THUR. 30 MARCH 2023-theGBJournal | Ecobank Group reported Net revenue growth of 6% or 26% at constant currency to $1.9bn in full-year 2022, reflecting diversification benefits, growth momentum, and efficiency gains.
The transnational bank profit before tax (PBT) rose 52% to $540 million, a $62 million rise, or 13% from 2021.
The bank said said in its corporate results published today on the Nigerian Exchange Limited (NGX) that the PBT growth was supported by the benefits of its diversified business model, the underlying growth momentum in its businesses and disciplined management of costs and credit losses in a challenging operating environment.
The bank notes that these benefits, however, were partially offset by a one-off non-conversion premium of $40 million resulting from the repayment of the $400 million convertible debt issued in September 2017.
Excluding the impact of the one-off, PBT increased by 21%. Profit available (attributable) to ETI shareholders increased 9% to $286 million and earnings per ordinary share (EPS) of 1.17 US cents ($0.0117) increased 10% from the prior year.
Financial and Business Highlights:
A few significant items impacted the 2022 profits:
-Impairment charges on financial assets included a $170m impairment charge related to the GoG’s local currency domestic bonds and Eurobonds. The GoG embarked on a debt restructuring exercise on its domestic debt as part of efforts to secure an IMF deal and restore its economy’s economic and financial stability.
-An impairment release (write-back to the income statement) of $126m out of the $206m central macro-overlay of expected credit losses (ECL) allocated to loans held in the Resolution Vehicle (RV) following a valuation of collateral associated with one of these loans, by an independent third-party valuer and subsequent impairment assessment on the net exposure to the Group concerning the RV.
-A $40m non-conversion premium (one-off) was associated with the repayment to debt holders of the $400m convertible debt the Group issued in September 2017.
-Hyperinflation (excessive and out-of-control general price increases in an economy) in Zimbabwe and South Sudan resulted in a $34m net monetary loss.
-Net revenue rose 6% or 26% at constant currency to $1.9bn, reflecting diversification benefits, growth momentum, and efficiency gains, which led to solid growth in net interest income and noninterest revenue.
-Payment’s revenues grew $25m or 12% to $234m (representing 13% of Group net revenues), driven by merchant acquiring, cards, and wholesale payments.
-Record cost-to-income ratio of 56.4% benefited from solid revenue growth and disciplined cost management in an inflationary environment.
-Total assets increased $1.4bn to $29.0bn, primarily driven by growth in loans and investment securities catalysed by customer deposits growth.
-Customer deposits (end-of-period, EOP) increased 6% or 19% at constant currency to $20.8bn.
-Gross customer loans (EOP) increased 13% or 25% at constant currency to $11.5bn.
-The non-performing loans (NPL) ratio improved to 5.2% (the lowest since the 3Q of 2015) compared to 6.2% a year ago. The NPL coverage ratio decreased to 86.5% from 102.1% a year ago, respectively, mainly due to the $126m central macro-overlay ECL release.
-Tangible book value per share (TBVPS) of 5.30 US cents decreased 7% from a year ago, primarily reflecting the negative impact of foreign currency translation reserves.
-The volume of digital transactions rose by 26% to $79.7 billion in 2022.
Jeremy Awori, CEO of Ecobank Group while commenting on the performance said, “Ecobank’s strong 2022 performance reflects the strength of our diversified business model, growth momentum and efficiency, and was achieved despite operating in a challenging macroeconomic environment, which also included the difficulties that Ghana’s debt restructuring exercise placed on us.”
He added that bank’s focus will be on execution, ‘’and we will have a performance, sales and service culture to drive success. Success for us will mean winning with the customer. So, we will reinvigorate our customers’ experience with Ecobank through investments in building a solid and enduring brand that offers them a more personal, relevant and rewarding experience than ever before. This will also deliver further solid financial performance for the Bank.”
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