Afreximbank Posts Strong Q1 2025 Results with Boosted Liquidity and Caribbean Expansion

The African Export-Import Bank (Afreximbank) and its subsidiaries have published their consolidated financial statements for the three-month period ending 31 March 2025. The results reflect a robust financial and operational performance, characterized by a resilient capital base, increasing profitability, strengthened liquidity, and strategic expansion initiatives in both Africa and the Caribbean.

Financial Performance: A Solid Start to the Year

Afreximbank Group delivered a strong first-quarter performance for 2025, posting a net income of US$215 million, up 21% from US$178 million in Q1 2024. This growth was largely attributed to prudent management of interest-earning assets and borrowing costs.

• Net Interest Income grew by 4.53%, reaching US$411.2 million, supported by a steady increase in interest-bearing assets.

• Fee-based income from Guarantees and Letters of Credit rose impressively by 47% and 36% respectively, showcasing the strength of Afreximbank’s off-balance-sheet operations.

• However, total unfunded income for the quarter saw a 7.41% decline, totaling US$26.9 million, down from US$29.0 million in Q1 2024. This decline was due to reduced advisory fee income but was offset in part by growth in Letters of Credit and Guarantees.

• The total assets and contingent liabilities of the Group rose 6.4%, reaching US$42.7 billion from US$40.1 billion at the end of FY 2024.

• On-balance sheet assets expanded to US$37.0 billion, with a notable 58% surge in cash balances to US$7.4 billion.

• Off-balance sheet assets saw a 19% increase, closing at US$5.7 billion, signifying rising volumes of trade-related guarantees and credit instruments.

Loan Portfolio and Asset Quality

While net loans and advances stood at US$27.8 billion, they slightly declined from the FY 2024 close. This was primarily driven by early repayments from sovereign clients benefiting from improved foreign currency positions. Notably, loan asset quality remained strong, with the Non-Performing Loans (NPL) ratio at 2.44%, only a marginal rise from 2.33% at FY 2024. The NPL ratio remains well below the Bank’s ceiling of 4%, reflecting sound credit risk management.

Operating Costs and Efficiency

Operating expenses rose by 23%, reaching US$75.4 million, primarily due to inflation and personnel-related costs. Despite this uptick, the cost-to-income ratio was a healthy 16%, maintaining a level below Afreximbank’s strategic target range of 17–30%. This indicates the Bank’s efficient operational management amidst rising costs.

Liquidity and Capital Strength

Afreximbank significantly improved its liquidity position during the quarter:

• Liquid assets rose to 20% of total assets, up from 13% at FY 2024 year-end.

• This was supported by successful fundraising efforts and timely loan repayments.

• Shareholders’ equity increased by 3.4%, reaching US$7.5 billion, thanks to internally generated capital and capital injections under the Bank’s ongoing General Capital Increase II (GCI II) programme.

Strategic and Operational Highlights

Boosting Industrial Development in Kenya

The Bank deepened its strategic partnership with Kenya by initiating several industrialisation projects under the US$3 billion Kenya Country Programme. These include the development of:

• Dongo Kundu Industrial Park in Mombasa, and

• Naivasha Special Economic Zone (SEZ) II in Mai Mahiu.

These projects align with Kenya’s Vision 2030 development blueprint, aimed at boosting export-led industrial growth. Afreximbank's support will facilitate infrastructure development, attract domestic and foreign investment, and promote regional integration.

Advancing Cross-Border Payments: PAPSS Expansion

Afreximbank made substantial progress in expanding the Pan-African Payments and Settlement System (PAPSS), a key initiative to enable instant cross-border transactions in local currencies. In Q1 2025:

• KCB Group (Kenya) and Bank of Kigali (Rwanda) launched PAPSS, becoming the first banks in their countries to offer this transformative payment solution.

PAPSS is expected to improve trade efficiency and reduce transaction costs across Africa.

Expanding in the Caribbean: Launch of AATC Barbados

As part of its Global Africa initiative, Afreximbank hosted the groundbreaking ceremony for the Afreximbank African Trade Centre (AATC) in Bridgetown, Barbados. This is the Bank’s first major facility outside Africa, marking a significant milestone in its expansion strategy.

The Barbados AATC, which will also serve as the regional office, aims to:

• Promote stronger trade links between Africa and the Caribbean,

• Enhance south-south cooperation, and

• Serve as a hub for trade diplomacy, commercial engagement, and cultural exchange between the regions.

Outlook

Commenting on the Q1 2025 performance, Mr. Denys Denya, Senior Executive Vice President of Afreximbank, stated:

“Our Q1 2025 results, which were in line with expectations, reflected a strong and resilient financial performance, notwithstanding continued macroeconomic challenges. With solid profitability growth, a strengthened liquidity position, and a well-capitalised balance sheet, the Group is firmly positioned to continue playing a pivotal role in advancing the aspirations of Africa and the Caribbean for economic transformation and sustainable development."

As Afreximbank continues to implement its five-year strategic plan “IX-PACE”, its Q1 performance sets a strong foundation for sustained growth and impact in Africa and beyond.