African banking group Ecobank (NYSE: ET) has released its financial results for Q1 2021, indicating a profit before tax of USD 100 million, up by 11% from Q1 2020.
Revenues increased by 4% to USD 409 million despite a challenging operating environment, with strong growth from all lines of business, especially in Commercial and Corporate and Investment Bank.
Corporate and Investment Bank delivered a 4% increase in revenues, driven by efficient balance sheet utilization and support for clients with structured financial solutions.
Revenues grew 13% in Commercial Bank, buoyed by increased cash management fees as pandemic-induced restrictions were eased and client activity increased.
Profit before tax reached USD 100 million, increasing by 11% year-on-year and by 20% from Q4 2020.
The bank’s ongoing focus on driving cost efficiency led to an improvement in the cost-to-income ratio from 62.7% in Q4 2020 to a record cost-to-income ratio of 59.3%, the lowest in a decade, despite a challenging revenue environment.
Customer deposits grew by USD 2.0 billion year-on-year (YoY) to USD 18.1bn.
The ratio of non-performing loans (NPL) remained stable at 7.7% during Q4 2020 but significantly improved from 9.9% in Q1 2020.
The NPL coverage ratio of 81.5% improved from 74.5% in Q4 2020 and 65.1% in Q1 2020 demonstrating efforts to build reserves of NPLs to near 100% in the near term.
Earning Per Share (EPS) increased by 8% to USD 0.209 and Return On Tangible Equity (ROTE) by 15.7%.
Commenting on the results, Ade Ayeyemi, Ecobank Group CEO, said: “The firm’s performance in the first quarter was strong, despite the continuing challenging operating environment. These results reflect the benefits of our diversification and the sustained focus on our strategic priorities. Our balance sheet continues to be liquid, robust, and healthy, providing us with the capabilities to be supportive of our client’s financial needs. The focus on driving digitalization in all our client engagements contributed to sustained growth in customer deposits.”
“Finally, I am proud of my fellow Ecobankers who continue to serve our customers and communities. Though the economic outlook remains uncertain with covid resurgences across parts of the world creating fragility in economic recovery, whatever the outcome, we are focused on remaining resilient and creating shareholder value for the long term. We will drive momentum to ensure a sustainable revenue expansion path with our clear focus on our people, platforms, products, and ultimately performance.” Ayeyemi concluded.
Ecobank began its operations in Tanzania in January 2010 and has since grown to include several branches across the country.
Ecobank is a full-service bank providing wholesale, retail, investment and transaction banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.
