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.
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.
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