African Export-Import Bank has released the consolidated financial statements of the bank and its wholly owned subsidiaries, altogether referred to as the Afreximbank Group (the ‘Group’), for the 2021 year under review.
The Group results demonstrated strong and resilient growth, with interest income crossing the US$1billion mark once again.
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.
The contribution of these subsidiaries to group results was not significant, as they only operated for a few months, toward the end of the 2021 financial year.
Afreximbank Group’s Total Assets grew by 13.4% from US$19.3billion as at 31st December 2020 to about US$22billion as at 31st December 2021, primarily due to the 11.5% growth in net loans and advances, and a 12.1% increase in cash and cash equivalents, to US$18.2billion and US$3.1billion, respectively.
With significant growth in guarantees and letters of credit, in line with strategy, total assets and guarantees of the Group rose from US$21.7billion in 2020 to US$25billion as at 31st December, 2021.
The bank achieved a 10.1% increase in the bank’s net income from US$351.7million in 2020 to US$387.3million in 2021 largely due to a solid growth in operating income in 2021. However, the Group’s net income of US$375.8million was slightly lower than the net income reported by the bank (US$387.3million) mainly because of the pre-establishment expenses incurred by the subsidiaries.
The Group’s gross income profile improved, having recorded US$1.13billion (2020: US$1.08billion) on the back of strong interest income, which crossed US$1billion in 2021. The increase in funded income was driven by healthy interest margins and higher loan volumes. The Group’s shareholders’ funds rose by 17.4% to US$4billion from the prior year position of US$3.4billion, primarily on account of the progress made in the ongoing US$6.5billion General Capital Increase (GCI, US$2.6billion 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% in 2021.
Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, reflected: “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 US$2billion Advance Procurement Commitment (APC) Guarantee Facility which supported Africa Vaccine Acquisition Trust (‘AVAT’) to secure 400million doses of COVID-19 vaccines for the continent, with 220million doses committed in parallel, we maintained strong support for financial institutions, corporates and our member-states in other areas,” he said.
Regarding flagship initiatives supporting the African Continental Free Trade Agreement (AfCFTA), President Oramah noted that: “The bank has also made substantial progress on its strategic AfCFTA-enabling initiatives. In this regard, the commercial operation of the Pan-African Payment and Settlement System (‘PAPSS’) was launched on 13th January 2022.
“The customer due diligence data platform (‘MANSA’), became operational; the Trade Information and Trade Regulations Portals have been developed and the development of the Africa Trade Exchange (‘ATEX’), an AfCFTA B2B / B2G platform, is well advanced, and will soon be launched 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”.
To support the implementation of its strategy, the bank launched an African Union-endorsed general capital increase, amounting to US$6.5billion, of which US$2.6billion is to be paid-in capital.
It is pleasing that the bank has received immense support from its shareholders, with some of the equity having been received ahead of schedule.
In concluding, he indicated that: “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 toward building the Africa we all want and deserve”, he stressed.