GCR Ratings, an affiliate of Moody’s Investors Service, has recently affirmed Egypt-based African Export-Import Bank’s (Afreximbank) international scale long and short-term issuer ratings of A and A2 respectively, with the outlook accorded as stable.
The rating agency citing its assessment of Afreximbank’s strong Preferred Creditor Treatment (PCT) track record in its member countries, as well as its growing systemic relevance to the continent.
The ratings also reflect Afreximbank’s strong capitalisation, sound risk position, and robust liquidity.
Japan Credit Rating Agency Ratings
Further to GCR’s ratings, Japan Credit Rating Agency, Ltd. (JCR) has also affirmed Afreximbank’s long-term issuer rating at A- with stable outlook. The rating is based on the bank’s proven ability to raise capital from its member states and its counter-cyclical role in supporting member countries when economic conditions are most challenging.
In justifying its ratings affirmation, GCR noted Afreximbank’s risk position as ratings positive, buttressed by non-performing loans (NPLs) that compare favourably to rated peers and further cited its loan book as exhibiting strong recovery fundamentals.
GCR’s analysis asserts the strength of Afreximbank’s record in de-risking its lending portfolio through innovative and astute balance sheet management, which include the deployment of structured finance models, the use of high-quality collateral, and leveraging credit risk insurance from minimum “A” rated insurers.
JCR also notes Afreximbank’s key role in advancing various strategic initiatives in collaboration with the African Union, and the strong support of its shareholders for its operations and ongoing general capital increase. The rating agency holds that the bank will maintain its financial base through its solid earnings capacity.
“I am delighted by both GCR and JCR’s affirmation of our strong credit ratings and outlook.” Benedict Oramah, President of Afreximbank, said.
Benedict Oramah, President of the African Export-Import Bank (Afreximbank)
“These serve as validations of Afreximbank’s considered, careful approach to supporting our member states and the wider African continent, and our commitment to see Africa industrialised while enabling trade of high value goods and services amongst African States.”
The ratings affirmations are a significantly positive event for the bank, supporting its continued development work by enabling it to leverage competitively priced international finance into the continent as well as deploying unfunded instruments to accelerate industrialisation and trade. They are particularly pivotal at the present time, when Afreximbank’s member states require focused and sustained support to navigate an extremely challenging macro-economic environment and capitalise on the opportunities presented by the recently operationalised AfCFTA, Oramah added.
“The GCR and JCR ratings are a strong testament to Afreximbank’s development mandate on the continent. We are committed to continuing to build a solid platform to deepen our partnership with clients and member states, to deliver sustainable growth and development.” Chandi Mwenebungu, Afreximbank Group Treasurer & Director of Treasury and Markets, said.
“This rating proves our risk discipline and continues to show that our capital and liquidity is strong.”
