Ecobank sees 59% jump in earnings to N1.2trn

The gross earnings of Ecobank Transnational Incorporated (ETI), a pan-African banking group, has risen by 59 percent to N1.2 trillion in the first nine months of 2023 from N761.3 billion in the same period in 2022, according to the company’s latest financial statements.

BusinessDay analysis shows that the surge was fueled by rising interest rates. The country’s benchmark interest rate, also known as the Monetary Policy Rate, has been raised by 725 basis points to 18.75 percent since May last year.

The company’s profit-after-tax surged by 94 percent to N77.7 billion in the first nine months from N40.1 billion recorded in the same period of 2022. In dollar terms, profit also increased, reaching $98.3 million in Q3 from $93.5 million recorded in the same period of 2022.

“Ecobank generated profit before tax of $450 million for the nine months to September. Moreover, we delivered profits attributable to ETI shareholders of $224 million which translated to a return on tangible shareholders’ equity of 25.6 percent on the back of strong revenue growth of 34 percent in constant currency and an improved cost-to-income ratio of 53.7 percent,” Jeremy Awori, chief executive officer of Ecobank Group, said.

The statement also revealed that interest income grew by 66 percent in the period under review to N805.1 billion from N485.9 billion recorded in the same period of 2022.

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Non-interest revenue increased by 49 percent to N386 billion in the period under review from N258.7 billion recorded in the same period of 2022.

Profit for the period appreciated by 56 percent to N18.9 billion from N117.4 billion recorded in the same period of 2022.

However, operating expenses increased by 48 percent to N475.3 billion in the period under review from N321 billion recorded in the same period recorded in 2022.

Ecobank’s total assets during the period also rose by 55 percent to N20.69 trillion with loans and advances to customers up by 56 percent to N7.89 trillion from N5.07 trillion as of September 2022.

Similarly, deposits from customers increased by 56 percent to N14.93 trillion.

Net cash flow from operating activities for the period amounted to N636.2 billion from N169.5 billion recorded in the same period of 2022.

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Net cash flow used in investing activities recorded negative amounting to N184.7 billion from a negative N169 billion recorded in the same period of 2022.

Ecobank’s net cash flow from financing activities improved in the third quarter of 2023, despite remaining negative. The outflow of cash was reduced to N35.5 billion, down from N211.9 billion in the same period of 2022.

Cash and cash equivalents at the end of the period amounted to N2.29 trillion, up from N1.35 trillion in the same period of 2022.

Awori also noted that the group would be increasing investment in technology.

“We will invest further in technology, in all its forms, to provide better, faster, and easier services to our customers. Furthermore, we are investing in building our brand to create greater connections and support our growth businesses,” he said.