The African Export-Import Bank (Afreximbank) says it recorded net income of $217.06 million for the nine months ended September 30 in spite of the impact of the COVID-19 pandemic.
The bank announced this in a statement issued in Cairo, Egypt, after the release of its unaudited financial statements for the nine-month period.
According to the bank, the amount recorded was a slight decrease on the comparable period of 2019 which recorded $225.36 million.
It said that the net interest income for the nine months grew by 16 per cent to $421.77 million as against $362.83 million in 2019.
This was mainly due to 18 per cent decline in interest expense to $272.44 million in nine months in 2020, compared to $331.36 million in the corresponding period of 2019, it said.
“Net interest margin as a result rose to 3.37 per cent as against 3.32 per cent in 2019, reflective of cost-effective management of interest expense coupled with the relatively higher average yields sustained on the bank’s interest-bearing assets.
“The bank’s total assets increased by 34 per cent to $19.33 billion as at Sept. 30, 2020 against $14.44 billion as at Dec. 31, 2019, primarily as a result of increases in loans and advances and cash and cash equivalents.
“Loans and advances increased on a net basis by 33 per cent underpinned by disbursements under the Bank’s Pandemic Trade Impact Mitigation Facility (PATIMFA), a facility launched in March 2020 in response to the COVID-19 pandemic.
“Cash and cash equivalents were up by 41 per cent to $3.13 billion resulting in the bank ending the period with a strong Liquid Asset to Total Assets ratio of 16 per cent against 15 per cent as at Dec. 31, 2019.”
According to the bank, the higher liquidity level was considered necessary to contend with the uncertainties arising from the pandemic.
It added that in spite of the bank’s interventions in support of entities in its member countries to enable them to better contend with the challenges of the COVID-19, its Capital Adequacy Ratio remained strong at 22 per cent in line with the bank’s Capital Management Policy targets.
It also said that credit ratings agency, Fitch, recently affirmed the bank’s long-term Issuer Default Ratings (IDR) at ‘BBB-‘ with a stable outlook.
The rating was driven by the bank’s intrinsic features, including solvency and liquidity, assessed at ‘a-‘ with a downward adjustment to reflect the current business environment.
Prof. Benedict Oramah, President of Afreximbank, said in spite of the ravages of the COVID-19 pandemic, the bank remained financially solid across all metrics.
“The bank solidified its policy relevance by rising strongly in support of its member countries.
“It entered the pandemic in a strong financial position, with a solid capital base, high operating efficiency, diversified and high-quality loan portfolio and a strong liquidity position.
“This has enabled us to record a sound financial performance for the nine-month period and continue to deliver on the Bank’s strategic initiatives while fulfilling its obligations to its member countries under conditions of market failure.”
Oramah said that in March, the bank launched a Pandemic Trade Impact Mitigation Facility (PATIMFA), aimed at helping African sovereigns, commercial banks and corporates to weather the impact of the pandemic.
In addition, in September, it launched a 100 million dollar overdraft facility to enable African states to procure COVID-19 related medical resources through the Africa Medical Supplies Platform.
He added that the platform was an online marketplace for the sale and purchase of medical supplies and equipment.
“Looking ahead, with this strong foundation and the strategic measures put in place to mitigate the adverse impacts of COVID-19, we are confident in meeting our expectations for the full year as well as the long-term prospects for the business.”
The Afreximbank is a Pan-African multilateral financial institution with the mandate of financing and promoting intra-and extra-African trade.
