Ecobank expects banking sector to record stronger growth

Ecobank Ghana says it expects the country’s banking sector to record stronger growth this year as the economy rebounds.

 

Improved contribution from the oil sector and the timely resolution of the outstanding Bulk Oil Distributing Companies (BDCs) loan challenges according to the bank would result in the growth.

 

Board Chairman of Ecobank Ghana, Mr. Terence Darko speaking at the bank’s annual general meeting in Accra described last year’s operating environment as a very challenging one for banks in the country.

 

He however, sated that despite the tough business operating environment in 2016, Ecobank Ghana Limited’s revenue jumps 18 per cent over that of the previous year.

 

Total revenue for 2016 was GH¢1.2 billion compared with GH¢1.02 billion in 2015, driven by gains from de-recognition of financial assets relating to the oil sector.

 

He said the bank was able to maintain a positive liquidity gap, growing its deposits by 12 per cent over the previous year despite the competitive market and faced with tightening liquidity.

 

Mr. Darko said the bank’s  capital adequacy ratio of 15.29 per cent, a healthy mark-up against the regulatory benchmark of 10 per cent is the result of the high standards of capital management to ensure that the business continues to run even in the most unlikely and unpredictable economic scenarios.

 

Overall, profit before tax was 8 per cent lower than the previous year, the bank stated in its annual report on the financial year under review.

 

Its net interest income increased from GH¢682 million to GH¢719 million while net fees and commission, which had hitherto been regularly impressive, declined by 15 per cent from GH¢185 million to GH157 million, attributable to lower transaction volumes associated with the operating environment.

 

The bank’s operating cost also jumped by 26 per cent over the previous year; however, its cost to income ratio was impressive at 46.94 per cent.

“This ratio compares favourably with the industry average and is a testament to the improvement in our return on assets and successful outcomes of our cost cutting initiatives,” Mr. Darko observed.

 

The Board Chairman noted that Ecobank had continued to demonstrate its resilience with an impressive and commendable return on equity of 35 per cent for 2016.

 

The Managing Director of the bank, Mr Daniel Sackey, stressed management’s commitment to deepen financial inclusion by “leveraging the rising trends in mobile adoption across the country to improve convenience and accessibility for you our cherished clients”.

 

Ecobank Ghana in 2016 successfully introduced the Ecobank Mobile App to aid its customers to make instant payments and to receive funds from any bank with Ghana and across all 33 countries in Africa where the bank operates.

 

Ecobank Ghana’s initiative to promote a cashless system is yielding impact with more than 80,000 customers of the bank signing on to the digital mobile banking platform, barely four months after its launch.

 

Shareholders approved a dividend of 82 pesewas per share declared by the bank.

By David Adadevoh

 

 

email
Print Friendly

Leave a Comment