Ecobank Group, one of Africa’s leading financial institutions, posted strong revenue growth in the nine months ended September 2021. Net revenue grew by 4 percent or $52 million to $1.3 billion on the back of funded income, cash management, trade finance, mobile and online payments.
The lender disclosed in its audited financial statement obtained by Investors King on Monday.
Return on assets and tangible equity also improved by 1.3 percent and 17.9 percent, respectively, compared with 1.0 percent and 14.1 percent recorded in the nine months ended September 2020.
Strong revenue growth was recorded in the bank’s payments business, rising by 34 percent to $140 million or 11 percent of the Group’s total revenue. Ecobank Group grew profit before tax to $352 million in the period under review.
Profit available to ETI shareholders grew by $215 million year-on-year to $182 million from -$32 million recorded in the corresponding period of 2020. Customer deposits increased by $1.5 billion or 9 percent year on year to $18.9 billion, attributed to client relationships, partnerships, and increasing consumption of our digital platforms.
Customer loans increased by $334 million or 4 percent year on year to $8.9 billion. While the bank’s Non-Performing Loan (NPL) ratio reduced further to 6.9 percent from 7.6 percent in the fourth quarter of 2020 and 9.9 percent in the third (3Q) 20.
Book value per share up 8 percent year-on-year to 6.04 cents, and tangible book value per share (TBVPS) up 11 percent to 5.52 cents.
Commenting on the company’s performance, Ade Ayeyemi, Ecobank Group CEO, said: “We reported strong results, reflecting the continued diligence of Ecobankers in putting our customers first and ensuring that we meet their respective needs. For the nine months period up to September 2021, we earned $352 million in pre-tax profit, a 41% increase compared to the prior year and revenues of $1.3 billion, a 4% growth. Hence return on tangible equity increased to 17.9%, and we grew the per-share value of our shareholders’ equity by 11% to 5.52 US dollar cents.
“These results also demonstrate the hard work invested in driving efficiency in all our businesses in line with our deliberate focus on driving down our cost-toserve, sustain improvement in the quality of our credit portfolio, and strengthen liquidity and capital buffers. As a result, our cost-to-income ratio has been declining consistently quarter on quarter, currently 58.3%. In addition, the stock of nonperforming loans as a percentage of loans outstanding is now at 6.9% compared to 9.9% a year ago. At the same time, we are proactively building loan reserves, currently at 91.2% of nonperforming loans, close to our near-term target of 100%.
“We have boosted the firm’s liquidity profile, thanks to growing customer deposits fueled by an acceleration in digital channel adoption, partnerships with Fintechs, Telcos, and businesses in the Payments Ecosystem,” Ayeyemi added.
“During the quarter, Arise B.V., a major institutional shareholder of ETI made a $75 million Additional Tier 1 (AT1) investment in the firm. Adding onto the $350 million Tier 2 Sustainability Note ETI successfully issued to investors in June. The AT1 further improves our Tier 1 capital and double leverage ratio and demonstrates stakeholder confidence in our strategy and business prospects,” Ayeyemi continued.
“Finally, we continue to invest in new digital and mobile capabilities to enhance customer experience, alongside the investments we are making in our people, processes, and controls, to ensure the continued resilience of our business and service delivery to our clients. I am deeply grateful to all our customers and the Ecobank team for the remarkable job.” Ayeyemi concluded.