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revenues, net results and… cost of risk on the rise in the first half of 2021

(Agence Ecofin) – After a successful 2020 year, but disrupted by covid-19, Ecobank CI is back at the end of the first half of 2021. The Bank having opted for a generous distribution policy, seems well on the way to setting a new record on its profit, but has a lot to do with its cost of risk.

Banking activity, loans, deposits up, charges down, Ecobank Côte d’Ivoire renewed its performance from 2020 to the first half of this year. The profit before taxes of the third largest banking asset in the WAEMU shows an increase of 31% compared to the end of June 2020, while its net profit, for its part, has increased by 18%, to 14.74 billion FCFA ($ 26.8 million).

Read also : Ecobank Côte d’Ivoire announces a further increase in dividend for 2020

This improvement is attributable to the good performance of the banking activity, as well as to the cost control strategies implemented by the top management of the Bank over the past three years. Thus, the income of the financial intermediary increased by 8.2% to 42.3 billion FCFA, supported by a resumption of activities on foreign exchange transactions.

Non-interest income (net commissions) having increased by 50.9% to 13.4 billion FCFA against 8.9 billion FCFA in June 2020, attenuated a 4.4% drop in interest income on operations with the customer base. Ecobank CI is satisfied with the management of its charges, which fell by around 6.8%.

“Maintaining discipline in the management of operating expenses as well as the implementation of certain initiatives aimed at optimizing them have enabled the Bank to limit the level of these expenses over the first half of the year to FCFA 19.7 billion, ie a decline of 6.8% (1.4 billion FCFA) ”, underlines the institution headed by Paul Harry Aithnard.

Read also : Paul Harry Aithnard, CEO Ecobank CI: “the beating heart of the Ecobank group is in French-speaking West Africa”

However, the decrease in its costs was insufficient to contain the effects of the 4.5% increase to 6.3 billion FCFA in the net cost of risk on the net result. A deterioration on which the Bank moderates and explains by its policy of consolidating the portfolio, “Aimed at the strict application of the prudential system” in order to “To strengthen the coverage of bad debts”. A major project that Ecobank CI is already working on, which indicates that a “9.9% increase in its provisions on overdue debts” has already “Allowed to increase the level of bad debt coverage to 81.7%” at the end of June.

Customer confidence

The third largest bank in WAEMU in terms of assets and deposits, Ecobank CI continued to consolidate its position during the first half of this year. Indeed, its total balance sheet is recorded at 1550.4 billion FCFA, up 12.8% compared to June 30, 2020 (1374.2 billion FCFA). This increase was mainly supported by the growth in deposits (+ 32.3%), with loans increasing by 3.3%.

In detail, deposits collected from customers exploded to reach FCFA1154.7 billion, marking a return of confidence, stimulated by the resumption of economic activity in Côte d’Ivoire, and digitization as well as various actions. commercial activities undertaken by the banking institution based in Abidjan Plateau.

Loans granted to customers (loans and advances), for their part, experienced a more modest increase of 3.3% to 576.6 billion FCFA in June 2021. An increase which is mainly driven by the increase in short-term loans .

Fiacre E. Kakpo


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