Ecobank Nigeria reported a profit before tax of $10 million, a decrease of $14 million, or 58%, or 55%, in constant currency, driven predominantly by a decline in net revenues because of non-linear movements in interest rates within the period. Annualised ROE for the period was 2.5%.
Ecobank Nigeria’s net revenues were $107 million, decreasing by $29 million, or 22%, or in constant currency, by 15%, with growth in noninterest revenues offset by a decrease in net interest income. Net interest income was $46 million, down $39 million, or 46%.
The decrease reflected a decline in interest income of 29%, offsetting a 22% decrease in interest expense. The reduction in interest income was driven predominantly by non-linear movements in interest rates, which led to liabilities repricing ahead of assets.
Non-interest revenue was $61 million, up to $10 million, or 20%, driven partially by fees and commission income as trade activity picked up and e-banking volumes grew on higher digital adoption rates.
In addition, non-interest revenue benefited from a gain on the disposal of non-core assets and dividends during the period. Client related FX sales declined as FX scarcity persisted with the Central Bank maintaining stringent control over the FX market.
Ecobank Nigeria’s expenses of $87 million decreased $22 million, or 20%, reflecting benefits accrued from the non-recurrence of costs that were associated with the staff and branch optimisation exercise of the prior-year period.
In addition, other efficiency initiatives such as out-sourcing power helped to substantially reduced capital expenditures. However, the cost-to-income ratio increased to 81.8% compared to 80.5% in the year-ago period due to the significant decrease in revenues.
Net impairment charges of $7 million compared to a net benefit of $1 million in the prior year, driven by impairment charges within Commercial Bank.
The Ecobank Group is divided into four geographical regions. These reportable regions are:
- Francophone West Africa (UEMOA)
- Nigeria, Anglophone West Africa (AWA)
- Central, Eastern
- Southern Africa (CESA).
The financial results of the constituent affiliates of Ecobank Development Corporation (EDC), the Group’s Investment Banking (IB) and Securities, Wealth, and Asset Management (SWAM) businesses across our geographic footprint are reported within their country of domicile and therefore in the applicable regions of UEMOA, Nigeria, AWA, and CESA.