Ecobank Transnational Incorporated’s third quarter net income has increased by 31 percent on reduced costs as the Togolese-based lender continues to seek organic growth through business combinations.
For the first nine months through September, Ecobank’s profit after tax (PAT) surged by 31 percent to N52.49bn from N39.96bn in the same period of the corresponding year (Q3) 2013.
Despite the CBN’s hike in interest rate, the Bank was able to grow gross earnings by 16 percent to N207.75bn while interest income were up by 10.70 percent N187.67bn in the period under review.
The growth at the top line level was a result of the savvy management of resources by the boards of directors of the bank which led to a remarkable reduction in costs.
“Our strong results for the first nine months of 2014 show solid revenue growth and a further reduction in our cost-income ratio,” said Albert Essien, group chief executive officer of the Bank in a press release.
“The sustained improvement in our Nigeria business, the largest of our 36 countries in Africa, and another strong treasury performance, has helped deliver earnings per share up 26 percent,” said Essien.
Based on BusinessDay analysis, the Bank’s cost to income ratio reduced to 66.56 percent in Q3 2014 from 71.20 percent the preceding year.
Additionally, net margin moved to 19.51 percent in Q3 as against 17.23 percent the preceding year.
Ecobank is aggressive about lending as its loans to deposit ratio jumped to 71.63 percent in Q3 2014 from 66.80 percent as at Q3 2013.
Loans and advances were up by 16.55 percent to N1.97trn in Q3 2014 from N1.69trn as at Q3 2013.
Deposit from customers also spiked by 8.69 percent to N2.75trn in Q3 2014 from N2.53trn as at Q3 2013.
Total assets were up by 10.69 percent to N3.83trn in Q3 2014 compared with N3.46trn the preceding year.
Ecobank’s share price closed at N18.20 on the floor of the NSE while market capitalisation was N290.40bn.
“Our capital position has been significantly enhanced recently, with the conversion of $75m of loans by IFC funds in the third quarter and Ned bank’s subsequent investment of $493m to reach a 20 percent shareholding in Ecobank,” said Essien.
Source : BusinessDay