Ecobank Transnational Incorporated (Nigeria) – PBT increases by 25% to $125 million in Q1 2022

By Published On: April 25th, 2022Categories: Corporate announcement, Earnings

Ecobank Transnational Incorporated (ETI.ng) Q12022 Interim Report

We delivered strong 1Q 2022 results with profit before tax increasing by 25% to $125 million, diluted earnings per share up 29% to 0.27 US cents and net revenue growth of 7% to $436 million. Returns on tangible shareholders’ equity of 18.9% was a record compared to 15.7% a year ago, says Ade Ayeyemi, CEO, Ecobank Group.

Ayeyemi continued: “We achieved these results in a difficult operating environment characterised by the strengthening of the US dollar against our operatingncurrencies, high inflation, high interest rates and tight labour markets across Africa as the Russia-Ukraine conflict continued to take its toll. Despite these challenges, we continued to support our customers effectively, which paid off as our businesses grew their revenues and profits. These were driven by trade, cash management, FICC and payments, while we also achieved modest loan growth with support from higher interest rates. As a result, pre-tax profits increased by 13%, 26% and 59% in our Corporate and Investment Banking, Consumer Banking and Commercial Banking businesses respectively. It is important to note that it is the bold strategic decisions and our investments in people, systems and processes over time that have resulted in the record returns for our shareholders today. We are unrelenting in our focus on driving returns towards our medium-term goal of approximately 20%.”

“We have continued to run the company with expense discipline, while growing earnings and investing in improvements to the customer experience. So, despite increased expenses – largely due to inflation – our cost-to-income ratio improved to 58.0%, compared to 59.3% a year ago. Our credit portfolio is in good shape, and we continue to drive down the non-performing loans ratio towards our near-term goal of under 6% while we maintain adequate impairment reserves as a buffer for possible downside risks.”

“We have ample liquidity on our balance sheet and continue to generate healthy levels of customer deposits while maintaining satisfactory levels of capital above internal and regulatory minimums. As a result, we are confident in the company’s positioning for growth, and will continue to invest in our digital offerings and payment capabilities while enhancing our core technology. In summary, we are pleased with our progress, and I would like to thank our customers for their trust, and all Ecobankers for their hard work towards realising our vision and remaining the bank that Africa and friends of Africa trust.” Ayeyemi concluded.

    • Record ROTE of 18.9% is above cost-of-equity.
    • PBT of $125m, up 25% or 29% in constant currency, driven by solid underlying business growth and deepening client engagements.
    • Profit available to ETI shareholders of $66m and diluted EPS of 0.27 US cents, up 27% and 29%, respectively.
    • Net revenue rose by 16% in constant currency, reflecting diversification benefits, robust client activity in trade, FICC, payments and cash management
    • Payments business grew 15% or $7.1m to $54m (12% of Group revenue), driven mainly by our merchant acquiring and Cards businesses
    • Record cost-to-income ratio of 58.0% benefiting from efficiency initiatives despite inflationary pressures
    • Customer deposits (EOP) increased by 9% or $1.6bn year-on-year (YoY) but flat year-to-date (YTD) to $19.7bn.
    • Net customer loans (EOP) increased 4% or $370m YoY but decreased by 3% or $266m YTD, primarily due to currency weakness with an increase in Commercial Bank loans offset by lower CIB and Consumer loans.
    • Continued to drive the NPL ratio down to 6.3% compared to 7.7% a year ago and proactively improved the NPL coverage ratio to 107.1%, surpassing our near-term target of 100%. In addition, our allowance for impairment charges includes a central macro-overly buffer of c.$184m for any potential future downside risks.
    • Book value per share (BVPS), up 5% YoY to 6.06 US cents, and tangible book value per (TBVPS) up 7% to 5.62 US cents.
    • Continue to see strong client adoption of our digital platforms (Omni plus, Omni Lite, Xpress Points) across our businesses. As a result, the value of digital transactions increased by $5.9bn YoY to $19bn in the first quarter of 2022.

Earnings Call Information:
Ecobank will not be holding an Earnings Conference Call to discuss the financial results for the three months ended 31 March 2022. The financial results, which have been submitted to the NSE, BRVM and GSE, can be accessed, including the Earnings Press Release, by visiting www.ecobank.com. If you should have any questions related to these results, please contact Ecobank Investor Relations via [email protected]

Contact information:

Investor Relations
Ato Arku, +228 2221 0303
[email protected]
[email protected]

Media

Christiane Bossom, +228 2221 0303
[email protected]