By Emma Okonji
The African Export-Import Bank (Afreximbank) has released its unaudited financial statements for the half-year period ended 30 June 2018, showing gross revenue of $343 million.
The figure represented a $21 million increase over the gross revenuerealised same period in 2017.
The results, released by the Bank in Cairo, Egypt, attributed the higher gross revenue to a significant increase in fee income, which rose by 119 per cent, while interest and similar income recorded a two per cent growth compared to prior year.
The bank’s attributable earnings over the six months also stood at $110 million, beating the budget by 34 per cent.
The key profitability ratios equally came in well above budget, with the return on the bank’s average shareholders’ equity (ROAE) at 10 per cent, compared to the budget of 8.08 per cent and the return on average assets (ROAA) at 1.88 per cent as against the budget of 1.57 per cent.
Commenting on the report, the President of Afreximbank, Dr. Benedict Oramah, said interest and similar income within the six months in reviewrose to $314.81 million, while net interest margin reached 3.17 per centand total assets of $11.52 billion.
In addition, total liabilities stood at $9.21 billion and shareholders’ funds of $2.31 billion.
According to the financial report, attributable earnings achieved by the bank over the six months amounted to $110 million, which was six per cent lower than prior year performance of $117 million. But theperformance was well ahead of budget by 34 per cent.
The decline against prior year was mainly due to fair value losses amounting to $15 million, which arose from derivative instruments held for interest rate risk management purposes, the report said.
The losses arose due to the impact of the rising interest rate environment.
“Despite the slight decline in net income on year-on-year basis, on the back of fair value loss from risk management derivatives, the key profitability ratios were well above budget with the return on the bank’s average shareholders’ equity at 10 per cent and return on the bank’s average assets at 1.88 per cent as at 30 June 2018,” it stated.
According to the report, “management is pleased with the results achieved for the first half of the year and which are in line with expectation. In general, all the key performance metrics were in line with budget and strategic plan targets.
“The results buttressed the healthy financial standing of the bank reflected in reported earnings growth, satisfactory profitability levels, high asset quality, solid liquidity and capital levels to support both existing and future business volumes.
“Expectations are that the bank will grow the attributable income in the second half of the year to meet full year targets whilst maintaining a sustainable balance between a strong capital base, business growth and profitability to deliver sustainable returns to its shareholders.”