African Export-Import Bank Considers London Stock Exchange Listing

African Export-Import Bank Considers London Stock Exchange Listing

Kanayo Awani, Managing Director, Intra-African Trade Initiative, Afreximbank (left), with Trade With Africa Summit founder Toyin Umesiri at the Trade With Africa Summit in Chicago, U.S.

The African Export-Import Bank (Afreximbank) is considering an initial public offering of global depositary receipts would trade on the main market of the London Stock Exchange.

According to a statement, the listing is to help finance the expansion, diversification, and development of African trade, particularly intra-African trade.

The bank said its total assets amount to USD15.4 billion and it registered a 20% compound annual growth in gross loans between 2015 and the first half of 2019, plus a 12% return on average equity in 2018. For the six months ended June 30, the bank made a USD137.6 million profit.

JP Morgan Securities PLC and HSBC Bank PLC have been hired to be the joint global coordinators and joint book-runners for the IPO and Exotix Partners LLP as the co-lead manager.

“Afreximbank is very much at the epicenter of Africa’s trade, which is expected to grow rapidly,” President Benedict Oramah said. 

“This growth will be driven by the enactment of the African Continental Free Trade Area (AfCTA) that will create an integrated market of 1.2 billion people, widespread urbanization, favourable demographics and rising investments. We are in a key position to leverage our existing relationships with the African Union and its 55 member countries to provide a platform for trade and investment flows across the continent.”

“Our focus on technology and operational excellence has ensured we have a robust and growing balance sheet and can sustain profitability. We are excited by Africa’s trade and economic prospects, particularly as we implement the Bank’s flagship initiative, the Pan African Payment & Settlement System, aimed at boosting intra-regional trade. Afreximbank is well placed to capitalize on the opening up of trade across the continent and, with our experienced management team, we are confident we can deliver value for shareholders and customers.”

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In September, Fitch Ratings affirmed Afreximbank Long-Term Issuer Default Rating (IDR) at ‘BBB-‘ with a Stable Outlook.  Fitch also affirmed the bank’s Short-Term IDR at ‘F3’ and senior unsecured debt at ‘BBB-‘.

Afreximbank strategy is anchored on four strategic pillars for the Afreximbank, namely: Intra-African Trade; Industrialisation and Export Development; Trade Finance Leadership; and Financial Soundness and Performance.

“Fitch deems the business environment ‘high risk’, reflecting Afreximbank’s strategy, characterised by rapid growth of its banking portfolio in ‘high risk’ countries of operations. The importance of the bank’s public mandate is assessed as ‘moderate’ balancing Afreximbank’s strong relationship with African sovereign authorities and its ambitious 2017-21 plan against its more limited size, especially compared with regional peer African Development Bank (AfDB, AAA/Stable),” according to Fitch.