Significant growth in letters of credit (L/Cs) and guarantees helped the African Export-Import Bank (Afreximbank) group demonstrate strong and resilient growth last year, notwithstanding the negative impacts of the Covid pandemic, according to the bank's 2021 annual consolidated financial statements.

The pan-African multilateral trade finance institution also established two new non-bank subsidiaries in 2021, the Fund for Export Development in Africa (FEDA) and Afreximbank Insurance Management Company (AfrexInsure).

L/C increase

In the year to December 2020, Afreximbank wrote US$2.35 billion of L/C and guarantee business, which grew by nearly 30 per cent in 2021 to reach just over US$3 billion.

Income from L/Cs and guarantees grew by 53 per cent to reach US$49 million for the year ended December 2021, reflecting the bank's strategy to strongly grow its L/C and guarantee portfolio.

Assets growth

The group's total assets grew by 13.4 per cent from US$19.3 billion as at December 2020 to about US$22 billion a year later, primarily due to an 11.5 per cent growth in net loans and advances and a 12.1 per cent increase in cash and cash equivalents to $18.2 billion and US$3.1 billion respectively.

With significant growth in guarantees and L/Cs, total assets and guarantees of the group rose from US$21.7 billion in 2020 to US$25 billion at the end of 2021.

FEDA and Afrexinsure

A development impact-oriented subsidiary of Afreximbank, FEDA provides equity and quasi-equity funding to companies developing trade and value-added export of goods and services in Africa.

Cairo-based Afreximbank registered its credit insurance subsidiary Afrexinsure in July 2021.

The new subsidiaries' contribution to the 2021 group results was not significant as they only operated for a few months, towards the end of the year.

Afreximbank's Abridged Audited Consolidated Financial Statements for the Year Ended 31 December 2021 can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.