AfreximBank grows loan to $6.1b, NPLs fall to 2.8%
Nigeria leads earnings list in $29 million dividend Bank pursues ‘African made’, intra-payment schemes
Africa Export-Import Bank (AfreximBank), like regular lending institutions, has recorded a huge growth in its loan portfolio to $6.1 billion from what in the financial year ended December 2015.However, unlike majority of the lenders that are now engulfed in Non-performing Loans (NPLs) crisis by trading beyond limits, the continent’s trade and development institution has kept its risk in check from 3.8 percent in 2014 to 2.8 percent in 2015.
Meanwhile, barring impairment charges, Nigeria would earn the bulk of the $28.8 million dividend declared by AfreximBank, as the largest investor in the continent’s financial institution.The dividend represented a payout ratio of 23 percent, in line with the bank’s historical practice.
The President, AfreximBank, Dr. Benedict Oramah, said the feat was achieved despite a financial year’s operations that were filled with uncertainties.According to him, by all measures, the bank is financially sound, profitable, liquid and under solid management, as Net Income rose by 25 percent, from $107 million in 2014 to $134 million in 2015.
Describing the bank risks as a “solid loans growth,” he noted the portfolio rose by 40 percent between December 2014 and December 2015 to reach $6.1 billion, as assets and sources of income were well diversified, with key financial ratios being in line with plans.Equity mobilization exercise and the quality of collateral that supported a large proportion of the bank’s loans also contributed in ensuring that it remained strongly capitalized, with Capital Adequacy Ratio now at 26 percent, up from 20 percent in 2014.
“We set ourselves the target of raising an amount of $500 million US dollars by the end of 2016 about six months to go, we have achieved that goal. Based on ongoing discussions with several potential investors, we expect additional investments in the coming months. “The bank’s shareholders funds have risen from $920 million in December 2014 to about $1.5 billion in June 2016, a growth rate of 51 percent,” Oramah said.
Total capital, including contingent (callable capital) stood at about $2 billion in June this year, as some new shareholders have joined the bank over the period. Meanwhile, the Republic of Congo (Brazzaville), the Dangote Group, the Seychelles Pension Fund, and Nouvobanq, Seychelles, to the family of the financial institutions shareholders.
“With overall pipeline of viable financing and guarantee requests nearing $60 billion, we cannot rest on our oars and we can’t turn back now. So, as we end the current round of raising $500 million, the bank has already approved proposals for another round of capital increase in an amount of $1 billion. This is to be raised largely from new shareholders.
“The second dimension of our intervention in the context of the current economic situation is a new focus on fostering economic transformation and intra African trade. We believe that the age of slogans about industrializing Africa is over and that the self-deceit in that approach is self-evident today.
“We hold firm our conviction that intra-African trade is the key to industrializing Africa, better management of commodity price shocks and promotion of regional peace and security,” he said.
Another strategy, he said, is the partnership with Export-Import Bank of China, which Memorandum of Understanding we have signed to drive the “Made in Africa” initiative, aimed at raising funding support to an amount of $1 billion.
However, AfreximBank is supporting the development of a mobile payment platform for Intra African trade and payment, which would be launched before year ends.The platform would incorporate a clearing feature, making it possible to potentially reduce the foreign currency content of the trade conducted through it. We also have plans to finance the development of logistic centres, border markets, intra-African shipping lines, African airlines and similar activities in so far as they would advance the course of its strategy.
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