Pan-African lender Ecobank optimistic about second half, CEO says
The Lome, Togo-headquartered lender, which operates in 35 countries around the continent, posted a 23% growth in pretax profit for the first six months of this year thanks to recoveries in some of its key markets like Ghana.
"We are confident that we will see the business continuing to perform. We have got a diversified business," Jeremy Awori, the group CEO, told Reuters in an interview.
Growth in the business is also being driven by payment services, remittances, trade finances and other non-lending income lines.
"Our lending is picking up. We are doing that cautiously because there are still many macroeconomic uncertainties and we don't want to lurch back into NPLs (non-performing loans)," Awori, who spoke to Reuters on Friday, said.
Ecobank's shares, which collapsed during the global financial crisis, are up by almost a third this year. That's more than double other regional lenders such as KCB Bank (KCB.NR), opens new tab and Access Bank (ACCESSCORP.LG), opens new tab and well above the 6% rise in Standard Bank. (SBKJ.J), opens new tab.
Last week though, Ecobank's biggest shareholder, South Africa's Nedbank (NEDJ.J), opens new tab, put its 21.2% stake in bank up for sale, in part due to concerns it may have had to inject more capital in order to prevent "shareholding dilution".
As one of Africa's biggest lenders, Ecobank's cash distribution business has been impacted by U.S. President Donald Trump's move to dismantle the United States Agency for International Development (USAID), Awori said.
Ecobank has also been handling funds for the World Health Organisation, a United Nations agency that has also been affected by the USAID cuts.
He did not provide data but Awori said the impact was distributed across its many markets, meaning the hit on deposits was not pronounced.
He is also monitoring broader international developments too, especially the scale of U.S. trade tariffs.
"A decision taken by the U.S. against China or against Europe can have a knock-on effect across into our markets," Awori said. "We are very joined up."
Although an opening-up Ethiopia could be an exception given its size and potential, Ecobank doesn't have any near-term geographical expansion plans.
"It is never say never, but right now, for the next couple of years, we feel we have enough opportunities where we are," Awori said.
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