African Export-Import Bank (“Afreximbank” or the “Group”) has released the consolidated financial statements of the Bank and its subsidiaries, for the half year ended 30 June 2023. The results demonstrate a strong and resilient performance, which was ahead of expectations.
Afreximbank Group’s total balance sheet assets grew by 8% from US$27.9 billion as of 31 December 2022 (FY-2022) to approximately US$30.1 billion as of 30 June 2023. The growth was driven by the increase in loans and advances to customers, which grew by 13% to close the period at US$26 billion. The liquidity position remained strong at US$3 billion, representing 11% of total assets and achieving a Liquidity Coverage ratio of 310% .
Due to increased volume of interest-earning assets, particularly loans and advances and higher interest rates, total interest income recorded a strong growth of 107.1% to reach $1.1 billion for the half-year (H1-2023) period compared to $540.8 million for the same period in 2022.
Net interest income amounted to $663.6 million, up 76% from the prior year, mainly due to continuous effective management of interest expenses. Net Interest Margin as a result increased to 4.77%, compared to 3.47% last year.
The Group’s shareholders’ funds rose by 7.63% to US$5.6 billion as of 30 June 2023 compared to FY-2022. The growth was largely attributable to the $261 million fresh equity contributions from existing and new shareholders who have supported the ongoing General Capital Increase exercise which aims to raise US$2.6 billion paid-in equity by 2026. In addition, the growth in shareholders’ funds was also underpinned by $125.5 million internally generated net earnings after taking into account the approved dividend and other appropriations which amounted to US$209 million.
Mr. Denys Denya, Afreximbank’s Executive Vice President, Finance, Administration and Banking Services, commented:
“During the period in which the Bank celebrated its 30th Anniversary, we have delivered a strong set of results, driven largely by a focused execution of our mandate as a countercyclical lender which generated increased volume of interest-earning assets, particularly loans and advances and benefited from a rising interest rate environment. The Bank continued to make progress on its strategy implementation, carefully balancing the need to be profitable and sustainable, while maintaining sufficient liquidity, capital, and a quality portfolio of assets. “
He further highlighted that despite the continued challenges caused by the Ukraine crisis, ongoing geo-political tensions and persistently high inflation, the half-year period saw some headwinds receding, including relatively lower energy and food prices, reduced supply bottlenecks and the re-opening of China, Africa’s biggest trading partner.
Mr. Denya pointed out that Global Credit Rating (GCR) and Japanese Credit Rating (JCR) respectively affirmed Afreximbank’s international scale long and short-term issuer ratings of A/A2 and A-, with a “Stable” Outlook, while Moody’s maintained the Bank’s credit rating at Baa1. In addition, African Banker recently bestowed on Afreximbank, the 2023 African Bank of the Year and the DFI of the Year awards in recognition of the Bank’s contributions to the continent’s Trade and Development. Significant progress was made during the first half of the year with the Bank’s subsidiary FEDA generating profit after only two years of operation and AfrexInsure generated premium income on assets valued at over $2 billion.
“We began the second half of 2023 well and are confident that Afreximbank’s strong financial position will provide a solid base for the Group to continue assisting its clients and African countries in expanding trade and investments, meet trade finance obligations, boost production especially of food and export value added products, as well as alleviate supply chain constraints and enable the continent to adapt sustainably to the challenging effects of climate change.”
Highlights of the results for the Group are shown below:
| Financial Metrics |
Group, H1 2022 ($ million) |
Group, H1 2023 ($ million) |
Change, % |
| Gross Income |
589.3 |
1,190.1 |
+102.1% |
| Net Interest Income |
377.3 |
663.6 |
+75.9% |
| Net Fee and Commission Income |
39.7 |
53.5 |
+35.0% |
| Operating Expenses |
92.7 |
117.2 |
+26.4% |
| Net income |
181.6 |
345.6 |
+90.3% |
| Total Assets |
27,863 (Dec) |
30,119 |
+8.1% |
| Loans and advances |
22,966 (Dec) |
26,015 |
+13.3% |
| Guarantees and Letters of Credit |
3,243 (Dec) |
2,404 |
-25.9% |
| Jun 23 |
Dec 22 |
Jun 22 |
|
| Profitability
Return on average assets (ROAA) Return on average equity (ROAE) |
2.36% 12% |
1.87% 10% |
1.52% 8.52% |
| Operating Efficiency
Net interest margin Cost -to -income ratio |
4.77% 16% |
n/a 22% |
3.47% 22% |
| Asset Quality
Non-performing loans ratio (NPL) Loan loss coverage ratio |
3.60% 90% |
3.40% 100% |
3.45% 116% |
| Liquidity and capital adequacy
Cash/Total assets Capital Adequacy ratio (Basel II) |
11% 25% |
15% 28% |
14% 26% |
