Ecobank registers $306m profit

HARARE - Ecobank Zimbabwe’s parent company, Ecobank Transnational Incorporated (Ecobank), says its profit in the nine months to September 2015 declined by five percent to $306 million due to adverse currency movements, operational and impairment losses.

In the period under review, the Pan African banking group’s profit before tax stood at $398 million down two percent from $408 million recorded in the corresponding nine months, while net revenue declined by three percent to $1,6 billion.

“The operating environment in Middle Africa was challenging during the period,” said Ecobank Group chief executive Ade Ayeyemi on the financial results.

“While our financial results were impacted by various factors, the strength of our diversified pan-African business model ensured a balanced outcome. We see looming headwinds ahead and as a result expect reported 2015 profits to come in lower than expected, but relatively flat in constant dollars,” he said.

The Ecobank boss said his regional financial institution recently had decent loan growth in its corporate bank business.

“And despite a decrease in Domestic Bank deposits, we increased the share of stable deposits within the deposit mix. With revenue growth challenged in the current environment, we would focus more on cost efficiency and invest in key initiatives in our Transaction banking, Cards, and e-Banking businesses.

“Also, we are simplifying our operating model to better serve our customers and position the company for long-term success,” Ayeyemi added.

Ecobank’s net interest income was $838 million, an increase of $27 million, from the prior year period, driven by loan growth in the group’s corporate bank business and higher yields mostly from loan re-pricing in Nigeria.

The net interest margin was 6,8 percent compared to 6,3 percent in the prior year period. In constant dollars, net interest income increased 26 percent year-on-year.

On the other hand, non-interest revenue was $760 million, a nine percent decrease from the prior year period reflecting lower fee and commission income and net trading income. In the period under review, fee and commission income slumped 12 percent – reflecting lower fees and commissions on loans, lower financial advisory fees, a decrease in cash management and trade finance fees

“We closed the period with healthy capital levels with a tier 1 capital ratio of 20,6 percent and total capital adequacy ratio of 22,8 percent under Basel I. Our 19 000 plus employees, whom I am proud of, have been supportive of our customers in these trying times,” Ayeyemi said.

 

Comments (2)

Congratulations Ecobank!! My only Pan African Bank.

Zvichapera - 16 December 2015

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