EcoBank's q1 2024 profits surge, crediting government policies for firm performance

By Guardian Reporter , The Guardian
Published at 06:00 AM Jun 13 2024

Ecobank-Tanzania Managing Director Dr Charles Asiedu addresses journalists in Dar es Salaam on the bank’s performance for the year 2023.
Photo: Guardian Correspondent
Ecobank-Tanzania Managing Director Dr Charles Asiedu addresses journalists in Dar es Salaam on the bank’s performance for the year 2023.

ECOBANK Tanzania's Profit before tax for the first quarter of 2024 has risen to 3.5bn/-, which is five times more than what was recorded in the corresponding period in 2023.

The bank hails the 6th phase government for implementing pro-business policies, something which has helped increase operational efficiency of the bank and positive performance of other economic sectors.

Addressing a news conference in Dar es Salaam over the Weekend, Ecobank-Tanzania Managing Director Dr Charles Asiedu said the results in Q1 were a continuation of the good performance that the bank achieved throughout 2023.

"In the first three months of the year, revenues surged by an impressive 66 percent to nearly 10bn/-compared to the same period in 2023. This significant growth was driven by increased lending aimed at bolstering Tanzania's economy, coupled with Anding business volumes, which underscored the strong acceptance of products by customers," he said.

 He said the profit growth was supported by controlled cost and decreased impairment charge arising from Non-Performing Loans (NPL) ratio consistently being under 3 percent for the past two years.

Operating efficiency continued to improve resulting from widening positive jaws between revenue and cost. Thus, cost to income ratio trended to less than 60 percent for the first time compared to 77 percent a year ago. We also returned better to shareholders as annualized return on equity improved to 44 percent from just 12 percent in 2023.

These impressive results reflect the increasing customer confidence in our business as deposit grew over the one-year period by 68 percent to 313bn/- billion influencing assets growth of 27 percent to 415bn/-. On the back of strong growth in deposits, we were able to support our client businesses as we grew our loan book by more than 65bn/- to 157bn/- from 90bn/-.

On annual basis, revenues surged by 48 percent, reaching 31.26bn/- in 2023, from 21.11bn/- in 2022.

"Profit before tax increased tremendously by 496 percent from 1.61bn/- in 2022 to 9.59bn/- in 2023. The bank's cost-to-income ratio improved significantly, decreasing from 90.56 percent in 2022 to 65.1 percent in 2023, reflecting effective cost management strategies," he detailed.

 The loans and advances portfolio grew by 79 percent from 91.75bn/- in 2022 to TZS 164.50bn/- in 2023. Customer deposits rose by 48 percent, from TZS 185.97bn/- in 2022 to 274.59bn/- in 2023, demonstrating strong customer relationships and trust in Ecobank's services. Total assets increased by 27 percent, reaching 406.69bn/- in 2023.

Dr Asiedu said the achievements align with the broader success of the Ecobank Group, the pan-African financial services conglomerate. Despite the challenging operating environment in 2023, the Ecobank Group reported a return on tangible shareholders' equity of 24.9 percent and increased profit before tax by 8 percent (or 34 percent at constant currency), reaching $581 million. Net revenue surpassed the $2.0 billion mark for the first time since 2015, growing by 11 percent (or 31 percent at constant currency) to reach $2.1 billion. This performance highlights the early successes of the Group's 5-year Growth, Transformation, and Returns (GTR) strategy.

The bank expressed commitment to continue to enhancing its services, expanding its reach, and fostering partnerships that drive growth and development in Tanzania.

The bank remains dedicated to supporting businesses and individuals in achieving their financial goals, further solidifying its position as a key player in the Tanzanian banking sector.