China Chengxin International Credit Rating Co., Ltd (CCXI) has assigned an ‘AAA/Stable’ rating to African Export-Import Bank (Afreximbank), in recognition of the bank as a leading development finance lender in Sub-Saharan Africa (SSA), making it the first African multilateral financial institution to receive AAA rating from CCXI.
The CCXI, in its 2024 Credit Rating Report for African Export-Import Bank, released in Beijing on 15 January, stated that the rating was based on Afreximbank’s “very high strategic positioning; sound risk management system; agility and adaptability in business generation, very strong profitability and prudent liquidity management underpinned by a very high coverage ratio of current assets over short-term debts.
“CCXI recognizes Afreximbank’s strategic relevance to the (African) continent and its ability to execute on its strategic goals and mandate and to meet the needs of member states at different stages of development, even during the most challenging times”, it added.
The Chinese rating agency expressed optimism that Afreximbank’s ratings would remain stable over the next 12 to 18 months.
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Commenting on the rating, Afreximbank’s Senior Executive Vice President, Denys Denya, said: “This is, again, a testament to the Bank’s systemic relevance to the African continent; its strong delivery of its developmental mandate; its prudent risk management practices and its relentless focus on capital and liquidity over the years which have culminated in a formidable rating that provides us with new opportunities to raise competitively priced capital in China and to diversify our funding partnerships.”
Assuring that the bank will continue to play a pivotal role in facilitating China-Africa trade and investment across its member-states, Denya highlighted the robust relationships Afreximbank continued to enjoy, which illustrates how integral it has become to the achievement of the African Union’s key strategic economic programmes and initiatives, covering the continent and the diaspora, thereby integrating Global Africa.
According to the development finance expert, the rating puts Afreximbank on a stronger pedestal in its fundraising activities in a relatively new capital market as it continues to leverage optimal financial resources into Africa.
He maintained that the ‘AAA’ credit rating would give assurance to the bank’s new and existing funding partners in China to support its fundraising activities on competitive terms and would position the Bank to pursue its developmental mandate and objectives.
Since 2019, Afreximbank has grown its assets by 28 per cent (5-year CAGR), achieving a return on average equity of 11 per cent and sustaining its capital adequacy at 25.5 per cent, on average, with the growth strongly supported by shareholders.
It launched its largest general capital increase in 2021, targeting to raise US$2.6 billion by 2026, but achieved nearly 90 per cent of that target in three years in a remarkable demonstration of support from shareholders, despite volatile macroeconomic circumstances.
