Ecobank increases deposits mobilization by 16%

 

Adnan Adams Mohammed

Ecobank, the trans-African bank has reported a 16 percent growth in its deposits to GH¢7.6 billion in 2018 from GH¢6.5 billion in 2017 showing a good effort in deposits mobilisation by the bank.

Dan Sackey, Ecobank’s Managing Director attributed the performance to an efficient and reliable digital banking system that allows their customers deposit funds from their phones into their bank accounts, and allows them access their accounts anytime from anywhere, especially the Ecobank App, which has over a million downloads and more than 300,000 active users, leading to increased deposits.

Of the total deposits, only GH¢4.1 billion was disbursed in loans, the largest in the industry, which also saw a growth but managed repayment in the best interest of the bank and clients, thereby ensuring almost total compliance. The MD explained that, Ecobank grew its loan book because the bank significantly improved its risk management processes, which allowed it to improve its ability to select assets and monitor those loans.

“Once you book a loan, you need to ensure that not only do you bring it in, but also monitor until it is fully repaid. As part of that process, we made sure that the assets we are booking are capital-friendly; and this ensured we would be able to match the returns on those assets with the capital they were consuming. What we did was to grow the loan book, but made sure it went into capital-friendly areas.”

In spite of the challenges in the economy and the banking sector crisis in 2018, the bank reported a profits before tax of GH¢506million in 2018, a 41 percent growth against the 2017 earning of GH¢358million. On revenue, the bank maintained its leadership position with a 17 percent growth to GH¢1.3billion despite the subdued operating environment. This performance was underpinned by an 18 percent and 15 percent growth in funded and non-funded income respectively.

Ecobank’s net interest income increased from GH¢744million in 2017 to GH¢878million – driven largely by increased lending to customers in the corporate and SME space. The bank increased its loan book from GH¢2.7billion in 2017 to GH¢4.1billion.

Mr Terence Darko, Board chairman noted that, the requirement to increase stated capital and build-in buffers in accordance with the new banking directives means that even though the bank built a total shareholder value of GH¢1.32billion, making it one of the best-capitalised banks in the industry, it is unable to pay dividends this year.

“We believe that continued investment in our business is required going forward, partly due to adoption by the central bank of the new Basel II and III requirements and the associated new capital requirements directives,” he said.