Ecobank’s Half-Year Profits Rise 5% to $324M Amid Diversified Growth Strategy

Ecobank Group’s profit before tax rose by 5% year-on-year to $324 million. However, excluding the impact of foreign currency translation due to the strength of the US dollar, profit before tax increased by an impressive 23%.

CEO Jeremy Awori commented on the results, stating “Our half-year results demonstrate the strength of our diversified business model. Despite facing macroeconomic challenges in some of our operating markets, the company increased its net revenues to $994 million and its profit before tax by 5% to $324 million. Excluding the impact of foreign currency translation, the profit before tax increased by 23%. The return on tangible shareholder’s equity (ROTE) was 34.7%, compared to 27% in the previous year.”

The company’s net revenues, which include net interest income and non-interest revenue, rose to $994 million, a 2% increase from the prior year. Adjusted for constant currency, net revenues surged by 21%.

This growth was driven by higher interest rates, loan repricing in various markets, increased trade loans, trade services fees, and higher deposit margins.

However, lower non-interest revenues from client-driven foreign currency and fixed-income sales, along with reduced revaluation gains primarily due to Zimbabwe’s currency volatility, partially offset the revenue growth.

Awori highlighted the bank’s progress in its Growth, Transformation, and Returns (GTR) strategy, which saw double-digit revenue growth in constant currency across all business segments.

Corporate and Investment Banking revenues grew by 14%, Commercial Banking by 23%, and Consumer Banking by 25%. The bank also gained market share in trade services and saw increased client activity in wholesale payments and cards.

“Our transformation agenda remains our top priority, with a focus on improving customer experience and driving efficiency and productivity. Despite persistent inflation, we achieved an efficiency ratio of 53.6%. We continue to right-size our risk-weighted assets, and our deposits franchise remains strong. Customer deposits rose 13% in constant currency to $19 billion, with current and savings accounts (CASA) comprising 81% of total deposits. With a loans-to-deposit ratio of 54%, we have room to take advantage of credit opportunities that meet our risk appetite if required,” Awori explained.

Group profit attributable to shareholders of Ecobank Transnational Incorporated (ETI) for the first half of 2024 was $158 million, a 2% decrease from the prior year period.

This decline was primarily due to the adverse effects of foreign currency translation, lower profit contributions from Nigeria, and a proactive increase in central impairment reserve overlays.

Excluding the impact of foreign currency translation, the profit attributable to shareholders increased by 27%.

Despite these challenges, the bank managed to achieve a return on shareholders’ equity (ROE) of 32.9% and a return on tangible shareholders’ equity (ROTE) of 34.7%, up from 27% in the previous year. These metrics reflect the bank’s strong profitability and efficient capital management.

Awori concluded with confidence in the company’s future, stating, “We have confidence in the company’s long-term prospects. While near-term monetary and fiscal challenges persist, our sole focus remains enhancing the customer experience and meeting their financial needs. I extend my heartfelt thanks to our fellow Ecobankers for their hard work and dedication in delivering these results.”

Under Awori’s leadership, Ecobank Group continues to demonstrate its ability to navigate economic challenges and achieve substantial growth, reinforcing its position as a leading financial institution in Africa.