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The West Africa region led by Nigeria, took the lion’s share of loans disbursed by Afreximbank as at December 2023 as the Cairo based development Finance Institution reported a 66% jump in net-income to $756 million for the period.
Geographical distribution of the loans exposure largely mirrored the trading patterns of Africa and, as a result, the West African region attracted more financing support from the Bank as it accounted for 43.55% of loans (FY-2022: 42.45%), followed by North Africa which attracted 26.04% (FY-2022: 28.99%).
The Bank further diversified the loan portfolio by increasing loan exposures to East Africa, 11.80% (FY22: 11.33%) and Central Africa, 2.58% (FY22: 1.61%).
The increase in East Africa and Central Africa regions was largely on account of the benefits arising from the newly established regional offices.
Southern Africa increased to 16.02% from 15.62 recorded in FY-2022.
Lines of credit and direct financing continued to be the Bank’s main financing programmes as they represented 79.06% of facilities at FY-2023 (FY-2022: 81.50%).
In FY-2023, Project-related finance accounted for 4.5% (FY-2022: 4.1%), while intra-African trade constituted 6.06% (FY-2022: 4.1%) of the programmes.
These increases corresponded with the anticipated need to promote intra-African trade, industrialization, and export development throughout the continent.
Asset quality remained satisfactory as the total facilities classified under IFRS 9 as Stage 1 and Stage 2 accounted for 97.53% (FY-2022: 96.60%) of the total Loans and advances as at FY-2023.
The NPL ratio of 2.47% remained within the Bank’s acceptable risk thresholds, demonstrating the high quality of the loans and advances. The outcome was directly attributable to the favourable impact of the Bank’s structured trade model.
The NPL coverage ratio of 161% at FY-2023 (FY-2022: 139%) was above the minimum strategic threshold of 100% indicating that the outstanding NPL exposures were adequately covered by the impairment provisions and the net value of collaterals.
Gross income rose by 74.20% from US$1.5 billion for the FY-2022 to US$2.6 billion for FY-2023. The solid growth was largely driven by a 78.58% increase in Interest income on the back of increased Loans and advances and increased benchmark interest rates.
Non-interest income increased by 33.74% from US$104.7 million for FY2022 to US$140.1 million for FY-2023.
Operating income closed FY-2023 at US$1.6 billion (FY-2022: US$1.03 billion), representing a 54.70% increase.
Group’s net income grew by 66.07% to reach US$756.1 million for FY2023 (FY-2022: US$455.3 million) on the back of higher Net interest income and effective containment of Operating expenses.
The Group proposed a dividend of US$264.6 million for the period, equivalent to a 35% payout ratio.
Group’s Total banking assets (on-balance sheet assets and Contingencies) reached US$37.3 billion, a 19.94% increase from US$31.1 billion recorded as at 31 December 2022.
Growth was driven by increased lending activities and liquid assets. Net Loans and advances accounted for 80% of Total on-balance sheet assets and closed FY’2023 at US$26.7 billion (FY’2022: US$23.0 billion). Cash and cash equivalents constituted 16.80% (FY’2022: 14.71%) of the Total assets and closed the period at US$5.6 billion (FY’2022: US$ 4.1 billion).
Operating expenses increased by 34.93% reaching US$304.5 million for FY-2023 (FY-2022: US$225.7 million) on account of: ü ongoing implementation of strategic initiatives; ü growth in business volumes; and ü the costs associated with an increased staff complement necessary to support increased business volume.
Despite the 34.93% increase in Operating expenses, the Group’s Cost-to-income ratio improved to 19.09% for FY-2023 from 21.88% in FY-2022 on account of a solid growth in Operating income.
Net Interest Margin (NIM) for FY-2023 improved to 4.96% from 3.83% achieved for FY-2022.
This was largely on account of: ü higher interest income earned during FY-2023 on the back of increased volume of interest-bearing assets and elevated benchmark interest rates; and ü effective cost management of borrowing costs which resulted in a 58.67% increase in Net interest income, which increased to US$1.4 billion from a FY-2022 level of US$0.9 billion.
The Group Shareholders’ funds, recorded a solid growth of 17.55% to reach US$6.1 billion as at FY-2023 (FY-2022: US$5.2 billion).
This growth was largely attributed to: ü the US$349.8 million fresh equity contributions raised during the year as Shareholders supported the GCI II programme; and the Net income of US$546.8 million generated during the year, net of 2022 appropriated dividends.
The Group achieved a return on average shareholders’ equity and a return on average assets of 13.31% (2022: 9.91%) and 2.56% (2022: 1.87%), respectively.
The Capital adequacy ratio closed at a sound level of 23.77% in 2023 (2022: 27.62%) well within the 20% strategic minimum level.
The Group’s net asset value per share of US$63,683 at FY-2023 was 8.86% higher than the US$58,500 at FY-2022. Growth was driven by internal capital generation during the period.
NAV per depository receipt also increased to US$6.37 at FY-2023 from US$5.85 at FY2022.
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