Net interest income and net fees and commissions drives Ecobank to profitability

Harare – Ecobank Zimbabwe, a unit of Togo-based Ecobank Transnational Inc reported an 81.8 percent profit after tax for FY18 to close at $40 million compared to $22 million the prior year mainly attributed to a year-on year increase of 42 percent in net interest income and a 44.8 percent year-on-year growth in net fees and commissions.

In a statement accompanying the bank’s financial results, Chairman Fortunate Chisango said the rise in net interest income was due to increased investment in Government Securities from $185 million at the beginning of the year to $380 million at the end of 2018.

On the other hand, growth in fees and commissions was driven by establishment of import letters of credit while cost management as reflected by the Cost to Income (CIR) remained effective at 34.12 percent.

In the period under review, total assets grew significantly by 92.1 percent to reach $1 050.3 million at the beginning of the year, reflecting both increased deposits and subsequent asset creation.

“May I hasten to add that we have fully exploited our Group network in order to grow our market share in Zimbabwe and in the process enhance shareholder value,” said Chisango.

During the period under review the recorded core capital of $109.1 million which reflects a year-on-year growth of 41.3 million.

Additionally, the Bank said it is proposing an interim dividend of $5.9 million for the 2018 financial year.

“The Board remains cognisant of the importance of continuing to provide a good return to shareholders through these dividend declarations, after taking due consideration of its impact of future statutory capital requirements and capacity to effectively compete in our chosen markets.”

In 2017 the Bank declared a final dividend of $5.9 million. This declaration, together with an interim dividend of $2.3 million declared and paid to shareholders registered on the bank’s books as at September 30, 2017 bringing the total dividend distribution for 2017 to $8.2 million.

Going forward, Ecobank said it will continue to scan the environment in order to identify new opportunities and be adaptive as it maintain a growth trajectory, adding that it expects to launch new digital platforms and platforms to meet clients need.

Ecobank Zimbabwe Limited (EZW) is a registered commercial bank that is supervised and regulated by the Reserve Bank of Zimbabwe (RBZ). It commenced operations in Zimbabwe in January 2011 after ETI acquired a controlling stake in Premier Banking Corporation. It has 12 branches.

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