Ecobank profit up 64 percent to $18,4m

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ECOBANK Zimbabwe recorded a $18,4 million profit after tax in the six months to June 30, 2018, a 64 percent increase from the $11,4 million realised during the same period last year.
The increase was mainly attributed to a year-on-year rise of 46 percent in net interest income added to a 75 percent year-on-year increase in non-interest income.
Total assets grew 31 percent to $714 million, reflecting both increased deposits and subsequent asset creation during the same period.
Fortunate Chisango, the Ecobank Zimbabwe chairman, said the bank’s core capital of $92 million reflects a year-on-year growth of 14 percent and was above the prescribed minimum levels and well ahead of the Reserve Bank of Zimbabwe’s approved capital plan.
“The bank remains committed to uploading good corporate governance principles as it believes good corporate governance enhances shareholder value,” he said.
A final dividend of $5,9 million was declared on March 29 this year. This, together with an interim dividend of $2,3 million declared and paid to shareholders on the company’s books as at September 30 last year, brought the total dividend for 2017 to $8,2 million.
During the period under review, Ecobank Zimbabwe accessed lines of credit from its group affiliates in excess of $100 million. These were utilised to facilitate the importation of fuel, fertilisers, mining equipment and edible oils.
The bank’s managing director, Moses Kurenjekwa, said the Ecobank Transnational Unit’s prudent risk lending model ensured a quality loan and trade book, resulting in a non-performing loan ratio of 2,6 percent.
“The bank continued to maximise and pursue emerging opportunities in the economy. Cost optimisation and operational efficiency trended positively as evidenced by a favourable cost to income ratio of 33,1 percent as at June 30, 2018,” he said.
This was underpinned by diversified income streams and product offering, net interest income which grew by 46 percent year on year on the back of increased interest earning assets and low deposit costs.
This alleviated the impact of capped lending rates while still serving the loan demands of the bank’s clients across the productive sectors.
Going forward, Kurenjekwa said to sustain financial performance, the bank would continue to focus on its key strategic initiatives which include optimising cost to serve through the existing and anticipated technologies which promote efficiency and improved customers’ service excellence.
He said the bank would exploit its Pan-African footprint to support local business.
“There will be a continued emphasis on the development of regional trade and opportunities within the region, as well as mobilisation of lines of credit from within and outside the group,” he said.
Kurenjekwa said a robust credit lending model to ensure high asset quality creation and deliberate customer relationship management would be pursued to avoid a resurgence of non-performing loans.
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