Connect with us

Banking Sector

Ecobank Grows Profit After Tax by 334% to N146.3 Billion in 2021

Published

on

Ecobank - Investors King

Ecobank, a leading pan-African bank, has reported an astonishing profit after tax for the financial year ended December 31, 2021.

The lender grew profit after tax by 334% to N146.3 billion in the year under review from N33.742 billion filed in the 2020 financial year.

Ecobank disclosed in its audited financial statement obtained by Investors King.

Gross earnings expanded by 14% from N841.1 billion in the corresponding year of 2020 to N956.4 billion in 2021. The increase does not stop there as net revenue climbed 12% to N719.3 billion.

Similarly, deposits rose by 14% to N8.360 trillion while loans and advances to customers grew by 10% to N4.061 trillion. See other details below.

Ecobank Financial Highlights for 2021

  • Gross earnings up 6% to $2,335.7 million (up 14% to NGN 956.4 billion)
  • Net revenue up 5% to $1,756.7 million (up 12% to NGN 719.3 billion)
  • Profit before tax and goodwill impairment up 41% to $478.0 million (up 52% to NGN 195.7 billion)
  • Profit before tax up 174% to $478.0 million (up 194% to NGN 195.7 billion)
  • Profit after tax up 305% to $357.4 million (up 334% to NGN 146.3 billion)
  • Total assets up 6% to $27.6 billion (up 13% to NGN 11,689.2 billion)
  • Loans and advances to customers up 4% to $9.6 billion (up 10% to NGN 4,061.2 billion)
  • Deposits from customers up 8% to $19.7 billion (up 14% to NGN 8,360.6 billion)
  • Total equity up 7% to $2.2 billion (up 13% at NGN 917.9 billion)

Commenting on the bank’s performance, Ade Ayeyemi, CEO of Ecobank Group, said “The Bank made significant progress with its strategic priorities and delivered strong business and financial returns. We grew revenues, remained efficient, improved credit quality, strengthened the balance sheet and, for the first time since 2016, our Board has recommended the payment of dividends to shareholders. “

“We increased profit before tax by $140 million to $478 million, after adjusting for the $164 million goodwill charge in 2020 and generated a record return on tangible shareholders’ equity of 19%. Net revenues were $1.8 billion, up 5%, benefiting from our diversified operating model and the continued focus on growing our trade finance, payments, fixed income, currencies, and commodities businesses. Furthermore, the efficiency ratio of 58.9% was the best in over a decade,” Ayeyemi said.

“Credit quality continues to be particularly strong, with non-performing loans at a historic low of 6.2% of total loans and a reduction in the concentration risk of the credit portfolio. Moreover, we proactively built provision reserves to above 100% of non-performing loans. In addition, deposit growth was robust, increasing by $1.4 billion, or 8%, which significantly boosted liquidity and supported our modest loan growth. The investments in pivoting Ecobank as a credible enabler of economic activity for households, businesses and governments in Africa strengthened our optimism for 2022 and beyond, while complementing the expectation of a strong global economic recovery following the easing of Covid-19 restrictions.“

“However, a word of caution following two critical global setbacks: IMF’s plan to cut global growth forecast, in a high inflation environment with about 60% of low-income countries in or at risk of ‘debt distress’; and Russia’s recent invasion of Ukraine. In this mix, African economies hang in the balance as contagion risks spread, US Fed and other developed-world central banks hike interest rates, energy prices soar, and geopolitical tensions exacerbate inflation and supply chain bottlenecks. Already the reverberations from these developments have forced some central banks in Africa to hike rates, as prices of goods and services soar and currencies are under pressure, all with security implications. In all this turmoil, we at Ecobank remain highly focused on conducting our business responsibly, committed to ESG principles, and discharging our investment in the Ecobank Foundation. We will continue to be aggressive in driving our strategic priorities, leading with technology, and serving our clients and communities. “

“Finally, I want to thank all Ecobankers for their unwavering commitment to realising our vision and remaining the bank that Africa and friends of Africa trust.”

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Continue Reading
Comments

Banking Sector

FBN Holdings To Invest N103.1bn In Corporate, Retail Businesses

Published

on

FBN Holdings

As part of means of actualizing its expectation of raising N150 billion from its existing shareholders by way of rights issue, the management of FBN Holdings said it has budgeted an estimated N103.1 billion for its corporate business and retail business lending segments of the market.

The Holdings recently held the signing ceremony to begin the rights issue offering of 5,982,548,799 ordinary shares of 50 kobo each at N25.00 per share to its existing shareholder on the basis of one new ordinary share for every six ordinary shares held as of October 18, 2024.

Extracts from the offer raising prospectus of the financial institution revealed that lending to the corporate business segment gets N77.34 billion, while lending to the retail business segment gets a budget of N25.78 billion.

This covers 68.95 per cent of the N150 billion proposed rights issue the management seeks to raise from existing shareholders.

Out of the N150 billion, a total of N29.46 billion was budgeted to support international business expansion and N14.73 billion for investment in automation and digital banking.

According to the financial institution, seamless and convenient banking experience for its customers would be guaranteed through its significant investment in automation and digital banking.

Through its mobile banking app, FirstMobile, and its internet banking platform, FirstOnline, the management of FBN Holdings said it has effectively acquired a broad cross-section of the target demography, with a clear proposition of owning bank accounts and utilising various financial services from the comfort of their locations.

It added that the bank plans to upgrade the FirstMobile and FirstOnline apps with additional features while driving customer adoption of the platforms, noting that the development is in line with First Bank’s commitment to providing customers with the best-in-class electronic banking experience.

The offer, however, is part of the company’s plan to recapitalise its commercial banking subsidiary, First Bank of Nigeria Limited,  with a view to increasing the bank’s capacity for business development and growth.

Chairman, FBN Holdings, Olufemi Otedola in a statement from the document urged shareholders to support the Rights issue by accepting their rights, stating that the company will be well positioned to achieve its strategic objectives and to deliver improved returns to all stakeholders.

Continue Reading

Banking Sector

Zenith Bank Achieves Triple-Digit Growth, Revenue Surges 118% to N2.9 Trillion

Published

on

Zenith Bank - Investors King

Zenith Bank Plc has announced its unaudited results for the third quarter ended 30 September 2024, recording a remarkable triple-digit growth of 118% from N1.33 trillion reported in Q3 2023 to N2.9 trillion in Q3 2024.

This performance underscores the Group’s resilience and market leadership in spite of the challenging macroeconomic environment.

According to the Bank’s unaudited third quarter financial results presented to the Nigerian Exchange (NGX), the triple-digit growth in the topline also led to an increase in the bottom line, as the Group recorded a 99% Year on Year (YoY) increase in profit before tax, growing from N505 billion in Q3 2023 to N1.0 trillion in Q3 2024.  Profit after tax equally grew by 91% from N434.2 billion to N827 billion in the same period.

The growth in the topline was driven by the expansion of both interest income and non-interest income. Interest income saw a notable 190% rise to N1.95 trillion, attributed to the high-yield environment.

Non-interest income rose by 41% to N856 billion, bolstered by substantial growth in fees and commissions, which highlights the strength of Zenith Bank’s retail growth and the robust performance of its digital channels during the reporting period.

The robust increase in profitability reflects the Bank’s focus on operational efficiency and strong risk management practices. Earnings per share (EPS) nearly doubled, rising to N26.34 from N13.82 in Q3 2023, underscoring Zenith Bank’s strong value creation for shareholders.

The Bank’s balance sheet grew significantly, with total assets growing by 49% to N30.4 trillion, largely supported by customer deposits, which rose by 42% to N21.6 trillion.

This growth in deposits was broad-based across corporate and retail segments, highlighting the Bank’s deepening reach and customer loyalty.

Gross loans increased by 46% to N10.3 trillion, underscoring the commitment to supporting strategic sectors in the economy.

Capital adequacy ratio remained strong, improving to 21.9%, well above regulatory requirements. The return on average equity (ROAE) stood at 37.8%, up from 35.1%, while return on average assets (ROAA) also improved to 4.3% as Zenith Bank maximized its asset base.

Cost of funds increased to 4.3%, reflecting the broader market trend of rising interest rates, while the cost of risk was maintained at 7.3%, underscoring the Bank’s proactive approach in provisioning for credit risk.

The Bank’s cost-to-income ratio rose to 39.5%, reflecting the impact of strategic investments in technology and capacity building aimed at supporting long-term growth, even as it continues to strive for greater operational efficiency.

Zenith Bank’s asset quality remains a cornerstone of its strength, with a non-performing loan (NPL) ratio of 4.5%, within regulatory limits. A high coverage ratio of 198.4% underscores the Bank’s disciplined approach to risk management, positioning it for resilience in the face of market volatility while supporting stable loan growth.

Zenith Bank remains steadfast in its commitment to sustainable growth and value creation. The Bank launched a capital raise program on August 1, 2024, consisting of a combined Rights Issue and Public Offer.

This capital raise was driven by the Central Bank of Nigeria (CBN)’s recapitalization directive for commercial banks issued in March 2024. While the Bank awaits final capital verification approvals from authorities, the fundraising exercise was successful, reflecting strong confidence in Zenith Bank’s brand.

The additional capital will enhance the Bank’s ability to expand its product offerings, deepen its penetration in strategic sectors, boost lending to the real sector and pursue its African and global expansion plan.

In furtherance of this, the Bank in September 2024 received regulatory approval for the establishment of a Zenith Bank branch in Paris, France, which is fully operational and will enhance the Bank’s product offerings in international markets.

With a strengthened capital base, Zenith Bank is well-positioned to navigate the evolving economic landscape, while putting best-practice sustainability standards at the heart of its business.

The Bank will also continue to prioritize opportunities that enhance stakeholder value and a strong compliance and corporate governance culture, which will reinforce the its leadership position within Nigeria’s financial sector and drive long-term growth.

Continue Reading

Banking Sector

UBA Expands Footprint in the Middle East with New Subsidiary in Saudi Arabia

Published

on

UBA House Marina

Africa’s Global Bank, United Bank for Africa (UBA) Plc, has set the wheels in motion to expand its operations in the Middle East with plan ongoing to open a subsidiary in Saudi Arabia, its largest economy.

This move which is expected to happen within the next year will mark the bank’s second subsidiary in the Gulf Region, following the expansion of its business to the United Arab Emirates in 2022.

UBA’s Group Deputy Managing Director, Muyiwa Akinyemi, who disclosed this during a panel session during the 8th Edition of the Future Investment Initiative(FII) in Riyadh, Saudi Arabia and in an interview with Arise TV, underscored the bank’s strategic commitment towards fostering Africa’s growth through infrastructure development, youth empowerment, and sustainable partnerships across key global markets.

He said, “Opening a presence in Saudi Arabia represents the next step for us in connecting the Africa-Gulf region. We are excited to bring UBA’s expertise in financial services to Saudi Arabia, where we aim to facilitate knowledge transfer and create strong economic linkages. This venture will further enable us to access Saudi expertise in food security, energy transition, and sustainable practices, which are all critical for Africa’s continued development.”

While emphasising the importance of Africa as a strategic investment destination for long-term capital, he said, “Africa’s infrastructure deficit is an opportunity for investors worldwide. Our pitch to the Gulf and Southeast Asia emphasizes that Africa must be part of their investment horizon. Today, food security is paramount as our population expands.

Akinyemi also highlighted the bank’s dedication to nurturing Africa’s youth talent through entrepreneurship. “Guided by our Group Chairman’s efforts with the Tony Elumelu Foundation, UBA is committed to supporting young entrepreneurs in tech, agriculture, and entertainment, which are all burgeoning sectors in Africa. With such a young and dynamic population, we see enormous potential for innovation and growth.”

He also reiterated the bank’s continuous support for Small and Medium Enterprises (SMEs) in Africa and beyond as he outlined the bank’s commitment to these businesses, which he referred to as key players in the African economy and vehicles for employment and economic growth.

“SMEs are the backbone of economic development in Africa. They contribute significantly to job creation and value chains, particularly within Nigeria. Over the last year, UBA has committed billions to support SMEs across Africa, and our network of over 20 countries enables us to make a substantial impact.”

During the panel discussions, Akinyemi took time to emphasize UBA’s longstanding experience on the continent as it navigates an ever-evolving investment landscape, adding that “As investors, we focus on infrastructure and sustainable projects that encourage economic prosperity while addressing pressing issues such as talent migration. Our goal is to ensure that people can thrive in Africa without needing to relocate. By investing in local talent and fostering growth sectors, we contribute to building the next generation of global innovators right here in Africa.”

The DMD further articulated UBA’s approach to risk management on the continent, emphasizing that the bank’s 75-year history has uniquely equipped it with insights and strategies to navigate diverse markets.

“With over seven decades of experience, Africa is what we know, and that knowledge allows us to manage risks effectively. We see tremendous opportunities in various sectors across the continent, and our continued investments are driven by a commitment to bring economic empowerment to communities, increase GDP, and improve socioeconomic quality. Our anniversary is a celebration of UBA’s legacy of contributing to Africa’s progress. We look forward to leveraging this milestone to drive even greater impact across sectors and empower future generations,” he said.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than forty-five million customers, across 1,000 business offices and customer touch points in 20 African countries. With presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.

Continue Reading

Trending