Record profit for Ecobank Group

Ecobank Group, one of Africa’s leading pan-African banking institutions, has unveiled its audited financial results for the full year 2024, showcasing a banner year marked by a record profit before tax of $658m. The results, announced on 31^st March, reflect a potent combination of strategic execution, operational efficiency and resilience amid a challenging economic landscape across the continent. With net revenue reaching $2.1bn and earnings per share climbing to 1.36 US cents, Ecobank has solidified its position as a powerhouse in African banking, delivering a remarkable return on tangible equity (ROTE) of 32.7%, up from 24.9% in 2023.

The 2024 performance indicates the success of Ecobank’s growth, transformation and returns (GTR) strategy, a multi-year roadmap designed to harness the bank’s sprawling geographic footprint, enhance its profitability and drive innovation. From a 16% surge in attributable profit after tax to shareholders of Ecobank Transnational Incorporated (ETI), reaching $333m, to a tangible book value per share increase of 4% to 4.20 US cents, the numbers tell a story of a bank hitting its stride.

Navigating volatility

Ecobank’s financial success in 2024 was propelled by an 18% increase in net revenue at constant currency, reaching $2.1bn. This growth was underpinned by a stable and recurring stream of fee and commission income, which rose to 25.1% of total revenues from 23.5% the previous year. This shift highlights Ecobank’s ability to diversify its income streams beyond traditional interest-based revenue, a critical factor in navigating the volatility of African markets.

Equally notable was the bank’s disciplined approach to cost management. Operating expenses declined by 0.4% year-on-year; a feat achieved through strategic cost-containment programmes rolled out across its operations. This reduction contributed to a record-low cost-to-income ratio (CIR) of 53%, down from higher levels in prior years and signalling operational efficiency that rivals some of the best-performing banks globally.

The shift in deposit mix further bolstered Ecobank’s financial stability. By prioritising low-cost current and savings accounts (CASA), the bank improved its CASA ratio to 86.4% from 83.4% in 2023. This strategic pivot not only reduced the cost of funds but also deepened customer relationships, illustrated by a 17% increase in customer deposits at constant currency, reaching $20.4bn. The growth in deposits reflects rising trust in Ecobank’s brand, an expanding customer base, and higher balances in current accounts, a testament to the bank’s focus on customer-centric banking.

While Africa’s economic environment in 2024 was far from hospitable, with high inflation, currency depreciation and rising interest rates testing financial institutions across the continent, Ecobank demonstrated foresight and resilience. The bank proactively increased its reserves for expected credit losses (ECL), a move aimed at cushioning its balance sheet against potential defaults in such key markets as Ghana, Nigeria and Zimbabwe, where macroeconomic pressures were particularly acute.

Conservative approach

This conservative approach to risk management paid off. The loan-to-deposit ratio improved to 53% from 53.9%, while the loan-to-assets ratio dropped to 37.6% from 40.6%, reflecting a stronger liquidity position. Meanwhile, the capital adequacy ratio climbed by 80 basis points to 15.8%, well above regulatory thresholds, ensuring Ecobank remains well-capitalised to weather future shocks. These metrics underscore a bank that is not only growing but doing so with an eye toward sustainability and stability.

Ecobank’s consumer and commercial banking segment emerged as a key driver of growth in 2024. The bank saw a 9% increase in active customers, fuelled by enhanced customer activity ratios and greater product penetration per client. Card revenue, a barometer of digital adoption, jumped 14% to $91m, supported by the rollout of the Premium Infinite Card in eight markets. This high-end card offering caters to affluent customers, reflecting Ecobank’s intent to capture a larger share of the premium banking segment.

Innovation also took centre stage with the launch of a new business line: payments, remittances and banking as a service. This initiative aims to position Ecobank as a leader in seamless financial connectivity across Africa. Strategic partnerships with platforms like XTransfer, TransferTo and Nium have expanded the bank’s capabilities in cross-border trade payments and remittances – critical services in a continent where intra-African trade is gaining momentum under frameworks like the African Continental Free Trade Area.

The corporate and investment banking (CIB) arm of Ecobank also delivered stellar results. Wholesale payments surged, with OMNI Plus transactions rising 25% to $73 billion and RapidCollect volumes climbing 24% to $7.8bn. These figures highlight Ecobank’s growing role as a trusted partner for businesses navigating Africa’s complex trade ecosystem. The bank’s share of letters of credit – a vital instrument in international trade – grew by 40 basis points to 5.2%, cementing its dominance in this space.

CIB’s expansion wasn’t limited to payments. The segment rolled out four new investment products in Ghana and the West African Economic and Monetary Union, signed an assets under management mandate in Kenya, and introduced fixed-income sales in five new markets. These moves reflect Ecobank’s ambition to deepen its investment banking offerings and cater to the evolving needs of corporate clients across the continent.

Pivotal year

Jeremy Awori, Ecobank Group’s CEO, described 2024 as a “pivotal year” for the GTR strategy. “We established solid foundations for our businesses to grow now and in the future,” Awori said in a statement accompanying the results. “Despite a challenging macroeconomic environment characterised by high inflation, currency depreciation across African markets, rising interest rates and tighter regulatory conditions in key countries such as Ghana, Nigeria and Zimbabwe, we delivered strong earnings and returns.”

Awori pointed to the record ROTE of 32.7% as a highlight of the year. “This underscores the strength of our pan-African franchise and disciplined execution,” he noted. “Excluding the adverse impact of foreign exchange rates, profit before tax rose 33% to $658m, while net revenue grew 18% to $2.1bn.” The CEO also emphasised the bank’s operational efficiency, with the CIR holding steady at 53%, and its robust balance sheet bolstered by a $3bn increase in deposits at constant currency.

Risk management was another focal point for Awori. “We adopted a more conservative and prudent approach to lending, which strengthened our liquidity position and increased reserves for expected credit losses,” he explained. “Our capital adequacy ratio rose to 15.8%, comfortably above regulatory requirements, ensuring we are well-positioned for future growth.”

Ecobank’s sprawling presence across 33 African markets remains a cornerstone of its success. “In 2024, we experienced strong momentum in fees and commissions, particularly from cross-border payments and trade,” Awori said. “Card revenues increased by 14%, supported by investments in our digital banking platforms, while our active consumer base grew by 9% with improved product penetration per customer.”

The GTR strategy, Awori added, is about redefining banking in Africa. “We are sharpening our market focus in each country, accelerating growth in consumer and commercial banking, and expanding our payments, remittances and fintech capabilities,” he said. “We are connecting customers to opportunities across borders, platforms and financial ecosystems.”

Nigeria, one of Ecobank’s turnaround markets, also featured in Awori’s commentary. “The transformation of our Nigeria business is underway, and we continue collaborating with key stakeholders to enhance its performance and realise its future potential,” he noted, signalling optimism about the region despite its economic challenges.

Awori expressed gratitude to the Group’s workforce, crediting their dedication for the year’s success. “Together, we are building a future-ready institution that will unlock further value for our shareholders, support our clients and drive inclusive growth across the continent,” he concluded.