By Adedapo Adesanya
The African Export-Import Bank (Afreximbank) recorded a 10 per cent growth in its net income in the first six months of the year. the unaudited financial statements of the bank said the net income grew to $150.8 million from $137.6 million in the same period of last year.
According to a statement from the Cairo-based lender, the rise in the net income was mainly driven by a strong growth in net fee and commission income, which rose by 134 per cent in the period.
The net interest income for the period grew by 17 per cent to $285.7 million from $243.93 million in June 2019, despite the impact of the COVID-19 pandemic on socio-economic conditions globally.
The net interest margin improved from 3.3 per cent to 3.7 per cent, driven by lower costs of funds as interest rates declined globally, were the total revenues were strong, rising by 4.4 per cent to $519.8 million from $497.8 million.
Fees and commission income supported the growth in revenues, reflecting continuing progress towards achieving the bank’s goal of diversifying its revenue sources.
Afreximbank noted that its total assets increased in the comparative period by 34 per cent from $14.4 billion as at 31 December 2019 to $19.4 billion as at 30 June 2020. This, it explained, was largely driven by a 26 per cent increase in loans to $15.2 billion and a 76 per cent increase in cash and cash equivalents to $3.9 billion.
It clarified that the high liquidity level was in response to the uncertainties caused by the coronavirus pandemic.
It noted that despite the growth in total assets, the bank’s Capital Adequacy Ratio (CAR) remained strong at 23 per cent in line with the Bank’s capital management policy targets.
Commenting on the results, the President of Afreximbank, Mr Benedict Oramah 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 workforce, 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,” he added.
As with previous economic shocks, the bank launched a key multi-billion 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.
As of June 30, 2020, the bank had disbursed more than $3.5 billion under this PATIMFA. In addition, it has provided a grant of $3 million towards the COVID-19 Special Fund set up by the African Union (AU) as well as to the African Center for Disease Control (ACDC) and other agencies.
Mr Oramah noted that despite the adverse effects of the pandemic, Afreximbank remains well prepared to continue to support the continent while delivering development impact and value to its shareholders.
Modupe Gbadeyanka