August 19, (THEWILL) – Amid the country’s troubled economy, Ecobank Nigeria Limited, injected N14.35 billion through ‘Loans and Advances to Customers’ in six months (January – June 2024).
The bank’s half-year financial statements filed with the Nigerian Exchange (NGX) revealed that it expanded its loan book by 43 percent, to boost Nigeria’s troubled economy, from N10.03 billion recorded on December 31, 2023, to N14.35 billion as of June 30, 2024.
For this quantum leap in risk exposure (Loans and Advances to Customers alone), the Tier-2 financial services institution hauled substantial interest income of N641.0 billion against N245.9 billion in the corresponding period of 2023, representing a 160.6% increase and constitutes 47,6 percent of the bank’s entire N1.22 trillion interest income during the period.
“This is a marvelous performance in an unfavourable interest rate regime occasioned by the Central Bank of Nigeria’s high Monetary Policy Rate (MPR) now sky-hitting 26.75 percent , when many people are shying away from bank loans with the ‘hostile; interest rate of over 30 percent,´ said Tony Akalonu, an investment analyst.
The bank’s aggressive loan book expansion impacted its enhanced assets growth which jumped to N38.5 trillion in six months from N25.9 trillion as of December 31, 2023, an increase of 48.6 percent “The impressive assets performance suggests that the bank may achieve a 100% assets growth in 2024,” said Akalonu,
A further look at the bank’s balance sheet showed that the 39-year-old lender recorded a 48.2 percent growth in ‘Deposits from Customers’ which rose to N28.2 trillion from N19.0 trillion. This implies strong confidence among its over 28 million customers serviced by its 273 nationwide branches.
Ecobank’s e-banking channels are well received in the industry. Ecobank in its website encourages its customers to embrace its digital banking channels which include the free offer on all transfers of N5,000 and below.
Ecobank’s USSD code, *326#, which is popularly known for its zero session fee is also used for other transactions such as paying bills, buying of airtime, checking of BVN, applying for an Xpress Loan, opening a bank account and even generating an e-token for cardless withdrawals from any Ecobank ATM or Xpress Point.
Recently, the lender announced that its 2024 Ecobank Fintech Challenge produced 12 finalists, including Sawport Video Banking, and Sproutly Africa – Nigerian firms.
The finalists were announced at the first semifinal event, which was held on August 15, at the Ecobank Pan African Centre, Lagos, by the Director/Regional Executive of Ecobank Nigeria, Bolaji Lawal, and the Executive Director/Chief Risk Officer, Niyi Olagbami.
Other finalists include; Buupass (Kenya), MiaPay (Togo), EasyEquities (South Africa), PaySika (Cameroon), Exuus (Rwanda), Daba Finance (Cote D’Ivoire), PROBOUTIK (Senegal), Melanin Kapital Neobank (Kenya), YMO Africa (Guinea) and VaultPay (Democratic Republic of Congo).
The Chief Executive Officer of Ecobank Group, Jeremy Awori, remarked, “The finalists in this year’s Ecobank Fintech Challenge have showcased exceptional talent and innovation, and we look forward to welcoming them to the finale.
“At Ecobank, we are committed to collaborating with these business builders to develop products and services that will benefit our customers and contribute to our continent’s progress.”
The Group Head of Payments Service, Cash Management & Client Access, Ecobank Group, Isaac Kamuta, highlighted why the banking group has been organising the challenge.
He said, “This challenge is more than just a competition. It is an African initiative designed to identify, nurture, support, and collaborate with innovative businesses that want to scale across Africa. Ecobank is proud to provide comprehensive support, which includes potential or commercial partnerships, which I think is important for any fintech or entrepreneur who has started a business, opportunities for technical integration with our platforms, and market access across our 35 African markets
“And I must say that is an important consideration because nobody builds a business and you want it to remain in one country. You all want to build a business that has scale across Africa and scales across globally.”
The Senior Fintech Advisor, Ecobank Group, Djiba Diallo, reassured the semi-finalists across the continent that the bank was still open to collaborating with them.
The finalists will compete in the grand finale scheduled to be held in Lome, Togo, in September for a $50,000 prize and a spot in the Ecobank Fintech Fellowship programme.
The Ecobank Fintech Challenge started in 2017 and this year’s edition received over 1550 applications from 70 countries, including from outside Africa.
The Ecobank Fintech Challenge, designed in partnership with international advisory firm Konfidants, is supported by a range of partners, including Huawei, Proparco, TechCabal, BlueSpace, Afrilabs, Africa Fintech Network, MEST Africa, Naija Startups, Expand in Africa, and Founders Africa.
During the period under review, the bank’s revenue rose by 186 per cent to N1.36tn from N475.65bn in H1 2023 of the previous year, driven by higher interest income and non-interest revenue.
Operating profit before impairment charges reached N631.5bn, a 215 percent jump from the N200.77bn reported in the previous year, due to robust growth in both interest and non-interest income.
Income for H1 surged by 175 per cent to N1.23tn from N445.9bn in H1 of the previous year, due to higher yields on loans and advances, as well as investment securities.
Fee and commission income grew by 186 per cent to N384.1bn, compared to N134.38bn in the previous year, supported by increased transaction volumes and enhanced service offerings.
Ecobank recorded a net investment income loss of N941.51m, compared to a gain of N2.27bn in H1 of the previous year.
The bank recorded operating expenses of a 165 per cent increase to N728.73bn, up from N274.88bn in the previous year, due to higher staff costs and depreciation.
Impairment charges on financial assets increased by 273 percent to N188bn from N50.46bn in H1 2023, attributed to heightened credit risk and cautious provisioning.
Tax expenses rose by 194 percent to N132.49bn compared to N45.09bn last year, in line with the higher profit before tax.
The rise in customer deposits and investment securities pushed the banks’ total assets up by 49 percent to N38.6tn as of June 2024, from N25.92tn in December 2023.
Additionally, deposits from customers grew by 49 per cent to N28.26tn, compared to N19.01tn at the end of the previous year.
The bank’s total equity decreased by 13 per cent to N2.25tn, down from N1.65tn in December 2023, on the back of exchange rate fluctuations, which affected retained earnings and reserves.
Earnings per share increased by 175 percent to 878 kobo, up from 319 kobo in H1 2023.
ETI grew profit after tax by 11 percent year-on-year to $407m in 2023 from $367m in 2022.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
