Ecobank Group Reports FY 2020 Profit Before Tax of $174 Million ($338 Million Excluding Goodwill Charge), EPS of 0.010 US Cents, Total CAR of 12.3%, and Record Deposit Growth of $2.0 Billion to $18.3 Billion

Group CEO Commentary

Ade Ayeyemi, Ecobank Group CEO, said: “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. I am proud of Ecobankers’ hard work and continued service to our customers and the support we provide to the communities we serve.”

Despite the pandemic’s challenges, revenues increased by 4% to $1.7 billion. Pre-tax pre-provision profits rose 14% to $626 million, reflecting the power of our pan African diversified one-bank business model. Our tangible book value per share rose 16% to $0.0547. Pre-tax profits were $174 million, down 57% on last year, due to a $164 million goodwill charge, $61 million in net monetary losses, and legal and restructuring costs of $44 million. Corporate and Investment Banking was the primary growth driver, increasing PBT by 45%, as it repositioned the FICC business to offer innovative and structured products.

Consumer Bank and Commercial Bank’s profits were down as the pandemic’s reverberations disproportionately affected households and small businesses, but they led the drive in the record growth of our customer deposits of $2bn to reach $18.3bn, thanks to the acceleration in digital channels usage. The regions’ results benefited from continued execution momentum. Nigeria improved Return on Equity (ROE) and strengthened liquidity and capital levels. UEMOA and AWA produced strong ROEs reflecting their leadership positions. CESA, hampered by Zimbabwe and South Sudan’s hyperinflation, delivered modest results.

Group-wide we ended the year with a provisional Total Capital Adequacy Ratio of 12.3% versus 11.6% at the start. We improved our efficiency ratio by 342 basis points to 62.7% as we continued resetting the firm’s cost base. With pre-tax, pre-provision profits up $77m, we added meaningfully to gross impairment reserves. We are turning the curve on asset quality. Non-performing loans reduced substantially, evidenced by our 7.6% NPL ratio. We closed with a coverage ratio of 75%, compared to 58% in 2019, and are aiming for 100% in the near term.

“We will continue to invest in our technology and payment business capabilities to ensure we deliver excellence in customer service. We remain 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 nearterm challenges from COVID-19. I thank all Ecobankers for their continued dedication to helping our customers, communities and governments.” Ayeyemi concluded.

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