Pan African financial group, Ecobank Transnational Incorporation (ETI) grew profit by 16% year on year to $333 million, according to the group audited financial results submitted on the Nigerian Exchange.
Details showed that the group’s profit after tax attributable to shareholders of ETI for 2024 increased by 16% to $333 million. The surge was primarily fuelled by strong fee and commission income performance, efficiency improvements, reduced impairment charges on other financial assets, and a lower effective tax rate.
The group net revenues, which is the sum of the net interest income (NII) and non-interest revenue (NIR)) climbed slightly to $2.1 billion in 2024. The contributing drivers of this growth were an expansion in the net interest margin, increased investment securities balances, and increased net fees and commission income.
Ecobank group net interest income printed at $1.2 billion for 2024, increasing 1%. The group reported that interest earned on interest-earning assets decreased by 1% to $1.9 billion, primarily due to lower interest income from corporate banking loans and government treasury bills, compounded by the adverse impact of exchange rate movements and higher cash reserve ratios (CRR) in Ghana and Nigeria.
Interest expense on interest-bearing liabilities decreased by 3% to $675 million, primarily due to a reduction in the cost of customer deposits from a deliberate strategy to shift the deposit mix to account for more low-cost current account deposits and away from expensive term deposits.
The results showed that operating expenses for 2024 were $1.1 billion, decreased by 0.4% from the comparable year in 2023.
Ecobank reported that the increase in expenses reflected higher inflation and increased expenses in communication and technology, advertising and promotion, and other administrative expenses, partially offset by decreases in professional and legal fees, operational losses, fines, and AMCON levies.
The group cost-to-income ratio improved to 53.0% in 2024 from 53.9% in 2023. Group pre-provision, pre-tax operating profit, a key metric for assessing the bank’s earnings power, increased by 3% to $981 million.
Income taxes for 2024 were $164 million compared with $175 million in 2023, partially benefitting from the utilisation of deferred tax assets associated with participation in the ‘Exchange Offer’ related to Republic of Ghana Eurobonds holdings.
As a result, the effective tax rate (ETR) reduced to 25.0% from 30.0% in 2023. The group gross impairment charges on loans and advances for 2024 were $325 million compared with $288 million in 2023, primarily driven by an increase in impairment charges on stages 1 and 2 loans, mainly within Commercial Banking in Ghana and Côte d’Ivoire.
Loans recovered, and the releases of previously booked impairment reserves for expected credit losses amounted to $132 million, a decrease of $11 million from 2023. The resultant net impairment charge on loans and advances was $194 million for 2024 compared with $145 million in 2023.
The audited results revealed that the group’s impairment charges on other financial assets decreased by $54 million to $130 million, primarily because last year’s period included the net modification losses Ghana incurred from the final exchange of its eligible bonds for the new bonds under the Government of Ghana’s (GoG) Domestic Debt Exchange Program (DDEP).
Commenting on the results, Jeremy Awori, CEO of Ecobank Group, stated, “2024 was a pivotal year for our Growth, Transformation, and Returns (GTR) strategy. We established solid foundations for our businesses to grow now and in the future.
“We delivered strong earnings and returns despite a challenging macroeconomic environment characterized by high inflation, currency depreciation across African markets, rising interest rates, and tighter regulatory conditions in key countries such as Ghana, Nigeria, and Zimbabwe.
“Our return on tangible equity (ROTE) reached a record 32.7%, underscoring the strength of our pan-African franchise and disciplined execution. Earnings per share increased by 16%, while tangible book value per share grew by 4%. Excluding the adverse impact of foreign exchange rates, we achieved a record profit before tax of $658 million, up 33% year-on-year, while net revenue rose by 18% to $2.1 billion.
“Our cost-to-income ratio improved and remained healthy at 53%, reflecting ongoing operational efficiencies. Our balance sheet remains robust. We grew our deposit base by approximately $3.0 billion in constant currency, reaching $20.4 billion, driven by a strategic shift toward low-cost, stable current and savings accounts, which improved our CASA ratio to 86.4% and reduced funding costs.
“Considering the challenging macroeconomic environment in some key markets, we adopted a more conservative and prudent approach to lending, which strengthened our liquidity position and increased reserves for expected credit losses.
“We also enhanced our capital adequacy ratio by 80 basis points to 15.8%, comfortably above regulatory requirements,” Awori explained.
Ecobank chief said the group diversified footprint across 33 African markets continues to be a key competitive advantage. In 2024, we experienced strong momentum in fees and commissions, particularly from cross-border payments and trade.
“We gained 40 basis points of market share in letters of credit, and card revenues increased by 14%, supported by investments in our digital banking platforms. Our active consumer base grew by 9%, with improved product penetration per customer,” Awori stated.
He commended these achievements, which reflect the effective execution of Ecobank GTR strategy: “We are sharpening our market focus in each country, accelerating growth in Consumer and Commercial Banking, and expanding our Payments, Remittances, and Fintech capabilities—key pillars of our Seamless Connectivity agenda.
“We are redefining banking across Africa by connecting customers to opportunities across borders, platforms, and financial ecosystems. We are making progress in our turnaround markets.
“The transformation of our Nigeria business is underway, and we continue collaborating with key stakeholders to enhance its performance and realize its future potential”, Ecobank chief said.
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