Ecobank hopes to grow in East Africa after $23m loss

Board of directors, shareholders and management of Ecobank attend the bank’s 27th Annual General Meeting in Dar es Salaam at the weekend. PHOTO|THE CITIZEN CORRESPONDENT 

By Felix Lazaro

In Summary

Ecobank’s group chairman Emmanuel Ikazoboh told the participants that last year’s performance was a good indication of the subsidiary’s future performance

Dar es Salaam. Ecobank Group is optimistic that its East African subsidiary stands a better position to record good performance in future.

The positive projection of the pan-African bank in Tanzania, Kenya, Uganda, Rwanda, Burundi, Southern Sudan and Ethiopia –which make the East African subsidiary- was expressed at the weekend during the bank group’s 27th annual general meeting here.

Ecobank’s non-executive group chairman Emmanuel Ikazoboh told the participants from 36 countries in which the bank operates that last year’s performance was a good indication of the subsidiary’s future performance.

East Africa returned to the black last year after reporting a small net profit in comparison to losses of $23 million the previous year.

“This was thanks to the combination of a 26 per cent year-on-year growth in net loans, lower cost of fund and higher fee and commission income, whilst operating expenses were held in check,” notes the Ecobank group’s abridged annual report 2014.

The bank recorded a pre-tax profit growth from $222 million to $520 million last year.

“Pre-tax profit growth was strong across all regions as indicated in percentages: Nigeria (+2,276), Central Africa (+4), Southern Africa (+26), Francophone West Africa (+11), Rest of West Africa (+12), while East Africa returned to the black after reporting a pre-tax loss in 2013,” said Mr Ikazoboh. According to him, the bank is still not conversant with the bloc’s environment given that it just dropped its feet few years back. In Tanzania it started operations in 2010, and it is present in less than five regions. “The good news is that we are working hard with the central banks of the respective central banks to sustain the growth. These subsidiaries are still new and hence need time to nurture so that they grow and perform well,” he said.

Ecobank Tanzania managing director Enoch Osei-Safo told the media that the group had recovered from the pre-tax loss of $222 million in 2013 to $520 million last year.

The outgoing group chief executive officer, Mr Albert Essien, was impressed with the performance in 2014, thanks to strong revenue growth and strategic cost management.

“Group revenue grew in line with our guidance for the year, reflecting the strength and stability of our diversified business model,” he said. Shareholders approved the company’s accounts for 2014 and the appropriation of profit of $5.82 million for the year. $0.87 million was transferred to special reserves and $4.85 million to retained earnings. The meeting also approved the issue of bonus shares. The new shares issued will rank equally with existing ordinary shares of the company.