Q1 2017: ETI Records 15% Increase in PAT N18.68bn, Market looks forward to $400million Convertible Bond Issue
As part of its re-engineering effort and coming from a loss position in 2016, Ecobank transnational incorporated (ETI) has announced 15 per cent increase in profit after tax to N18.7 billion for the first quarter (Q1) ended March 2017.
The financial institution in the first quarter of 2016 posted N16.2 billion profit after tax.
Ecobank had announced a loss before tax of $131million in 2016 financial year as against profit before tax of $205million recorded in 2015, attributable to higher loan impairment charges taken in fourth quarter of 2016.
Ecobank in its unaudited result and accounts to the Nigerian Stock Exchange (NSE) on Thursday, stated that profit before tax gained 11 per cent to N22.9 billion in Q1 2017 from N20.6 billion recorded in Q1 2016.
Gross Earnings rose by 36 per cent from N131.39 billion in Q1 2016 to N178.4 billion in Q1 2017 while operating profit before impairment losses gained 36 per cent from N33.89 billion to N46 billion in first quarter of 2017.
In a statement, the Group Chief Executive Officer, ETI, Mr. Ade Ayeyemi, said, “Our performance in the first quarter was encouraging despite continued macroeconomic headwinds. All of our businesses made meaningful progress in executing our strategy by continuing to focus on cost discipline, stringent credit risk practices, and digitisation of processes to enhance the customer experience”.
“Our first quarter revenues of $425 million (N130 billion), increased three per cent in constant dollars, while operating expenses were flat, year-on-year. Preimpairment income increased 10 per cent in constant dollars, reflecting positive operating leverage”.
The cost-to-income ratio of 64.5 per cent was an improvement on the 66.1 per cent for 2016, reflecting strong efficiency gains. However, pre-tax profits decreased 17 per cent in constant dollars, mainly because impairments remain elevated as we forecast, for which we continue to aggressively address in our ongoing overhaul of credit risk management. We delivered a return on tangible equity of 16 per cent.
According to the Group CEO, the bank’s diversified business model and pan-African footprint is a competitive advantage. “It allows us to meet the trade finance, cash management, and online and mobile financial needs of our clients across Middle Africa with unique financial products and services”.
“Together with the more than 17,000 Ecobankers, I am proud of what Ecobank continues to do for its customers,” he said.
ETI’s total assets rose by 36 per cent from N4.6 trillion in 2016 to NN6.26 trillion as at March 2017, driven by 28 per cent increase in loans and advances to customers to N2.8 trillion as at March 2017 from N2.2 trillion recorded in 2016 financial year results.
Other key contributors to the financial institution balance sheet include 32 per cent increase in deposits from customers to N4.15 trillion as at March 2017 and 12 per cent increase in total equity from N505.5 billion in 2016 to N565.7 billion as at March 2017.
Market watchers are expecting the commencement of the proposed $400million convertible bond issue this year.