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Pan-African banking conglomerate Ecobank Group has reported $256 million in profit in the first nine months of 2021, as the bank’s earnings soared by nearly tenfold on the back of improved efficiency in its operations.
The triple-digit growth in its profit was supported by improved asset quality and substantial loan recovery and impairment charge releases.
The result came weeks after Ecobank Group secured a €100-million ($113.2 million) credit facility from the European Investment Bank to support businesses in Africa.
Ecobank is the leading independent regional banking group in West and Central Africa, serving wholesale and retail customers in 36 African countries.
The pan-African banking conglomerate operates under Cameroon-born businessman Alain Nkontchou and Nigerian banker Ade Ayeyemi.
The solid bottom-line performance demonstrates the effectiveness of the management strategies, which helped drive efficiency in the bank’s businesses in line with the focus to drive down operating costs and improve the quality of its credit portfolio and liquidity.
Its banking operations’ efficiency and the quality of its interest-bearing assets caused profits to soar by 847 percent from $27 million to $256 million despite single-digit growth in its interest and non-interest income.
The bank’s financial performance was underpinned by a four-percent decline in operating expenses, a 76-percent increase in loan recoveries and impairment charge releases.
Ecobank Group CEO Ade Ayeyemi said the triple-digit growth in the bank’s earnings demonstrates Ecobank’s continued efforts to put customers first and ensuring that the group meets their individual needs.
He explained further that the results demonstrate the bank’s hard work in driving efficiency in all its businesses in line with its deliberate focus on driving down costs, sustaining improvement in the quality of its credit portfolio and strengthening liquidity and a capital buffer.
“As a result, our cost-to-income ratio has been declining consistently quarter-on-quarter, currently 58.3 percent. In addition, the stock of nonperforming loans as a percentage of loans outstanding is now at 6.9 percent compared to 9.9 percent a year ago,” Ayeyemi said.
During the first nine months of the year, Arise B.V., a major institutional shareholder of the Togo-based banking conglomerate, made a $75-million Additional Tier-1 (AT1) investment in the firm.
This adds to the $350-million Tier 2 Sustainability Note that the banking group issued successfully to investors in June.
Ayeyemi explained that the AT1 investment improved its tier-1 capital and double its leverage ratio. He added that this move demonstrates investor confidence in its strategy and business prospects in the financial services industry.
