portfolio returned $191 millionin FY23 compared to $208 million in FY22. The FY23
return comprised dividends ($164 million), realized
gains on sales ($161 million) and unrealized losses($134 million).
Net income from loans, debt securities and associatedderivatives, net of allocated charges on borrowings,
was $1.6 billion in FY23 compared to $1.1 billion in FY22.
Unrealized gains from loans and debt securities were$175 million in FY23 compared to unrealized losses of$123 million in FY22. IFC recorded provisions for lossesof $29 million in FY23 compared to $140 million inFY22. Included in the FY22 provision was a qualitative
overlay of $135 million, which remained unchanged at
FY23-end.
IFC reported income of $241 million on liquid assets
in FY23, net of allocated charges on borrowings,
compared to a loss of $521 million in FY22. The FY23
treasury income benefited from more favorable
market movements.

IFC’s administrative expenses were $1.2 billion
in FY23 compared to $1.1 billion in FY22, anincrease of $73 million primarily driven byhigher staff costs and higher travel expenses.
Pension expenses decreased by $48 million to$214 million in FY23 from $262 million in FY22.

IFC ANNUAL REPORT 2023

71

IFC’s net income or loss for the past three fiscal years are presented below:

IFC’s Net Income (Loss) FY21–FY23 (US$ MILLIONS)
2021
2022
2023

4,209(464)672

IFC uses Income Available for Designations (a non-U.S. GAAP measure) as a basis for designations of retained
earnings. Income Available for Designations comprises net income excluding unrealized gains and losses oninvestments and borrowings and grants to IDA in the year ended June 30, 2021.

Reconciliation of Net Income (Loss) to Income
Available for Designations(US$ MILLIONS)FOR THE YEAR ENDED JUNE 30
Net income (loss)

2023
$672

$2022

2021(464)$ 4,209(3,285)

Adjustments to reconcile Net income (loss) toIncome Available for Designations
Unrealized (gains) losses on investments

(41)

740

Unrealized losses (gains) on borrowings

50106(71)

Grants to IDA

––213

382

$ 1,066

Income Available for Designations

72 IFC ANNUAL REPORT 2023

$681

$

Summary of Financial Results(US$ MILLIONS)FOR THE YEAR ENDED JUNE 30

2023

2022

2021

Consolidated statement of operations highlights:
Income from loans and guarantees, including realized gains and losses on loans and associated derivatives$(Provision) release of provision for losses on loans, off-balance sheet credit exposures and other receivables

2,290

$

(22)

1,156

$

1,116(126)201

Income from equity investments and associated derivatives

191

208

3,201

Income from debt securities, including realized gains and losses on debt securities and associated derivatives

518

414

340

Provision for losses on available-for-sale debt securities

(7)

(14)

(3)

Income (loss) from liquid asset trading activities

1,464

(413)

327

Charges on borrowings(2,598)

(302)

(326)

Other income

518

419

595

Other expenses(1,721)(1,653)(1,687)

(86)

76

(148)

Foreign currency transaction (losses) gains on non-trading activities
Income (loss) before net unrealized gains and losses on non-trading financial instruments accounted for at fairvalue and grants to IDA

547

(235)

3,616

Net unrealized gains (losses) on non-trading financial instruments accounted for at fair value

125(229)806

Income (loss) before grants to IDA

672(464)

4,422––(213)

Grants to IDA
Net income (loss)(US$ MILLIONS)AS OF THE YEAR ENDED JUNE 30$

672$(464)

2023

2022

$

4,209

Consolidated balance sheets highlights:
Total assets$ 110,547$ 99,010

Liquid assetsa

40,12041,717

Investments

51,50244,09352,44348,269$ 35,038$ 32,805$ 11,589$ 10,840

221

298

Borrowings outstanding, including fair value adjustments
Total capitalof which
Undesignated retained earnings
Designated retained earnings
Accumulated other comprehensive income (loss) (AOCI)
Paid-in capital

632

(82)

22,596

21,749a. Net of securities sold under repurchase agreements, payable for cash collateral received and associated derivatives.

IFC ANNUAL REPORT 2023

73

Key Financial Ratios

COMMITMENTS(US$ BILLIONS, EXCEPT RATIOS)AS OF THE YEAR ENDED JUNE 30

2023

2022

Overall liquidity ratioa

104%

111%

Debt-to-equity ratiob

Total reserve against losses on loans to total disbursed portfolioc

1.6

1.6

3.7%

4.4%

34.8

32.5

Capital measures:
Capital availabled
Capital requiredeCapital utilization ratiof

21.1

20.1

60.7%

62.0%

a.Overall Liquidity Policy states that IFC would at all times maintain a minimum level of liquidity, plus
undrawn borrowing commitments from the IBRD, such that it would cover at least 45% of the next threeyears’ estimated net cash requirements. IFC’s overall liquidity as a percentage of the next three years’
estimated net cash needs stood at 104% as of June 30, 2023, above the minimum requirement of theBoard of 45%.

Total commitments (Long-Term Finance and ShortTerm Finance) was $43.7 billion in FY23 as compared
to $33.6 billion in FY22. Long-Term Finance (LTF)
Commitments comprise Own Account and CoreMobilization and totaled $31.7 billion in FY23, an
increase of $8.5 billion or 37% from FY22. IFC’s FY23
LTF Own Account Commitments were $16.7 billion($12.6 billion in FY22) and Core Mobilization was$15.0 billion ($10.6 billion in FY22). Short-Term Finance(STF) Commitments Own Account were $11.0 billion
in FY23 ($9.7 billion in FY22) and Core Mobilization was$996 million in FY23 ($767 million in FY22).

c.Total reserve against losses on loans to total disbursed loan portfolio is defined as reserve against
losses on loans as a percentage of the total disbursed loan portfolio.

In direct response to the COVID-19 pandemic, IFC
committed $4.1 billion in FY23 including $1.0 billion
under its Fast Track COVID-19 Facility in supportof IFC’s existing clients. Outside of the facility, IFC
committed an additional $3.1 billion in financing tosupport clients in response to COVID-19. Since thestart of the COVID-19, IFC committed $8.4 billion under
the Fast Track COVID-19 Facility and an additional$17.0 billion outside of the facility.

d.Capital available: Resources available to absorb potential losses, calculated as: Balance Sheet Capitalless Designated Retained Earnings.

CORE MOBILIZATION

b.Debt-to-equity (leverage) ratio is defined as outstanding borrowings plus committed guarantees
divided by total capital (comprises paid-in capital, retained earnings and Accumulated othercomprehensive income (loss)). IFC’s debt-to-equity ratio was 1.6 as of June 30, 2023, well within themaximum of 4 required by the policy approved by IFC’s Board of Directors.

e.Capital required: Aggregate minimum Economic Capital required to maintain IFC’s AAA rating.
f.CUR is defined as Capital Required divided by Capital Available.

Core Mobilization is financing from entities other thanIFC that becomes available to clients due to IFC’s direct
involvement in raising resources.

Total Commitments(Own Account and Core Mobilization)(US$ MILLIONS)FOR THE YEAR ENDED JUNE 302023

2022$ 43,729$ 33,591

Long-Term Finance Own Account

16,677

12,569Long-Term Finance Core Mobilization

15,02910,596

Short-Term Finance Own Account

11,027

9,659

996

767

Total Commitments (Own Account and Core Mobilization)

Short-Term Finance Core Mobilization

74 IFC ANNUAL REPORT 2023

AMC
IFC Equity Mobilization Department (AMC), invests third-party capital and IFC capital, enabling outside investors to invest alongside IFC indeveloping markets. Investors in funds managed by AMC have included sovereign wealth funds, national pension funds, multilateral and bilateraldevelopment institutions, national development agencies and international financial institutions (IFIs). The Funds managed by AMC and theiractivities as of and for the years ended June 30, 2023 and 2022 are summarized as follows:Funds Managed by AMC
THROUGH JUNE 30, 2023
TOTAL FUNDS RAISEDSINCE INCEPTION(US$ MILLIONS)FOR THE YEAR ENDED JUNE 30, 2023
CUMULATIVEINVESTMENTCOMMITMENTSa

INVESTMENTCOMMITMENTS
MADE BY FUNDb

INVESTMENTDISBURSEMENTS
MADE BY FUND––TOTAL

FROM IFC

FROM
OTHER
INVESTORS$ 1,275

$ 775

$ 500

$1,214

Post Investment Period
IFC Capitalization (Equity) Fund, LP (Equity Capitalization Fund)IFC Capitalization (Subordinated Debt) Fund, LP (Sub-Debt Capitalization Fund)

1,725

225

1,500

1,614––IFC African, Latin American and Caribbean Fund, LP (ALAC Fund)

1,000

200

800864–

–

418

75

343363–8902––

IFC Catalyst Fund, LP, IFC Catalyst Fund (UK), LP and IFC Catalyst Fund
(Japan), LP (collectively, Catalyst Funds)
IFC Global Infrastructure Fund, LP (Global Infrastructure Fund)

c

1,430

200

1,230

IFC Global Emerging Markets Fund of Funds, LP and IFC Global Emerging
Markets Fund of Funds (Japan Parallel), LP (collectively, GEM Funds)

800

150650757–

86

Women Entrepreneurs Debt Fund, LP (WED Fund)

115

3085110––

162

60

102

86

481,200–

1,200362–

10IFC Middle East and North Africa Fund, LP (MENA Fund)
China-Mexico Fund, LP (China-Mexico Fund)IFC Financial Institutions Growth Fund, LP (FIG Fund)

505

150355344–

3IFC Emerging Asia Fund, LP (Asia Fund)

693

150

543

573

1697

9,323

2,015

7,308

7,189

20212

Africa Capitalization Fund, Ltd. (Africa Capitalization Fund)

182

–182

130––

IFC Russian Bank Capitalization Fund, LP (Russian Bank Cap Fund)

550

25030082––

Post Investment Period Total

Liquidated Funds

Liquidated Funds Total
Grand Total

732

250482212––$10,055$2,265$7,790$7,401$20$212

a. Net of commitment cancellations.
b. Excludes commitment cancellations from prior periods.
c. Includes co-investment fund managed by AMC on behalf of Fund LPs.

IFC ANNUAL REPORT 2023

75

Funds Managed by AMC
THROUGH JUNE 30, 2022
TOTAL FUNDS RAISEDSINCE INCEPTION(US$ MILLIONS)FOR THE YEAR ENDED JUNE 30, 2022

TOTAL

FROM IFC

FROM
OTHER
INVESTORS

505

$ 150

$ 355

CUMULATIVEINVESTMENTCOMMITMENTSa

INVESTMENTCOMMITMENTS
MADE BY FUNDb

INVESTMENTDISBURSEMENTS
MADE BY FUND

$ 347

$ 90

$ 138

Investment Period
IFC Financial Institutions Growth Fund, LP (FIG Fund)$IFC Emerging Asia Fund, LP (Asia Fund)
Investment Period Total

693

150

543

559

187

197

1,198

300

898

906

277

335

1,275

775

500

1,214––

Post Investment Period
IFC Capitalization (Equity) Fund, LP (Equity Capitalization Fund)IFC Capitalization (Subordinated Debt) Fund, LP (Sub-Debt Capitalization Fund)

1,725

225

1,500

1,614––IFC African, Latin American and Caribbean Fund, LP (ALAC Fund)

1,000

200

800

864––418

75343363–

7929

–

–

IFC Catalyst Fund, LP, IFC Catalyst Fund (UK), LP and IFC Catalyst Fund
(Japan), LP (collectively, Catalyst Funds)
IFC Global Infrastructure Fund, LP (Global Infrastructure Fund)

C

1,430

200

1,230

IFC Global Emerging Markets Fund of Funds, LP and IFC Global Emerging
Markets Fund of Funds (Japan Parallel), LP (collectively, GEM Funds)

800

150650757–117

Women Entrepreneurs Debt Fund, LP (WED Fund)

115

3085110––

162

60

102

82

413

China-Mexico Fund, LP (China-Mexico Fund)IFC Middle East and North Africa Fund, LP (MENA Fund)

1,200

–

1,200362

47

47

Post Investment Period Total

8,125

1,715

6,410

6,295

51

184

Africa Capitalization Fund, Ltd. (Africa Capitalization Fund)

182

–

182

130–

–

IFC Russian Bank Capitalization Fund, LP (Russian Bank Cap Fund)

550

250

300

82–

–

Liquidated Funds

Liquidated Funds Total
Grand Total
a. Net of commitment cancellations.
b. Excludes commitment cancellations from prior periods.
c. Includes co-investment fund managed by AMC on behalf of Fund LPs.

76 IFC ANNUAL REPORT 2023

732

250

482

212

––

$10,055$2,265$7,790$7,413$328$519