- Ecobank Delivers 24.90% Return on Tangible Equity, but Nigeria Risks Persist
Ecobank Transnational Incorporated recorded a 12% increase in profit before tax to $737 million for the nine months ended September 2026, supported by higher interest income, expanding customer deposits and strong performances across its Central, Eastern, Southern and Anglophone West African operations.
The pan-African banking group’s net revenue rose by 12% to $1.96 billion from $1.75 billion. On a constant-currency basis, however, revenue increased by 6%, indicating that exchange-rate movements contributed materially to the reported growth.
Profit attributable to ETI shareholders increased by 17% to $364 million, while profit after tax rose by 13% to $516 million. Basic earnings per share advanced by 15% to 1.48 US cents from 1.29 US cents.
The earnings improvement was broad enough to demonstrate the benefits of Ecobank’s geographical diversification, but the results also reveal uneven performance across regions, continued pressure from Nigeria’s impaired loan portfolio and declining returns on an enlarged equity base.
Chief Executive Officer Jeremy Awori said the performance reflected the implementation of Ecobank’s Growth, Transformation and Returns strategy, supported by improved operating efficiency and stronger customer confidence.
The group’s return on average tangible equity stood at 24.90%, remaining strong in absolute terms but declining from 31.20% in the corresponding period of 2025. Return on shareholders’ equity similarly fell to 24.40% from 30.30%.
The reduction in returns, despite higher earnings, suggests that the growth in the group’s equity base outpaced the increase in profit. Equity attributable to ETI shareholders rose by 24% year on year to $2.05 billion, helped by retained earnings.
Ecobank’s revenue performance was supported almost equally by interest and non-interest businesses.
Net interest income increased by 12% to $1.13 billion, accounting for approximately 57.60% of total net revenue. The increase reflected higher low-cost deposit balances and loan growth in selected regions, which helped offset pressure from falling interest rates in several markets.
The net interest margin improved marginally to 5.84% from 5.79%, while the average rate paid on funds declined to 1.97% from 2.28%.
The reduction in funding costs demonstrates the value of Ecobank’s current and savings account franchise. As interest rates decline, banks with large pools of inexpensive transactional deposits are generally better positioned to protect their lending margins.
Non-interest revenue rose by 12% to $832 million and represented 42.40% of total revenue. This provides Ecobank with a relatively diversified income structure and reduces excessive dependence on lending spreads.
Net fees and commissions increased by 10% to $478 million, supported by cash management, credit-related services and card income. Net fee and commission income accounted for 24.50% of total revenue.
Payment revenue rose by 9% to $241 million and represented approximately 12% of the group’s total revenue. Wholesale payment revenue increased by 14% to $119 million, card revenue grew by 5% to $77 million and remittance revenue climbed by 25% to $8.10 million.
The expansion in payment income is strategically important because it provides recurring revenue without requiring the bank to assume the same credit risk associated with loan growth.
Net trading and foreign-exchange income increased by 7% to $312 million. Foreign-exchange translation gains reached $47 million, reversing a $25 million loss recorded in the corresponding period.
However, foreign-exchange trading gains declined by 26% to $194 million, partly because of regulatory changes in the West African Economic and Monetary Union market. The decline was partially offset by a 38% increase in securities trading income as yields on government instruments fell.
Operating expenses increased by 12% to $938 million, although the rise was limited to 5% in constant currency.
Staff expenses grew by 12% to $413 million as Ecobank invested in training and recruited additional sales and customer-service personnel. Other operating expenses increased by 12% to $464 million, driven partly by technology investment.
Revenue growth was sufficient to absorb the additional expenditure. The cost-to-income ratio improved to 47.80% from 48%, placing the group slightly ahead of its 2026 target range of between 48% and 50%.
Pre-provision operating profit increased by 12% to $1.02 billion. That performance indicates that the core franchise generated more than one billion dollars before credit losses and taxation.
The improvement in efficiency was nevertheless modest. Sustaining the trend will require technology spending to translate into higher transaction volumes, stronger customer retention and lower unit operating costs.
Gross loans and advances increased by 6% to $12.91 billion, while net loans rose by the same rate to $11.97 billion.
Loan growth was uneven across the group. Consumer and Commercial Banking loans increased by 16% to $4.32 billion, supported by microloans and personal lending. Corporate and Investment Banking loans rose by only 2% to $8.60 billion.
Anglophone West Africa recorded a 33% increase in loans to $2.45 billion, while Central, Eastern and Southern Africa posted growth of 31% to $3.03 billion.
By comparison, loans in Francophone West Africa declined by 3% to $5.25 billion. Nigerian loans fell by 6% to $1.54 billion as the group curtailed new lending to address legacy asset-quality problems and restore regulatory capital strength.
Customer deposits grew more quickly than lending, increasing by 14% to $27.54 billion. Current and savings deposits rose by 16% to $23.30 billion and represented 84.50% of the deposit base, up from 83% in September 2025.
Corporate and Investment Banking deposits increased by 19% to $11.71 billion, while Consumer and Commercial Banking deposits grew by 11% to $15.83 billion.
The strong deposit growth lowered the cost of customer deposits by 15 basis points to 1.27%.
However, the loan-to-deposit ratio declined to 46.90% from 50.50%. The ratio demonstrates substantial liquidity, but it also shows that less than half of customer deposits were deployed into loans.
This conservative position protects liquidity and limits credit risk, but it may constrain future interest income if Ecobank cannot identify sufficient high-quality borrowers. The challenge is to deploy more of its funding without weakening credit standards.
Total assets increased by 11% to $35.96 billion, while the loan-to-asset ratio declined to 36% from 37.60%.
Ecobank’s non-performing loan ratio stood at 7.50%, improving from 9.40% at the end of 2025 and remaining within management’s 2026 target range of between 6% and 8%.
The improvement, however, was driven substantially by write-offs. Non-performing loans declined by $232 million from December 2025 to $971 million, with approximately $200 million of loans in the Resolution Vehicle written off.
Compared with September 2025, non-performing loans actually increased by 50% from $647 million, while the NPL ratio rose from 5.30%.
This makes the direction of asset quality more complicated than the headline ratio suggests. The year-to-date position has improved, but the loan book still contains materially more impaired credit than it did one year earlier.
Accumulated expected credit-loss allowances stood at $942 million, down 6% from December 2025 but 13% above the September 2025 level.
The NPL coverage ratio improved to 97% from 83.30% at year-end, meaning Ecobank held provisions equal to almost the full value of its non-performing loans. Stage Three coverage increased to 67.50% from 62.20%.
Impairment charges on financial assets rose by 13% to $287 million. Net impairment charges on loans increased by 3% to $231 million, while impairment charges on other financial assets jumped by 78% to $57 million.
Despite the increase in impairment expenses, the cost of risk declined by 23 basis points to 2.39%.
Nigeria remains the main asset-quality concern. The region held $688 million in non-performing loans, representing approximately 71% of the group total. Its NPL ratio reached 44.80%, while regional NPL coverage was only 19.70%.
Ecobank held an additional $503 million of expected credit-loss provisions centrally, built predominantly against Nigerian risks. This central provision provides a wider group-level buffer but also illustrates how heavily the legacy Nigerian portfolio continues to influence the consolidated balance sheet.
Central, Eastern and Southern Africa produced the group’s strongest regional profit before tax at $392 million, up 20%. Revenue rose by 19% to $720 million, while return on equity stood at 35.90%.
Anglophone West Africa followed with profit before tax of $337 million, an increase of 10%. The region achieved a return on equity of 28% and a cost-to-income ratio of 37%.
Lower interest rates, particularly in Ghana, reduced Anglophone West Africa’s net interest margin to 7.44% from 8.84%. However, loan and deposit growth, lower impairments and stronger fees protected profitability.
Francophone West Africa generated profit before tax of $266 million, down 3%, as higher impairment charges and weaker foreign-exchange trading income offset revenue growth.
Nigeria recorded profit before tax of only $7 million, down 45%, and a return on equity of 2.60%. The figures show that Ecobank’s stronger regions continue to compensate for the underperformance of its Nigerian operation.
Ecobank’s estimated Common Equity Tier One ratio remained at 12.90%, while its Tier One capital ratio stood at 13.50%. The total capital adequacy ratio increased slightly to 16.90% from 16.80%.
Management said the ratios remained above regulatory minimums.
During the period, ETI issued a $450 million Tier Two bond to replace an existing $350 million instrument, adding a net $100 million to its Tier Two capital. It also replaced $75 million in Additional Tier One capital with a new $70 million instrument.
Tangible book value per share increased by 25% to 8.15 US cents. Ecobank’s market price reached 5.12 US cents, more than double the 2.42 US cents recorded in September 2025.
Despite that 111% share-price appreciation, the stock traded at approximately 63% of tangible book value. The discount suggests that investors continue to apply a risk adjustment for asset quality, regional volatility, currency movements and the Nigerian operation.
Ecobank enters the final quarter with growing revenue, a strong low-cost deposit base, considerable liquidity and capital ratios above regulatory requirements.
The group’s pan-African diversification remains its greatest strategic advantage. CESA and Anglophone West Africa can continue supporting earnings while management works through weaker results in Nigeria and parts of Francophone West Africa.
The principal risks are energy prices, inflation, exchange-rate volatility, declining interest rates and further deterioration in problem loans. The rise in impairments on other financial assets also deserves attention.
The central test for Ecobank is no longer whether it can grow. It is whether it can translate deposit growth into carefully selected lending, sustain fee income and resolve Nigeria’s asset-quality problem without consuming a disproportionate amount of group capital.
If management achieves that balance, the gap between Ecobank’s market valuation and tangible book value could narrow. If Nigerian credit losses continue to dominate the risk discussion, strong performances elsewhere may remain undervalued.
