Home Finance Afreximbank delivers exceptional financial results in 2023

Afreximbank delivers exceptional financial results in 2023

by Business News Report

African Export-Import Bank Group’s results for the financial year ended 31 December 2023 showed Net interest income reached $1.4 billion at the end of the 2023 financial year, compared to $910.3 million in 2022. The 58.67% increase was driven by the growth in interest income, which in turn was driven primarily by the growth in the Bank’s portfolio of loans and advances. Net Interest Margin grew to 4.96% compared to the prior year’s level of 3.83%. Due to global inflationary pressures and investment in human capital to support increased business activities, the Group’s total operating expenses were $304.5 million, 34.93% higher than in 2022. The capacity expansion and rise in expenditures were envisaged in the five-year Sixth Strategic Plan, which is currently under implementation until December 2026. The Group’s Total assets grew by 20.12% to $33.5 billion (FY2022: $27.9 billion), largely on account of increases in net loans and advances to customers and cash and cash equivalents. 

The Group Shareholders’ funds, which largely mirrored the Bank’s Shareholders’ funds, recorded a solid growth of 17.55% to reach US$6.1 billion as of December 31, 2023, compared to the FY’2022 position of $5.2 billion. Accounting for this growth were the $546.8 million retained income (which is net of appropriated 2022 dividends) and the $349.8 million fresh equity raised during the year as shareholders supported the GCI II programme, which aims to raise $2.6 billion paid-in-capital ($3.9 billion callable capital) by 2026. Mr. Denys Denya, Afreximbank’s Senior Executive Vice President, commented

“During the 2023 financial year, the Afreximbank Group exceeded the budget and significantly surpassed its 2022 performance. This outcome was mainly driven by the Bank’s and its subsidiaries’ achievements. Our focus is steadfast on fuelling industrial growth, boosting trade within Africa, and promoting exports with added value, which are crucial for the continent’s prosperity. We will continue to maintain a cautious balance between profitability, liquidity, and safety to ensure a decent net interest margin and deliver profitable and sustainable growth and quality assets. We are delighted to report results well above forecasts for the financial year ended 31 December 2023, and look forward to delivering stronger financial outcomes in 2024.”

In 2023, the Bank was ranked number one in all three categories in the Bloomberg Capital Markets League Tables Report for African Capital Markets – number one Mandated Lead Arranger, Bookrunner and Administrative Agent for Sub-Saharan Borrower Loans. This is a testament to the Bank’s leadership role in facilitating capital from within and outside the continent. Additionally, its subsidiary, the Fund for Export Development in Africa (FEDA), received multilateral support from Zimbabwe, Kenya, Congo, Chad, Gabon, Sierra Leone, and São Tomé and Príncipe, who officially signed the FEDA Establishment Agreement. This collective support is pivotal in the Bank’s mission to provide lasting financial support to African economies. The Bank also celebrated a key milestone — its 30th anniversary, marking three decades of financing and supporting trade in Africa and highlighting the need for Africa to enhance intra-African trade and integration amidst the challenges stemming from the global shocks caused by the COVID-19 pandemic, the adverse economic ramifications of the Ukraine crisis, and other global conflicts.

Moreover, the Bank inaugurated its Afreximbank Caribbean Office, a pivotal step in supporting the implementation of the Partnership Agreement between Afreximbank and the Caribbean Community (CARICOM) member states. This expansion solidifies Afreximbank’s commitment to promote and develop trade between Africa and the Caribbean, aligning with its Diaspora Strategy and the African Union’s designation of the African Diaspora as Africa’s sixth region.

Despite Africa’s economic challenges and constraints, Afreximbank’s management and team demonstrated a focus on supporting member countries by offering customised programmes and facilities designed to address the continent’s distinctive needs. These efforts and interventions assisted member countries in meeting trade finance commitments, assessing crucial imports, boosting food security and commodity production, alleviating supply chain bottlenecks, and adjusting to challenges arising from climate change.

 Highlights of the results for the Group and Bank

Financial MetricsFY-2022FY-2023
Gross Income (US$ billion)1.502.62
Operating Income (US$ billion)1.031.60
Net Income (US$ billion)455.3756.1
Total Assets (US$ billion)27.8633.47
Total Liabilities (US$ billion)22.6627.35
Shareholders’ Funds (US$ billion)5.216.12
Net asset value per shareUS$58,500US$63,683

Profitability Return on average assets (ROAA) Return on average equity (ROAE)1.87%     9.91%2.56%     13.31%
Operating Efficiency Net interest margin Cost-to-income ratio3.83% 21.88%4.96% 19.09%
Asset Quality Non-performing loans ratio (NPL)3.40%2.47%
Liquidity and capital adequacy Cash/Total assets Capital Adequacy ratio (Basel II)14.71%   27.62%16.80%   23.77%

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