Ecobank Reports 16% Profit Growth To $333m In 2024

Ecobank Transnational Incorporated (ETI) has reported a 16 percent increase in profit after tax, reaching $333 million in 2024.

The pan-African financial group attributed the surge to strong fee and commission income, improved efficiency, reduced impairment charges on other financial assets, and a lower effective tax rate.

Net revenue for the year climbed slightly to $2.1 billion, supported by an expanded net interest margin, increased investment in securities, and higher net fees and commission income. The bank’s net interest income stood at $1.2 billion, reflecting a one percent increase, while interest earned on assets dropped by one percent to $1.9 billion due to lower income from corporate banking loans and government treasury bills.

Additionally, the impact of exchange rate fluctuations and higher cash reserve ratios in Ghana and Nigeria weighed on earnings. Interest expenses declined by three percent to $675 million, largely due to a shift in the deposit mix toward low-cost current account deposits.

Operating expenses for the year were $1.1 billion, a 0.4 percent decrease from 2023. The bank attributed this to higher inflation and increased spending on communication, technology, advertising, and administrative expenses, offset by reductions in professional and legal fees, operational losses, fines, and AMCON levies. The cost-to-income ratio improved to 53.0 percent from 53.9 percent in the previous year.

Group pre-provision, pre-tax operating profit rose by three percent to $981 million. The bank’s income tax expense fell to $164 million from $175 million in 2023, benefiting from deferred tax asset utilisation linked to the Republic of Ghana Eurobonds exchange program. This reduced the effective tax rate to 25.0 percent from 30.0 percent. Impairment charges on loans and advances increased to $325 million from $288 million, mainly due to higher provisions on stage 1 and 2 loans, particularly in Ghana and Côte d’Ivoire. However, impairment charges on other financial assets decreased by $54 million to $130 million, as the previous year’s results included net modification losses from Ghana’s Domestic Debt Exchange Program.

CEO of Ecobank Group, Mr. Jeremy Awori, described 2024 as a crucial year for the bank’s Growth, Transformation, and Returns (GTR) strategy. He noted that despite high inflation, currency depreciation, rising interest rates, and tighter regulations in key markets such as Ghana, Nigeria, and Zimbabwe, the bank delivered strong earnings and returns. Return on tangible equity reached a record 32.7 percent, while earnings per share grew by 16 percent, and tangible book value per share increased by four percent. Excluding the impact of foreign exchange movements, profit before tax climbed 33 percent to $658 million, with net revenue up by 18 percent to $2.1 billion.

Mr. Awori highlighted the bank’s balance sheet strength, with a $3.0 billion increase in deposits, reaching $20.4 billion. A strategic shift toward low-cost current and savings accounts improved the CASA ratio to 86.4 percent and reduced funding costs. The bank also enhanced its capital adequacy ratio to 15.8 percent, exceeding regulatory requirements.

Ecobank’s diversified presence across 33 African markets remains a key competitive advantage. The bank saw strong growth in fees and commissions, particularly from cross-border payments and trade, gaining 40 basis points in market share for letters of credit. Card revenues grew by 14 percent, supported by digital banking investments, while the active consumer base expanded by nine percent.

Looking ahead, Mr. Awori emphasised the bank’s focus on accelerating growth in consumer and commercial banking, expanding payments and remittances, and strengthening fintech capabilities. He noted that Ecobank is redefining banking across Africa by connecting customers to opportunities across borders, platforms, and financial ecosystems.

The bank is also making strides in transforming its Nigeria operations, working closely with stakeholders to enhance performance and unlock its full potential.