ETI Q1 2020 Unaudited Results - Lower Loan Recoveries Mask Gains in Nigeria

Proshare

Friday, April 24, 2020 / 3:39 PM / by CardinalStone Research / Header Image Credit: Brand Arena


Ecobank Transnational Incorporated (ETI) recorded a 19.0% YoY decrease in earnings to $66.0 million in its unaudited Q1'20 result. The decline in earnings largely reflected a 67.0% fall in loan recoveries in the review period. Similarly, lower loan recoveries impacted net impairment losses on financial assets, which rose by 48.0% YoY.


Proshare Nigeria Pvt. Ltd.

 

Pre-provision operating profit rose by 2.0% YoY (34.0% YoY in constant currency terms) in Q1'20, supported by a 21.0% YoY growth in net interest income. The increase in net interest income was supported by higher asset yield (+30 bps to 8.5%) and lower funding costs (-60 bps to 2.6%). Both operating revenue and operating expenses were relatively flat (+1.0% YoY, apiece). Cost to income ratio was flat at 66.0% (Q1'19: 66.2%), whereas cost of risk rose 40 bps to 1.5%. All in, ROE came in lower at 13.5% from 16.9% in Q1'19.

  

Regional Highlights

  • Francophone West Africa (UEMOA): Earnings for the region fell by 39.0% YoY in Q1'20, weighed by an 84.0% drop in loan recoveries. Elsewhere, pre-provision operating income came in flat (-1.0% YoY), as a 7.0% growth in net interest income was offset by a 9.0% decline in non-interest income. Cost to income was flat at 63.0% while NPL ratio improved from 5.6% to 3.9%. Overall, ROE declined to 18.4% from 22.8% in December 2019

  • Nigeria: Earnings rose 2.6x during the quarter. The quarterly earnings was uplifted by a two-fold increase in net interest income, which offset the 70.0% decline in loan recoveries. Also, pre-provision earnings rose to $13.0 million from a loss of $10 million in Q1'19. Cost to income ratio improved to 81.9% from 119.3% in Q1'19, while NPL ratio moderated slightly to 23.3% (December 2019: 23.9%). Overall, ROE improved to 3.2% from 0.4% in December 2019

  • Anglophone west Africa (AWA): Earnings rose by 27.0% YoY in Q1'20, supported by a 16.0% growth in operating income. The higher operating income reflected 23.0% and 5.0% increases in net interest and non-interest incomes, respectively. Impairment charges came in flat year-on-year. Cost to income ratio eased to 47.8% (Q1'19: 49.0%), but NPL ratio rose to 8.4% from 7.7% in December 2019. Overall, ROE slowed to 27.9% from 30.1% in December 2019

  • Central, Eastern and Southern Africa (CESA): Earnings weakened by 30.0% during the quarter, dragged by the 26.0% slump in non-interest income. Operating expenses rose 3.0% which, in addition to the 15.0% slowdown in operating income, resulted in a higher cost to income (60.1% vs 49.8% in Q1'19). NPL ratio rose slightly to 8.9% (December 2019: 8.4%), while ROE was relatively flat at 23.8% (December 2019: 23.6%).  

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

Related News

1.     ETI Declares N24.7bn PAT in Q1 2020 Results,(SP:N4.50k)

2.    Takeaways from ETI s Investors Conference Call Reimaging The Past...

3.    ETI Declares N99bn PAT in 2019 Audited Results,(SP:N4.90k)

4.    ETI Announces Two New Appointments and Changes On Its Board

5.    ETI to Hold Board Meeting on Feb 28 2020 to Approve Its 2019 Audited Financial S...

6.    ETI Enters Cross-border Remittance Partnership with Alipay

7.   Ecobank Transnational Incorporated Appoints Deepak Malik As A Director; Monish Dutt Departs

8.   ETI: Walking A Tight Rope; Earnings Down As Continental Headwinds Persist

9.   ETI Declares N78.84bn PAT in Q3'19,(SP:N7.10k)

10.S and P Global Ratings Affirmed ETI And Ecobank Nigeria Ltd Ratings; Outlook Stable

11. Airtel Africa Announces Partnership With Ecobank Group


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP