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Cashless Policy: Ecobank Nigeria on Track to Meet Full-Year Targets

Ecobank
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Amid renewed drive towards full cashless policy implementation across Nigeria, Ecobank Nigeria, the subsidiary of Ecobank Transnational Incorporated (ETI) has said it is on track to meet its full-year targets notwithstanding the increasingly complex operating environment.

The Central Bank of Nigeria (CBN) has stepped up measures to accelerate Nigeria’s sluggish cashless policy since introduction about 12 years ago.

In a series of activities that commenced with the Naira redesign in October 26, the CBN has unveiled several policies to reposition Nigeria’s financial services’ space to align with global advancement in cashless policy.

This include the cash withdrawal limits that comes into effect today, Monday, January 9, 2023.

The development coincides with the recent release of the interim audited 9-month report of ETI for the period ended September 30, 2022 which showed a 12 percent increase in profit after tax to N117.40 billion from N104.50 billion in the corresponding period.

The transnational financial services institution also posted N165.44 billion earned from fees and commission income as against N144 billion in the 9-month period of 2021. The company also posted interest income amounting to N485.84 billion from N445.11 billion in the corresponding period, showing a 9 percent increase.

Commenting on the performance, Group CEO, Ecobank Transnational Incorporated, Mr Ade Ayeyemi, said the Pan African financial services institution had stepped up efforts towards meeting the group’s full-year targets, amidst complex operating environment.

He said the firm witnessed appreciable client services in its various payment platforms across the continent in a cost efficient manner.

The statement read: “We continued to deliver on our strategic priorities and are on track to meet full-year targets despite the complex operating environment. Group-wide return on tangible equity reached a record 21%, and profit before tax increased by 14%, or 48% at constant currency (i.e., excluding currency movements).

“These results reflect the resilience, strong brand and diversification of our pan-African franchise. We saw decent client activity in consumer and wholesale payments, trade finance and foreign currency markets. Additionally, despite inflationary pressures, we maintained a tight lid on costs, thereby improving our cost-to-income ratio to 56.3% from 58.3% in the previous year.

“The dampened economic outlook necessitated maintaining a sound balance sheet with adequate levels of liquidity and capital. As a result, our total capital adequacy ratio at 14.4% is well above our internal and minimum regulatory limits. Also, we hold sufficient gross impairment reserves that fully cover our non-performing loans.

“Moreover, we have fully repaid the five-year $400 million convertible debt we issued in September and October of 2017.

“Ecobankers have worked extremely hard to serve our customers’ financial needs, and I am proud of them. As always, we will passionately work towards realising our vision and remaining the bank that Africa and friends of Africa trust.”

Speaking later on what he considers the key drivers of the economy especially in the financial services sector in 2023, Ayeyemi said the year would be very exciting for Nigeria. He stated that innovation in the digital payment space will continue to be very visible during and beyond the new year.

“Specifically, innovation in the digital payments space will continue to be very visible.

“This will lead to growth in the volumes in the digital payment space. The digital financial services ecosystem will deliver unified and instant self-service across a range of interconnected payment solutions much more than we see now

“These solutions will be available to individuals, and all businesses from small informal micro merchants to large corporates as well as governments, allowing them to offer easy and convenient payment options to their customers in-store or online.”

According to the Group CEO, “Religious organizations, government agencies, transport companies, telecom service providers, financial payment facilitators, the hospitality, leisure and entertainment sector, e-Commerce and utility companies and all other stakeholders must harness the opportunities and advantages of digital solutions which will move Nigeria into a more cashless and financially inclusive society.

“Ecobank is committed to simplifying doing business for its customers, through its innovative digital payment solutions. We are determined to ensure payments are made easier, faster, convenient and secure.”

Ecobank Nigeria had in July 2022, unveiled the programme of extending remittances to its business account holders.

Under the plan, business customers will be able to instantly receive funds sent through Ecobank Rapidtransfer or any of the Bank’s remittance partners from other businesses anywhere in the world directly into their bank accounts. Similarly, they will be able to instantly receive remittances from their customers and transfer money to other business customers’ bank accounts.

The launch of the service followed the implementation of a seamless account opening procedure for customers who do not have domiciliary accounts with Ecobank Nigeria so that they can leverage the service for effective money transfers.

The Pan African Bank in Nigeria also said it was working to enlist other International Money Transfer Operators (IMTOs) for a more robust remittance offering.

The bank’s Head of Consumer Banking, Korede Demola-Adeniyi, disclosed at the occasion that the development was in line with the Bank’s strategy to provide accessible remittance services to Nigerians all over the world.

She listed the various channels which these remittances can be accessed through as Rapidtransfer app, Ecobank Mobile App, Ecobank Online, and the bank’s branches.

She said, “We are excited about these and other future collaborations as our contributions to drive remittance inflows into the country, promote trade and foreign direct investments, create businesses, spur entrepreneurship, and generally develop the Nigerian economy.

“There are several benefits for business account holders including no limits to how much they can receive, no hidden charges and the opportunity to invest the funds received in foreign currency at a competitive rate.” she said.

The Pan African lender had in December 2022, released its Q3 2022 results; reporting a 2.37 percent year-on-year rise in profit before tax on the back of growth across its income lines.

It also recorded the highest quarterly interest income of N168.619 billion, more than it did in Q1 and Q2. And on the heels of that, profit before tax rose 29% year-on-year to N52.071 billion, while net revenue increased 10% to N180.540 billion.

Though profit after tax from continuing operations declined by 4.34 percent to N40.192 billion on the back of higher tax expenses from other geographic reporting segments, it still affirms the bank’s consistent earnings over the years.

For instance, the Q3 earnings history of the bank over the past 5 years has a growth rate of 14.65 percent, while the annual earnings history over the past 5 years has a compound annual growth rate (CAGR) of 15.97 percent.

Also, the Q3 2022 results affirm the bank’s strong revenue diversification supported by a broad geographic footprint across four reporting regions and noteworthy non-interest income of 45.46 percent of the operating income in 9 months of 2022.

The Pan African lender with subsidiaries spanning 33 Sub-Saharan Africa (SSA) countries saw its assets up $25.6 billion or N11.207 trillion as of September 30, 2022, making it one of the largest banking groups on the continent outside of South Africa

The Pan-African financial institution said it is building valued partnerships with Payment Service Banks, including Airtel Africa, MTN, Alipay and Palm Pay, to drive financial inclusion towards its strategic ambition to access 100 million customers digitally.

Its award winning Mobile App is helping to expand digital offerings to

13.9 million digital customers as value of its digital transactions hit $18 billion year-on-year to $59 billion nine-months of 2022. It says that attractive regional Payments business offers significant growth and value creation opportunities.