African Export-Import Bank (Afreximbank) has increased its total assets by 34 per cent to $19.33 billion for the nine months ended 30 September 2020, as against $14.44 billion it stood as of 31 December 2019.
Although, the Bank in its third-quarter (Q3) unaudited financial statements released on Monday explained that the factor responsible for the increase was primarily as a result of increases in its loans and advances and cash and cash equivalents.
This is even as 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.
According to the result, cash and cash equivalents were up by 41per 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 (31 December 2019: 15%). The higher liquidity level was considered necessary to contend with the uncertainties arising from the pandemic.
Considering the highlight of the financial result, Afreximbank, notwithstanding the impact of the pandemic, recorded net income amounting to US$217.06 million (2019: US$225.36 million) for the period, showing a slight decrease in the comparable period last year.
Also, net interest income for the nine months grew by 16per cent to US$421.77 million (2019: US$362.83 million) mainly due to the 18 per cent decline in Interest expense to US$272.44 million in 9M, 2020 compared to US$331.36 million in the corresponding period of 2019.
Similarly, the Net Interest Margin, as a result, rose to 3.37 per cent (2019: 3.32%) reflective of cost-effective management of interest expense coupled with the relatively higher average yields sustained on the Bank’s interest-bearing assets.
Despite 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.
A credit rating 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.
Speaking on the financial result, President of Afreximbank, Prof. Benedict Oramah said: “Despite the ravages of the COVID-19 pandemic, the Bank remains 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.”