Eastern and Southern African Trade and Development Bank (PTA Bank) has recorded a 34 per cent rise in earnings for the first half of the year, buoyed by a triple digit growth in income from trade financing fees.
The regional development lender which specialises in project and trade financing chalked up Sh650 million in the first six months of this year compared to the Sh486 million in the first half of 2009.
After signing a Sh3.3 billion line of credit from China Development Bank in April this year, Mr Michael Gondwe, the president of the PTA Bank, said the bank was eyeing regional lending opportunities especially in sectors that require a large amount of funding such as mining, telecommunications and infrastructure.
Dr Gondwe made a reference point to Africa’s rapidly expanding telecommunications sectors, adding that the PTA bank was placing special emphasis on projects in the sector.
“The developmental impact of improving telecommunication networks cannot be underestimated and, because we are a development bank, it is our intention to continue being very active in this sector,” said Mr Gondwe in a press statement released by the bank.
So far, the PTA Bank has supported telecommunications projects in Kenya, Malawi, Tanzania, Uganda and Zambia.
It’s growth in earnings stemmed from a 112 per cent rise in net fees income from Sh486 million to Sh892 million that made up for a 17 per cent decline in net interest income to Sh852 million in the first six months of the year.
The bank’s trade loans were up by 37 per cent in the first six months of the year from Sh15.9 billion by the end of June last year to Sh25 billion within the same period last year.
The PTA Bank is owned by 19 shareholders, 17 of whom are member states from the eastern and southern Africa region.
The shareholders are: Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.
China is a non-regional shareholder while the African Development Bank (AfDB) is an institutional shareholder.
At a time when infrastructure projects are set to gain traction and commercial enterprises seek lines of credit to grow business, development banks are expected to rev up lending in support of private sector growth.
Since the the global financial crisis, trade finance in Africa is reported to have deteriorated. According to AfDB the key problem is falling trade volumes.
The AfDB had indicated in its forecasts that African exports would fall by $250 billion in 2009, or almost 45 per cent from its pre-crisis levels.