Ecobank Reports Record Revenues for 2023, $2.1 Billion

Banking

Friday, 03 May 2024 17:39

Ecobank Reports Record Revenues for 2023, $2.1 Billion

(Togo First) - It is a first for the Togo-based holding. It achieved the record amidst challenging monetary conditions in key markets like Nigeria and Ghana.

According to the 2023 certified financial results, the Ecobank Group reported a pre-tax profit of $581 million, up 8% year-on-year. This was supported by a net income of nearly $2.1 billion, up 11%.

For the first time since 2015, the group's revenues exceeded $2 billion. However, currency fluctuations in Nigeria and Ghana limited the performance, as the naira and cedi weakened against the dollar. At constant exchange rates, pre-tax profit would have increased by 34%, and net income by 31%.

The revenue growth was driven by a 15.3% rise in net interest income, from $1.014 billion in 2022 to $1.169 billion in 2023. Non-interest income, including fees and commissions, investment income, trading revenue, and foreign exchange gains, also grew modestly by over 5%.

Profit was impacted by significant asset losses, as provisions for financial asset impairment increased by 66.7% to $330 million. Loan losses surged by 1405% to over $145 million, from about $10 million in 2022. The losses were more pronounced in Nigeria, where impairments rose by over 80%.

As a result, the bank's total assets declined for the first time(-6%) since at least 2019, partly due to lower loans and advances to customers, which made up 39% of total assets. As of December 31, 2023, the total gross loans and advances amount to $11.062 billion, with the bank estimating impairments on these loans at $519 million. This represents a 4.2% decrease compared to the $11.003 billion in the previous year.

The financial report analyzed by the Ecofin Agency reveals that loan portfolio quality remained relatively stable, with the non-performing loans (NPL) ratio slightly increasing to 5.4% in 2023, compared to 5.2% in 2022.

Deposits slumped by about 4%, while equity plummeted by 14.4%, from $2.027 billion in 2022 to $1.734 billion in 2023. The fall is mainly attributable to currency conversion losses and asset value adjustments, in a challenging operational environment marked by unfavorable market conditions, economic challenges, or significant fluctuations in exchange rates.

Despite the challenges, Ecobank created value for shareholders, with its tangible return on equity increasing by 3.8 percentage points to 24.9%..

Fiacre E. Kakpo

REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.