Ecobank confident of growth despite macroeconomic challenges

The Managing Director of Ecobank, Daniel Sackey, has expressed confidence in the bank’s resilience and healthy performance despite prevailing challenges in the macroeconomic sphere in 2022.

As the nation’s largest financial services provider in terms of total assets, Ecobank remains optimistic about its ability to fully recover and achieve growth despite the temporary setback caused by the Domestic Debt Exchange Programme (DDEP).

Speaking during the bank’s 2023 Annual General Meeting (AGM), Mr. Sackey reassured shareholders that the bank’s liquidity and solvency remains strong; positioning them favorably to recover quickly from the impairment losses resulting from government securities investments affected by the DDEP.

“Although the DDEP has resulted in significant impairment losses relating to the bank’s investments in government securities, this is a temporary setback that we expect to recover quickly from. The bank has booked the required impairment and closed the chapter on local bonds. The bank remains very liquid, solvent and the most capitalized bank after the debt exchange programme,” he said.

The managing director emphasised the importance of rebuilding the bank’s capital base and liquidity buffers to deliver superior Return on Equity (ROE) for shareholders. Ecobank aims to prioritise the rebuilding process to enhance its capacity to deploy loans, taking into account the availability of liquidity and capital.

Ecobank’s MD explained: “The capacity to deploy loans is a function of liquidity and capital availability. There is however an expectation that over time there will be improved capacity to grow the loan book by rebuilding our capital base”.

Despite the challenging macroeconomic environment, Ecobank said it is committed to its strategy and intends to deepen its relationships with customers in all three banking segments – consumer, commercial and corporate. The bank is well-positioned to take advantage of lending opportunities as they arise.

Mr. Sackey assured shareholders at the meeting, saying: “Our strategy as a bank broadly remains unchanged despite happenings in the economy; so, starting from 2023, we have been working to implement that strategy while bearing in mind the current economic situation. We will continue to deepen our relationships with customers in all three segments of consumer, commercial and corporate banking, regarding lending activities in 2023 and 2024”.


In the year under consideration total revenue surged by 40.3 percent, reaching GH¢2.97billion and demonstrating the bank’s ability to generate income even in difficult circumstances. The increase in revenue was primarily driven by higher net interest income, fee-based income, and successful trade and cash management initiatives.

Net interest income remained the largest contributor to revenue, accounting for 85 percent while non-interest income made up the remaining 15 percent. Interest income witnessed a significant growth of 63 percent, supported by higher loan volumes and increased lending rates.

However, interest expense rose by 108.7 percent due to the disruptive operating environment. The bank’s Treasury business also experienced challenges, resulting in an 82.5 percent decline in trading income compared to the previous year.

Operating expenses increased by 37 percent, mainly driven by unprecedented inflationary pressures and exchange rate depreciation. The bank incurred a net impairment charge of GH¢1.73billion on government bonds due to the domestic debt restructuring, leading to a loss of GH¢27.2million before tax payment.

Despite these challenges, Ecobank’s balance sheet remained robust with total assets amounting to GH¢25.9billion; marking a growth of 44.5 percent from the previous year. Customer deposits appreciated by 54.4 percent, reaching GH¢20.4billion driven by improved product offerings and increased customer confidence in the Ecobank brand. The bank’s digital channels and proactive customer engagements played a significant role in fostering deposit growth.

Ecobank demonstrated its commitment to supporting business growth, boasting a net loan book of GH¢8.9billion – which is among the industry’s largest. The bank’s capital adequacy ratio stood at 14.63 percent in December 2022, surpassing the regulatory requirement of 10 percent and highlighting its healthy capital position.

Furthermore, Ecobank demonstrated prudent cost reduction measures, which resulted in a reduction of the cost-to-income ratio (CIR) from 46.24 percent to 43.47 percent for the year under review.

The bank’s chief reassured shareholders, saying: “We also operate a zero tolerance for spending overruns by evaluating spending in detail – either as a revenue booster or a cost savings catalyst”.

The bank’s credit appraisal processes contributed to a strong loan book and notable improvement in non-performing loan (NPL) ratios.

Mr. Sackey stated: “As a bank, we have a very robust credit appraisal process which gives rise to a strong loan book. As a result, our NPL ratios improved from 6.22 percent in 2021 to 5.66 percent; and from 12 percent to 9.47 percent at the end of 2022, which is an enviable performance compared with our peers and the industry average”.

Although the DDEP impacted the bank’s bottom line, Ecobank recorded significant revenues of almost GH¢3billion in the year under review. The MD expressed confidence in overcoming the setback swiftly and returning to maximising shareholder value.

“We believe we were able to deliver on our promise to our customers and employees, resulting in record revenues of almost GH¢3billion. However, the DDEP has significantly impacted our bottom line; such that we could not declare profit to our shareholders. We are confident that we can overcome this setback as quickly, and return to set the pace when it comes to shareholder value maximisation,” he stated.

In line with central bank expectations on dividend payment, the bank elected not to pay a dividend for the calendar year under review.

Ecobank however stressed the importance of restoring capital eroded by the DDEP for soundness of the industry and long-term sustainability of banks. While short-term cashflows of shareholders relying on dividends may be affected, the restoration of capital will contribute to increased returns in the medium- to long-term.

The bank’s shares are currently trading at GH¢5.4 – down from GH¢6.64 at the beginning of the year, with a market capitalisation of GH¢1.74billion.

2023 and beyond

Looking ahead, Ecobank acknowledged the challenging macroeconomic environment in 2023. Revenues, particularly income from investments, could be slightly affected due to lower coupons on the new bonds. However, the bank remains optimistic about the medium- to long-term fundamentals of the economy, highlighting government’s swift IMF deal and its ability to navigate through short-term economic headwinds.

Technology investment is a key focus for Ecobank, as it aims to improve service delivery, customer experience and cost-efficiency. By automating processes and expanding digital services, the bank can serve a larger customer base while reducing costs.

Mr. Sackey highlighted that: “Our aim is to continue investing in technology and other areas that allow us to improve our service delivery and the best customer experience at the lowest cost”.

As a regional lender, Ecobank said it has positioned itself as the go-to bank for intra-African trade, especially with establishment of the African Continental Free Trade Area (AfCFTA).

In furtherance of this, the bank recently launched the Ecobank Single Market Trade Hub portal to facilitate trade across the continent.

Leveraging its wide client base and network advantage, Ecobank has already attracted over 300 businesses from 22 countries. The bank aims to continue pursuing existing exporters while actively attracting new ones interested in intra-African trade.




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The Managing Director of Ecobank, Daniel Sackey, has expressed confidence in the bank’s resilience and healthy performance despite prevailing challenges in the macroeconomic sphere in 2022.