Ecobank Transnational Incorporated (ETI) robust growth in profit before and after tax for the nine-month ended September 30, 2021, despite the slow growth in gross earnings, following which Earnings Per Share stood at N3.01062, compared to the previous loss of N50.166 kobo.
According to the audited result for the period presented to the Nigerian Exchange, gross earnings increased from N614.469bn in the corresponding period of last year, to N686.768bn; revenue of N516.156bn up from N461.162bn. Interest income improved by 12% from N397.374bn to N445.119bn; , driven primarily by loans and advances to corporate customers of N155.262bn, from 147.256bn; and investment securities of N130.655bn, compared to N97.358bn, among others. Interest expense rose to N160.698bn from N142.34bn, resulting in net interest income jumped from N255.033bn to N284.42bn; with expense on corporate customers growing from N40.422bn to N57.447bn; whiler other borrowed funds cost N50.027bn, up from N35.817bn. Fee and commission income grew by 25% to N144.036bn from N115.07bn, on the growth in cash management and related fees from N48.955bn to N63.882bn; and credit fees & commissions of N39.842bn, compared to the N35.23bn reported in the preceding nine months. Fee and commission expense soared by 69% from N8.828bn to N14.93bn, being other fees paid amounting to N14.355bn, from N8.383bn; net trading income dropped by 13% from N97.905bn to N85.474bn; while net investment income stood at N5.564bn, compared to the previous N1.314bn loss. Other operating income increased by 252% from N3.295bn to N11.591bn; bringing non-interest revenue to N231.736bn, 12% better than the N206.128bn reported in the preceding nine months; bringing operating income to N516.156bn, up from N461.162bn.
Staff expenses for the period rose to N132.253bn from N129.729bn; depreciation and amortization from N29.408bn to N33.253bn; while other operating expenses amounted to N135.061bn from N133.248bn in the first nine months of 2020. Operating profit before impairment charges and taxation rose by 28% from N186.775bn to N215.441bn. The group reported a 3% drop in impairment charges on financial assets from N61.489bn to N59.568bn, after impairment charges on loans and advances stood at N94.246bn from N76.204bn; as recoveries for the period jumped to N52.048bn from N27.62bn, just as impairment charges on other financial assets climbed to N17.37bn from N12.905bn. This resulted in operating profit after impairment charges and
before tax of N155.873bn, which was 48% better than the previous N107.286bn. Net monetary loss arising from hyperinflationary economies stood at N12.07bn from N12.39bn. Profit before tax and goodwill impairment jumped to N143.674bn from N95.082bn; while a nil impairment in goodwill, compared to the preceding N60.84bn, left profit before tax at N143.674bn; a 316% growth from the N34.498bn of 2020. The tax expense for the period rose by 60% from N24.84bn to N39.644bn; leaving a net profit of N103.83bn, representing 978% leap from N9.657bn in the previous year.
The balance sheet showed total assets of N10.907tr, compared to the previous N10.318tr; with customer loans and advances dropping slightly from N3.699tr to N3.665tr; while total liabilities improved from N9.502tr to N10.035tr, lifted by customer deposits of N7.787tr, compared to N7.324tr at the end of 2020 financial year. Total equity for the period grew to N876.333bn from N811.754bn at the end of last year.
A statement by the group quoted Ade Ayeyemi, the chief executive officer as describing the strong results as a reflection of “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 $352m in pre-tax profit, a 41per cent increase compared to the prior year and revenues of $1.3bn, 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% to $5.52.
“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 58.3 per cent. In addition, the stock of nonperforming loans as a percentage of loans outstanding is now at 6.9 per cent compared to 9.9per cent a year ago. 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.
“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. I am deeply grateful to all our customers and the Ecobank team for the remarkable job,” he stressed.
