Ecobank’s diversified business model raises PBT by 13% to $540m in 2022

By Onome Amuge 

Ecobank Group grew its profit before tax (PBT) by 13 per cent to $540 million in the 2022 financial year, supported by the benefits of its diversified business model.

The  leading independent regional banking group in West and Central Africa made the disclosure in its audited results for the year ending December 31, 2022.

Within the period under review, the solid profit growth in commercial banking rose 100 per cent to $134 million.

Consumer banking was up 50 per cent to $130 million, but the figure was partially offset by a 17 per cent decline to $333 million in corporate and investment banking PBT, attributed to impairment charges associated with Government of Ghana’s debt restructuring exercise.

The pan-African banking institution also recorded net revenues of $1.9 billion in the period under review.

Ecobank’s payment revenues grew $25 million or 12 per cent to $234 million, representing 13 per cent of the Group net revenues, driven by merchant acquiring, cards, and wholesale payment. Its total assets rose $1.4 billion to $29.0 billion, primarily supported by growth in loans and investment securities driven by customer deposits growth.

The bank also stated that its gross impairment charges on loans and advances stood at $270 million for 2022 compared with $374 million in 2021, reflecting a decrease in non-performing loans. The net impairment charges on loans and advances were also lower in 2022 at $10 million compared to $170 million in 2021.

In the same vein, the bank said that hyperinflation in Zimbabwe and South Sudan resulted in a $34 million net monetary loss.

As part of its commitment to shareholders, the bank  announced a proposed final dividend payout of $28 million or 0.11 US cents per share subject to shareholder approval at its next annual general meeting (AGM).

Commenting on the bank’s financial performance in the full year,Jeremy Awori,the newly appointed chief executive officer of Ecobank, stressed that Ghana’s debt restructuring exercise placed the company in a difficult position during the financial year.

Awori said 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 the bank.

In his words: “We grew profit before tax by 13 per cent to $540m, translating into earnings per share growth of 10 per cent and delivering a record return on shareholders’ equity of 21.1 per cent  With stubborn inflationary pressures in 2022, improving our cost-to-income ratio to 56.4 per cent demonstrates our discipline around cost management.

Moreover, we further reduced the amount of non-performing loans to 5.2 per cent, reflecting our continued progress in improving credit quality. Our balance sheet is well capitalised, with a total capital adequacy ratio of 14.4 per cent  above the regulatory minimum.”