Company curbing costs as clients move to digital, CEO says
Bank will hold off on Eurobond plans until conditions ease
Pan-African lender Ecobank Transnational Inc. sees profit after tax rising 50 percent this year as bad loans decline and it curbs costs by encouraging customers to use digital platforms more often.
“Our credit portfolio is not as bad as it used to be,” Chief Executive Officer Ade Ayeyemi said in an interview Thursday in Abuja, Nigeria’s capital. “Our intention is to get our cost-income ratio from 60 percent today to 50 percent in the medium term. Once we do that, we will be able to generate a return on equity above 20 percent.”
The Lome, Togo-based bank has operations in around 30 African countries, more than any other lender. It made a post-tax profit of $228 million in 2017 and a return on equity, a key measure of a bank’s profitability, of 10 percent, according to data compiled by Bloomberg.
While Ecobank executives went on a roadshow to meet global debt investors last month, they will hold off on a Eurobond for now, according to Ayeyemi. Ecobank doesn’t need the funding and the sell-off in emerging markets over the past three months has made conditions tougher, he said.
“There was no trade war when we started,” he said. “There were no challenges in Turkey. As per now, we just wait. If we don’t get a window, we do it next year.”
Ecobank shares have risen 21 percent in Lagos this year. They fell 0.2 percent to 20.55 naira by the close on Thursday.
— With assistance by Paul Wallace