Ecobank Transnational Incorporated : 1H 2021 Earnings Presentation PDF 1.28 MB

Ecobank Group

1H 2021 Earnings Investor Presentation

27 July 2021

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1	Introduction	Ade Ayeyemi, Group Chief Executive Officer

2	Financial Review	Ayo Adepoju, Group Chief Financial Officer

3	Risk Management	Eric Odhiambo, Group Chief Risk Officer

4 Q & A

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INTRODUCTION

1 Momentum in execution delivered strong 1H results

Ade Ayeyemi, Group Chief Executive Officer

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Prevailing macro perspectives

Real GDP Growth Rate

		2020			2021			2022														6.1%			6.5%						6.1%
4.0%																															4.3%
														3.5%								6.0%
										2.2%			2.3%				3.8%				4.6%			2.3%										1.0%	4.3%
					3.4%												0.9%									3.4%
									2.2%							2.5%
				SSA			Oil				Nigeria			MIC(2)		Ghana	Côte d'Ivoire	Cameroon		LIC(3)
-1.9%			Exporters(1)	-1.8%
								-2.3%																										-2.8%
																						-4.4%
Macro Factors & Economic Fundamentals
		SSA GDP to rebound in						Accommodative monetary			Commodities & oil price
2021 & 2022											& fiscal policy									recovery
Av. inflation in SSA to fall:			Manufacturing & Services				Delta variant & low
10.8%, 9.8%, and 7.8% for					vaccination rate (1.3% of
		PMI suggests sector
2020, 2021, & 2022,												African population) create
							activities are expanding
						respectively													uncertainty
																																					Impact on accommodative
	Moderate exchange rate			Sovereign debt-to-GDP				policies if advanced
				movements YTD								ratios remain elevated				economies tighten
																																						financial conditions

1. Oil Exporters include Nigeria, Angola, Gabon, Chad, Equatorial Guinea
2. Middle-IncomeCountries include South Africa, Ghana Côte d'Ivoire, Cameroon, Zambia and Senegal, Botswana, Cabo Verde, Eswatini, Lesotho, Mauritius, Namibia, and Seychelles
3. 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

Sources: IMF World Economic Outlook, April 2021, World Bank Global Economic Prospects, June 2021, and IMF West African Economic and Monetary Union, Jan 2021

• IMF projects a stronger recovery in 2021 and 2022 for the global economy with a forecast of 6% and 4.4%, respectively.
• The economic impact of the pandemic continues to exert a large toll on sub- Saharan Africa. Following the largest contraction ever for the region (-1.9% in 2020), growth is expected to rebound to 3.4% in 2021.

Inflation rising - Global, Advanced-Economy and Emerging Market and Developing Economies (EMDE) Inflation Trend

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Our focus on execution momentum is delivering results

2021 and Beyond: Roadmap to Leadership

Symbiotic Partnerships: 100mn Customer Goal

Sustainable revenue expansion path

Trade, Payments, & FICC¹

Expense Discipline: ~55% CIR in Medium-Term

~5% NPL Ratio in Medium-Term with 100% Coverage

Generate Long-Term Sustainable RoTE

1. FICC = Fixed Income, Currencies and Commodities
2. MNO = Mobile Network Operators
3. MTO = International Money Transfer Organisations
4. CMB = Our Commercial Bank line of business
5. CB = Our Consumer Bank line of business

Delivering on our goals

Partnerships with Fintechs, MNOs2, IMTOs3 Trade associations, and global development organisations

Revenues of $825m, up 7% YoY, driven by all business lines, with CMB4 and CB5, up 13% & 6%, respectively

Payment revenues up 20% to $90m. Trade activity increased and FICC drove revenue gains across business lines

Expenses down 2% YoY; achieved record CIR of 58.7%. Cost-to-assets fell to 3.7% vs 4.1% from prior year.

NPL and NPL coverage ratios improve further to 7.4% and 86.7%, respectively. On course to meet near-term target of >90% coverage ratio

ROA of 1.2% and ROTE of 16.1%, above the cost-of-

capital.

ETI successfully raised $350m Tier 2 Sustainability Notes, first ever by financial institution in SSA. Tier 2 is first to have a Basel III-complaint 10NC5 structure outside of SA in 144A/RegS format.

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