Ecobank’s interest income jumps 41% to N445.9bn

Ecobank Transnationals records a 41 percent growth in interest income for the first half of 2023, BusinessDay analysis has shown.

Data sourced from the bank’s latest financial report showed that Ecobank’s Interest income grew to N445.9 billion in the first half of 2023 from N317.23 billion in the corresponding period of 2022.

“Our results for the first six months of 2023 demonstrate the benefits of our diversified business model, resilient balance sheet and our commitment to serving our customers,” Jeremy Awori, the CEO of Ecobank Group said.

Further analysis shows the growth was driven by loans and advances to customers which was at N246 billion, investment securities (N103.12 billion), treasury bills and other eligible bills (N60.43 billion), loans and advances to banks (N34.97 billion), financial assets held for trading measured at FVTPL (N5.86 million) and other at N1.37 billion.

“We achieved these results despite continued challenging macroeconomic conditions in the second quarter, with significant weaknesses in African currencies, high consumer prices, and tepid economic growth,” Awori said.

Ecobank’s interest expense increased by 60 percent to N178.9 billion from N111.66 billion.

Consequently, net interest income recorded a 30 percent growth to N267.01 million in the first half of 2023.

On a quarterly basis, Ecobank recorded a 36 percent growth in net interest income to N144.37 billion in the quarter ended June 2023.

Non-interest revenue grew 38 percent to N239.05 billion in the first six months of 2023, driven by 127 percent growth in other operating income.

Ecobank’s operating expenses grew 29 percent to N274.88 billion in the first half of 2023.

Ecobank said its “The higher operating expenses in the half year were driven by a mix of inflationary-driven costs and increased staff compensation in some of our markets in line with inflationary trends.

“Key drivers of the expense increase were costs associated with the card business, insurance, IT licenses and related technical fees, and other administrative expenses. However, the rise in operating expenses was offset by higher revenues helping drive an improvement in the cost-to-income ratio to 54.3 percent compared with 56 percent in the prior year.”

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Ecobank spent N115.39 billion on salary expenses, a 25 percent increase from N92.44 billion in the comparable period.

Depreciation and amortisation stood at N23.09 billion from N21.16 billion in the period reviewed.

In the same vein, other operating expenses grew to N136.41 billion in the first half of 2023 from N98.71 billion in the similar period of 2022.

Profit before tax recorded 38 percent growth to N150.31 billion during the period reviewed.

The bank paid N45.09 billion as tax in the first half of 2023 from N31.64 billion in the first half of 2022.

Ecobank Transnational’s profit after tax stood at N105.22 billion, a 36 percent increase from N77.31 billion in the comparable period.

Trading income increased to N102.19 billion in the first half of 2023 from N68.37 billion in the same period of 2022.

Net investment income, however, dropped to N2.27 billion from N3.4 billion in the comparable periods.

Total assets rose to N20.45 trillion in June 2023 from N13.37 trillion in December 2022 while total liabilities increased to N19.11 trillion from N12.44 trillion in the same period.

Total equity stood at N1.33 trillion in June 2023 from N934.66 billion in December 2022.

Cash and cash equivalents at the end of the period stood at N2.3 trillion in the six months period ended June 2023 from N1.54 trillion in the similar period of 2022.

Movement in the cash and cash equivalents reveals that net cash flow from operating activities was at a positive of N21.98 billion, coming from a negative cash flow of N72.76 billion.

Net cash flow from investing activities arrived at N58.17 billion from a negative cash flow of N112.54 billion.

Net cash flow used in financing activities stood at N34.31 billion from N25.63 billion negative cash flow year on year.

Basic earnings per share stood at 319.27 kobo from N220.93 kobo in the comparable period.