Ecobank Group says it expects profit to be better this year after it struck out N60.9bn from its books regarding its acquisition of Oceanic Bank, bringing down its profit for the 2020 financial year by 64 per cent.
The bank posted a profit after tax of N35.88bn compared to N99.46bn recorded in 2019.
It made a slight improvement in revenue, recording a seven per cent increase of N630.34bn compared to N586.87bn in 2019.
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Its profit before tax and goodwill impairment had stood at N126.36bn, lower by 14 per cent compared to N146.54bn it recorded in 2019. The bank’s profit was impacted by a surge in impairment on financial assets which went up by 84 per cent to N88.75bn compared to N48.31bn in 2019.
Likewise, profits were brought down by net monetary loss arising from hyper-inflationary economies up by 387 per cent from N3.42bn in 2019 to N16.67bn.
The greatest blow to its profit for the year was the goodwill impairment of N60.9 billion.
The bank had in 2011 acquired Oceanic, a deal that it took a convertible loan of $285m from South Africa’s Nedbank to support.
Ecobank said it was optimistic that with a clean book following Oceanic’s full provision, it would improve its profitability in 2021 and years ahead.
Despite the economic headwinds occasioned by the COVID-19 pandemic, the bank noted it could increase its lending to customers as loans and advances in 2020 rose by nine per cent while deposits were up by 23 per cent.
Total loans and advances grew from N3.38tn as of December 31, 2019, to N3.699tn at the end of the 2020 financial year.
The bank’s total assets grew last year by 19 per cent from N8.62tn to N10.27tn, as investments in securities rose to N2.409tn in 2020 compared to N1.77tn in 2019.
Key Indices
-Gross earnings down two per cent to N829.0bn
– Revenue up seven per cent to N630.3bn
– Operating income before impairment losses up 17 per cent to N231.6bn
– Profit before tax and goodwill impairment down 14 per cent to N126.4bn
– Profit before tax down 55 per cent to N65.5bn
– Profit after tax down 64 per cent to N35.9bn
– Total assets up 19 per cent to N10.27tn
– Loans and advances to customers up nine per cent to N3.69tn
– Deposits from customers up 23 per cent to N7.3tn
– Total equity up 17 per cent to N805.1bn
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