Ecobank Transitional Incorporated (ETI), parent company of Ecobank Ghana and 35 other subsidiaries in Africa, is seeking to consolidate on its existing businesses with country specific strategy, as it brings many years of expansion to an end.
The out-going Group Chief Executive Officer, Albert Essien, disclosed this at the ETI’s annual general meeting in Dar es Salaam, Tanzania on Friday.
According to him, the bank would extend its reach in countries that it operates and make them more efficient, and more profitable.
“We would now concentrate on country specific strategies to make them run efficiently and profitability. Digital and internet banking would be receiving more attention”.
Mr. Essien said: “Our diversified Pan-African business model continues to serve us well, with encouraging underlying performance in our line of businesses and geographic areas of coverage. We are pleased with our cost efficiency gains, which led to our cost-income ratio improving in 2014 to 65.4% from 70.1%”.
Strong financial performance
Reporting the group’s financial performance for the 2014 financial year to the shareholders, the Ecobank Group Chairman, Emmanuel Ikazoboh, told them the bank recorded a 14 per cent increase in net revenues to $2.3 billion.
“We closed the financial year with total assets of over $24 billion. To further strengthen our financial position, during the year we raised nearly $1 billion in combined equity and debt capital for both the parent company and our Nigerian subsidiary.
“Ecobank’s financial results demonstrated solid revenue growth and a further reduction in the cost-income ratio, thanks to our renewed focus on operational efficiency”, he stated at the well-attended annual general meeting.
Mr. Ikazoboh added: “Our accounts for FY 2014 have shown a resurgent Ecobank, which enjoys the confidence of all its stakeholders: shareholders gathered here, customers and its dedicated staff. We can expect similar positive performance for 2015.
“We experienced significant growth in non-interest revenue, buoyed by a strong performance from treasury, as a result of currency volatility and higher transaction volumes,” he noted.
Geographical performance
Mr. Ikazoboh was quick to say that each of the Group’s geographical clusters contributed positively to achieve solid growth during 2014 financial year, with net revenue growth exceeding that of operating costs across all the subsidiaries.
An ongoing improvement in the performance of Ecobank Nigeria, the largest of Ecobank’s African subsidiary, together with another strong performance from the Treasury business, contributed to an 134% year-on-year increase in pre-tax profits for the Group.
According to him, Ecobank Nigeria net revenues grew by 21% year-on-year to nearly $1 billion. Increases in the reserves required to be held in cash at the Central Bank, and thus not earning interest revenue, he intimated.
Contrastingly, non-interest income grew by an impressive 41% to $494 million, reflecting buoyant levels of client foreign exchange and fixed income trading, as well as a 13% increase in fee and commission income, the Ecobank Group Chairman explained.
Touching on Ecobank Ghana and the entire West Africa performance, Mr Ikazoboh stated: “The macroeconomic challenges faced by Ghana during 2014, particularly the 26% depreciation of the Cedi relative to the US Dollar, had an adverse impact on the operational performance of the entire Rest of West Africa cluster”.
Nevertheless, efficiency improvements across the region led to 130 basis point fall in the cost-to-income ratio to 49% and the highest return on average equity (RoAE) of any of the clusters of 37.5%.
Francophone West Africa reported an 11% rise in profit before tax to $141 million, thanks largely to stringent cost control. The net impairment change increased 36% year-on-year to $45 million, reflecting higher loan impairments in Togo and Benin.
Major approvals
At the company’s 27th Annual General Meeting which ended in Dar es Salaam, Tanzania over the weekend, shareholders approved the company’s accounts for 2014 and the appropriation of profit of $5.82 million for the year. A sum of $ 0.87 million was transferred to special reserves and $4.85 million to retained earnings.
Mr Bashir Ifo, a director representing the ECOWAS Bank for Investment and Development, who completed his term of office, was reappointed for another three-year term.
Shareholders also ratified the co-option of Dolika Banda, Graham Dempster and Sheila Mmbijjewe as directors for a term of three years respectively. Alain Francis Nkontchou was also elected as a director on the board for a three-year term.
The firms Akintola-Williams Deloitte Nigeria and Grant Thornton, Côte d’Ivoire, were appointed as Joint Auditors for a one year term.
The meeting also approved the issue of bonus shares, out of retained earnings, of one ordinary share for every fifteen ordinary shares held on the closure of the company’s share register, in accordance with the rules of the stock exchanges on which Ecobank’s shares are listed. The new shares issued will rank equally with existing ordinary shares of the company. The meeting authorised the board of directors to determine the modalities for the issue as it deems appropriate.
Shareholders recognised the invaluable contributions of Essien, who, having reached the company’s mandatory retirement age of 60, retires from the company on June 30 after 25 years of meritorious service. A new successor, Mr. Ade Ayeyemi, has been appointed to replace Mr Essien and will assume office on the 1st of September, 2015. The General Meeting welcomed this appointment.
Masahudu Ankiilu Kunateh back from Dar es Salaam, Tanzania
