Ecobank has reaffirmed its dominance in the banking industry with a total balance sheet of GH¢25.77billion at the end of 2022, its audited financial results indicate.
This performance – highest in the banking sector in what was a tumultuous year for the industry on account of mark-to-market losses on government securities as well as impact of the domestic debt exchange programme (DDEP) – represents a 20.58 percent leap over the GH¢21.36billion recorded by the nation’s second-biggest bank, GCB Bank.
It was also 44 percent higher than the GH¢17.86billion Ecobank had the prior year.
An examination of the results shows that this was driven primarily by cash and its equivalents, loans as well as property and equipment. Cash and its equivalents appreciated by 125 percent, from GH¢2.87billion in 2021 to GH¢6.44billion in 2022.
Despite elevated risks in the wider economy, the bank expanded its loan book – lending GH¢8.8billion to individuals and businesses, 56.2 percent more than it did in the previous year. It also illustrates Ecobank’s loan asset quality, as non-performing loans (NPLs) fell to 9.47 percent from 12 percent in 2021.
Its liabilities also increased significantly, to GH¢23.1billion in 2022 from GH¢15.2billion in 2021, as deposits from customers swelled by 52 percent from GH¢12.87billion in 2021 to GH¢19.59billion in the year under consideration.
While net income grew from GH¢2.07billion in the previous year to GH¢2.89billion, the bank unsurprisingly took a hit to its profits as pre-tax and post-tax profits shrunk significantly.
The former stood as a loss of GH¢53.09million, compared to a positive GH¢ 886.3million in the previous year. Similarly, Ecobank reported a post-tax loss of GH¢33.5million – a sizable drop from the previous year’s profit of GH¢579.4million.
A look at the impairment charges for the period under consideration shows that it was approximately six times higher at GH¢1.7billion at the end of December 2022 versus the GH¢274.7million from a year earlier.
The bank’s capital adequacy and liquidity ratios both fell, with the latter declining from 20.24 percent in 2021 to 14.63 percent during the period under review. It however stood at double the regulatory floor of 10 percent. The latter ratio also dipped to 48.37 percent from 69.84 percent.
The market is yet to react to Ecobank’s results, as its share price has remained flat since it fell to GH¢5.4 in March this year. Its share price at the beginning of the year was GH¢6.64.