Ecobank Digital Transactions Revenue Increases to $19 Billion in Q1 2022

Ecobank Transnational Inc. (ETI) has revealed  its digital transactions increased by $5.9bn YoY to $19bn in the first quarter (Q1) 2022.

The bank CEO, Ade Adeyemi stated that the increase is as a result of continued and strong client adoption of its digital platforms (Omni plus, Omni Lite, Xpress Points) across our businesses.

Although the gross earnings increased by 11% to $589.5 million, compared to $532.8 million during the comparable period in Q1 2021, the report also showed that deposits from customers during the first three months of 2022, remained unchanged at $19.7 billion.

In its unaudited financial statement for Q1 2022, the bank posted a profit after tax from continuing operations at N92 billion in the first quarter of the year 2022. The amount recorded was 25% up from the N75 billion it posted in the same period of the previous year.

While the report rides on the presence of double-digit inflation which has crept into many households, the recovery of economic activities – after a long time pause from the Covid-19 which struck hard in 2020 – continued into the year 2021, causing a boost in banking activities.

Analysis shows that the sustained profit was due to the bank’s ability to increase its income as well as manage its expenses in the first quarter of 2022 compared to the first quarter of 2021.

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Adeyemi also noted that profit before tax increased by 25% to $125 million, up 25% or 29% in constant currency, driven by solid underlying business growth and deepening client engagements. Profit available to ETI shareholders of $66m and diluted EPS of 0.27 US cents, up 27% and 29%, respectively.

Net interest income was up by a paltry 1% to N239 billion from the N237 billion same time the previous year. This is on the back of an increase in interest expenses by 25% to N137 billion, which affected the interest income.

Other income such as net trading income and net investment income also saw a spike, recording a 12% and 88% high from the amount in first quarter of 2021 to N71 billion and N4 billion while operating income dipped 8% to close at N5.3 billion in the first quarter of 2022, causing a 15% rise in non-interest revenue to N197 billion.

Total operating income for the period was N436 billion in the first quarter of the year compared to the N409 billion in the same period last year.

Operating expenses grew by 4% as a result of a slight change in staff expenses as well as other operating expenses by 4% and 6% respectively to N113 billion and N115 billion.

Total asset was down by 4% to close at N 11.3 billion. Loans and advances to customers declined by 5% to N3.9 billion.

Ecobank last traded at N12 as of 25th April 2022 while its market cap stood at N220 billion and earnings per share was N1.16.

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Commenting on this, Ayeyemi continued: “We achieved these results in a difficult operating environment characterised by the strengthening of the US dollar against our operating currencies, high inflation, high interest rates and tight labour markets across Africa as the Russia-Ukraine conflict continued to take its toll.

“Despite these challenges, we continued to support our customers effectively, which paid off as our businesses grew their revenues and profits. These were driven by trade, cash management, FICC and payments, while we also achieved modest loan growth with support from higher interest rates.

“As a result, pre-tax profits increased by 13%, 26% and 59% in our Corporate and Investment Banking, Consumer Banking and Commercial Banking businesses respectively. It is important to note that it is the bold strategic decisions and our investments in people, systems and processes over time that have resulted in the record returns for our shareholders today. We are unrelenting in our focus on driving returns towards our medium-term goal of approximately 20%.”