Ecobank Transnational Net Profit Leaps 334%, As Loan Book Rises By 10%

The Ecobank Transnational Incorporated, on Tuesday published its audited financials for the year ended December 31, 2022, showing significant 334% growth in bottom-line, even while keeping a hold on its top line, which improved by 14% year-on-year, just as total assets, total deposits, as well as customer loans and advances rose 13%, 14%, and 10% respectively in Naira terms.

According to the result presented to the Nigerian Exchange Limited, gross earnings for the period (Naira) rose by over N100bn from N841.142bn to N956.392bn; net revenue stood 12% better at N719.31bn from N641.753bn. Of this, interest income rose to N603.366bn from N531.216bn, lifted by a combination of the N209.588bn income from corporate loans, up from N193.751bn and N179.043bn from investment securities, as against N136.811bn. Expenses increased from N184.61bn to N216.656bn, after expenses due to corporate customers increased from N53.563bn to N75.065bn; resulting to net interest income of N386.709bn, up from N346.605bn the lion’s share of which was the N225.499bn from corporate and investment banking segment; followed by N98.522bn from consumer banking.

Fee and commission income rose 26% from N162.214bn to N204.792bn, helped by the N89.547bn earned from cash management and related fees, compared to N71.529bn earlier; expenses, however, rose by a faster 46% from N13.617bn to N19.949bn. Net trading income dropped 9% from N132.294bn to N121.044bn, after trading income on securities fell from N30.876bn to N10.99bn, the impact of which was reduced by the growth in foreign exchange from N101.416bn to N110.053bn. Net investment income grew 20% from N6.348bn to N7.6bn. Other operating income growth was even more significant at 142% from N7.908bn to N19.111bn; resulting in non-interest revenue of N332.6bn, up 13% from N295.148bn. Operating income, therefore rose 12% to N719.31bn from N641.753bn in the corresponding period of 2020.

Staff expenses rose from N176.885bn to N186.28bn; depreciation and amortization from N39.811bn to N44.485bn; other operating expenses was up 4% to N192.894bn from N185.996bn; bringing total operating expenses to N423.671bn from N402.694bn.

Operating profit before impairment losses was up 24% from N239.058bn to N295.639bn; impairment charges on financial assets growth was constrained at 3% from N89.132bn, compared to the previous N86.734bn; after ‘recoveries and release of provisions’ grew by almost 100% from N49.863bn to N83.738bn; reducing the impact of the growth in impairment charges on loans and advances from N119.226bn to N153.187bn; while impairment charges on other financial assets inched from N17.371bn to N19.111bn. Net monetary loss arising from hyperinflationary economies within the period dropped 54% from N23.122bn to N10.585bn; leaving profit before tax and goodwill impairment up by 52% to N195.72bn from the prior year’s N129.087bn. With zero goodwill on impairment during the year, as against N62.489bn in 2020. As such, while profit before tax for the year 2021 remained the same that of 2020 dropped to N65.598bn. Tax expenses rose by 47% from N34.13bn to N50.069bn; resulting in profit after tax, therefore stood at N146.328bn, far better than the preceding year’s N33.742bn; which translated to N4.35 earnings per share, compared to N0.03 a year earlier. From the earnings per share, the directors have proposed a dividend of 16 cents, while closure date for the register of shareholders is June 6.

Total assets for the period amounted to N11.689tr from N10.384tr, boosted by the N4.061tr in customer loans and advances, which grew from N3.699tr; while total liabilities increased from N9.502tr to N10.771tr; after customer deposits grew from N7.324tr to N8.36tr. Total equity, therefore, stood at N917.903bn from N811.754bn.