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Brighton Gumbo Business Reporter
PAN African banking institution Ecobank says its profit in the nine months to September 2015 declined by five percent to $306 million due to adverse currency movements, operational and impairment losses. In the period under review, the group’s profit before tax stood at $398 million down two percent from $408 million recorded in the corresponding nine months.
The net revenue declined by three percent to $1,6 billion. In a statement accompanying the financial statement, Ecobank Group chief executive officer Ade Ayeyemi said operations in Central Africa had been challenging.
“While our financial results were impacted by various factors, the strength of our diversified pan-African business model ensured a balanced outcome. We see looming headwinds ahead and as a result expect 2015 profits to come in lower than expected, but relatively flat in constant dollars.”
He said the regional financial institution recently recorded a loan growth in its corporate bank business.
“Despite a decrease in domestic bank deposits, we increased the share of stable deposits within the deposit mix. With revenue growth challenged in the current environment, we would focus more on cost efficiency and invest in key initiatives in our transaction banking, cards, and e-banking businesses.
“Also, we’re simplifying our operating model to better serve our customers and position the company for long-term success,” Ayeyemi added. Ecobank’s net interest income was $838 million, an increase of $27 million compared to the previous year and was driven largely by loan growth in the group’s corporate bank business and higher yields mostly from loan re-pricing in Nigeria.
The net interest margin was 6,8 percent compared to 6,3 percent the previous year. In constant dollars, net interest income increased 26 percent year-on-year. On the other hand, non-interest revenue was $760 million, a nine percent decrease from the previous year reflecting lower fee and commission income and net trading income.
For the period under review, fee and commission income fell 12 percent, reflecting lower fees and commissions on loans, a decrease in cash management among others.
“We closed the period with healthy capital levels with a tier 1 capital ratio of 20,6 percent and total capital adequacy ratio of 22,8 percent under Basel I. Our 19,000 plus employees, whom I’m proud of, have been supportive of our customers in these trying times,” Ayeyemi said.
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