Ecobank TransNational Incorporated (ETI) has attributed the 24 per cent increase in Profit Before Tax (PBT) in its half-year (H1) operations to the bank’s diversification exercise and massive investment in technology within the period.
The bank achieved a 24 per cent rise in PBT to $261 million, in addition to a return on tangible equity of 19.5 per cent.
Reviewing its performance, Chief Executive Officer, Ecobank Group, Ade Ayeyemi said, “Our results for the first six months of 2022 reflect not only the benefits of the firm’s diversification but also our resilience and capabilities to continue serving our clients and customers in a challenging environment and still generate adequate returns responsibly for our shareholders.
“As a result, we delivered a return on tangible equity of 19.5 per cent and increased earnings per share for shareholders by 24 per cent year-on-year. In addition, profit before tax increased by 24 per cent to $261 million and by 53 per cent if you adjust the increase for the significant depreciation of some of our critical African currencies to the US dollar.”
Ayeyemi continued: “We performed well because of our investments, including in technology, and Ecobankers’ continued dedication to meet customers’ financial needs, despite a challenging operating environment of high inflation, weakening African currencies, worsening government fiscal balances and lowering economic growth.”
According to him, pre-tax profits in the consumer banking business increased 43 per cent on higher deposit margins, loans, and debit card spending while corporate and investment banking profits rose 33 per cent.
Ayeyemi said FX volumes grew by 25 per cent as client activity rebounded from the pandemic, just as an increase in SME activity and growth in the payment business lifted profits in commercial banking by 15 per cent.
“Our investments in technology and digital capabilities have contributed to a reduction in our cost-to-serve. Along with revenue growth, the outcome is our
record cost-to-income ratio of 56 per cent.
In addition, he said the bank increased impairment charges to reflect heightened credit risk, as well as proactively built central impairment reserves of $206 million, which can be deployed in a stressed credit environment.
He assured shareholders that the bank’s balance sheet remain liquid and
adequately capitalised, providing the capacity to serve its customers better.
“Our service to our customers and communities, anchored on our vision to advance Africa’s economic development and financial integration, is widely
recognised. Recently, Euromoney adjudged Ecobank for 2022 – Africa’s Best Bank, Africa’s Best Digital Bank and Africa’s Best Bank for SMEs.
“These accolades are a testament to our passion for serving clients and customers and our continued investments in technology, processes, and people. As always, we are passionately working towards realising our vision and remaining the bank that Africa and friends of Africa trust, ” he said.
