Ecobank Transnational Incorporated (ETI) has released its unaudited Q1 2025 results, reporting a pre-tax profit of N267.305 billion ($174.9 million), reflecting a 32.68% year-on-year increase.
In addition to strong profitability, the group’s gross earnings rose by 16.59% YoY to N1.054 trillion, driven by robust growth in both interest and non-interest income.
Commenting on the results, Jeremy Awori, CEO of Ecobank Group, stated:
“Turning to our results, we achieved a return on tangible shareholders’ equity (ROTE) of 30.5%. Our profit after tax attributable to shareholders was $84 million, marking a 22% increase, or 39% in constant currency.
Additionally, we delivered net revenue of $516 million, up 4% or 13% in constant currency. Our revenue streams continue to diversify, with core fee and commission income now contributing 25.2%.”
What drove the results:
At the heart of Ecobank’s strong Q1 showing was a solid rise in its core operating income; the bread and butter of banking.
- Both interest and non-interest income pulled their weight, but the bank’s ability to manage its lending and fee-generating activities made the real difference.
- Interest income remained the star performer, contributing nearly 66% of total earnings. While its share dipped slightly from last year, the bank leaned more on investments in government securities and treasury bills, a safer, more stable bet, which grew 10% year-on-year.
Meanwhile, income from loans to customers and other banks fell 7%, reflecting a strategic shift in the loan book. Loans to banks surged by over N555 billion, while customer lending shrank slightly, suggesting a cautious stance on credit risk.
- On the flip side, interest expenses grew at a slower pace than income, which is a healthy sign. Even as customer deposits surged by N1.5 trillion (with interest payments on those deposits rising by 21%), the overall cost of funds dropped marginally, improving margins.
The bank also aligned with this strategy. Commenting further on the results, the CEO stated:
“Our margins remained stable, supported by a conscious reduction in the cost of customer deposits, driven by our successful strategy to generate low-cost customer deposits. As a result, customer deposit growth increased in the first quarter, with deposits rising by $1.1 billion. Improvements in our credit portfolio are evident across our cost of risk, non-performing loan (NPL) ratio, and coverage ratios.”
Crucially, loan impairments losses from bad loans fell by 32%, cushioning the bottom line and helping lift operating profit by a third.
Beyond traditional banking, ETI flexed its muscle in non-interest income. Fees and commissions soared, led by strong performances in cash management and credit-related services.
- Cash management fees jumped to N108.9 billion, while credit-related commissions reached N61.7 billion ahead of Q1 2024.
- Add in a N125.7 billion foreign exchange gain, and you get a diversified income engine firing on all cylinders.
The balance sheet
Ecobank’s balance sheet remained robust, expanding by N1.23 trillion in Q1 2025 to reach N44.54 trillion, reflecting a 2.86% growth compared to Q1 2024.
- Customer deposits, which account for over 74% of the group’s total assets, rose 4.97% YoY to N33.208 trillion, reinforcing the bank’s strong funding base.
- Despite the strong top-line and profit growth, Ecobank’s strategy appears to be tilting toward liquidity and interbank positioning rather than aggressive retail lending.
- While loans and advances to customers declined slightly by 0.23% to N15.310 trillion, lending to banks surged—signaling a preference for lower-risk, short-term credit exposure. Cash and cash equivalents also saw a slight decline of 1.15% to N7.803 trillion, suggesting some reallocation of liquidity.
Shareholders’ funds grew 7.91% YoY to N2.99 trillion but still accounted for just 6.74% of the balance sheet size, underscoring the bank’s heavy reliance on deposits and leverage to drive growth.
Key highlights (Q1 2025 v. Q1 2024):
- Gross earnings: N1.054 trillion +16.59% YoY
- Interest Income: N694.520 billion +14.17% YoY
- Interest Expense: N243.191 billion +10.56% YoY
- Net interest income; N451.329 billion +16.22% YoY
- Non-interest income: N337.345 billion, +21.75% YoY
- Operating income: N788.674 billion+18.52% YoY
- Profit after tax: N187.113 billion +32.80% YoY
- Basic EPS: N5.2 +38.67% YoY
Share price performance
As of the close of trading on May 2, 2025, the share price stood at N28.00, reflecting a year-to-date (YtD) loss of 7.14%.