ETI Q2'16 Conference Call & Earnings Presentation - The Key Takeaways


Tuesday, August 02, 2016 3:22pm / Proshare Markets

Ecobank Transnational Incorporated (ETI) today holds its Q2’16 Investors and Analyst Conference Call Earnings Presentation.

In Q2, the bank operated and delivered its earnings results in a tough operating environment with economies across Africa slowing while Nigeria’s economy is stressed particular due to the impact of low oil prices and FX scarcity.

Also, the bank witnessed subdued client activity across its businesses as well as an elevated credit risk environment.

Despite the challenges experienced, the bank still recorded steady growth on strategic initiatives which is led by growth in consumer banking, investments in people and systems, cost reduction initiates which is ongoing as its headcount has been down approximately by 10% from December 2015 and strengthened credit risk management & credit culture.

The bank recorded revenue of $1.02bn in H1 2016 compared to $1.07bn in H1 2015. This represents a 5% drop YoY. The slight drop in revenue is as a result of 15% drop in Non-Interest Revenue (NIR) from $513m in Q2’15 to $433m in Q2’16  as the decline was driven by lower volume and client activity.

Profit before tax dropped by 35% from $312m in H1 2015 to $204m in H1 2016. Higher impairments driven by actions to improve loss absorption capacity and depreciation of key currencies, particularly the Naira were the key drivers of the drop in PBT recorded.

The bank’s balance sheet is negatively impacted by FX fluctuation naira depreciation. Customer loans dropped by 14% YoY while customer deposits also dropped by 12% YoY, both affected by FX translations.

In a nutshell, below are the key takeaways from the Q2’16 earnings presentation made by bank management;

·         The bank operated in a tough operating environment and despite the broad macroeconomic challenges, it recorded flat revenue of $1bn YoY.

·         The banks businesses, client activities and balances sheets are affected by adverse foreign exchange translations.

·         The bank’s NPL coverage ratio at 8.6% is better than its previous figure of 9%.

·         The bank reviews its 2016 targets as it revised its deposits for 2016 from 2% to (15%) in his balance sheet growth.
·         Also, it reviewed it net loans from a flat position to (15%) for 2016 and revenue from a flat position to (5%) for 2016.
·         Its NPL ratio is expected to be at 7.5% at the end of 2016 after achieving 8.6% NPL ratio in Q2 2016.

Related New

1.       Ecobank Group Reports PBT of 204mln on Revenue Of 1.0bn for Q2 16

2.      ETI Records 35.4 Drop in PAT in Q2 16 SP N12.74k

3.      Ecobank announces consolidation of shares declares a dividend of US 48.2 million

4.       ETI to Rationalize Branches to Drive Productivity

5.     Ecobank announces consolidation of shares declares a dividend of US 48.2 million 

6.     ETI and Old Mutual Announce New Strategic Agreement 

7.     Ecobank Group Appoints Amin Manekia as Group Exec Corporate Investment Banking 

8.     ETI Q4 15 Q1 16 Conference Call Earnings Presentation The key takeaways

9.       ETI Records 33.8 Drop in PAT in Q1 16 SP N13.87k

10.  ETI Proposes 40kobo Dividend as PAT Dips by 67.6 in 2015 Result SP N13.90k

11.   ETI Announces Laurence do Rego as Group Executive of Commercial Banking Business

12.  ETI Appoints GTL Registrars Limited as its New Company Registrar

13.  ETI Announces that Full Year 2015 Profit Will be Materially Lower than Expected  

Related News