Banking Sector

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

Published

2 months ago

July 31, 2024

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.

Up Next

Nigerian Banks Spend $50 Million Annually on Private Jets, Says Otedola

Don't Miss

Under Otedola’s Leadership, FBN Holdings Doubles Half-Year Profits

Samed Olukoya

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.

Comments

Appointments

Keystone Bank Receives New Board Chairman, Directors From CBN

Published

13 hours ago

September 18, 2024

Bassey Marshall

It is the dawn of a new era for Keystone Bank, a top player in the Nigerian banking sector.

As part of a broader strategy to ensure sustained growth for Keystone Bank, the Central Bank of Nigeria (CBN) has approved a new chairman and board of directors for the financial institution.

The new board consists of a new board chairman, five non-executive directors, and two new directors, all carefully selected to take the bank to new heights.

The apex bank confirmed the latest development via a statement on Wednesday.

Steering the ship of leadership is Lady Ada Chukwudozie, as the new board chairman.

Lady Ada Chukwudozie, brings with her a truckload of experience.

A prominent figure in Nigeria’s corporate sector, Ada has nearly three decades of experience in business strategy, management, and administration.

Her expertise cuts across multiple industries, including De-Endy Industrial Company Limited, Dozzy Group, the Manufacturers Association of Nigeria, and Vogue Afrique Magazine.

Indeed, to whom much is given, much is expected.

With her extensive background and experience, Ada will now shoulder the responsibility of guiding the bank toward achieving its long-term goals.

The good news is that she is not alone. Joining her on the board are five non-executive directors, each bringing their unique skills to the table.

The five non-executive directors are Abdul-Rahman Esene, Mrs. Fola Akande, Akintola Ayodeji Olusoji, Obijiaku Samuel, and Senator Farouk Bello.

Together, they will play a critical role in shaping the future of the bank.

Furthermore, two new executive directors, Ladi Oluwole and Abubakar Usman Bello were also confirmed by the CBN.

Meanwhile, Keystone Bank’s Managing Director and CEO, Hassan Imam, bragged about his confidence in the new team.

To him, he was certain they would drive the bank’s growth and ensure reliable service for customers.

Imam noted that their wealth of experience would play a crucial role in the bank’s continued repositioning and growth.

His words: “We are pleased to welcome the new chairman, non-executive directors, and executive directors to the board of Keystone Bank.

We are confident that their extensive experience will be invaluable as we continue to reposition the bank to seize emerging economic opportunities while maintaining strong corporate governance and providing our customers with a secure and reliable banking experience,” Imam concluded.

Recall that in January, the CBN dissolved the board and management of Union Bank, Keystone Bank, and Polaris Bank.

Banking Sector

Zenith Bank Extends Public Offer and Rights Issue by Two Weeks

Published

1 week ago

September 10, 2024

Investors King

Zenith Bank Plc on Monday announced that it has obtained regulatory approval to extend its public offer and rights issue by two weeks.

In a statement released via the Nigerian Exchange Limited (NGX), the leading financial institution said its offers for both existing shareholders and new investors have been extended to September 23, 2024, from the initial closing date of September 9.

The bank attributed the extension to the nationwide protest that began on August 1, the same day the offers were opened.

Zenith Bank stated that the extension will provide shareholders with more opportunities to take advantage of the rights issue and allow the general public ample time to subscribe to the public offers.

Banking Sector

Unity Bank Projects N27b In Q4 Earnings, Targets N4b Profit

Published

1 week ago

September 10, 2024

Investors King

Unity Bank Plc has projected gross earnings of N27 billion and a Profit After Tax of N4 billion in Q4, 2024, in its latest earnings forecast released to the Nigerian Exchange Group.

Although the projected gross earnings represent a marginal increase from the N26 billion projected for Q3 2024, the lender continues to maintain a profitable outlook, with pre-tax profit expected at N4.2 billion.

An analysis of the earnings forecast shows that the lender also expects interest income to rise from N23 billion to N24.5 billion, with net revenue expected to rise marginally by 1.0% to N7.2 billion within the quarter compared to N6.5 billion in Q3, 2024.

Net operating income is projected at N12 billion, while cash flow from financing activities is projected to rise to N481.4 billion from N353.6 billion, a 1.3% projected increase on a quarter-on-quarter basis. This projected growth in cash flow from financing activities continues to reflect the lender’s growing liquidity position which is essential for sustained business operations.

The lender said it expects to cover the milestones with a consistent optimistic outlook in its projection, barring any significant changes in the operating environment, under which the assumptions were made.

The lender noted that it will continue to deliver top-notch customer-centric products and services, especially in the digital lending space following the roll-out of enhanced platforms and channels for superlative customer experiences.

Analysts are of the view that the Q4 forecast reflects a steady growth trajectory on the back of key performance indicators and strategic repositioning to hedge the challenging market conditions.