African Export-Import Bank, Afreximbank, has posted a 10% increase in net income in the preceding financial year.
Specifically the bank said despite the impact of the Covid-19 pandemic on socio-economic conditions globally, net income rose by 10% from US$137.63 million in June 2019 to US$150.75 million in June 2020, mainly as a result of strong growth in net fee and commission income, which rose by 134%.
Net interest income for the period grew by 17% to US$285.71 million (2019: US$243.93 million). The Net Interest Margin improved from 3.3% to 3.7%, driven by lower costs of funds as interest rates declined globally. Total revenues were strong, rising by 4.4% compared to the first half of 2019, to amount to US$519.8million. Fees and commission income supported the growth in revenues, reflecting continuing progress towards achieving the Bank’s goal of diversifying its revenue sources.
Total assets increased by 34% from US$14.44 billion as at 31 December 2019 to US$19.35 billion as at 30 June 2020, largely driven by a 26% increase in loans to US$15.20 billion and a 76% increase in cash and cash equivalents to US$3.91 billion. The high liquidity level was in response to the uncertainties caused by the Covid-19 pandemic.
Liquidity sources were well diversified by geography and products, with African sources accounting for almost 40 %, an indication of progress being made under the Bank’s Africa Resource Mobilization Initiative.
Despite the growth in total assets, the Bank’s Capital Adequacy Ratio remained strong at 23% in line with the Bank’s Capital Management Policy targets. The capitalization level was supported by equity injection, internal capital generation and the nature of collateralization of some of the loan assets funded during the period.