The Independent Uganda: You get the Truth we Pay the Price
The bank’s next focus is on delivering on the priorities set under its new strategic plan
Kampala, Uganda | ISAAC KHISA | Pan-African multilateral lender, African Export-Import Bank, recorded a 10% growth in profit for the year 2021 to $387.3 million, demonstrating a strong and resilient growth.
The inclusion of two new non-bank subsidiaries, Fund for Export Development in Africa (FEDA) and Afreximbank Insurance Management Company (AfrexInsure) and reported as a group, however, lowers the bank’s profitability to US$375.8 million due to pre-establishment expenses incurred.
Afreximbank group’s assets grew 13.4% to $22 billion in 2021, primarily due 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.
With significant growth in guarantees and letters of credit, in line with strategy, total assets and guarantees of the group rose from US$21.7 billion to US$25 billion during the period under review.
The group’s gross income profile, too, improved having recorded $1.13 billion compared to $ 1.08billion in 2020, on the back of strong interest income, which crossed $1 billion last year. 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 $4 billion from the prior year position of $3.4 billion, primarily on account of the progress made in the ongoing US$6.5 billion general capital increase.
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 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.”
He said throughout last year, 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 which supported Africa Vaccine Acquisition Trust to secure 400 million doses of Covid-19 vaccines for the continent with 220 million doses.
Professor Oramah said the bank also maintained strong support for financial institutions, corporates and member states in other areas.
Progress on AfCFTA
Regarding flagship initiatives supporting the African Continental Free Trade Agreement, President Oramah said the bank has made substantial progress on its strategic AfCFTA-enabling initiatives.
He highlighted that the commercial operation of the Pan-African Payment and Settlement System was launched January this year. Similarly, 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 in advanced stages 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,” he said.
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.
Professor Oramah said “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,” he said.
Afreximbank, with regional headquarters dotted across the continent including Uganda, has a mix of public and private entities divided into four classes consisting of African governments, central banks, regional and sub-regional institutions, private investors and financial institutions, as well as non-African financial institutions, export credit agencies and private investors, as shareholders.
The Class “A” shareholders are mainly African states, African central banks and African public institutions, including the African Development Bank, while Class “B” is made up of African financial institutions and African private investors.
Class “C” shares are held by non-African investors, mostly international banks and export credit agencies, including Standard Chartered Bank, HSBC, Citibank, China Exim Bank and Exim India. Class “D” shares, a tier approved in December 2012, are fully paid value shares that can be held by any investor.
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