ETI Grows 2017 Half-Year Net Profit By 21% To N37.7bn

Directors of Ecobank Transnational Incorporated (ETI), on Thursday presented its audited result for the half-year ended June 30, 2017, indicating that while earnings fell 6% in US$ terms, it climbed 31% in Naira to N386.9bn; just as profit before and after tax declined by 26% and 19% in US$, but 11% and 21% in Naira.
Commenting on the performance in a statement that accompanied the result, Ade Ayeyemi, ETI’s Group Chief Executive, said the result “demonstrated the benefits of our diversified business model. Despite a fragile macro-economic backdrop in most of ur markets, we still generated a 15.6% return on tangible equity and further improved our cost-to-income ratio to 60.6% driven by our continued cost reduction initiatives across the network.”
He expressed delight at the progress made in the digital front, “particularly on our strategy to enable millions of unbanked Africans have access to financial solutions using our revolutionary Ecobank App and other digital channels.
Ayeyemi blamed the 20% drop in PBT in US Dollar terms to “continued provision building and elevated cost-of-risks as we had earlier communicated.”
Gross earnings for the period rose to N386.858bn, 41% better than the N273.445bn in the corresponding half year of 2016 (unaudited); helped by the 34% interest income growth from N180.057bn to N241.906bn; while interest expense jumped 65% from N59.948bn to N99.167bn; leaving net interest income for the period at N142.738bn, as against the previous N120.109bn, an increase of 19%. The bulk of net interest income came from loans to corporate customers from the group earned N113.186bn, up from N93.825bn; while commercial and consumer customers loans fetched N27.821bnb as against N20.908bn; and N14.947bn from N14.749bn respectively.
Fee and commission income increased by 34% from N51.685bn to N69.276bn; while expense rose 79% to N8.976bn from N5.009bn; Net trading income was up 82% to N71.103bn from N39.103bn.
Non-interest revenue therefore rose 54% from N88.379bn to N135.975bn; just as operating profit before impairment losses and tax stood at N109.75bn, 47% better than the preceding half year’s N74.474bn.
The group suffered impairment losses on financial assets of N63.432bn, 93% more than the previous N32.913bn; the bulk of which was the N49.016bn loans loss impairment, an increase from N31.764bn in 2016; while losses on other financial assets soared by 1,153% to N14.415bn from N1.149bn.
Total operating expenses grew to N168.964bn from N134.014bn; with staff expenses gulping N77bn, up from N62.299bn; while other operating expenses jumped to N78.178bn from N61.261bn; and depreciation and amortization worth N13.784bn, up from N10.453bn.
PBT rose to N46.241bn from previous half-year’s N41.56bn; while tax expenses dropped from N10.073bn to N8.545bn; while profit for the period stood at N37.696bn, which translates to Earnings Per Share of 131 kobo; from N31.495bn or 108 kobo.
Meanwhile, ETI, the holding company of the Ecobank Group reported exchange rate gains on translation of foreign operations of N14.993bn; as against the N91.371bn loss; while net fair value gain on available-for-sale financial assets stood at N31.296bn; as against the previous N21.843bn loss; which added up to “Other Comprehensive Income for the period, net of taxation of N46.142bn; as against the N104.911bn loss in the corresponding half year.
This left the group with a total comprehensive profit for the period of N83.877bn; which was 214% recovery from the N73.829bn (unaudited) loss in 2016 half year.
Total assets for the period crawled 3% in both Naira and US$ terms for the period. It rose from N5.916tr in 2016 half year to N6.458tr; boosted by customer loans and advances of N2.899tr, a slight increase from N2.856tr; and cash and balances with central banks of N702.268bn, up from N658.604bn. Term loans was the bulk of the group’s loan book, accounting for N2.235tr; up from N2.305tr; followed by overdrafts of N836.972bn; up from N674.263bn
Total liabilities also rose to N5.824tr from N5.29tr; with customer deposits of N4.235tr, up from N4.01tr in 2016; while shareholders’ funds closed flat at N547.008bn from N548.968bn.