Harare – Multilateral trade finance institution, African Export-Import Bank (Afreximbank) has posted a gross revenue of $343 million for the half-year ending June 30, 2018.

The figure represents a $21 million increase over the gross revenue for the same period in 2017.

The results, released by the Bank in Cairo on Friday, attributed the higher gross revenue to a significant increase in fee income by 119 per cent while interest and similar income recorded a 2 per cent growth compared to prior year performance.

Afreximbank has been Zimbabwe’s biggest benefactor since the turn of the century, at a time when most global lenders had stopped extending fresh lines of credit to the southern African nation, either at the behest of Western countries that were livid over the country’s land redistribution programme or over defaulting on earlier loans.

The bank launched Trade Debt-backed Securities (AFTRADES) which is a $100 million facility and associated instruments aimed at alleviating the liquidity challenges confronting the financial sector in Zimbabwe.

It also provided a $600 million line of credit to Reserve Bank of Zimbabwe to finance the central bank’s trade-related transactions and projects in Zimbabwe.

More recently, President of the Bank Dr Benedict Oramah announced that the Bank is arranging   between $1 billion and $1.5 billion of funded and guarantee facilities to support businesses interested in investing in Zimbabwe,

During the period under review interest and similar income increased despite the winding down of the Bank’s 2-year Countercyclical Trade Liquidity Facility (COTRALF) programme, which led to a reduction in loans and advances which closed the period at US$8.8 billion compared to US$10.5 billion in 2017.

 Interest and similar expenses increased by 12 percent to $139.3 compared to $124.8 million prior year in line with expectation given the rising interest rate environment.

Consequently, operating income grew by 3 percent compared to prior period to reach US$ 199.9 million from $194.2 million last year.

The Bank said it maintained operating expense growth within budget during the period under review despite the implementation of planned increase in human resources in order to support the execution of the current five year strategic plan.

“Attributable earnings achieved by the Bank over the six months amounted to US$ 110 million. While 6 percent lower than prior year performance of US$117 million, the performance was well ahead of budget by 34 percent.

“The decline against prior year was mainly due to fair value losses amounting to US$ 15 million arising from derivative instruments held for interest rate risk management purposes.”

The continental bank said losses arose due to the impact of the rising interest rate environment.

“The interest rate swaps transforms the interest rate profile of the Bank’s borrowings from fixed to floating in order to match the interest rate risk profile of the loan assets which is floating.

“As a result, the incurred fair value loss is adequately being compensated given that the majority of the loan book is priced at floating rate, thus any rise in market interest rates positively impacts the interest income,” it said.

Additionally, the Bank said, Management has put in place measures to cap these fair value losses going forward.

“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 (ROAE) at 10 percent (Budget: 8.08% and 2017: 13.9%) and return on the Bank’s average assets (ROAA) at 1.88 percent (Budget: 1.57% and 2017: 1.82%) as at 30 June 2018.”

Headquartered in Cairo, Egypt, the Bank has regional offices in Harare (Zimbabwe), Abuja (Nigeria), and Abidjan (Cote D’Ivoire) and is currently setting up a regional office in East Africa.

The Bank has 4 classes of shareholders, class A (African Governments and/or associated institutions and African Multilateral institutions, class B (African financial institutions and private investors), class C (non-African institutions) and class D (any investor).

Class A, B and C shares are partially paid 40% upon subscription while class D shares are fully paid.

Class D shares were created in 2012 to facilitate the Bank’s entry in to the equity capital market. In October 2017 the Bank Listed Depository Receipts on the Stock Exchange of Mauritius backed by class D shares.

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