• JCR affirms Afreximbank at A-/stable; CCXI keeps AAA/stable rating

• Bank’s strong capital base and steady profits highlighted by Asian agencies

• Fitch and Moody’s cite sovereign risks, weaker funding, and PCS concerns

After China’s CCXI confirmed Afreximbank’s AAA/stable rating at the end of August 2025, Japan Credit Rating Agency (JCR) has also reaffirmed the bank’s A-/stable rating. These two positive ratings contrast with more cautious assessments by Western agencies.

JCR said its decision reflects Afreximbank’s strategic role, robust risk management, consistent profitability, and solid capital base. The agency expects the rating to remain stable over the next 12–18 months, despite volatile markets. CCXI previously pointed to strong asset growth (+28% average over five years) and a capital adequacy ratio of 25.5%, in line with global best practice.

At the end of 2024, Afreximbank reported assets of $35.2 billion and capital of $7.2 billion. This will be further strengthened by a $6.5 billion capital increase planned through 2026, which is ahead of schedule. Liquidity is tight, with cash covering 13% of assets, but JCR noted this is offset by $2 billion in undrawn credit lines.

The agency also highlighted that the bank has never posted annual losses since its creation in 1993 and delivered record profits in 2024, helped by loan expansion and higher global rates. About 80% of its loans are secured, and the CARPROOF risk tool can now cover up to $400 million in potential losses, with plans to extend to $1 billion.

These strengths have bolstered Afreximbank’s access to Asian capital markets. The bank has raised ¥81.3 billion ($530 million) through its first samurai bond in 2024 and RMB2.2 billion ($303 million) via its inaugural panda bond in China.

In contrast, Fitch downgraded Afreximbank in June to BBB-/negative, citing higher sovereign exposure and disputed levels of non-performing loans. Moody’s followed in July, cutting its rating to Baa2/stable, pointing to limited funding diversification and heavy lending to fragile states. JCR itself acknowledged that over 70% of Afreximbank’s portfolio is concentrated in five countries—Nigeria, Egypt, Zimbabwe, Tunisia, and Angola—and that loans outstanding equal 430% of its capital (600% including guarantees and undrawn loans).

Divergent approaches

Asian agencies tend to emphasize Afreximbank’s strategic importance for African trade finance, while Western agencies focus on rising sovereign risks and growing dependence on weaker member states.

A key issue is Afreximbank’s Preferred Creditor Status (PCS). The bank claims this protects it in sovereign restructurings. But Fitch and Moody’s argue recent cases in Ghana and Zambia weakened that privilege, bringing Afreximbank closer to commercial creditors. JCR countered that the bank has a strong record of priority repayments, which supports investor confidence, though it acknowledged some governments might still seek exceptional relief.

The debate has real market consequences. According to JP Morgan, doubts over PCS have driven discounts on Afreximbank bonds, prompting the U.S. bank to upgrade its recommendation to overweight, calling the current pricing an attractive buying opportunity.