ECOBANK: A LITTLE POLISH BY WEAK NAIRA.

From the figures wisely released by Ecobank recently in dollars and Naira for nine months to September, it was quite obvious that this year, fortunes may be polished some how by the weak Nigerian Naira.
For example while the dollar figures point to 2.63% drop to $2083.6m from $2139.9m, the Naira equivalent was reflecting 18.1% increase to N411832.3m from N348728m
This was driven mainly by 1.89% increase in dollar interest income to $1298.8m from $1274.8m which translated into 23.6% increase in naira terms to N256722.7m from N207745m.
Of course the polish comes from the devaluation of the Naira this year.
However, in spite of this, it is still clear that Ecobank did not have serious issues with cost pressure within the period, not even with interest expenses despite the increase in interest income it generated.
In dollars terms interest expense dropped by 0.6% to $461m from $463.8m while the naira equivalent increased by 20.5% to N91122.1m. Hence net interest income grew by 3.33% and 24.7% in dollar and Naira terms respectively.
No issues too with operating expenses which dropped ahead of the dollar percentage drop in gross earnings or grew at a lower rate (9.81%) in naira terms.
The only real threat to profitability came from loan loss provision which closed the period 22.1% up in dollar terms at $175.4m from $143.7m previously and 47.8% up in naira terms to N34594.8m from N23411.8m.
In the end, Ecobank profit before tax dropped by 1.63% in dollar terms at $398m and increased in naira terms by 16.8% to N79665.5m from N68197.7m.
IN SUM:
* It is not unlikely that the challenging environment in west Africa alluded to by Ecobank while submitting the figures, will continue to year end.
* Thus a weak naira will continue to help apply helpful coats to an otherwise trying financial year.

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