The African Export-Import Bank (Afreximbank) on Monday announced its half year financial and business standing with a positive margin irrespective of the Covid-19 pandemic economic shock effect.
This was published on the official website of the lender continental bank, www.afrexinbank.com which we accessed.
The report stated that the “unaudited financial statements for the six months ended 30 June 2020. Despite the impact of the Covid-19 pandemic on socio-economic conditions globally, the Bank saw its Net Income rise by 10% from US$137.63 million in June 2019 to US$150.75 million in June 2020, mainly as a result of strong growth in net fee and commission income, which rose by 134%.
Net interest income for the period grew by 17% to US$285.71 million (2019: US$243.93 million). The Net Interest Margin improved from 3.3% to 3.7%, driven by lower costs of funds as interest rates declined globally. Total revenues were strong, rising by 4.4% compared to the first half of 2019, to amount to US$519.8million. Fees and commission income supported the growth in revenues, reflecting continuing progress towards achieving the Bank’s goal of diversifying its revenue sources.
Total assets increased by 34% from US$14.44 billion as at 31 December 2019 to US$19.35 billion as at 30 June 2020, largely driven by a 26% increase in loans to US$15.20 billion and a 76% increase in cash and cash equivalents to US$3.91 billion. The high liquidity level was in response to the uncertainties caused by the Covid-19 pandemic.
Liquidity sources were well diversified by geography and products, with African sources accounting for almost 40 %, an indication of progress being made under the Bank’s Africa Resource Mobilization Initiative.
Despite the growth in total assets, the Bank’s Capital Adequacy Ratio remained strong at 23% in line with the Bank’s Capital Management Policy targets. The capitalization level was supported by equity injection, internal capital generation and the nature of collateralization of some of the loan assets funded during the period.
Prof. Benedict Oramah, President of Afreximbank, said:
“Our financial performance in the first half of the year was pleasing and demonstrated that we remained focused on delivering value to Shareholders even as we pursued the Bank’s development agenda and intensified our support to our continent in its effort to contain the spread of the new coronavirus disease and its devastating economic consequences. The observed outcome reflected the wisdom of the COVID-19 response measures the Bank launched in mid-March which prioritized the health of its work force, support for the Bank’s member countries to manage the impact of the pandemic and the need to deliver an acceptable financial performance with minimal credit losses.
As with previous economic shocks, the Bank launched a key multibillion US dollar intervention tool known as the Pandemic Trade Impact Mitigation Facility (PATIMFA) which aimed at supporting sovereigns, financial institutions and corporates to deal with the economic and health impacts of COVID-19. Funding under the facility have been made available to ensure continued access to international trade finance, procurement of vital COVID-19 containment material, food and agricultural input as well as promoting manufacturing of medical and healthcare products in Africa. As at 30 June 2020, the Bank had disbursed more than US$3.5 billion under this PATIMFA. In addition, the Bank provided a grant of US$3 million towards the COVID-19 Special Fund set up by the African Union as well as to the African Center for Disease Control and other agencies.
Despite the adverse effects of the pandemic, the Bank remains well prepared to continue to support the continent while delivering development impact and value to shareholders.”