Ecobank Ghana 2018 profit shoots up … plans leverage digital platform to promote cash-lite agenda
Ecobank Ghana has delivered very strong
profit before tax growth of 41 per cent year- on-year to GH₵506 million as at
December 2018.
The increased profitability performance was anchored on strong revenue growth,
lower impairment charges coupled with successful execution of cost containment
strategies.
Revenues went up 17 per cent to GH₵1.3 billion with excellent contribution from
all the bank’s business units.
Mr Terence Darko, the Board Chairman, addressing the bank’s annual general
meeting in Accra said although, the banking industry was yet to fully recover
from the aftershocks of the withdrawal of licences, mergers, consolidation and
the voluntary exit of about 11 banks, Ecobank Ghana had weathered the storm due
to its robust risk and capital management structures.
“We are confident however that the sector is on a positive path and will
ultimately be stronger and better placed to provide the needed services to all
customers,” he said.
Customer
deposits
Customer deposits grew by 20 per cent to
end the year at GH₵1.82 billion, compared to GH₵1.52 billion in 2017. The
increase was largely driven by growth in savings and current deposits anchored
on agency banking and digital deposit mobilisation drive.
Customer loans at the end of the year was GH₵384 million representing a 40 per
cent growth year on year.
Mr Darko said the bank had made significant progress on the troubled energy
sector loan book with the part payment of the outstanding receivables from
government.
“We are confident of a full resolution in 2019, following the completion of a
government commissioned verification process for the outstanding amount
attributable to government. In 2019, we expect to be able to term out the
residual BDC exposure through series of bilateral negotiations with the
companies involved,” he said.
In line with the above, our impairment charges for 2018 reduced by 26% from
GH₵174 million to GH₵129 million, largely driven by the above mentioned part
payment and the lower provisioning on a healthier loan book compared to the
previous year, he said.
Mr Darko said to put the bank on a strong path through continued investment,
the bank was unable to pay cash dividend in 2018.
“We expect to deliver greater shareholder value growth through increased
revenue generation and cost management. I firmly believe that we are on the
right path and that the changes that we have seen in the banking industry will
lead to sustainable growth in the future for all our stakeholders,” he said.
Digitisation agenda
Mr Daniel Sackey, Managing Director, in
an interview with the media after the meeting said the bank would continue to
leverage on its digital platform to support government’s agenda to deepen
financial inclusion and promote a cash-lite society as well as to enhance
customers’ satisfaction.
Currently, he said, over 78 per cent of banking transactions were conducted via
the digital technology platforms deployed by the bank.
“Our range of products and services meet the day-to-day banking, financing,
investment and transactional needs of our customers. We remain focused on
delivering on our commitment to be the leading consumer financial
services franchise in Ghana,” he said.
Dividend
Explaining the reason why the shareholders would not be paid dividend Mr Sackey said that the bank is still in the process of building its reserve before declaring dividends.
He said, “Meeting the GH₵400 million capital requirements is not the end of the game but it is key that you maintain the appropriate capital levels to support the business. If you look at Ecobank’s position on the market and balance sheet and revenue generation capacity, it’s important that we maintain adequate capital.”
“We did that last year by moving income surplus to, first of all, meet the requirements and also to ensure that we have adequate buffers to support what we do. This year we will continue to build on those buffers to boost the operations and without adequate capital, we won’t be able to make it,” Mr Sackey added.
By David Adadevoh