Ecobank net income spikes on cost efficiency

Ecobank Transnational Inc., shares has gained as the lender’s first quarter profit spiked on the back cost efficiency and stringent credit risk amid a tough operating environment.

For the first three months through March 2017, Ecobank’s net income moved by 15 percent to N18.68 billion from N16.20 billion the previous year.

Interest income was up 35 percent to N115.68 billion, thanks to the contributions from interest on loans and advances.

The lender’s cost to income ratio, which measures the profitability and efficiency, fell to 64.50 percent in March 2017 from 66.10 percent the previous year. A lower ratio means a bank making profit while curbing expenses.

“Our performance in the first quarter was encouraging despite continued macroeconomic headwinds,” said Ade Ayeyemi, Group CEO of the bank.

“All of our businesses made meaningful progress in executing our strategy by continuing to focus on cost discipline, stringent credit risk practices, and digitisation of processes to enhance the customer experience,” said Ayeyemi.

Nigeria banks have been struggling with rising impairments of financial assets and rising Non Performing Loans (NPLs) as an economic downturn hindered customers from paying interest on loans borrowed from lenders.

Ecobank’s share price opened at 1.43 to close at N7.78 as at 1:00pm.