Loans, elevated risk cost hamper ETI

The Group CEO of Eco Transnational Incorporated (ETI), Ade Ayeyemi, has said that the financial performance for the group within the first half of the year could have been better if not for continued provision building and elevated cost-of-risks.

The pan-African banking conglomerate, with banking operations in 36 African countries, and headquartered in Western Africa, releases its audited results in both the Nigerian Naira and the US Dollar.

Reacting to the audited half year financial statement released by the lending group via the Nigerian Stock Exchange (NSE) on Thursday, Ayeyemi, who reviewed the performance of the bank in constant currency (USD), noted that the group’s profit before tax, fell 20 per cent in constant currency, due to continued provision building and elevated cost-of-risks as the bank had earlier communicated.

The bank had cleaned its books of non-performing loans, by making a provision of N221.7 billion in its 2016 audited accounts.

Although, Ayeyemi described the audited half year results to demonstrate the benefits of a diversified business model, he explained that despite a fragile macroeconomic backdrop in most of our markets, the bank, still generated a 15.6 per cent return on tangible equity and further improved cost-to income ratio to 60.6 per cent, driven by continued cost reduction initiatives across the bank’s network.

Ayeyemi stated that, ”We are also happy with the progress we are making on the digital front, particularly on our strategy to enable millions of unbanked Africans have access to financial solutions using our revolutionary Ecobank App and other digital channels.”

He explained that the recent appointment of Eric Odhiambo as Chief Risk Officer, is to help drive the bank’s risk management objectives and improve its risk culture.

He said “Our revenues increased 5 per cent in constant currency, and highlighted encouraging growth in our Trade and FICC, businesses, thanks to encouraging client activity and improving foreign-exchange markets.

Overall, we are making good progress on our strategy and continue to serve our customers diligently. We look forward to the second half of the year with excitement.”
A breakdown of the bank’s performance showed that the Ecobank group reported Gross earnings of N386.9bn, representing a growth of 41 per cent when compared with N273.4bn declared as gross earnings in the same period of 2016.

Revenue expanded from N208.5bn to N278.7bn, an increase of 34 per cent while operating profit before impairment losses were up 47 percent to N109.8bn from N74.5bn in June 2016.

The result also showed that profit before tax increased to N46.2bn, rising 11 per cent against N41.6bn posted in the preceding year. Profit after tax also rose remarkably by 21 per cent to N37.7bn, from N31.1bn in 2016.

Total assets increased 3 per cent to N6.5trillion, from N6.3trn in the corresponding period of 2015, Loans and advances also went up by 3 percent to N2.9bn, deposits from customers inched 3 per cent higher to N4.2bn while Total Equity increased 12 per cent to N602.6bn