African Export-Import Bank (Afreximbank) has revealed that its net interest income rose to 31.7 percent in the first quarter of 2024, according to its consolidated financial statements.
The bank said its net interest income grew to $393.4 million, compared to $298.6 million in the same period last year. The increase was largely driven by a 40.07 percent increase in interest income to $721.8 million, on the back of the growth in the bank’s portfolio of loans and advances.
Net interest margin improved to 4.82 percent compared to 4.40 percent in the corresponding period due to a combination of higher benchmark rates and effective management of borrowing costs.
The group’s results for the period demonstrates yet again great resilience in the face of challenging geopolitical and macroeconomic conditions. The results show year-on-year growth and an increase in shareholder value. It demonstrated an improvement in operating efficiency with a lower cost-to-income ratio of 14.50 percent in Q1, compared to 16.82 percent in Q1 2023.
This was achieved despite a 10.63 percent increase in operating expenses to $61.4 million (Q1 2023: $55.5 million). Staff costs rose by 28.55 percent year-on-year following an increase in staff headcount to support the growth of group business and other initiatives, in line with the bank’s sixth strategic plan, constituting 52.93 percent of the group’s expenses.
Total assets closed at $ 32.8 billion compared to $33.5 billion. Cash and cash equivalents closed the period at $4.9 billion (FY 2023: $5.6 billion) with the liquidity ratio remaining strong at 14.9 percent.
The group’s shareholders’ funds rose by 2.89 percent to $6.3 billion as of March 31, 2024 (FY 2023: $6.1 billion) on the back of growth in group net income of $178.7 million. Callable capital, a significant proportion of which was credit enhanced as part of the bank’s capital management strategy, was maintained at $3.7 billion as of March 31, 2024 (FY 2023: $3.7 billion).
Denys Denya, Afreximbank’s senior executive vice president, said, “During the first quarter of the financial year 2024, Afreximbank Group delivered a strong performance even as we expanded our subsidiary companies’ operations and our activities in the Caribbean. Looking ahead, we will continue to prioritise revenue and quality assets growth, and operational efficiency, while ensuring capital adequacy and adequate liquidity levels are maintained. Focusing on these key areas will enhance the Group’s ability to execute its strategy and initiatives as outlined in its Sixth Strategic Plan.”
“The implementation of the African Continental Free Trade Area, strongly supported by a robust payments and settlement system like PAPSS, is poised to strengthen the continent’s economic resilience by providing a shield against volatility on the international scene. Consequently, Africa is projected to sustain its resilience in 2024 and attain a growth rate of approximately four percent. We look forward to the rest of the year with confidence,” he added.
