Amid the challenging operating environment, African Export-Import Bank (Afreximbank), said the Group’s total assets rose to $22billion as at 31 December 2021, a 13.4% jump above the $19.3billion recorded a year earlier.
The Bank attributed the rise primarily to the 11.5% growth in net loans and advances and a 12.1% increase in cash and cash equivalents to $18.2 billion and $3.1 billion respectively.
This is contained in its consolidated financial results for 2021, released yesterday on its website, with interest income again crossing the $1 billion mark.
Afreximbank, which described the Group’s results as demonstrating strong and resilient growth, also said total assets and guarantees rose from $21.7 billion in 2020 to $25 billion year-on-year. This is due to significant growth in guarantees and letters of credit, in line with its strategy.
The Bank achieved a 10.1% increase in its net income from $351.7 million in 2020 to $387.3 million in 2021 largely due to a solid growth in operating income in the year.
However, the Group’s net income of $375.8 million was slightly lower than the net income reported by the Bank ($387.3 million) mainly because of the pre-establishment expenses incurred by the subsidiaries
The Bank ascribed the increase in the Group’s funded income at $1.13 billion (2020: $1.08 billion) to healthy interest margins and higher loan volumes.
Similarly, the Group’s shareholders’ funds rose by 17.4% to $4 billion up from $3.4 billion a year ago, primarily on account of the progress made in the ongoing $6.5 billion General Capital Increase (GCI, $2.6 billion expected as paid-in amount).
Overall, the Group maintained a healthy, liquid and robust balance sheet position with respective NPL, liquidity coverage and capital adequacy ratios of 3.4%, 169% and 25% respectively in 2021.
Its wholly owned two non-bank subsidiaries, Fund for Export Development in Africa (FEDA), and Afreximbank Insurance Management Company (AfrexInsure), commenced operations during the 2021 financial year.
This resulted in the reporting of consolidated financial statements for the first time.
The consolidated financial statements showed a separate performance of the Bank and an aggregate performance of the Bank and the subsidiaries.
But the contribution of these subsidiaries to Group results was not significant, as they only operated for a few months, towards the end of the 2021 financial year, the bank explained.
Proactive support
Commenting on the results, President and Chairman of the Board of Directors of Afreximbank, Prof. Benedict Oramah, said: “2021 was, again, a challenging year with continued economic and business disruptions caused by the pandemic, including continued supply chain disruptions, delayed access to the COVID-19 vaccines and rising global prices.
“Throughout 2021, the Bank remained focused on proactively and aggressively supporting the fight against COVID-19 in Africa by acting as a financial and transaction advisor, guarantor, payment agent and instalment payment facility provider under the $2 billion Advance Procurement Commitment (APC) Guarantee Facility.
“This supported Africa Vaccine Acquisition Trust (AVAT) to secure 400 million doses of COVID-19 vaccines for the continent with 220 million doses committed in parallel. We maintained strong support for financial institutions, corporates and our member states in other areas.”
2021 was, again, a challenging year with continued economic and business disruptions caused by the pandemic, including continued supply chain disruptions, delayed access to the COVID-19 vaccines and rising global prices.
Regarding flagship initiatives supporting the African Continental Free Trade Agreement (AfCFTA), Oramah noted that “The Bank has also made substantial progress on its strategic AfCFTA-enabling initiatives.”
These include the Commercial operation of the Pan-African Payment and Settlement System (PAPSS), launched on January 13 2022; and the customer due diligence data platform (MANSA).
Also the Trade Information and Trade Regulations Portals have been developed and the development of the Africa Trade Exchange (ATEX), an AfCFTA B2B/B2G platform to be launched soon to support pooled procurement of critical commodities in response to the Ukraine crisis.
“The Bank has also commenced the process of integrating these platforms through the creation of the African Trade Gateway,” he added
Strategy implementation
To support the implementation of its strategy, the Bank launched an African Union-endorsed general capital increase amounting to $6.5 billion of which $2.6 billion is to be paid-in capital.
This has received immense support from its shareholders, with some of the equity having been received ahead of schedule.
“The Bank will remain focused on delivering on the priorities set under its new Plan (the Sixth Strategic Plan, covering 2022-2026). Management is confident that the Bank’s solid financial position will provide a strong foundation for the Bank and its member states to sustain efforts towards building the Africa we all want and deserve,” Oramah concluded.
