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Ecobank Transnational Incorporated Plc has remained resilient even amid a challenging business environment as the Pan African lender with office branches across the continent recorded strong earnings growth to end the 2022 financial year.
The audited financial statement shows the lender’s net income was up 7 percent to N156.55 billion from N146.32 billion as at December 2021.
Gross earnings followed the same growth trajectory as it increased by 11.87 percent to N1.09 trillion in the period from N956.39 billion the previous year.
“Ecobank’s strong 2022 performance reflects the strength of our diversified business model, growth momentum and efficiency, and was achieved despite operating in a challenging macroeconomic environment, which also included the difficulties that Ghana’s debt restructuring exercise placed on us,” said Jeremy Awori, CEO of Ecobank Group.
Analysts are sanguine regarding the long-term outlook for the bank and expect financial performances to remain strong, supported by strong underlying fundamentals and strong management.
The bank is making money from its electronic and online banking while contemporaneously ensuring that banking service reaches people who reside in rural areas.
It is worth noting that digital channels are contributing to Group earnings, as top line (revenue) growth helps absorb rising impairment charges on financial asset and spiraling operating expenses exacerbated by red-hot inflation and volatility in foreign currency.
Non-interest income rose by 8.86 percent to N362.07 billion in the period under review from N332.60 billion as at December 2021.
Fees and commission income was up 10.65 percent to N227.81 billion in the period under review from N204.97 billion as at December 2021.
As the economy has recovered from Covid-19 crisis, there has been a bounce back in loans as interest income got a boost from the high interest rate environment brought on by the aggressive monetary stance of the central bank that seeks to tame stubborn inflation.
Ecobank’s loans and advances were up 24.73 percent to N5.07 trillion in December 2022 from 4.06 trillion the previous year.
“With stubborn inflationary pressures in 2022, improving our cost-to-income ratio to 56.4% demonstrates our discipline around cost management. Moreover, we further reduced the amount of non-performing loans to 5.2%, reflecting our continued progress in improving credit quality. Our balance sheet is well capitalised, with a total capital adequacy ratio of 14.4% above the regulatory minimum,” said Awori.