Ecobank sees profit soar by 23% for FY 2020

Edward Nartey Botchway, Executive Director – Finance at Ecobank

… total assets also rise 21%

Ecobank has recorded profit after tax of GH¢543.8 million for the year ended December 31, 2020. This represents a 23% growth when compared to the GH¢441.9 million recorded in the corresponding accounting period of 2019.

The bank also saw its profit before tax amounted to GH¢773.7 million and was 22% growth on prior year’s numbers.

This was contained in the audited summary statement detailing the bank’s performance during the timeframe.

In the report, the pan-African bank stated that the value of its total assets had appreciated by some 21%, from GH¢13.2 billion in 2019 to GH¢15.89 billion for the year under consideration, once again cementing its status as the largest player in the industry.

An examination of the statement reveals that revenue grew by 17% year-on-year (YoY) to GH¢1.8 billion, up from GH¢1.54 billion, whilst net impairment shrunk by 17.3%.

Furthermore, profit before tax and deposits were up by 22% and 21% respectively, with retail customers attributed with contributing more than 30% to the hike in deposits.

Ecobank’s capital adequacy ratio (CAR) was up by 0.6 percentage points, from 18.58% in 2019 to 19.18% in 2020 and remains well ahead of the regulatory threshold.

Fees and commission income declined marginally, by 10.64% on account of decreased trade financing and remittances occasioned by the ongoing pandemic.

Despite prevailing economic constraints, the ratio of non-performing loans (NPLs) increased by a mere 0.5 percentage points YoY, to 6.2%, up from 5.7% in the previous year.

This was ascribed to Ecobank’s robust risk profiling and management.  The bank also made advances particularly towards medical and health related projects.

The bank continued to remain highly liquid, particularly with reference to meeting its short-term obligations, with a ratio of 104.84% up from 87.85% over the same period in 2019.

Also, Earnings-Per-Share (EPS) of bank stood at 169 Ghana pesewas (GH¢1.69) at the end of 2020, up from 140 pesewas (GH¢1.4) the previous year.

Other metrics which appreciated over the accounting period were cost to income ratio (47.9%); return of average asset (3.8%), return on average equity (26%); and non-funded income relative to total income (25.9%).

In addition to the positive Profitability and Liquidity metrics, the Bank’s Capital Adequacy of 19.18% points to a well-Capitalized Bank.

Executive Director – Finance, Edward Nartey Botchway, stated that the performance of the bank – despite the unfavorable economic conditions, globally and locally, was attributable to the measures the bank had put in place to become a digital-centric financial institution, prior to the advent of COVID-19 and the dedication and commitment of Staff.

“Our performance is a testament to the planning and the preparation to build a world-class digital-centric bank which occurred before COVID-19 and I think we are at a place where we can build up on it and do a lot more, even in the midst of the pandemic,” he said to the B&FT in an interview discussing the results.

He also encouraged customers to sign on the Bank’s flagship product the Ecobank Mobile App and the products of the Bank.  He added that “30 years ago this bank was established and from our humble beginnings we have built the largest bank by balance sheet size and the most profitable bank in the country, we are most grateful to our customers, shareholders and staff for their support.

Mr. Botchway further disclosed that his outfit made GH¢1.75 million for COVID-19 related donations.

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