Ecobank Transnational Incorporated (ETI) is the parent company of the leading independent pan-African banking Group, Ecobank, present in 35 African countries, including representative offices/subsidiary in France, United Arab Emirates, London-UK, Beijing-China, South Africa, and Addis Ababa-Ethiopia.
The Ecobank group has recently released its half year ended June 2020 unaudited result to the public. The result of the pan-African the lender shows an 18 percent drop in Profit After Tax (PAT) to N48.5 billion from N59.4 billion.
Analysis of the result revealed that the drop in half year 2020 profit of the bank was induced by a 51 percent reduction in recoveries from loan provisions which resulted in a 37 percent rise in Net Impairment Charges. A 20 percent drop in Net trading Income also contribution to the dip in profit for the lender.
Here are the other highlights of the H1 2020 results published by Ecobank Transnational Plc
- Gross earnings down 3% Year-on-Year (YonY) to N392.0 billion from N405.0 billion.
- Revenue up 4% YonY to N290.3 billion from N180.1 billion
- Net-interest income of N128.9 billion, down 14% YoY, Jun 2019: N149.2 billion
- Non-interest income of N290.3 billion, up 40% YonY, Jun 2019: N280.1 billion
- Operating income of N290.3 billion, up 4% YonY, Jun 2019: N196.3 billion
- Net Impairment charge for credit losses of N36.5 billion, up 76% YonY, Jun 2019: N20.7 billion
- Operating expenses flat at N186.1 billion.
- Profit Before Tax down 13% YonY to N64.1 billion from N73.4 billion
- Profit After Tax for the period down 18% YonY to N48.5 billion from N59.4 billion
Statement of Financial Position
- Total Assets up 9% year to date (ytd) to N9.39 trillion from N8.62 trillion
- Loans and Advances to customers down 1% ytd to NGN 3.33 trillion from N3.38 trillion
- Deposits from customers up 9% ytd to N6.46 trillion from N5.92 trillion
The Balance Sheet size of ETI Plc also had a Year to date (ytd) impressive growth for the period ended 30 June 2020. Total Assets grew 9% to N9.39 trillion in June 2020 from N8.62 trillion in December 2019. Loans and Advances was down by 1% while Customer Deposit grew by 9% and Total Equity was also up by 8%.
Ade Ayeyemi, Group CEO while commenting on the results said: “I am pleased with our diversified business model and the investments that we have made in people, systems, and processes. These have enabled us to serve our customers and communities safely during the COVID-19 pandemic. It also highlights the strength of our franchise and the continued resilience of Ecobank staff. We have been able to serve our customers seamlessly with over 65% of employees working from home. Moreover, we are providing support to our customers, at the time that they need it most. For instance, we are extending relief to our customers through payment deferrals, loan modifications and restructurings.
“We were recognised for our commitment to improving the lives of people across Africa by Euromoney. They awarded Ecobank with the coveted price of Africa’s Best Bank for Corporate Responsibility, in the Euromoney Awards for Excellence 2020, for our focus on sustainability and partnerships in delivering positive social and environmental outcomes across Africa. I believe that all of my Ecobank colleagues have reason to be proud of themselves,” Ayeyemi added.
“Our financial performance for the period was encouraging, despite the adverse impact of foreign currency translation and COVID-19. We generated profit before tax of $170 million, a growth of 12% if adjusted for the effects of currency translations. We also continued to grow customer deposits, increasing them by $604 million in the second quarter to $16.7 billion, boosting our liquidity buffers, and placing us in good stead during these unsettling economic times. The pandemic has completely changed the way that customers transact, accelerating the adoption of digital transactions which are gradually replacing cash. There is increased customer utilisation of our digital channels, through our mobile app, Ecobank Pay, OMNI, online, and self-service on our ATMs. The number of transactions in branches has dropped about 64% year-on-year, while digital engagements have increased by 56%.
“Going forward, the operating environment remains challenging as the pandemic continues to surge across the continent, though economic activities are slowly returning across our footprint. However, economic activity in sub-Saharan Africa is forecast to reduce. But, our commitment to the continent, our stakeholders, and employees remains steadfast. We will continue to support our customers and ensure the sustainable viability of the organisation,” Ayeyemi concluded.