Ecobank Group reports performance for 2021 first quarter. From the result, Ecobank Group’s Gross earnings remained stable at $532.8 million (up 10% to NGN 214.3 billion) while Revenue up 4% to $409.4 million (up 15% to NGN 164.6 billion).

Key financial highlights:

• Operating income before impairment losses up 25% to $166.6 million (up 37% to NGN 67.0 billion)
• Profit before tax up 11% to $100.3 million (up 22% to NGN 40.3 billion)
• Profit after tax up 12% to $75.8 million (up 23% to NGN 30.5 billion)
• Total assets down 1% to $25.6 billion (up 1% to NGN 10,442.3 billion)
• Loans and advances to customers down 3% to $8.9 billion (down 1% to NGN 3,644.3 billion)
• Deposits from customers down 1% to $18.1 billion (up 1% to NGN 7,378.9 billion)
• Total equity down 4% to $2.0 billion (down 2% to NGN 796.8 billion)
• EPS increased 8% to 0.209 US cents and ROTE of 15.7%
• Ongoing focus on driving cost efficiency led to an improvement in the cost-to-income ratio from 62.7% in 4Q20 to a record cost-to-income ratio of 59.3%, the lowest in a decade, despite a challenging revenue environment.
• Customer deposits grew $2.0bn year-on-year (YoY) to $18.1bn.
• Non-performing loans (NPL) ratio of 7.7% was flat on 4Q20 but a significant improvement from 9.9% in 1Q20.
• NPL coverage ratio of 81.5% improved from 74.5% in 4Q20 and 65.1% in 1Q20 demonstrating efforts to build reserves of NPLs to near 100% in the near term.
• Book value per share of 5.77 US cents, up 2% YoY; tangible book value per
  share (TBVPS) up 18% to 5.25 US cents
• Basel II/III total regulatory capital of $1.92bn; Total CAR ratio of 12.3%.
• Corporate & Investment Bank’s digital transformation of its cash management and trade business gained momentum. The total volume of transactions on Omni Plus increased 44% to $8.6bn compared to 1Q20.
• Digital transactions among Commercial Bank clients rose 42%, accounting for 37% of total transactions. Transactions within branches fell 32%.
• The number of Xpress Point agents increased 72% YoY to c.76,000 agents with the volume of transactions increasing by 42% to $573m.
• Transaction volumes on Omni Lite were nearly a $1bn in the quarter, increasing by $618m from the prior year.
• The volume of transactions on the Ecobank mobile app (including USSD) continues to accelerate, growing by $541m YoY to $1.2bn.

Ade Ayeyemi, Ecobank Group CEO, said:

“The firm’s performance in the first quarter was strong, despite the continuing challenging operating environment. Revenues increased 4% to $409 million, and we earned $100 million in profit before tax, an increase of 11% year-on-year. Earnings per share grew by 8%, and return on tangible equity was 15.7%. These results reflect the benefits of our diversification and the sustained focus on our strategic priorities.”

“We were also pleased with the underlying performance of our businesses. Our Corporate and Investment Bank delivered a 4% increase in revenues, driven by efficient balance sheet utilisation and support for clients with structured financial solutions.

Revenues grew 13% in Commercial Bank, buoyed by increased cash management fees as pandemic-induced restrictions were eased and client activity increased.

However, the consumer continues to be disproportionately affected, which contributed to revenues in Consumer Bank declining by 3%. But we are encouraged by the gradual pick-up we are seeing in consumer spending activity.

We continued to be unrelenting in our efficiency goals and improved further our cost-to-income ratio from 62.7% in the fourth quarter of 2020 to 59.3% in the current quarter, the lowest in a decade. We continued to build our impairment reserves on nonperforming loans in line with our goal of achieving a reserve coverage close to 100% in the near term.

Consequently, the coverage ratio improved to 81.5%, from 74.5% in the fourth quarter of 2020″.

“Our balance sheet continues to be liquid, robust, and healthy, providing us with the capabilities to be supportive of our client’s financial needs. The focus on driving digitalisation in all our client engagements contributed to sustained growth in customer deposits,”.

“Finally, I am proud of my fellow Ecobankers who continue to serve our customers and communities. Though the economic outlook remains uncertain with virus resurgences across parts of the world creating fragility in economic recovery, whatever the outcome, we are focused on remaining resilient and creating shareholder value for the long term. We will drive momentum to ensure a sustainable revenue expansion path with our clear focus on our people, platforms, products and ultimately performance.”