Ecobank Transnational Incorporated : reports 1Q 2021 profit before tax of $100 million on revenue of $409 million.

PUBLIC

New Release

Lomé 26 April, 2021

Ecobank Group reports first quarter 2021 profit before tax of $100 million, up 11% year-on-year, on revenue of $409 million. EPS increased 8% to 0.209 US cents and ROTE of 15.7%.

Income Statement ($M)	1Q 2021 1Q 2020
Net revenue (operating income)	409	393
Pretax, pre-provision operating profit	167	133
Profit before tax (PBT)	100	90
Profit available to ETI shareholders	52	48
Diluted EPS ($ cents)	0.209	0.194
Balance Sheet ($M)	1Q 2021 1Q 2020
Net loans and advances to customers	8,940	8,788
Deposits from customers	18,102	16,103
Cost of funds	2.0%	2.6%
Non-performing loans (NPL) ratio	7.7%	9.9%
NPL coverage ratio	81.5%	65.1%
Tangible book value per share ($ cents)	5.25	4.45
Profitability Metrics	1Q 2021	1Q 2020
Return on average total assets (ROA)1	1.2%	1.2%
Return on tangible shareholders' equity (ROTE)2	15.7%	17.1%
Net interest margin (NIM)	5.2%	5.0%
Cost-to-income ratio (CIR)	59.3%	66.0%
Cost-of-risk (CoR)	1.97%	1.46%
Geographical Region (data as of 1Q21)	CIR	ROE
Francophone West Africa (UEMOA)	56.0%	21.4%
Nigeria	77.9%	4.0%
Anglophone West Africa (AWA)	43.5%	27.3%
Central, Eastern and Southern Africa (CESA)	52.5%	16.8%

• 1. ROA (annualised)is calculated as the Group's profit after tax divided by average end- of-period total assets
  2. Profit available (attributable) to ETI shareholders divided by the average end-of- period tangible shareholders' equity
• Revenues increased 4% to $409m despite a challenging operating environment, with strong growth from our lines of business, especially in Commercial and Corporate and Investment Bank.
• Profit before tax of $100m increased 11% year-on-year and 20% from the fourth quarter of 2020 (4Q20).
• Ongoing focus on driving cost efficiency led to an improvement in the cost-to-income ratio from 62.7% in 4Q20 to a record cost-to- income ratio of 59.3%, the lowest in a decade, despite a challenging revenue environment.
• Customer deposits grew $2.0bn year-on-year (YoY) to $18.1bn.
• Non-performingloans (NPL) ratio of 7.7% was flat on 4Q20 but a significant improvement from 9.9% in 1Q20.
• NPL coverage ratio of 81.5% improved from 74.5% in 4Q20 and 65.1% in 1Q20 demonstrating efforts to build reserves of NPLs to near 100% in the near term.

Group CEO Commentary

Ade Ayeyemi, Ecobank Group CEO, said: "The firm's performance in the first quarter was strong, despite the continuing challenging operating environment. Revenues increased 4% to $409 million, and we earned $100 million in profit before tax, an increase of 11% year-on-year. Earnings per share grew by 8%, and return on tangible equity was 15.7%. These results reflect the benefits of our diversification and the sustained focus on our strategic priorities."

"We were also pleased with the underlying performance of our businesses. Our Corporate and Investment Bank delivered a 4% increase in revenues, driven by efficient balance sheet utilisation and support for clients with structured financial solutions. Revenues grew 13% in Commercial Bank, buoyed by increased cash management fees as pandemic-induced restrictions were eased and client activity increased. However, the consumer continues to be disproportionately affected, which contributed to revenues in Consumer Bank declining by 3%. But we are encouraged by the gradual pick-up we are seeing in consumer spending activity. We continued to be unrelenting in our efficiency goals and improved further our cost-to- income ratio from 62.7% in the fourth quarter of 2020 to 59.3% in the current quarter, the lowest in a decade. We continued to build our impairment reserves on nonperforming loans in line with our goal of achieving a reserve coverage close to 100% in the near term. Consequently, the coverage ratio improved to 81.5%, from 74.5% in the fourth quarter of 2020" Ayeyemi added.

"Our balance sheet continues to be liquid, robust, and healthy, providing us with the capabilities to be supportive of our client's financial needs. The focus on driving digitalisation in all our client engagements contributed to sustained growth in customer deposits," Ayeyemi continued.

"Finally, I am proud of my fellow Ecobankers who continue to serve our customers and communities. Though the economic outlook remains uncertain with virus resurgences across parts of the world creating fragility in economic recovery, whatever the outcome, we are focused on remaining resilient and creating shareholder value for the long term. We will drive momentum to ensure a sustainable revenue expansion path with our clear focus on our people, platforms, products and ultimately performance." Ayeyemi concluded.

• Book value per share of 5.77 US cents, up 2% YoY; tangible book value per share (TBVPS) up 18% to 5.25 US cents
• Basel II/III total regulatory capital of $1.92bn; Total CAR ratio of 12.3%.
• Corporate & Investment Bank's digital transformation of its cash management and trade business gained momentum. Total volume of transactions on Omni Plus increased 44% to $8.6bn compared to 1Q20.
• Digital transactions among Commercial Bank clients rose 42%, accounting for 37% of total transactions. Transactions within branches fell 32%.
• Number of Xpress Point agents increased 72% YoY to c.76,000 agents with volume of transactions increasing by 42% to $573m.
• Transaction volumes on Omni Lite were nearly a $1bn in the quarter, increasing by $618m from the prior year.
• Volume of transactions on the Ecobank mobile app (including USSD) continue to accelerate, growing by $541m YoY to $1.2bn.

PUBLIC

PUBLIC

Ecobank Reports

First quarter 2021 Earnings Results

TOTAL VOLUME ($m) OF TRANSACTIONS - DIGITAL CHANNELS

Quarter ended	31 Mar	31 Mar	% CHG
(in millions of US dollars)	2021	2020
Omni Plus	8,596	5,990	44%
Omni Lite	922	304	203%
Ecobank Mobile App	1,153	642	80%
Ecobank USSD	68	38	77%
Ecobank Online	413	172	140%
Xpress Points (Agency Network)	573	405	42%
RapidTransfer App	1.5	0.4	275%
Indirect Channels1	1,040	513	103%
(1) Mostly transactions Partership platforms, like with Telcos

SUMMARY FINANCIAL REVIEW OF THE ECOBANK GROUP

Selected Income Statement Highlights

	Quarter ended	31 Mar	31 Mar	YoY	Constant1
	(In millions of US dollars except per share data and ratios)	2021	2020	Currency
	Net interest income	237	209	13%	16%
	Non-interest revenue	172	183	(6)%	(0.4)%
	Net revenue (operating income)	409	393	4%	8%
	Operating expenses	(243)	(259)	(6)%	(5)%
	Pretax pre-provision operating profit	167	133	25%	38%
	Gross impairment charges on loans	(66)	(58)	15%	14%
	Loan recoveries and impairment charge releases	19	23	(17)%	(19)%
	Net impairment charges on loans	(48)	(35)	36%	35%
	Impairment charges on other assets	(9)	(7)	27%	32%
	Impairment charges on financial assets	(57)	(42)	34%	35%
	Net monetary loss arising from hyperinflationary economy	(10)	(1)	NM	-
	Share of loss of associate	0.0	(0.1)	NM
	Profit before tax	100	90	11%	27%
	Profit after tax from continuing operations	75	66	12%	-
	Profit after tax from discontinued operations	1	1	26%
	Profit for the year	76	67	12%	23%
	Profit available to ETI shareholders	52	48	8%	-
	Per Share Data (US cents)
	Basic EPS	0.209	0.194	8%
	Diluted EPS	0.209	0.194	8%

Note: Selected income statement lines only and totals may not sum up.

1. Constant currecy = year-on-year percentage change on a constant currency basis NM - Not meaningful

First Quarter 2021 vs. First Quarter 2020

Profit before tax was $100 million, increasing by $10 million or 11 per cent. Adjusting for the net impact of foreign currency translation effects (constant currency), the growth in pre-taxprofits was 27 per cent, reflecting strong operating leverage.

Net revenue (operating income) was $409 million, increasing by $17 million or 4 per. In constant currency, net revenue increased by $32 million or 8 per cent. Revenues benefited from an increase in net interest income.

2 | P a g e

PUBLIC

PUBLIC

Ecobank Reports

First quarter 2021 Earnings Results

Net interest income of $237 million increased by $28 million ($32 million in constant currency) or 13 per cent. A significant decrease in interest expense primarily drove the increase in net interest income. The strategic focus to increase current accounts and savings accounts (CASA) deposits and reduce our cost of funds is paying off and supporting margin expansion in a low interest rate environment. As a result, the net interest margin (NIM) expanded to 5.2 per cent versus 5.0 per cent in the first quarter of 2020. The cost of funds improved to 2.0 per cent from 2.6 per cent.

Non-interestrevenue of $172 million decreased by $11 million ($1 million in constant currency) or 6 per cent. The decrease reflected ongoing challenges in the economic environment that is impacting business activity and consumer consumption. Also, the likelihood of a resurgence in virus infections is possible. These uncertainties are holding businesses from investing and affecting trading activity, in turn impacting our fee and generation income. However, our continued efforts in providing our clients with digitally enabled tools and self-onboarding capabilities helped increase fees and commissions generated within our cash management business. Also, episodic consumer spending led to an increase in card management fees. Overall, net fees and commissions rose by $3 million or 3 per cent to $100 million. Net trading income of $64 million declined by $16 million or 20 per cent, adversely impacted by lower client-related foreign exchange sales and the net impact of lower rates on fixed-income sales.

Expenses were $243 million, declining by $17 million ($14 million in constant currency). Expenses continued to benefit from efforts to ensure optimal efficiency in our underlying businesses and ongoing digitalisation initiatives. Staff costs declined by $10 million to $108 million and other operating expenses by $9 million to $109 million. Depreciation and amortisation costs, however, inched up by $3 million to $26 million. The cost-to-income ratio (efficiency ratio) was 59.3 per cent, an improvement of 670 basis points and 350 basis points, from the first quarter of 2020 and yearend 2020.

Impairment charges on loans (net) were $48 million compared with $35 million in the prior. The higher impairments in the current quarter reflected an increase in gross impairments, partially offset by lower loan recoveries than prior year. Also, given the still uncertain economic outlook, total impairments for the first quarter includes a macro-overlay of approximately $10 million. The cost of risk was 1.97 per cent compared to 1.46 per cent in the prior year's quarter and 1.85 per cent at yearend 2020.

Taxation

Income taxes were $26 million in the first quarter of 2021 compared with $24 million in the prior-year period. The effective income tax rate (ETR) was 25.7 per cent versus 26.4% in the prior year.

3 | P a g e

PUBLIC

PUBLIC

Ecobank Reports

First quarter 2021 Earnings Results

BALANCE SHEET SUMMARY

Selected Balance Sheet Information
				31 Mar	31 Dec	31 Mar
As At: (in millions of US dollars, except per share amounts)	2021	2020	2020	YoY	Ccy*
Gross loans and advances to customers		9,541	9,798	9,391	2%
Less: allowance for impairments			601	558	603	(0)%	(1)%
Net loans and advances to customers		8,940	9,240	8,788	2%	0.1%
Deposits from customers				18,102	18,297	16,103	12%	11%
Total assets				25,596	25,939	23,217	10%	59%
Equity available to owners of ETI				1,428	1,503	1,396	2%
Total equity to all owners				1,955	2,028	1,818	8%	6%
Loan-to-deposit ratio				52.7%	53.6%	58.3%
Total capital adequacy ratio (CAR)	1			NA	12.3%	NA
Tier 1 capital adequacy ratio				NA	9.4%	NA
Risk-weighted assets (RWA)				NA	15,518	NA
End-of-period ordinary shares outstanding (millions of shares)	24,730	24,730	24,730
# of ordinary shares to be issued if convertible bond converts	6,667	6,667	6,667
Per Share Data (in US cents)
Book value per ordinary share, BVPS	2		5.77	6.08	5.65	2%
Tangible book value per ordinary share, TBVPS	3	5.25	5.47	4.45	18%
Share price -End of Period				1.33	1.58	1.15	15%

1. December 2020 CAR is provisional until submission to the regulator in April 2021. CAR ratios are based on transitional
   adjusted capital; the Group is recognising IFRS 9 Day 1 impairments in regulatory capital over a 5-year period from 1 January 2018 to 1 January 2023
2. ETI shareholders' equity divided by end-of-period ordinary shares outstanding
3. Tangible ETI shareholders' equity divided by end-of-period ordinary shares outstanding. Tangible ETI shareholders' equity is ETI shareholders' equity less goodwill and intangible assets
   *Ccy = year-on-year percentage change on a constant currency NA - Not applicable

First Quarter 2021 vs. First Quarter 2020 unless otherwise stated.

Gross loans and advances to customers were $9,541 million, up $150 million or 2 per cent. On a year-to-date (YTD) basis, gross loans declined $257 million. Net loans were $8,940 million, up $152 million, but down $300 million YTD. The YTD decrease in loans, however, reflected the ongoing challenges in the operating environment in which potential demand and lending opportunities within our risk appetite remained limited. Also contributing to the decline were early client paydowns and run-offs of loans as businesses de-risked their balance sheets. Overall, we saw lower loan balances across all our business lines in the YTD period.

Deposits from customers were $18,102 million, up $1,999 million or 12 per cent. On a YTD basis, deposits declined $195 million or 1 per cent. The year-on-year increase was driven mainly by an acceleration in digital channels consumption by clients facilitated by the coronavirus pandemic. The YTD decline in deposits reflected huge client payment outflows, particularly among consumers and small businesses, as some semblance of economic activity emerged during the quarter.

The Group's provisional Tier 1 CAR and Total CAR were 9.4 per cent and 12.3 per cent, as of 31 December 2020, compared with 8.8 per cent and 11.6 per cent as of 31 December 2019. The increase in CAR is primarily due to internal profit generation and the issuance of Tier 2 capital instruments at affiliate level. On a fully loaded IFRS 9 Day One basis, the Group estimates Tier 1 CAR at 8.8 per cent and Total CAR at 11.7 per cent as of 31 December 2020. The $164 million impairment of goodwill during 2020 had no impact on the capital ratios. Goodwill is already a deductible in the computation of Tier 1 capital.

Equity available (attributable) to ETI shareholders was $1,428 million as of 31 March 2021, compared with $1,503 million and $1,396 million as of 31 December 2020 and 31 March 2020, respectively. The YTD decline in shareholders' equity was driven by unrealised losses on fixed-income securities due to movements in interest rates, unfavourable foreign currency translation reserves, partially offset by profit accretion for the period.

4 | P a g e

PUBLIC

PUBLIC

Ecobank Reports

First quarter 2021 Earnings Results

Asset Quality
For the period ended (in millions of US dollars)	31 Mar	31 Dec	31 Mar
2021	2020	2020
Gross impairment charges on loans and advances	(66)	(312)	(58)
Less: recoveries and impairment releases	19	131	23
Net impairment charges on loans and advances	(48)	(182)	(35)
Impairment charges on other assets	(9)	(45)	(7)
Impairment charges on financial assets	(57)	(227)	(42)
Cost-of-risk	(1)		1.97%	1.85%	1.46%
As at:			31 Mar	31 Dec	31 Mar
		2021	2020	2020
Gross loans and advances to customers	9,541	9,798	9,391
Of which stage 1		7,604	7,808	7,318
Of which stage 2		1,200	1,241	1,147
Of which stage 3, credit impaired loans (non-performing loans)	738	749	925
Less: allowance for impairments (Expected Credit Loss)	601	558	603
Of which stage 1: 12-month ECL	(2)	88	90	156
Of which stage 2: Life-time ECL		113	93	40
Of which stage 3: Life-time ECL		400	375	407
Net loans and advances to customers	8,940	9,240	8,788
Impaired loans or non-performing loans (NPLs)	738	749	925
NPL ratio			7.7%	7.6%	9.9%
NPL coverage ratio		81.5%	74.5%	65.1%
Stage 3 coverage ratio		54.2%	50.1%	44.0%
(1) Cost-of-risk is computed on an annualised basis
(2) Expected Credit Losses
Note: totals may not add up due to rounding.

Impaired loans (Non-performingloans or Stage 3 loans) were $738 million as of 31 March 2021 compared with $749 million as of 31 December 2020 and $925 million as of 31 March 2020. Recoveries, collections, and write-offs drove the decrease. The non-performing loans ratio inched up slightly to 7.7 per cent from 7.6 per cent in 2020. The coverage ratio improved to 81.5 per cent from 65.1 per cent in 31 March 2020 and 74.5 per cent on 31 December 2020. As we continue to build higher pre-taxpre-provision operating profit, we expect to drive coverage gradually towards 100 per cent of non- performing loans in the near term.

REGIONAL PERFORMANCE

The Group is divided into four geographical regions. These reportable regions are Francophone West Africa (UEMOA), Nigeria, Anglophone West Africa (AWA), and Central, Eastern and Southern Africa (CESA). The financial results of the constituent affiliates of Ecobank Development Corporation (EDC), the Group's Investment Banking (IB) and Securities, Wealth, and Asset Management (SWAM) businesses across our geographic footprint are reported within their country of domicile and therefore in the applicable regions of UEMOA, Nigeria, AWA, and CESA.

Comparisons noted in the commentary below are calculated for the three months ended 31 March 2021 versus the three months ended 31 March 2020, unless otherwise specified.

5 | P a g e

PUBLIC