Ecobank’s record-breaking N311bn profit soars 196%
By Esther Agbo
Ecobank Transnational Incorporated has announced a remarkable profit after tax of N311 billion for the first half of 2024, representing an impressive 196 per cent surge compared to the N105 billion recorded in the corresponding period last year.
However, a deeper look at the bank’s performance reveals a complex narrative of both significant gains and underlying challenges.
The bank’s revenue skyrocketed by 186 percent, reaching N1.36 trillion from N475.65 billion in H1 2023 of the previous year, driven by substantial growth in both interest income and non-interest revenue streams.
Operating profit before impairment charges also saw an extraordinary increase of 215 percent from the N200.77 billion reported in the previous year, amounting to N631.5 billion, as the bank capitalised on higher yields from loans, advances, and investment securities.
Despite these strong revenue gains, Ecobank faced notable hurdles. Trading income and foreign exchange gains dropped by 20 percent, declining to N230.31 billion down from N209.45 billion in the previous year, signalling potential vulnerabilities in the bank’s market activities.
Additionally, the bank reported a net investment income loss of N941.51 million, a significant reversal from the N2.27 billion gain in the same period last year.
The bank’s rising operating expenses, which soared by 165 percent to N728.73 billion up from N274.88 billion in the previous year, reflected the increased cost of doing business, driven largely by higher staff costs and depreciation.
This sharp rise in expenses underscores the challenges of managing operational efficiency amidst rapid growth.
Furthermore, impairment charges on financial assets surged by 273 percent, reaching N188 bn from N50.46 billion in H1 2023, as the bank took a cautious approach to credit risk amid uncertain economic conditions.
The rise in impairment charges highlights the bank’s efforts to safeguard its balance sheet in a volatile financial environment.
Ecobank’s tax expenses also climbed significantly, rising by 194 percent to N132.49 billion compared to N45.09 billion last year, aligning with the higher profit before tax.
This increase, while indicative of the bank’s strong performance, also underscores the growing tax burden on the institution.
On the asset side, the bank reported a 49 percent increase in total assets, reaching N38.6 trillion as of June 2024, from N25.92 trillion in December 2023, driven by a rise in customer deposits from 49 percent to N28.26 trillion, compared to N19.01 trillion at the end of the previous year.
However, despite this growth, the bank’s total equity decreased by 13 percent to N2.25 trillion, down from N1.65 trillion in December 2023, a result of exchange rate fluctuations that impacted retained earnings and reserves.
