…Net income rose 4% to $87.3m via 23% growth in net interest income
Ben Eguzozie, in Port Harcourt
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Pan-African multilateral financial institution, African Export-Import Bank (Afreximbank) has released its unaudited financial statements for three months ended 31 March 2021, showing strong and resilient growth, ahead of prior year results and in line with expectations.
The Bank, mandated to finance and promote intra-and extra-African trade, reported a net income of US$87.3 million, a four per cent increase over the 2020 performance of US$84.2 million, achieved largely due to a 23 per cent growth in net interest income. The increase in net interest income arose from a 41 per cent growth in net loans and advances and a 11 per cent decline in interest expense.
Total assets grew year-on-year by 30 per cent to US$19.25 billion as at 31 March 2021, primarily due to the implementation of the Pandemic Trade Impact Mitigation Facility (PATIMFA), with most of the facilities having been disbursed in the second half of 2020. Total assets decreased marginally from the balance of US$19.31 billion as at 31 December 2020, primarily driven by slight decreases in Loans and Advances and Cash and cash equivalents.
The Bank’s shareholders’ funds increased by 2.64 per cent to US$3.46 billion from the position of US$3.37 billion recorded in December 2020, reflecting the support from existing investors and strong internal capital generation capacity.
Benedict Oramah, Afreximbank president, commenting on the results said: “Afreximbank has made significant progress in the implementation of its strategic initiatives and remains committed to promoting intra-African trade under the African Continental Free Trade Agreement (AfCFTA), on the basis of which trading commenced on 1 January 2021. Regarding the Bank’s interventions in tackling the pandemic, we are proactively and aggressively supporting the fight against COVID-19 in Africa to accelerate the return to normalcy. We are supporting vaccine procurement by African economies with a US$2 billion guarantee and financing facility. Through PATIMFA, Afreximbank disbursed over US$6.5 billion in support of African sovereigns, central and commercial banks, as well as corporations and SMEs”.
Oramah said in the context of a global economy which has improved since the last quarter of 2020 with the successful roll-out of COVID-19 vaccines, Afreximbank was pleased to have reported year-on-year growth in the first quarter of 2021 and closed the period in a healthy financial position with strong capital levels.
“Overall, we are confident that the Bank’s solid financial position, alongside the robust strategic measures put in place to proactively manage the effects of the pandemic, provide a strong foundation for a resilient and growing business going forward and are confident that Africa will see a strong economic rebound in 2021,” he said.
Highlights of the results show that: gross income rose to $262.7 million in Q1 2021, from $229.3 million in same period in 2020; net interest income was $163.6 million from $133.1m last year; fee and commission income, $19.6m up from $6.6m; operating expenses $33.5m up from $26.0m in same period in 2020. Profit for the year went up marginally to $87.3m up from $84.2m in 2020.
Meanwhile, the Bank’s total assets was southward to $19,250.2bn down from $19,306.9bn. Shareholders’ funds was northward to $3,456.1bn in Q1 2021 up from $3,367.0 in same period last year.
Under profitability, Afreximbank saw lower Return on average assets (ROAA) of 1.81 per cent down from 2.31 per cent in Q1 2020. Return on average equity (ROAE) went up by 10.23 per cent in Q1 2021 up from 11.84 per cent last year.
On asset quality, Afreximbank’s non-performing loans (NPL) ratio was high at 3.22 per cent in the period under review against December 2020’s 3.18 per cent; while its liquidity and capital adequacy were untouched for both periods at 14 per cent for Total Assets and 23 per cent for Capital Adequacy ratio.
Afreximbank’s total assets and guarantees at the end of 2020, stood at US$21.5 billion, and its shareholder funds amounted to US$3.4 billion. The Bank disbursed more than US$42 billion between 2016 and 2020. It has ratings assigned by GCR (international scale) (A-), Moody’s (Baa1) and Fitch (BBB-).