The board of Ecobank Transnational Incorporated (ETI), on Thursday presented its un-audited financials for the half year ended June 30, 2018, indicating a 36.62% rise in net profit, helped by the N22.306bn or 35.16% drop in impairment losses on financial assets.
There was also the 313.59% rise in profit for the year from discontinued operations, which stood at N159.664bn, up from just N38.604bn in the corresponding period of 2017.
Gross earnings for the period stood at N384.588bn, down from N386.858bn; out of which interest income accounted for N242.214bn, as against the prior half-year’s N241.906bn. Interest expenses dropped by a marginal 3.55% to N95.645bn from N99.167bn; resulting in net interest income of N146.569bn, which just 2.68% better than the previous N142.738bn.
Fee and commission income climbed 11.51% from N69.276bn in the previous half year to N77.246bn; while fee and commission expense rose by 12.86% to N10.131bn from N8.976bn. Net trading income dropped by 17.21% to N58.866bn from N71.103bn; other operating income rose by 32.56% to N6.061bn from N4.572bn; just as non-interest revenue fell slightly to N132.043bn, compared to N135.975bn.
Operating income was flattish at N278.612bn when compared to N278.718bn; even as the group constrained staff expenses to N75.685bn from N77.001bn; depreciation and amortization cost rose to N15.213bn from N13.784bn. Other operating expenses at N81.526bn, after rising from N78.178bn; operating expenses climbed to N172.425bn from N168.964bn.
Operating profit before impairment losses and taxation dropped to N106.187bn, as against N109.75bn; impairment losses on financial assets fell to N41.126bn from N63.432bn; while operating profit after impairment losses jumped 40.47% to N60.06bn to N46.317bn.
The group’s shares of profit of associates stood at N38.845m, from N76.131m; following which profit before tax stood at N65.099bn, compared to N46.241bn; while tax expenses rose by 60.4% from N8.545bn to N13.706bn. This resulted in net profit of N51.392bn, which was 36.33% better than the N37.696bn of the 2017Q; translating to Earnings Per Share of N1.67, up from N1.31 each.
On the balance sheet, total asset growth was flat also at N6.613tr, as against the previous N6.458tr, lifted by customer loans and advances of N2.681tr, which dropped by 8% from N2.899tr.
Total liabilities fell to N6.025tr, from N6.199tr; the bulk of which was customer deposits that improved by 12% from N4.236tr to N4.722bn; following which shareholders’ fund slipped from N498.311bn to N575.507bn.
Commenting on the result, Ade Ayeyemi, Group Chief Executive of Ecobank described the result as the fruit of “considerable achievements we are already making in the execution phase of our strategy.
“For the first half of the year the firm generated profit before tax of $213 million, an increase of 41% from the same period a year ago, and a return on tangible total shareholders’ equity of 20.9%.”
In the area of customer loans and advances, Ayeyemi said management was “encouraged with the levels of client activity we saw in most of our businesses and precisely in our deposit-generating franchise. As a result, customer deposits grew 12% in constant currency, improving the firm’s liquidity and ability to lend to customers. The enormous efforts we have made to improve asset quality is also paying off. We have started to see improvements in our credit portfolio, resulting in lower impairment losses for the period.
“Finally, on 14 June, we announced intended meetings with global fixed-income investors, following which, if market conditions permitted, would result in a 5-year USD denominated senior unsecured bond offering. Despite positive investor meetings, market conditions were less benign, driven by the confluence of interest rate rises in the US and sell-off in emerging market debt.
“As a result, we have held off on the offering until such a period when conditions will improve,” he stressed.