Ecobank profit drops by 66 per cent to N33.7bn, grows deposits by N1.4tn
The Group delivered earnings per share (EPS) of N3.73 in the current reporting period, down 99 per cent from the N281.57 EPS declared in 2019.
Ecobank Transnational Incorporated (ETI), a leading Pan-African banking group, released its audited consolidated financial statements for the year ended 31st December, 2020 on Tuesday, showing a net profit of N33.7 billion. This represents a 66 per cent drop in profit compared to N99.5 billion reported in 2019. Ecobank, which has operations in 33 African countries, said the COVID-19 pandemic, which negatively impacted households and small businesses, affected its consumer banking and commercial banking profits last year.
According to the financial statements released on the website of the Nigerian Stock Exchange (NSE) and a press statement by ETI, the bank's gross earnings dropped marginally by 0.2 per cent to N841.1 billion. But despite the pandemic's challenges, Ecobank's revenue grew by 4 per cent in 2020 N641.8 billion, compared to the N586.9 billion posted in the previous year.
The bank also posted a record deposit of N7.3 trillion last year, representing 24 per cent increase in customers' deposits from N5.9 trillion in 2019. The bank said the increase in deposits was driven by its consumer banking and commercial banking divisions. Ecobank also reported a 20 per cent growth in total assets, which increased by N1.8 trillion to N10.4 trillion in the reporting period.
Given the fall in net profit, the Group delivered earnings per share (EPS) of N3.73 in the current reporting period, down 99 per cent from the N281.57 EPS declared in 2019.
"2020 was a year which tested the resilience of the human spirit in rising to the many challenges as governments, businesses and households' unrelentingly strove to keep citizens, clients and loved ones safe," said Ade Ayeyemi, Ecobank Group CEO. "I am proud of Ecobankers’ hard work and continued service to our customers and the support we provide to the communities we serve."
The Group reported an improved return on equity (ROE) and strengthened its liquidity and capital levels in its Nigeria operations. Nigeria is one of the four geographical regions of ETI, the others being Francophone West Africa (UEMOA), Anglophone West Africa (AWA), and Central, Eastern and Southern Africa (CESA). The Group’s ROE in Nigeria was 4.2 per cent in 2020, compared to 0.4 per cent reported in the previous year.
According to the financial report, the bank's non-performing loan (NPL) ratio was 7.6 per cent in 2020, down from 9.7 per cent in the previous year. The bank also increased the allowance coverage for NPLs from 58.3 per cent in 2019 to 74.5 per cent last year. ETI said it aims for 100 per cent coverage ratio in the near term.
Ayeyemi said ETI remains “optimistic about future growth and ability to create shareholder value by utilising our investments and achievements to grow revenues and generate long-term returns, despite the near-term challenges from COVID-19." He also said the bank will continue to invest in its technology and payment business capabilities to deliver excellence in customer service.
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