Ecobank Ghana Parent company records $2.1bn net revenue; $531m profit-before-tax
The parent company of Ecobank Ghana, Ecobank Transnational Incorporated (ETI) for the 2023 fiscal year, recorded net revenue of $2.01bn.
This is the per bank Group’s audited financial statements for the year 2023.
This is the first time the bank’s net revenue has exceeded the $2bn mark since 2015.
Profit-before-tax of ETI within the review period was $581m with profit-after-tax amounting to $407m.
Growth in the Group’s profit-before-tax was primarily due to revenue growth outpacing expense growth, which resulted in positive operating leverage. As a result, the pre-provision, pre-tax operating profit (PPOP) reached $951 million in 2023.
Group profit available (attributable) to shareholders of ETI in 2023 was $288 million, slightly higher than $286 million in 2022.
The increase was due to solid underlying growth in both funded (net interest income) and non-funded (non-interest revenue) revenues, disciplined cost management, and stable credit costs across all business lines. However, higher profits available to non-controlling shareholders partially offset this increase.
The Group’s gross impairment charges on loans and advances for 2023 were $288 million, an increase of 7% or 12% in constant currency if compared with $270 million of gross impairment charges in 2022.
The increase in impairment charges is due to a gradual reserve increase for expected credit losses in an uncertain macroeconomic environment. Loan recoveries and the release of previously booked reserves for expected credit losses amounted to $143 million, compared with $260 million in 2022.
As a result, the net impairment charge for 2023 was $145 million, which is higher than the $10 million in 2022. The higher net impairment charges on loans and advances for 2023 resulted in a higher cost-of-risk of 1.28% compared to 0.09% for 2022.
ETI’s gross loans and advances (EOP) were $11.1 billion on 31 December 2023, compared to $11.5 billion on 31 December 2022. The year-on-year (YoY) decrease of 4% was primarily driven by foreign currency translation effects resulting from significant weaknesses in the local currencies of some of our subsidiaries versus the US dollar, such as the Nigerian naira, Ghana cedi and Zimbabwe dollar.
However, gross loans and advances increased by 15% reflecting underlying loan growth across business lines and regions, particularly in trade loans within Corporate Banking in the operating markets.
CEO of ETI, Jeremy Awori, speaking on the Group’s 2023 financial results stated, “2023 was a challenging year for many households, businesses, and governments across Africa due to higher inflation, higher interest rates, weakening currencies, and uncertainty in the economic outlook.
“We have worked closely with our customers and stakeholders through this period, and managed to make progress in our new strategic agenda and grew our business. Ecobank generated a return on tangible shareholders’ equity of 24.9% despite the challenging operating environment in 2023.
“Profit before tax increased by 8% or 34%, at constant currency, to $581m. Net revenue exceeded the $2.0bn mark for the first time since 2015, increasing by 11% or 31% at constant currency to reach $2.1bn. This performance demonstrates proof of the early successes of the bank’s 5-year Growth, Transformation and Returns (GTR) strategy.”
