Ecobank plunges into US$5,9m loss

course to profitability.
A rollout of commercial banking operations, as opposed to merchant banking, will also enhance operations and income streams.

Regulatory approval has already been obtained from the Reserve Bank of Zimbabwe.
Last year’s loss came as the bank reorganised its operations, but despite a 171 percent growth in operating income to US$4,9 million, driven by loan advances and successful implementation of cost cutting initiatives.
A 12 percent decline in expenses to US$8,4 million, after a 20 percent fall in staff costs due to a reduction of the head count in 2010, did not help matters.

Also, an additional loan provision of US$5 million was made to the US$0,6 million reported last year.
Of that US$1,5 million was regarded as prior year adjustments.
But total deposits surged by 24 percent from US$41 million in 2010 to US$51 million while bank assets increased by 5 percent to US$58 million.

Ecobank Zimbabwe, 62 percent controlled by Ecobank Group, saw the asset management arm recording a US$200 000 after-tax loss, although interest income rose 637 percent while fees and commissions went up 70 percent.
This was the bank’s first year of operation under the giant, pan-African banking giant group. It was focused on transition and realigning the bank’s operations.

“In line with this, an extensive review of the loan book inherited from Premier Banking Corporation was carried out during the second half of the year with the objective of cleaning out the loan book,” said Ecobank.
“The year 2012 will be devoted to the effective execution of the bank’s strategic plan to improve overall financial performance on the back of a wide product range and better service quality,” the directors said in a statement.

Managing director Mr Daniel Sackey said this year more external and domestic lines of credit would be pursued to support underwriting capacity.
He said 10 more branches would be added to the existing five to improve accessibility.
E-channels would also be rolled out to enhance product delivery while a number of new innovative products would be introduced.

“We have put our past behind us, restructured and put in new controls,” he said. “We have succeeded in upgrading information communication technologies. We have added new models for our commercial banking franchise.”