By Yinka Ezun
Ecobank Transnational Incorporated (ETI) leveraged on o the African financial market to massively drive returns for its customers and investors.
ETI, a pan-African banking conglomerate, with banking operations in 36 African countries crosses N11.56trillion in total assets in 2021 as customers deposit and loans to customers closed the same year under review at N8.28trillion and N4.07trillion respectively.
Total assets grew by 11 per cent to N11.56billion in 2021 from N10.38billion in 2020. The growth in total assets was driven by 10 per cent increase in loans and advances to customers to N4.06trillion in 2021 from N3.7trillion in 2020, while deposits from customers grew by 13 per cent to N8.28trillion from N7.3trillion reported in 2020.
Total equity from the balance sheet position grew by 11 per cent to N902.89billion from N811.75billion reported in 2020.
ETI is the leading independent regional banking group in West Africa and Central Africa, serving wholesale and retail customers
It also maintained subsidiaries in Eastern and Southern Africa. ETI has representative offices in Angola, China, Dubai, France, South Africa, and the United Kingdom.
ETI remains well-positioned to maximize opportunities, given its significant traction in Nigeria, across Africa and the world at large.
The financial institution proactively developed effective and timely strategies to ensure zero disruption in the delivery of service to all stakeholders despite the foreign and domestic challenges faced by branches where it has branches.
Last year, the Group relied heavily on its branches network to deliver uninterrupted services to customers, indicated in its corporate earnings.
Specifically, ETI’s gross earnings grew by 13 per cent to N952.85billion from N841.14billion reported in 2020. The growth in gross earnings impacted positively on profitability.
The financial institution’s profit before tax grew significantly by 194 per cent to N195.72billion in 2021 from N66.6billion reported in 2020, while profit after tax increased by 324 per cent to N143.11billion in 2021 from N33.74billion reported in 2020.
Hitherto, ETI in its nine months ended September 30, 2021 audited result and accounts reported stronger growth in profit, attributable to reduction in impairment charges on loans & advances to customers and effective management Operating Expenses (OPEX).
The results underlined solid and resilient results amid numerous domestic and foreign challenges that faced the sector and economy at large in the period under review.
The Group continued to maintain a well-structured, efficient and diversified balance sheet with strong earnings capacity.
ETI joined most outstanding banks on the Nigerian Exchange Limited (NGX) to report consistent growth in profitability.
The balance sheet structure enabled the group to withstand the negative impact of COVID-19 which virtually affected all the sectors of the nation’s economy.
The pan-African bank in the nine months under review crossed N100billion mark in Profit before tax . PBT rebounded in the period, against prior nine months of 2020 figures when the Ecobank paid goodwill impairment of N60.6million, leading PBT to decline by -68.49 per cent in the period.
In the period under review, the Group reported its highest PBT as it was up by 316.47 per cent to N143.67billlon from N34.5 billion reported in nine months of 2020.
Also, profit after tax grew by 916 per cent to N104.51billion in nine months of 2021 from N10.28billion reported in nine months of 2020.
The growth in profits was on the back of a 11.93 per cent in operating income to N516.17billion in nine months of 2021 from N461.74 billion reported in nine months of 2021, while impairment charges on financial assets dropped slightly by 3.12 per cent to N59.57billion from N61.5billion reported in nine months of 2020 (fell -10.4 per cent to US$145.01million)
According to the bank: “Impairment charges on loans (net) were $103 million compared with $128 million in the prior year. Gross impairment charges were $231 million, $31 million more than a year ago, driven by higher impairment charges in our Francophone West Africa and Central, Eastern and Southern regions.
“Ongoing effectiveness of our NPL remedial and recovery strategy, asset quality improvements, and better economic conditions continued to sustain loan recoveries, which were $128 million for the period, increasing $55 million from the prior year. The cost-of-risk was 1.43% compared to 1.79per cent in the prior year.”
With the growth in profits, Basic earnings per share (EPS) rose to N301.06 from a negative of N50.17 in nine months of 2020.
Also, Return on equity rose to 16.39 per cent in nine months of 2021 from 4.87 per cent in nine months of 2020.
The group also reported three per cent decline in total operating expenses to N300.72billion in nine months of 2021 from N292.39billion reported in nine months of 2020.
The breakdown of ETI’s OPEX showed two per cent increase in staff expenses to N132.4billion from N129.7billion reported in prior nine months while, Depreciation and amortization inched up by two per cent to N33.25billion from N29.41billion reported in nine months of 2020.
In addition, other operating expenses grew slightly by one per cent to N135.06billion from N133.25billion.
Ecobank Group CEO, Ade Ayeyemi in a statement said: “We reported strong results, reflecting the continued diligence of Ecobankers in putting our customers first and ensuring that we meet their respective needs. For the nine months period up to September 2021, we earned $352 million in pre-tax profit, a 41 per cent increase compared to the prior year and revenues of $1.3 billion, a four per cent growth.
“Hence return on tangible equity increased to 17.9per cent, and we grew the per-share value of our shareholders’ equity by 11 per cent to 5.52 dollar cents.
“These results also demonstrate the hard work invested in driving efficiency in all our businesses in line with our deliberate focus on driving down our cost-to serve, sustain improvement in the quality of our credit portfolio, and strengthen liquidity and capital buffers. As a result, our cost-to-income ratio has been declining consistently quarter on quarter, currently 58.3per cent.
“In addition, the stock of nonperforming loans as a percentage of loans outstanding is now at 6.9% compared to 9.9per cent a year ago.
“At the same time, we are proactively building loan reserves, currently at 91.2% of nonperforming loans, close to our near-term target of 100%. We have boosted the firm’s liquidity profile, thanks to growing customer deposits fueled by an acceleration in digital channel adoption, partnerships with Fintechs, Telcos, and businesses in the Payments Ecosystem,” Ayeyemi added.
“During the quarter, Arise B.V., a major institutional shareholder of ETI made a $75 million Additional Tier 1 (AT1) investment in the firm. Adding onto the $350 million Tier 2 Sustainability Note ETI successfully issued to investors in June. The AT1 further improves our Tier 1 capital and double leverage ratio and demonstrates stakeholder confidence in our strategy and business prospects,” Ayeyemi continued.
“Finally, we continue to invest in new digital and mobile capabilities to enhance customer experience, alongside the investments we are making in our people, processes, and controls, to ensure the continued resilience of our business and service delivery to our clients.”
