Ecobank Group
9M 2021 Earnings Investor Presentation
7 December 2021
We Have Turned The Corner And Are Delivering On Our Strategic Priorities
1 Building Back Better
Ade Ayeyemi, Group Chief Executive Officer
Prevailing macro dynamics
The Great Vaccination Divide | Real GDP Growth Rate: Recovery continues but momentum has been | Inflation Trends | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(% of population) | weakened by the pandemic | (3mth moving average; Ann.% chg) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2021 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
6.2% | 6.0% | 6.5% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
4.8% | 4.7% | 4.6% | 5.3% | |||||||||||||||||||||||||||||||||||||||||||||||||||
3.7% | 4.2% | 3.6% | 3.6% | 4.1% | ||||||||||||||||||||||||||||||||||||||||||||||||||
2.1% | 2.5% | 2.6% | 2.7% | 0.4% | 2.0% | 1.9% | ||||||||||||||||||||||||||||||||||||||||||||||||
SSA | Oil | Nigeria | MIC(2) | Ghana | Côte d'Ivoire | Cameroon | LIC(3) | |||||||||||||||||||||||||||||||||||||||||||||||
-1.7% | -2.5% | -1.8% | -4.2% | -1.5% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Exporters(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
• 10.6% and 7.0% of Africa's population | Inflation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
have been partially and fully vaccinated, | • | Inflationary pressures persist | ||||||||||||||||||||||||||||||||||||||||||||||||||||
• | respectively as of 1 Dec 2021 | • | Higher food and oil prices, especially for importers, means that price | |||||||||||||||||||||||||||||||||||||||||||||||||||
The large disparities in vaccine access and | pressures are anticipated to stay elevated in 2020 in some EM and FM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
in policy support are driving economic | • | economies | ||||||||||||||||||||||||||||||||||||||||||||||||||||
• | outlook divergencies | Underlying drivers of increases in headline inflation are - pickup in | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Greater support to COVAX and removal of | economic activity, rapidly rising commodity prices, and supply chain | |||||||||||||||||||||||||||||||||||||||||||||||||||||
trade restrictions to accelerate flow of | bottlenecks | |||||||||||||||||||||||||||||||||||||||||||||||||||||
vaccines (only 19% of 850m doses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
pledged to COVAX by the G7 has been | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | delivered) | Higher commodity prices | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Omicron4, the new variant, is alleged to be | • | Rising commodity prices to benefit commodity exporters | ||||||||||||||||||||||||||||||||||||||||||||||||||||
spreading faster than the Delta strain, but | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
hospitalisations remain muted. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sustained | Could push advanced | |
rise in inflation | economies to withdraw | |
monetary accommodation | ||
and disrupt financial markets | ||
Capital outflows and exchange rate depreciation likely to be impacted
Depreciation of our major operating currencies vs USD as of 9M21 vs 9M20 - $/XOF: 1.1%, $/NGN: 6.6%,$/GHS: 2.8%
Monetary policy tightening by Central Banks
- Oil Exporters include Nigeria, Angola, Gabon, Chad, Equatorial Guinea
- Middle-IncomeCountries include South Africa, Ghana Côte d'Ivoire, Cameroon, Zambia and Senegal, Botswana, Cabo Verde, Eswatini, Lesotho, Mauritius, Namibia, and Seychelles
- Low-IncomeCountries include Ethopia, Kenya, Tanzania, Benin, Burundi, Central African Republic, Comoros, Eriteria, Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar, Malawi, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Togo, and Zimbabwe
- Source - Bloomberg
Source: IMF World Economic Outlook, October 2021
© Ecobank Group 2021| 9M 2021 Earnings Presentation | 7 December 2021 | 3 |
Strong progress on our strategic priorities
Revenue
generation
Expense
Discipline
Reset Credit
Portfolio
Strengthen Balance
Sheet
Customer Excellence
Program
Continued
Digitalisation
$1.3bn
9M21 net revenue
+4% YoY
Record cost-to-
income ratio (CIR)
58.3%
CoR2: 1.43%
NPL3 ratio: 6.9%
Coverage: 91.2%
LDR4: 50.2%
Total CAR5: 14.7%
Improved CX8 score
- reduced complaints
Customer
engagement &
Fintech partnerships
- Diversification across products, business, and geography benefiting revenues
- Increasing Trade Finance and FX volumes; growing share of LC1 market
- Net interest income benefited from volume growth and stable margins
- Payment's volume up 34% YoY to $140m; digital sales up on online & mobile platforms
- "Manufacture centrally, distribute locally" strategy is driving cost saves and efficiency across the Group
- Adherence to stringent expense discipline
- Expect CIR of ~55% in the medium-term
- Asset quality improvements reflective of prudent risk culture
- Cost of risk reducing
- Reduced concentration risk in the credit portfolio
- Expect 100% coverage in the near term
- Record customer deposit growth driven by online and mobile platforms, partnerships with Fintechs and MNOs6, and deepening client relationships
- Strong internal capital generation and recent Tier 2 Sustainability Note and AT17 issuances have boosted CAR
- Continuous monitoring of CX score through Quality of Experience and Advocacy via monthly and quarterly surveys
- Rolled out of Microsoft Dynamics 365 For Customer Service across the Group
- Empowerment of Contact Center front line to be able to deliver First Contact Resolution
- Using technology to drive customer engagement
- Using API9 sandbox to drive innovative digital products
- Reinforcing Cyber Security
- Intelligent operations (data analytics, machine learning, artificial intelligence)
- Letters of credit (2) Cost-of-risk (3) Nonperforming loans (4) Loan-to-deposits (5) Capital Adequacy Ratio (6) Mobile Network Operators
- Additional Tier 1 (8) Customer excellence (9) Application programming interface
© Ecobank Group 2021| 9M 2021 Earnings Presentation | 7 December 2021 | 4 |
3
Driving Earnings Growth Through Sustained Positive Operating Leverage
Generating returns above the cost of capital
Ayo Adepoju, Group Chief Financial Officer
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ETI - Ecobank Transnational Inc. published this content on 07 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 December 2021 13:01:07 UTC.