Ecobank group is in a strong financial position and well poised to unlock the opportunities in the marketplace
By Eugene Onyeji
Pan-African lender, Ecobank Plc, has released its 2021 full-year audited financial result, recording an all-time growth of 334 per cent in its Profit After Tax (PAT) to N146.3 billion as against N33.7 billion profit reported in the financial year ended December 31, 2020.
The group posted a strong financial performance as the results showed profit before tax gaining 174 per cent to N195.72 billion in 2021 from N66.6 billion reported in 2020.
For Ecobank, 2021 proved to be a transformational year, and going forward, they are poised to unlock the opportunities in the marketplace, having been able to double its profits in 4 years since hitting N69 billion in 2017 with the profit now slightly hitting above N146 billion.
The lender’s profit performance for FY 2021 was on the back of all margin growth as income from interest, investment and fees and commission income all pointed upwards year on year.
The group’s gross earnings for 2021 financial year was a significant 14 per cent increase to N956.39 billion from N841.14 billion in 2020, while Other operating income rose substantially by 142 per cent to close 2021 at N19.1 billion from N7.91 billion in 2020.
Operating expenses grew moderately by 5 per cent to N423.7 billion, helping to keep the pressure of costs on earnings low in turn quickening the pace of profit growth.
The statement further revealed that the group grew its deposits from customers by a staggering 14.14 per cent to N8.36 trillion while its total assets are now N11.69 trillion, almost twice the bank’s total assets in 2017. Net assets rose by 13.08 per cent to N917.90 billion.
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Commenting on the impressive performance, Ade Ayeyemi, CEO, Ecobank Group, in a statement said: “The Bank made significant progress with its strategic priorities and delivered strong business and financial returns. We grew revenues, remained efficient, improved credit quality, strengthened the balance sheet and, for the first time since 2016, our Board has recommended the payment of dividends to shareholders.
“We increased profit before tax by $140 million to $478 million, after adjusting for the $164 million goodwill charge in 2020 and generated a record return on tangible shareholders’ equity of 19%. Net revenues were $1.8 billion, up 5%, benefiting from our diversified operating model and the continued focus on growing our trade finance, payments, fixed income, currencies, and commodities businesses. Furthermore, the efficiency ratio of 58.9 per cent was the best in over a decade,”
Ayeyemi said. “Credit quality continues to be particularly strong, with non-performing loans at a historic low of 6.2 per cent of total loans and a reduction in the concentration risk of the credit portfolio. Moreover, we proactively built provision reserves to above 100% of non-performing loans. In addition, deposit growth was robust, increasing by $1.4 billion, or eight per cent, which significantly boosted liquidity and supported our modest loan growth. The investments in pivoting Ecobank as a credible enabler of economic activity for households, businesses and governments in Africa strengthened our optimism for 2022 and beyond, while complementing the expectation of a strong global economic recovery following the easing of Covid-19 restrictions.
“However, a word of caution following two critical global setbacks: IMF’s plan to cut global growth forecast, in a high inflation environment with about 60% of low-income countries in or at risk of ‘debt distress’; and Russia’s recent invasion of Ukraine. In this mix, African economies hang in the balance as contagion risks spread, US Fed and other developed-world central banks hike interest rates, energy prices soar, and geopolitical tensions exacerbate inflation and supply chain bottlenecks.
“Already the reverberations from these developments have forced some central banks in Africa to hike rates, as prices of goods and services soar and currencies are under pressure, all with security implications. In all this turmoil, we at Ecobank remain highly focused on conducting our business responsibly, committed to ESG principles, and discharging our investment in the Ecobank Foundation.
“We will continue to be aggressive in driving our strategic priorities, leading with technology, and serving our clients and communities. “ “Finally, I want to thank all Ecobankers for their unwavering commitment to realising our vision and remaining the bank that Africa and friends of Africa trust.”
