Fitch affirms Afreximbank’s BBB- credit rating with stable outlook

Fitch Ratings, an American credit rating agency, has affirmed African Export-Import Bank (Afreximbank)’s long-term Issuer Default Ratings (IDR) at ‘BBB-‘ with a stable outlook, the Bank said on Thursday.

The agency also affirmed the Bank’s Short-Term IDR at ‘F3’ and senior unsecured debt at ‘BBB-‘.

Fitch highlighted that Afreximbank’s ‘BBB-‘ rating is driven by its intrinsic features, including solvency and liquidity, and adding that the ongoing and expected capital increases support the resilience of the bank’s solvency during the COVID-19 pandemic.

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The agency noted that “the strong capitalization is underpinned by the equity to assets guarantees ratio at 18.1 percent in 2019, close to 2018 level (18.5%) as the bank’s expansion has been broadly matched by paid-in capital payments from the ongoing US$1 billion capital increase (targeted to be completed by end-2021, 91 percent had been raised by end-H1 2020) and internal capital generation”. Fitch further noted that a high level of loan collateralization (88% of the facilities), credit insurances from ‘A’ rated insurers, and hedging strategies on commodity-backed facilities, have all helped the Bank maintain a low impairment ratio of 2.4 percent on a 10-year average, “despite its ‘high’ risk operating environment.”

Fitch observes that the Bureau of African Union Heads of States and Governments recently endorsed a significant increase to Afreximbank’s subscribed capital, which will further support the resilience of the Bank’s solvency amid COVID-19 related pressures on asset quality. The agency expressed the view that Afreximbank’s PATIMFA facility, which is supporting African nations during the pandemic, will incentivize sovereigns to remain current on loan repayments with the Bank.

Benedict Oramah, President of Afreximbank, said, “Afreximbank is pleased to receive this positive affirmation from Fitch and we have full confidence in our resilience during the COVID-19 pandemic. Through strong liquidity and robust risk management, we have ensured that we have the solid foundation needed to support Africa’s post-pandemic recovery and the continued expansion of intra-African trade. Our strategic response to COVID-19, and the implementation of the African Continental Free Trade Agreement, will only strengthen our position, reinforcing our role as a key driver of the continent’s economic development.”

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.