Afreximbank posts 4% net income growth in Q1

The African Export-Import Bank (Afreximbank) has reported a 4% growth in net income to $87.3 million in the first quarter of 2021. This growth was primarily driven by a 23% increase in net interest income, which resulted from a significant 41% growth in net loans and advances. Afreximbank's Executive Vice President for Finance, Admin, and Banking Services, Denys Denya, sat down with CNBC Africa's Kenneth Igbomor to discuss the details of the bank's recent achievements. Denya highlighted the successful issuance of a $1.3 billion dual-tranche bond, marking the largest bond issuance in the bank's history. The bond, with five and ten-year portions, attracted a diverse group of investors from around the world and was priced competitively at 2.64% and 3.79% above treasuries, respectively. The issuance not only helped Afreximbank refinance maturing debt but also raised new liquidity to support ongoing business activities. Denya emphasized the strategic importance of the bond in fulfilling the bank's liability management objectives and supporting its focus on intra-Africa trade. The positive feedback from investors underscored their confidence in Afreximbank's operations and resilience in the face of the ongoing pandemic. The bank's ability to swiftly respond to the challenges posed by COVID-19 through initiatives like the Pandemic Trade Impact Mitigation Facility (PATIMFA) impressed investors and helped maintain the bank's credit ratings stability. Looking ahead, Denya shared insights into the key drivers of Afreximbank's strong performance in Q1 2021. The bank saw substantial growth in loans and advances, a decline in interest expenses, and a significant increase in non-interest income, driven primarily by advisory fees and guarantees. Despite the economic uncertainties brought about by the pandemic, Afreximbank managed to control its cost-income ratio and maintain robust asset quality. Noteworthy achievements included a minimal increase in expected credit losses and a decline in non-performing loans ratios. The bank's structured lending approach, coupled with stringent collateral requirements, contributed to the resilience of its loan portfolio. As Afreximbank continues to play a pivotal role in promoting trade and economic development across Africa, its solid financial performance and prudent risk management strategies position it for sustained growth and impact.