Ecobank Group FY 2020 Earnings Investor Presentation - 23 March 2021
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PUBLIC
Ecobank Group
FY 2020 Earnings Investor Presentation
23 March 2021
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 1
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1 Introduction Ade Ayeyemi, Group Chief Executive Officer
2 Risk Management Eric Odhiambo, Group Chief Risk Officer
3 Financial Review Ayo Adepoju, Group Chief Financial Officer
4 Q&A
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 2
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INTRODUCTION
Ecobank focused on its ‘Execution Momentum’ agenda, serving
1
customers, and achieved a decent set of results despite COVID-19’s
challenges and an uncertain outlook
Ade Ayeyemi, Group Chief Executive Officer
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 3
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Key Investment Highlights
1
• Unique footprint across 35 African countries benefitting from attractive LT macro and sector fundamentals
Leading Pan-African
• Regional leadership position as either a market leading or a top-3 bank in 16 countries
Franchise: Strong • Preferred partner for governments and global development institutions such as the United Nations
Positioning and • “One Bank” with strong brand recognition through a substantial network of over 24 million customers, served by
Preferred Partner ~14,000 employees and 690 branches across the continent
2
• Geographic diversification: UEMOA represents 30% of FY20 Revenues, AWA 28%, Nigeria 16%, CESA 27%(1)
Diversified Business • Business model diversification: CIB (55% of FY20 Net revenue), CB (22%), Consumer (23%)(1)
Model • Integrated technology platform eProcess enables central manufacture of products rolled out consistently across the platform
• Recognised for innovation in African banking (Global Finance and African Banker Awards, 2020)
3
• Leadership in technology adoption to drive financial inclusion. Valued partnerships with Airtel Africa, MTN, Alipay, Palm
Pioneer in Digitisation Pay: strategic ambition to access up to 100m customers digitally
with a Growing • Expansion in digital offerings with Ecobank Mobile (App & USSD) serving ~12.9m customers
Customer Base • Strong growth with value of digital transactions up 43% y-o-y to $40.0bn as of 31 December 2020
• Captive regional payments business offers a significant opportunity to drive growth and value creation
4
• Strong profitability across regions. AWA (27% ROE), UEMOA (19%), and CESA (16%).
Strong Financial Profile • Improved funding costs, ongoing cost reduction efforts and risk management have led to improved profitability in
Delivers High ROE Nigeria
Across Key Regions • Group-wide efficiency efforts support the path to enhanced profitability
5
• Strong risk management and corporate governance practices
Enhanced Risk and • Redeployment of experienced executives to key parts of the business to enhance controls
Compliance Culture • Robust regulatory understanding and interface led by dynamic management team
• Regulated and compliant under Basel II/III prudential standards (provisional 9.4% Tier 1 and 12.3% Total CAR as at FY20)
6
• Highly experienced management team who have implemented first phase of new strategy in 2016-18 to restore Group
Experienced profitability and since driving ‘Execution Momentum’ aimed at growth and improved shareholder returns
Management Team • Management successfully raised $500m in a debut Eurobond in 2019
Coupled With Strong • Blue-chip shareholder base comprising reputable institutions – Nedbank, QNB, Arise, and PIC
Shareholder Base • Management in Nigeria successfully raised $300m 5-year Eurobond in Feb 2021
1. Percentages represent segment / regional contribution to Revenues. Excluding Consolidation Adjustments and Other Adjustments.
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 4
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‘Roadmap to Leadership’ strategy: The Journey
2016 2017 2018 2019 2020
Bold & Strategic Actions to ‘Secure the Firm’s Foundation’ Headwinds Faced
Fit-for-purpose business model Nigeria positioned for success Basel II/III Capital – FCTR impact
Reset the cost base Restructured CESA IFRS 9 & Day 1 impact
Repositioned credit portfolio Invested in people Covid-19 pandemic
Modernised technology Improved liquidity Goodwill charge
Digitally transformed the business Core banking platform Elevated asset quality
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 5
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Current phase: Execution Momentum
2021 2022 2023 2024 2025
Generate long-term sustainable ROTE
We have secured the firm's
Drive coverage towards 100% & NPL c.5% MT1
foundation. We addressed
our credit portfolio and Expense discipline: drive CIR c.55% MT
capital issues. Made
investments in people, Trade, Payments, & FICC2
systems, and processes.
Group positioned now to Symbiotic partnerships – 100m customer goal
'Build Back Better' focusing
on… Grow revenues
Adequate capital to support growth
1. Medium-Term goals
2. FICC = Fixed Income, Currencies and Commodities
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 6
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Africa’s GDP expected to transition to growth in 2021
New cases and deaths falling but fatality rate increasing.
GDP expected to rebound after a year of COVID-19-
New virus variants likely to fuel second wave. However,
induced economic contraction
vaccination rollouts provide a glimmer of hope
Real GDP growth at market prices1
2020 2021
-3.0% Latest updates2 on the COVID-19 crisis in Africa…
SSA
3.2% 2000 In thousands
Africa Cases
4,116,865
1800
-4.1%
Nigeria
1600
1.1% Deaths
109,922 1400
1.1%
Ghana 1200
1.4% Recoveries
1000
3,683,840
1.8% 800
Cote d'Ivoire
5.5% Total
600
39,850,362
Test 400
-2.5%
Cameroon
200
3.0%
Global cases3
0
-1.0% 123,386,930
Central Western Eastern Northern Southern
Kenya
6.9%
Source:
1. Africacdc.org/covid-19/ - 22 March 2021
-10.0% 2. Real GDP growth rates for SSA are for Jan 2021 sourced from IMF World Economic
Zimbabwe Outlook (WEO) Update, Jan 2021. SSA 2021 output was revised up by 0.1ppt. All other
2.9% GDP growth are sourced from the 'Global Economic Prospects’, a World Bank Group
Flagship Report, January 2021
3. Johns Hopkins University COVID-19 as of 22 March 2021
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 7
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Encouraging financial performance despite COVID-19 & one-offs
2020 Encouraging business momentum
• Net revenue up 4% to $1.7bn, benefited from our diversified business model as strong
Net revenue $1.7bn
(operating income) +4% CIB revenues offset modest growth in Commercial and Consumer due to COVID-19’s
disproportionate impact on small businesses and households
62.7% • Pre-provision operating profit up $77m to $626m on positive operating leverage,
Cost-to-income ratio
(3.4)pp
providing flexibility to increase NPL coverage
Pre-provision $626m • Expenses down $19m, despite one-off restructuring cost of $32m and litigation accruals
operating profit +14% of $12m. Cost-to-income ratio improved to 62.7%
$227m • One-off goodwill charge of $164m and net monetary loss of $61m negatively impacted
Impairment
+70% profit before tax resulting in $231m decrease to $174m
Profit before tax (excl. $338m
goodwill) (17%) Strong balance sheet
$174 • Record growth of $2.0bn in customer deposits to reach $18.3bn, driven mostly by
Profit before tax
(57%) current and savings account (CASA) deposits
Return on tangible • Highly liquid balance sheet – Loans-to-deposit ratio of 54% & Liquidity ratio of c.48%
equity (ROTE) – excl. 13.3% • NPL ratio improved to 7.6% (2019: 9.7%). Proactively built NPL coverage to 74.5% (2019:
goodwill 58.3%) towards near term target of 100%
• TBVPS increased 16% YoY to 5.46 US dollar cents
ROTE 0.3% • Provisional est. of Tier 1 ratio of 9.4% (8.8% in 2019) and Total CAR of 12.3% (11.6% in
2019) are above regulatory minimums. Adequate capital to support planned growth
Tangible book value 5.46 $ cents
per share – TBVPS +16% Strategic priorities
Total CAR1 12.3% • Revenue generation – Trade, Payments, FICC
• Maintain expense discipline – expect CIR to trend lower
1. Total Capital Adequacy Ratio of 12.3% as of 31/12/20 is a
provisional estimate • Credit portfolio reset – NPL ratio down; Coverage up & focus on keeping S3 loans low
• Maintain solid balance sheet – ample liquidity & improving CAR
• Driving group-wide customer excellence programs
• Invested in technology to position us for growth
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 8
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Acceleration in digital adoption: # of transactions up 56%; volumes up 43%...
Total Digital Transactions1 OMNI Lite OMNI Plus
140 70. 1.00 8. 20.00 80.
119 0.90 18.00
120 60. 7. 70.
56% 0.80 16.00 14.80 14.63
100 50.
0.68 6. 60.
0.70 14.00
76 0.60
5.
12.00
50.
80 $40.1 40.
43% 0.50 $3.9 4. 10.00 40.
60 30.
$27.9 0.40
3.
8.00
30.
21% $27.7
40 20. 0.30 1368% 6.00
$22.9
0.20
0.16 2.
4.00
20.
20 10. 1. 10.
0.10 2.00
0 0. - $0.3 0. - 0.
2019 2020 2019 2020 2019 2020
Transactions (M) Volume ($B) Transactions (MM) Volume ($B) Transactions (MM) Volume ($B)
Mobile App (incl. USSD) Ecobank Online Xpress Points (Agency)
60 56 12. 2.00 2. 3.50 5.
1.80 2.
3.00 2.85 5.
50 10.
1.60 1.45 2. 4.
41 2.50
1.40 1. 4.
40 8.
1.98 3.
1.20 1.
2.00
$1.1
30 6. 1.00 0.83 1. 3.
1.50
0.80 1. 2.
171%
20 4. $1.7 (9)%
$1.6
62% $3.5 0.60 1. 1.00 2.
10 $2.3 2.
0.40 $0.4 0. 1.
0.50
0.20 0. 1.
0 0. - 0. - 0.
2019 2020 2019 2020 2019 2020
Transactions (MM) Volume ($B) Transactions (MM) Volume ($B) Transactions (MM) Volume ($B)
1. Total digital transactions comprise transaction count on the Ecobank App, USSD, Online banking, OMNI
Plus, OMNI Lite, Xpress Points, Rapid Transfer (RT) App, and other indirect digital channels
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 9
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…with increasing digital adoption rates across our regions
We are seeing the shift from physical-to-digital across all regions
LEGEND : Number of digital transactions
ATM Branch Digital
UEMOA NIGERIA AWA CESA GROUP
18% 18%
24% 24% 25%
33% 35% 36%
40%
54%
11%
33% 5% 18%
29% 44% 9%
25%
24%
13%
65% 62%
57% 55%
49% 47%
38% 40%
36% 33%
2019 2020 2019 2020 2019 2020 2019 2020 2019 2020
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 10
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Enabling pan-African payments solutions
$154m contribution to Group revenues in FY20
Group Payment Services
Flows
9%
Individuals Businesses Governments
• Airtime top-up • Salary payments • Salary payments
• Bill payments • Cross-border payments • Tax refunds
• Merchant payments • Taxes and levies • Supplier payments
• Taxes and levies • Supplier payments • Vendor payments
• School fees • Dividend payments • Passports
• Donations and Fundraising • Charity distribution • Visas
• Peer-to-peer transfers • Peer-to-peer transfers • Citizen documents
Payments Revenue2 Breakdown
Products1
• Mobile money transfers • Domestic funds transfer • Direct debits
• Virtual card creation • Merchant acquiring / QR • International funds transfer Disbursements
9%
3%
• Prepaid card top-ups • POS Acquiring • Regional funds transfers
• Credit card payment • e-commerce acquiring • Payments to mobile 5%
• VISA P2P • ETF / RTGS services • Bill payments Card solutions
49%
Alternative channels
Merchant Biller Card Alternative
Disbursements
Solutions Solutions Solutions Channels Biller solutions
34%
Merchant solutions
1. See Product definitions in appendix
2. Payments revenue only includes fee income
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 11
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RISK MANAGEMENT
Proactively managed risks across the firm and ensured credit
2 portfolio is adequately reserved in an uncertain economic outlook
Eric Odhiambo, Group Chief Risk Officer
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 12
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Our approach to credit risk during COVID-19
Assessing the damage & adapting Supporting our customers and Anticipating challenges & future
our risk profile mitigating the impact client needs
February – April 2020 May –December 2020 2021 Outlook
• A series of stress tests were • Unlike Western Governments that • It is our planned objective to
conducted from as early as directly provided cash to steadily increase the coverage
February 2020, to determine the companies and individuals, ratio towards 100% and to
sectors, countries, and products Regulators in Africa provided reduce the NPL Ratio to the 5%
most vulnerable to the Covid-19
relief to the economy by way of range in the near term
pandemic and its fall out.
various actions such as • We are proactively engaging with
forbearance approvals which we clients to assess their conditions
• Decisions we made included have applied to ease the burden one year into the pandemic and
freezing further lending to sectors on select clients during the agree on new normal concerning
such as Airlines, Upstream Oil & pandemic. These measures have performance/repayment levels.
Gas, Mining and Financial helped sustain the quality of the
Institutions. portfolio and minimize further
deterioration. • We continue to adjust our
operating model, for speed and
• … and placed restrictions on flexibility through centralization
origination in Tourism, Real • We reached out to vulnerable and digitalization of the credit
Estate, Construction and import obligors to identify mitigating process from origination to
dependent manufacturing. measures that could be taken to
remedial management.
avoid distress and default
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 13
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Impairments up on Covid-19 challenges; includes macro-overlay buffer
Net impairment charges on loans ($M) & Cost-of-risk
900
Impairment Macro overlay CoR 8%
7.09%
800 7%
700
6%
600
Excluding macro- 5%
500
overlay, the cost-of-
risk is 1.29% 4%
3.30%
400
3.24%
770
3%
300
1.85%
2%
200
1.12%
326 319 55
1%
100 182
110 127
0 0%
2016 2017 2018 2019 2020
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 14
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Proactively built reserves; NPL ratio improved to 7.6%; Coverage to 74.5%
Net impairment charges on loans ($M) & Cost-of-risk(1) Accumulated impairments ($M), NPL Coverage & Stage 3 Coverage
70
Net impairments CoR
4.00% Accumulated impairments NPL Coverage Stage 3 Coverage
3.50%
60 700
$52 $54 $635 120%
$603 $591
$48 3.00%
600 $557 $558
110%
50 $45 100%
2.50%
500 90%
40 $35 1.79% 1.85% 74.5%
1.75% 2.00% 70.1% 80%
1.46% 400 65.1% 65.3%
30 58.3% 70%
1.12% 1.50% 300 60%
20
1.00% 200 50%
10 50.7% 50.1%
40%
0.50% 100 45.0% 44.0% 43.4% 30%
0 0.00% 0 20%
4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20
NPL ($M) (EOP(2)) & NPL ratio Key Points
NPLs NPL ratio • Increased impairments gradually to reflect the uncertain macroeconomic
environment. As a result, the cost-of-risk increased to 1.85% vs 1.12% in the
1,000 $955 20.0%
$925 prior year. Which was still below our downside scenario of >2%.
950
$904 $906
900
850
16.0%
• Gross impairments were $558m at the end of 4Q20 largely unchanged from
4Q19, but this is as of result of the net movement between impairments taken
800 $749
in 2020, recoveries made in 2020, and write-offs made in 2020, resulting in a
750
9.7% 9.9% 9.8% 9.9% 12.0%
700
$1m increase in gross impairments in the end.
7.6%
•
650
600
8.0% We continue to build up our impairment with the objective being to improve
550
on our overall coverage to 100% in the near-term and also achieve Stage 3
500 4.0%
coverage above 70%.
4Q19 1Q20 2Q20 3Q20 4Q20
• The stock of NPLs i.e. S3 Loans has reduced to $749m. Having started with
$955m, we saw new migrations into S3 of $125m and saw Recoveries of
$75m, Upgrades of $85m and Write-offs of $171m.
1. Cost of risk has been computed on an annualised year-to-date basis
2. EOP = End-of-period
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 15
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Group YTD IFRS 9 stage movements
All in millions of $
Stage 1 loans Stage 2 loans Stage 3 loans
74
7,733 7,807 543 1,242
1,145 (447)
955 (331)
125 749
2019 Net increase 2020 2019 Recoveries Additions 2020 2019 Recoveries Additions 2020
W/Os
• The $543m additions to stage 2 loans • The $331m reflect recoveries, collections,
represent downgrades from stage 1 and write-offs and upgrades in 2020. The
upgrades from stage 3 written-off loans are fully provided for and
we continue to pursue recovery
• The $447m reflects both reduction in
Stage 2 exposure through repayments • The $125m represents new downgrades
and in some cases upgrades to Stage 1 from Stage 2 into Stage 3
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Liquid balance sheet
Liquid assets / Total assets Demand deposits/ Tot. Deposits Liquidity profile
• Group liquidity profile remains resilient
47.8% and strong despite the pandemic,
63.2% providing comfortable room to support
47.0%
46.3% planned loan growth
61.1%
60.6% • Overall group liquidity was bolstered by a
60.1% 60.2% substantial growth in deposits reflecting
44.0% client confidence in the Ecobank franchise
43.2%
• Deposit growth was driven by demand
deposits which comprised 63.2% of total
deposits, a 260bps increase from 2019
• LDR ratio fell and now stands at 53.6%
reflecting enhanced capacity for asset
4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 growth
Loan-to-deposits
• NIB deposits to Total loans ratio increased
NIB / Total loans to the point where we closed the year at
111.3%. This will continue to drive a
111.3% strong positive impact on NIM.
60.8%
107.7%
106.0% • On the foreign currency front, we have
58.1% seen improvement in many countries
facing challenges in FCY liquidity as the
55.1%
year came towards a close. We expect the
cross-border risk profiles of these
53.6% 97.8%
52.9% countries to continue to improve
94.8%
4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 17
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FINANCIAL REVIEW
Encouraging growth in pre-provision profits despite pandemic’s
3 challenges; profits adversely impacted by one-offs
Ayo Adepoju, Group Chief Financial Officer
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Resilient FY 2020 performance
Record customer deposit growth… …drove ample liquidity… …and led to improved reserve build
Customer deposits ($B) Loans-to-deposits ratio NPL coverage ratio
60.5%
$18.29 74.5%
$16.25
58.3%
53.6%
2019 2020 2019 2020 2019 2020
Resetting the cost base PPOP benefited from positive operating Robust ROTE despite Covid-19
Cost-to-income ratio Pre-provision operating profit ($M) ROTE
13.3%
Goodwill impact
66.2% 16.5% excluded
$626
62.7% $549
2019 2020 2019 2020 2019 2020
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Key Performance Indicators
In millions of US dollars except per share 2020 2019
Profit before tax, net monetary loss, and goodwill charge 399 415
Profit before tax and goodwill charge 338 405
Profit before tax 174 405
Profit after tax 88 275
Profit available to ETI shareholders 4.2 194
ROTE1 (%) 0.3 16.5
ROTE excl. goodwill charge % 13.3 16.5
Diluted EPS (US cents) 0.01 0.78
Diluted EPS (excl. goodwill charge (US cents) 0.67 0.78
Net revenue (operating income) 1,680 1,622
Pre-tax, pre-provision operating profit 626 549
Net interest margin (NIM) % 5.5 4.7
Non-interest revenue/ Net Revenue (NIR) % 46.1 53.8
Cost-to-income ratio % 62.7 66.2
Cost-of-risk % 1.85 1.12
Total capital adequacy ratio2 (CAR) % 12.3 11.6
Tier 1 CAR (%) 9.4 8.8
Book value per ordinary share, BVPS (US cents) 6.08 5.97
Tangible BVPS (US cents) 5.46 4.72
ETI share price3 (US cents) 1.58 1.79
(1) ROTE is profit attributable to ETI shareholders divided by the average EOP tangible shareholders’ equity. Tangible shareholders’ equity is
ETI shareholders’ equity less non-controlling interests, goodwill, and intangible assets.
(2) Basel II/III CAR is as of 31 December 2020 is a provisional estimate.
(3) The USD/NGN rate used to convert ETI’s end-of-period NGN share price into U.S. dollar is sourced from Bloomberg; EOP = end-of-period
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Profits negatively impacted by one-offs (goodwill charge & restructuring costs)
Summary Income Statement
2020 2019 % YoY % Ccy
1 Key points
(In millions of $ except per share)
• Net revenue up $57m to $1.7bn with an increase
Net revenue (operating income) 1,680 1,622 4% 11%
in NII partially offset by a decrease in NIR. ROTE of
Operating expenses 1,054 1,073 (2)% 2%
13.3% (excluding goodwill charge)
Pre-provision operating income 626 549 14% 32%
Gross impairment losses on loans (312) (314) (1)% (1)% • Expenses benefited from targeted efforts to reset
Loan recoveries and impairment releases 131 204 (36)% (37)% the firm’s cost base, especially amid the current
Net impairment losses on loans (182) (110) 65% 69% challenging environment. Cost-to-income ratio
Impairment losses on other assets (45) (24) 92% 37% improved by 342bps to 62.7% despite one-off
Total impairment losses (227) (134) 70% 61% restructuring costs
Operating profit after impairment losses 399 415 (4)% 20%
• Pre-provision operating profit up $77m to $626m
Net monetary loss arising from hyperinflationary economy 2 (61) (9) - -
on positive jaws
Profit before tax and goodwill impairment 338 405 (17)%
Goodwill impairment (164) - - - • An increase in impairment charge due to COVID-
19 and proactive macro-overlays
Profit before tax 174 405 (57)% (47)%
Taxes (89) (135) (34)% -
• Profit before tax of $174m negatively impacted by
Profit from discontinued activities 3 5 (29)% -
non-cash goodwill charge, net monetary losses,
Profit after tax 88 275 (68)% (34)% and restructuring costs. As a result, profit available
Profit available to ETI shareholders 4 194 (98)% - to ETI shareholders declined $190m to $4m
Diluted EPS (US dollar cent) 0.01 0.78 (99)% -
Diluted EPS (excl. goodwill impairment) -US dollar cent 0.67 - - -
ROTE3 0.3% 16.5%
ROTE (excl. goodwill impairment) 13.3% -
Cost-to-income ratio (CIR) 62.7% 66.2%
Cost-of-risk (CoR) 1.85% 1.12%
Effective tax rate (ETR) 26.4% 33.3%
1. Constant currency reporting eliminates fluctuations in the functional currencies of our operating subsidiaries against the US dollar, our reporting
currency. It is a clearer and meaningful indicator of the firm’s underlying performance, assuming the US dollar exchange rate to the various
functional currencies did not change within the period.
2. Zimbabwe and South Sudan designated hyperinflationary economy and IAS 29 (Financial Reporting in Hyperinflationary Economies Standard)
applied resulting in $61m net monetary loss for FY 2020
3. ROTE is profit attributable to ETI shareholders divided by the average EOP tangible shareholders’ equity. Tangible shareholders’ equity is ETI
shareholders’ equity less non-controlling interests, goodwill, and intangible assets.
Note: Totals may not sum due to rounding
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Profit before tax significantly impacted by goodwill & net monetary loss
Profit Before Tax ($M)
(100)
157
(19)
(93)
405 (51)
(164)
1
174
PBT 2019 NII NIR Expenses Impairments Net monetary Goodwill Associated PBT 2020
loss charge income
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Decline in interest expense drives modest gains in revenue
In $ million (All)
Non- Net Non-interest revenue
Net interest income
interest revenue interest income NIM NIR/Revenue
260
$242 $236
7.0%
$1,680 $244
$1,622
260 70.0%
$219 $230
$209 $209 6.5%
210 65.0%
210
$200
6.0% $183 60.0%
$750 $907 5.5% 5.5% 54%
160 5.4% 5.4% $159
5.5% 160 55.0%
50%
47%
4.7% 45%
50.0%
110 5.0%
110
42% 45.0%
4.5%
$873 $774
60
60 40.0%
4.0%
35.0%
10 10
3.5%
30.0%
2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20
-40 3.0% -40 25.0%
Key points
• Net revenue of $1,680m benefitted by higher NII, primarily driven by a significant decrease in interest expense
• NII of $906m, up $156m, reflecting the benefit of deposit and funding mix. The lower rates paid on funds benefited from a
deliberate approach to grow CASA deposits (customer deposits grew by $2bn YoY) and allowance for the natural attrition of
expensive term deposits
• NIR of $774m, down $99m, primarily because consumer and business activities slowed down significantly due to COVID-19
pandemic.
(1) Operating income (net revenue) defined as net interest income plus non-interest revenue
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Resetting the cost base
Operating expenses ($ millions) Key points
• Expenses down 2%, YoY. The cost-to-income ratio
Staff expenses Other expenses D&A CIR improved by 342bps to 62.7% vs 66.2%
66.2% 62.7% 65.6% 66.0% 61.1% • Expenses benefited from targeted efforts to reset
1200
62.1% 62.2%
$1,073
350
the firm’s cost base, especially amid the current
$1,054 challenging environment.
$297
50.0%
109 104 $285 50.0%
1000 300
$275
31 $259
487
30.0%
27 • The YoY decrease in expenses benefited from a
487 $235 30 30.0%
250
133 23
800
136 reductions in the following cost items -business
24
10.0%
118 132
200 10.0% travel, (-50%), operational losses/fines (-53%),
600 -10.0% 101 training (-60%), fuel (-41%), and repairs and
150
-30.0%
-10.0%
maintenance (-19%), partially offset by increases
400 490 463 in communications/technology (+13%) and
134
122 rent/utilities (+27%)
-30.0%
118
100
-50.0%
109 114
200
-50.0%
•
50
Current year expenses included $32m of one-off
-70.0%
0 -90.0%
0 -70.0% restructuring charges related to branch closures
FY19 FY20 4Q19 1Q20 2Q20 3Q20 4Q20
(closed 145 branches, mostly in Nigeria),
severance costs (reduced group-wide headcount
by c.850 people), and $12m litigation accruals in
575 branches closed since 2016 Headcount down by 3,320 since 2016 AWA (which has been fully provisioned).
1,265 17,343 16,386 • Excluding the one-off costs, expenses would
15,930 14,878 14,023 have declined by $63m (within our FY20 target
927 888 847
690 range of $60-$80m). Also, the CIR would have
been c.60% instead of the reported 62.7%
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 24
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Balance Sheet Trends: Record Deposit Growth, up $2bn YoY
Legend
2018
2019
In billions of US dollars 2020
Record deposit growth… …drove higher balances in treasuries …and in fixed-income securities
18.30
15.94 16.25 6.07
1.83 4.86
1.63 1.71 4.57
Net loans down on cautious lending Decline in borrowed funds Shareholder’s equity
9.09 9.28 9.24
2.06 2.08
1.92
1.46 1.48 1.50
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 25
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Significant growth in CASA deposits drives record $2bn growth in deposits
Customer Deposits ($M)
683 ( 364 )
18,297
1,732
16,246
Customer Current Savings Term Customer
Deposits Deposits Deposits Deposits Deposits
2019 2020
FY20 Customer deposits by…
Business Segment Geographical Region Type
Term
CESA
CB 18%
CIB 25%
35% UEMOA
41%
38%
Savings
AWA 19% Current
18% 63%
CMB NIGERIA
24% 19%
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 26
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Capital Exceeds Minimum Regulatory Requirements
Tier 1 & Total Capital Adequacy Ratios Key points
Tier 1 CAR Total CAR
• As at December 2020, the Group provisionally estimates1 its Tier 1 CAR at 9.4% and Total CAR
13.2% at 12.3%. The improvement in CAR for the year (up from 8.8% Tier 1 and 11.6% Total as at
12.4%
11.6% 12.3% December 2019) is primarily due to internal profit generation and issuance of Tier 2
instruments at affiliate level.
9.1% 9.1% 8.8% 9.4%
• On a fully loaded IFRS 9 Day One basis, the Group estimates its Tier 1 CAR at 8.8% and Total
CAR at 11.7% as at December 2020.
• The Group calculates regulatory risk weighted assets according to standardized approaches;
UMOA Basel II/III does not allow for internal models or advanced approaches.
Dec 2017 Dec 2018 Dec 2019 Dec 2020
UEMOA Basel II/III requirements 2019 2020 2021 2022 2023
(provisional)
$ billions Tier 1 CAR 7.25% 7.25% 7.875% 8.5% 8.5%
T1 capital 1.62 1.46 1.36 1.46
Total CAR 9.5% 9.5% 10.375% 11.25% 11.5%
Total capital 2.36 1.98 1.79 1.91
Total RWAs 17.89 16.01 15.50 15.52
Additional ETI-specific SIFI buffer +0.4% +0.7% +1.0% +1.0%
2020 Changes in Group Consolidated Total CAR
14%
+ 1.4% + 0.1% - 0.5%
13% - 0.3%
+ 0.1% - 0.1% + 0.1% - 0.0%
12% 12.3%
11.6%
11%
10%
Total CAR Dec 2019 Δ retained earnings Δ minority interests Δ foreign currency Δ other reserves & Δ Tier 2 instruments Δ credit risk Δ operational risk Δ market risk Total CAR Dec 2020
(excluding goodwill translation & deductions weighted assets weighted assets weighted assets (provisional)
impairment) hyperinflation (excluding goodwill
reserve impairment)
1. Per UMOA regulations, December regulatory capital adequacy reports are due to the regulator on 30 April 2021. Ecobank’s December 2020 capital adequacy calculations are therefore considered provisional
and not final.
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 27
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LOB PBT impacted by pandemic-induced impairments & net monetary losses
FY20 ($m)
Corporate & Net revenue 945 17%
Investment Bank
Expenses 454 7%
NIR ratio: 42% PPOP1 495 27%
CIR: 47.8%
CoR: 1.8% Impairment2 126 108%
NPL ratio: 4.3%
PBT 337 2%
NPL coverage: 70.2%
FY20 ($m)
Commercial Bank Net revenue 372 3%
Expenses 280 1%
NIR ratio: 52%
CIR: 75.3% PPOP1 92 11%
CoR: 3.2%
NPL ratio: 22.3% Impairment2 52 60%
NPL coverage: 74.8%
PBT 23 -54%
FY20 ($m)
Consumer Bank Net revenue 400
-4%
Expenses 326 -2%
NIR ratio: 43%
CIR: 81.6% PPOP1 74 -11%
CoR: 1.9%
NPL ratio: 7.3% Impairment2 22 40%
NPL coverage: 88.3%
PBT 42 -37%
1. PPOP = Pre-tax pre-provision operating profit
2. Macro-overlay of $55m allocated across business segments as 73% CIB, 22% Commercial, and 5%
Consumer. Business segment’s impairment losses will not total Group’s impairment losses of
$227m because of $27m of net impairment losses allocated to ‘Others’, representing mainly ETI.
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 28
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Nigeria’s performance improving; stable ROEs in other regions
UEMOA Net revenue 511
1%
Expenses 304
ROE: 18.6% 1%
NIR ratio: 39% PPOP1 207
CIR: 59.6% 1%
CoR: 1.3% Impairment2 56 71%
NPL ratio: 3.3%
NPL coverage: 56.8% PBT 152 -13%
NIGERIA Net revenue 269
5%
Expenses 222 -9%
ROE: 4.2%
NIR ratio: 40% PPOP1 47 265%
CIR: 82.4%
CoR: 0.3% Impairment2 12 82%
NPL ratio: 19.9%
NPL coverage: 56.7% PBT 35 462%
AWA Net revenue 476
9%
ROE: 26.9% Expenses 235 15%
NIR ratio: 33%
CIR: 49.4%
PPOP1 241 4%
CoR: 3.1% Impairment2 40 -26%
NPL ratio: 6.3%
NPL coverage: 93.5% PBT 201 13%
CESA Net revenue 458
3%
Expenses 249 -4%
ROE: 16.1%
NIR ratio: 54% PPOP1 209
CIR: 54.4% 13%
CoR: 1.7% Impairment2 29 896%
NPL ratio: 9.7%
NPL coverage: 98.9% PBT 119 4%
1. PPOP = Pre-tax pre-provision operating profit
2. Net impairment losses will not add up to Group’s impairment losses of $227m mostly because of
a macro-overlay of $55m
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 29
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Nigeria: positioned for success
Turnaround successes… …and the strategic initiatives to drive growth & profitability
• Deepening value chain
Resetting the cost base
CASA • Cross-sell products
• Increase CASA and reduce Cost-of Funds
• Drive Payments business
Improved deposit mix PAYMENTS • Payment volumes increasing across
platforms
• Investing in salesforce teams
Adequate capital and liquidity EFFICIENCY • Branch optimisation
• Driving NIM expansion via lower CoF
• NPL recovery strategy and heightened loan
GOOD LOANS monitoring
Ability to raise Tier 2 capital & RECOVERIES • Conservative lending
• Drive reductions in Stage 2 loans
Improvement in credit portfolio
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 30
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Guidance
2020 TARGET ACTUAL 2021 TARGET
Gross loans
Down 0.4% YoY
(End-of-period 0% to 3% decline YoY 0-2% growth YoY
Within target
EOP balances)
Customer
Up 13% YoY
deposits Approx. 8% growth YoY 0-4% growth YoY
Above target
(EOP balances)
Up 4% YoY
Revenue Flat compared to prior year 0-2% growth YoY
Above target
Operating Approx. 4% lower compared
Down 2% YoY 2%-4% decline YoY
expenses to prior year
Cost-to-income
Approx. 63% 62.7% Approx. 61%
ratio
Cost-of-risk 180 – 200 basis points 185 basis points 150 – 180 basis points
NPL ratio 9.5% - 9.8% 7.6% 5% - 7%
NPL coverage
> 75% 74.5% > 90%
ratio
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Summary takeaway
Vaccination rollout expected to support economic rebound in 2021. But our priority is to continue to
ensure that we sustain our services to our customers in these uncertain times
Managing the bank through the pandemic with a heightened sense of risk and control measures to
ensure continued stability of the firm
Driving behavioural change through our ongoing Ethics, Culture and Conduct transformation program
Continuing our discipline with expense management, and putting our expense on a declining path,
while sensibly investing for the future
Accelerating our digital transformation agenda to continue drive better outcomes for our customers
Taking ongoing actions to strengthen the resiliency of our balance sheet
Firm remains profitable and resilient
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 32
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Summary Regional performance
Ecobank Geographical Regions
ETI & Ecobank
Summary Performance as of 31 December 2020 NIGERIA(1) UEMOA AWA CESA (2)
Others Group
(In millions of US Dollars)
Income statement highlights
Net interest income 161 311 317 211 (92) 907
Non-interest revenue 109- 201- 159- 247- 57- 773- -
- - - - - -
Net revenue (operating income) 269 511 476 458 (35) 1,680
Operating expenses 222 304 235 249 44 1,054
-- -- -- -- -- -- -
Pre-provision operating profit 47 207 241 209 (79) 626
Impairment losses on financial assets 12- 56- 40- 29- 91- 227- -
- - - - - -
Operating profit after impairment losses 35 152 201 180 (169) 399
Net monetary loss arising from hyperinflationary economies - - - (61) 0 (61)
Share of post-tax results of associates -- -- -- (0.1)
-- (0.2)
-- (0.3)
-- -
- - -
Profit before tax and goodwill impairment 35 152 201 119 (170) 338
Goodwill Impairment -- -- -- -- (164)-- (164)-- -
- - - -
Profit before tax 35- 152- 201- 180- (394) - 174-
Profit after tax 33- 141- 139- 89- (314)
-- 88- -
- - - - -
Balance sheet highlights
Total Assets 5,630 9,969 4,304 5,961 75 25,939
Gross loans and advances to customers 2,481 3,870 1,213 1,796 438 9,798
Of which stage 1 1,343 3,460 1,078 1,437 490 7,808
Of which stage 2 645 281 59 194 62 1,241
Of which stage 3 (NPLs) 493 129 77 165 (114) 749
Less: Accumulated impairments (279) (73) (72) (163) 29 (558)
Of which stage 1 (9) (27) (22) (29) (3) (90)
Of which stage 2 (62) (13) (7) (20) 9 (93)
Of which stage 3 (208) (33) (43) (114) 23 (375)
Net loans and advances to customers 2,202 3,796 1,142 1,633 467 9,240
Non performing loan 493 129 77 165 (114) 749
Deposits from customers 3,538 6,849 3,180 4,510 221 18,297
Total equity 796 822 585 595 (771) 2,028
Ratios
ROE (3) 4.2% 18.6% 26.9% 16.1% 0.3%
ROA 0.6% 1.5% 3.5% 1.5% 0.4%
Cost-to-income 82.4% 59.5% 49.4% 54.4% 62.7%
Loan-to-deposit ratio 70.1% 56.5% 38.2% 39.8% 53.6%
NPL Ratio 19.9% 3.3% 6.3% 9.2% 7.6%
NPL Coverage 56.7% 56.8% 93.5% 98.9% 74.5%
1. Also included in the Nigeria region are the results of the Resolution Vehicle
2. ETI & Others comprise the financial results of the parent company (ETI), eProcess (the Group's technology shared services company owned by ETI), Paris subsidiary, other ETI-owned
affiliates and structured entities, and the impact of accounting eliminations arising from Group consolidation.
3. ROE for the regions are computed using profit after tax divided by average end-of-period (EOP) total equity. For the Group, the ROE is computed using profit available to ETI divided by
average EOP shareholder's equity
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 33
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Francophone West Africa (UEMOA)
Summary financials (UEMOA) Financial performance
Year ended 31 December (in millions of US dollars) 2020 2019 YoY Ccy* • Profit before tax down $22m to $152m. ROE of 18.6%
Net interest income 311 291 7% 4%
Non-interest revenue 201 217 (8)% (10)% • Net revenue up $3m to $511m, as higher NII partially
Net revenue (operating income) 511 508 1% (2)%
offsets lower NIR
Operating expenses (304) (302) 1% (2)%
Pretax, pre-provision operating profit 207 206 1% (2)%
Gross impairment losses on loans (104) (154) (33)% (36)% • Net interest income (NII) up $20m to $311m on higher
Loan recoveries and impairment releases 53 121 (57)% (59)%
Net impairment losses on loans (51) (32) 57% 46%
investment securities balances. Non-interest revenue
Impairment losses on other assets (5) (0.1) n.m. n.m. (NIR) down $17m to $201m, reflecting the adverse impact
Impairment losses on financial assets (56) (32) 71% 59% of COVID-19 on business activity. As a result, fees and
Profit before tax 152 174 (13)% (14)%
commissions generated on cash management, trade
As at 31 December (In millions of US dollars) 2020 2019 YoY Ccy finance, and payments reduced significantly. A substantial
Loans & advances to customers (gross) 3,870 3,848 1% - portion of NIR decrease was associated with a significant
Of which stage 1 3,460 3,498 (1)% -
Of which stage 2 281 191 47% -
compression in the margins generated on client-driven FX
Of which stage 3, credit impaired loans (non-performing loans) 129 159 (19)% (26)% transactions.
Less: allowance for impairments (Expected Credit Loss) (73) (79) (8)% (16)%
Of which stage 1: 12-month ECL(1) (27) (28) (3)% -
Of which stage 2: Life-time ECL (13) (11) 22% -
• Expense up $2m to $304m, reflecting one-off restructuring
Of which stage 3: Life-time ECL (33) (41) (19)% - costs of c.$8.3m. The cost-to-income ratio of 59.5% was flat
Loans & advances to customers (net) 3,796 3,769 1% (8)% on previous year.
Total assets 9,969 8,960 11% 2%
Deposits from customers 6,849 5,641 21% 11%
Total equity 822 697 18% 8% • Pre-provision operating profit of $207m was largely
Cost-to-income 59.5% 59.4% unchanged from the prior year
ROE 18.6% 22.8%
Loan-to-deposit ratio 56.5% 68.2%
NPL ratio 3.3% 4.1% • Net impairments of $56m were higher $23m, driven by
NPL coverage ratio 56.8% 50.1% episodic loan downgrades. NPL ratio deteriorate from 4.1%
Stage 3 coverage ratio 25.6% 25.6%
of 3.3%
Note: Selected income statement line items only and thus may not sum up
* Ccy = year-on-year percentage change on a constant currency
(1) ECL = Expected Credit Loss
1. Constant currency reporting eliminates fluctuations in the functional currencies of our operating subsidiaries against the US
dollar, our reporting currency. It is a clearer and meaningful indicator of the firm’s underlying performance, assuming the
US dollar exchange rate to the various functional currencies did not change within the period.
UEMOA comprises of Benin, Burkina Faso, Cote d’Ivoire, Cape Verde, Mali, Niger, Senegal, Togo, Guinea Bissau, Microfinance in
Burkina and EDC affiliates within the region
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 34
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Nigeria
Summary financials (NIGERIA) Financial performance
Year ended 31 December (in millions of US dollars) 2020 2019 YoY Ccy*
• Profit before tax of $35m increased $29m YoY, on positive
Net interest income 161 103 56% 66% operating leverage. ROE improved to 4.2%.
Non-interest revenue 109 153 (29)% (21)%
Net revenue (operating income) 269 256 5% 15%
Operating expenses (222) (243) (9)% (0.4)%
• Net revenue up $14m to $269m driven by higher NII,
Pretax, pre-provision operating profit 47 13 265% 323% partially offset by lower NIR.
Gross impairment losses on loans (33) (32) 4% 11%
Loan recoveries and impairment releases 27 28 (2)% 1%
Net impairment losses on loans (6) (5) 40% 96%
• Net interest income (NII) up $58m to $161m, driven by
Impairment losses on other assets (6) (2) 166% 171% the impact of lower rates and an improved mix of customer
Impairment losses on financial assets (12) (7) 82% 126% deposits in favour of lower-cost CASA deposits.
Profit before tax 35 6 462% 506%
• Non-interest revenue (NIR) fell $44m, reflecting COVID-
As at 31 December (In millions of US dollars) 2020 2019 YoY Ccy 19’s impact and the economic recession in Nigeria, partially
Loans & advances to customers (gross) 2,481 2,504 (1)% - offset by episodic gains in fixed-income trading due to
Of which stage 1 1,343 1,175 14% -
market opportunities.
Of which stage 2 645 731 (12)% -
Of which stage 3, credit impaired loans (non-performing loans) 493 598 (18)% 5%
Less: allowance for impairments (Expected Credit Loss) (279) (279) 0% 56% • Expenses were down $21m to $222m, primarily driven by
Of which stage 1: 12-month ECL(1) (9) (22) (58)% -
Of which stage 2: Life-time ECL (62) (56) 12% -
branch and headcount reductions. Cost-to-income ratio
Of which stage 3: Life-time ECL (208) (201) 3% - improved to 82.4% from 94.9% in the prior year
Loans & advances to customers (net) 2,202 2,225 (1)% 9%
Total assets 5,630 5,933 (5)% 10%
Deposits from customers 3,538 3,715 (5)% 5% • Pre-provision operating profit up $34m to $47m, driven
Total equity 796 785 2% 89% by positive operating leverage.
Cost-to-income 82.4% 94.9%
ROE 4.2% 0.4%
Loan-to-deposit ratio 70.1% 67.4%
• Net impairments were $12m, up $5m, driven by impact of
NPL ratio 19.9% 23.9% COVID-19 partially offset by recoveries including $13m in
NPL coverage ratio 56.7% 46.6% the Resolution Vehicle (RV)
Stage 3 coverage ratio 42.2% 33.6%
Note: Selected income statement line items only and thus may not sum up
* Ccy = year-on-year percentage change on a constant currency
• Nigeria has strengthened its CAR position – Total CAR as of
(1) ECL = Expected Credit Loss 31/12/20 was 21.4%
1. Constant currency reporting eliminates fluctuations in the functional currencies of our operating subsidiaries against the US
dollar, our reporting currency. It is a clearer and meaningful indicator of the firm’s underlying performance, assuming the US • Balance sheet is substantially liquid. ENG successfully raised
dollar exchange rate to the various functional currencies did not change within the period.
$300m 5yr Eurobond at 7.125% being the first non-
Nigeria region includes EDC affiliates with Nigeria and the Resolution Vehicle. sovereign bond from Africa in 2021(February). The bond
offering was 300% oversubscribed and offered the lowest
coupon rate of any outstanding Nigerian bank issuer
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 35
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Anglophone West Africa (AWA)
Summary financials (AWA) Financial performance
Year ended 31 December (in millions of US dollars) 2020 2019 YoY Ccy*
• Profit before tax up $24m to $201m, driven by positive
Net interest income 317 264 20% 32% operating leverage and lower impairments. ROE of 26.9%
Non-interest revenue 159 172 (8)% (12)% versus 30.1% in the prior year.
Net revenue (operating income) 476 436 9% 13%
Operating expenses (235) (205) 15% 18%
Pretax, pre-provision operating profit 241 232 4% 9% • Net revenue up $40m to $476m on higher NII.
Gross impairment losses on loans (53) (62) (14)% (10)% • Net interest income (NII) up $53m to $317m, primarily
Loan recoveries and impairment releases 13 10 35% 42%
Net impairment losses on loans (40) (52) (23)% (20)%
driven by higher investment securities and inter-bank
Impairment losses on other assets (0.01) (2) (100)% (100)% placements.
Impairment losses on financial assets (40) (54) (26)% (23)% • Non-interest revenue (NIR) fell $13m to $159m, driven by
Profit before tax 201 178 13% 19%
pandemic’s effects, which affected fee and commission
As at 31 December (In millions of US dollars) 2020 2019 YoY Ccy income from trade finance, payments, and cash
Loans & advances to customers (gross) 1,213 1,376 (12)% - management
Of which stage 1 1,078 1,203 (10)% -
Of which stage 2 59 67 (12)% -
Of which stage 3, credit impaired loans (non-performing loans) 77 106 (28)% (26)% • Expenses increased $30m to $235m, largely driven by one-
Less: allowance for impairments (Expected Credit Loss) (72) (86) (17)% (21)% off restructuring costs related to headcount reductions
Of which stage 1: 12-month ECL(1) (22) (38) (43)% -
Of which stage 2: Life-time ECL (7) (2) 189% -
($6.8m) and a litigation accrual ($12m), which has been fully
Of which stage 3: Life-time ECL (43) (46) (6)% - provisioned for. The cost-to-income was 49.4% compared
Loans & advances to customers (net) 1,142 1,290 (12)% (9)% to 46.9% in 2019.
Total assets 4,304 3,595 20% 12%
Deposits from customers 3,180 2,704 18% 17%
Total equity 585 449 30% 31% • Pre-provision operating profit up $9m to $241m,
Cost-to-income 49.4% 46.9% primarily driven by significantly higher NII, partially offset by
ROE 26.9% 30.1%
one-offs in expenses.
Loan-to-deposit ratio 38.2% 50.9%
NPL ratio 6.3% 7.7%
NPL coverage ratio 93.5% 80.9% • Net impairments fell $14m to $40m, reflecting a decrease
Stage 3 coverage ratio 56.5% 43.1%
in NPLs. NPL ratio decreased to 6.3% vs 7.7% from the prior
Note: Selected income statement line items only and thus may not sum up
* Ccy = year-on-year percentage change on a constant currency
year.
(1) ECL = Expected Credit Loss
1. Constant currency reporting eliminates fluctuations in the functional currencies of our operating subsidiaries against the US
dollar, our reporting currency. It is a clearer and meaningful indicator of the firm’s underlying performance, assuming the US
dollar exchange rate to the various functional currencies did not change within the period.
AWA comprises of Ghana, Guinea, Liberia, Sierra Leone, Gambia, Microfinance in Ghana and Sierra Leone and EDC Ghana
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 36
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Central, Eastern and Southern Africa (CESA)
Summary financials (CESA) Financial performance
Year ended 31 December (in millions of US dollars) 2020 2019 YoY Ccy* • Profit before tax down $7m to $180m, primarily reflecting
Net interest income 211 194 9% 21% the impact of net monetary loss $61m coming from
Non-interest revenue 247 250 (1)% 32%
Zimbabwe and South Sudan. As a result, ROE of 16.1%
Net revenue (operating income) 458 444 3% 27%
Operating expenses (249) (259) (4)% 6% deteriorated from 23.6 largely reflecting the impact of
Pretax, pre-provision operating profit 209 185 13% 67% monetary loss.
Gross impairment losses on loans (50) (39) 28% 33%
Loan recoveries and impairment releases 27 45 (41)% (40)%
Net impairment losses on loans (23) 6 n.m n.m • Net revenue up $14m to $458m on higher NII.
Impairment losses on other assets (5.8) (9) (36)% (31)%
Impairment losses on financial assets (29) (3) 896% 1,696% • Net interest income (NII) up $17m to $211m, driven by
Net monetary loss arising from hyperinflationary economy (61) (9) n.m n.m higher investment securities and inter-bank placements.
Profit before tax 180 173 4% 46%
• Non-interest revenue (NIR) fell $3m to $247m, primarily
As at 31 December (In millions of US dollars) 2020 2019 YoY Ccy driven by a decline in fees on client-related FX sales.
Loans & advances to customers (gross) 1,796 1,699 6% -
Of which stage 1 1,437 1,382 4% -
Of which stage 2 194 175 11% - • Expenses decreased $10m to $249m, reflecting significantly
Of which stage 3, credit impaired loans (non-performing loans) 165 143 15% 12%
Less: allowance for impairments (Expected Credit Loss) (163) (152) 7% 7%
lower staff-related costs. he cost-to-income was 54.4% was
Of which stage 1: 12-month ECL
(1)
(29) (33) (11)% - an improved if compared to 58.3% in 2019.
Of which stage 2: Life-time ECL (20) (5) 275% -
Of which stage 3: Life-time ECL (114) (114) (0.4)% -
Loans & advances to customers (net) 1,633 1,547 6% 7% • Pre-provision operating profit up $24m to $209m, driven
Total assets 5,961 5,598 6% 16%
by higher NII and lower expenses, partially offset by lower
Deposits from customers 4,510 3,903 16% 25%
Total equity 595 517 15% 25% NIR.
Cost-to-income 54.4% 58.3%
ROE 16.1% 23.6%
Loan-to-deposit ratio 39.8% 43.5%
• Net impairments were $29m compared with $3m, driven
NPL ratio 9.2% 8.4% mainly by downgrade to oil and gas loans. Also included in
NPL coverage ratio 98.9% 106.4%
Stage 3 coverage ratio 69.0% 79.8%
the current period’s impairments are higher management
reserve overlays as buffers against prevailing uncertainties
Note: Selected income statement line items only and thus may not sum up
* Ccy = year-on-year percentage change on a constant currency due to COVID-19. The NPL ratio was 9.2% vs 8.4% in the
(1) ECL = Expected Credit Loss
prior period.
1. Constant currency reporting eliminates fluctuations in the functional currencies of our operating subsidiaries against the US dollar, our
reporting currency. It is a clearer and meaningful indicator of the firm’s underlying performance, assuming the US dollar exchange rate
to the various functional currencies did not change within the period.
CESA comprises Cameroon, Chad, Sao Tome, Congo Brazzaville, Gabon, Central Africa Rep., Equatorial Guinea, Rwanda, Kenya, Burundi,
Uganda, Tanzania, South Sudan, DR Congo, Malawi, Zambia, Zimbabwe, Mozambique, EDC CEMAC
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 37
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Q&A
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 38
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Appendix
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 39
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Ecobank: The Leading pan-African Banking Institution
Market Leader in 6
Founded Strong Diversified & Early Adopter of
Countries; Top 3 in
1985 Brand At scale Technology
15 Countries
Stock market • Bank subsidiaries: 334
NSE, BRVM & GSE Africa Presence
listing • Rep. Offices: 2
Market Value1 $311M
Addis Ababa
(Rep Office)
• Fitch: ‘B-’ / Stable Principal Shareholders
Credit Ratings • S&P: ‘B-’ / Stable
• Moody’s: ‘B3’ / Negative
Nedbank
Others 21%
31%
• Assets: $25.9B
• Deposits: $18.3B
Balance Sheet2
South
• Loans: $9.2B QNB
20%
Africa
• Equity: $2.0B GEPF/PIC
14% Arise B.V
Francophone West Africa (UEMOA) 14%
Customers Approx. 24M
Nigeria
Anglophone West Africa (AWA)
• Ecobankers: 14,023
Central, Eastern and Southern Africa (CESA) People
• Nationalities: 43
Ecobank Representative Offices
• Branches: 690
• ATMs: 2,659
Distribution3 • Mobile app users: 12.9M
• Xpress Points: 66,408
• Ecobank Pay: 309,208
1. Market value of ETI as of 22 March 2021
2. Balance sheet figures are as of 31 December 2020.
3. Distribution figures as of 31 December 2020
4. Ecobank also has a subsidiary bank in Paris, France and Representative Offices in London, Dubai and Beijing
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 40
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Ecobank’s Response to the Coronavirus Pandemic
Primary objective is the health of Ecobankers, meeting the financial needs of our customers safely
and conveniently in these challenging times, and being supportive of the communities we serve
Employees Customers Communities
• Activated our Business Continuity • ATMs & Call centers open 24/7 • Contributed about $3 million in
Plan cash, healthcare equipment, and
• Clients have access to full range
• Instituted flexible working supplies
banking services on all our digital
arrangements: 60% of Ecobankers platforms – Mobile, Online, Omni • Continue to embark on sustained
working from home
Lite, Omni and robust COVID-19 awareness
• Ensured working environment is campaigns
COVID-19 compliant • Waived some fees on our digital
channels • Leveraging our digital banking
• Provided WHO approved personal platforms to provide money to
protective equipment to front line • Strict adherence and compliance
some of the most vulnerable
staff to WHO, governments, and health
members in our communities
agencies COVID-19 protocols
• Co-leading with the African
Union-Nepad to support MSMEs
with technical knowledge,
mentoring, knowledge sharing,
and financial support
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 41
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Average Yields on IEA1 and IBL2, and NIM3
UEMOA NIGERIA
6.1% 11.6%
5.8% 5.6% 10.9%
9.4%
3.8% 4.0% 4.0%
6.2% 5.8% 5.6%
5.1%
2.0% 2.1% 4.1%
1.7% 3.2% GROUP
8.5% 8.5% 8.3%
2018 2019 2020 2018 2019 2020
5.3% 5.5%
Average yield Average yield NIM Average yield Average yield NIM 4.7%
on IEA on IBL on IEA on IBL
3.4%
3.0%
2.3%
AWA CESA
7.3% 6.7% 6.6%
11.2% 11.6% 11.4%
5.6%
9.8% 9.9%
9.1% 4.9% 2018 2019 2020
4.7%
Average yield Average yield NIM
on IEA on IBL
1.7% 1.7% 1.8%
2.1% 1.8% 1.5%
2018 2019 2020 2018 2019 2020
Average yield Average yield NIM Average yield Average yield NIM
on IEA on IBL on IEA on IBL
1. IEA – Interest Earning Assets, i.e. loans, investment securities, and other interest earning financial instruments
2. IBL – Interest Bearing Liabilities i.e. customer deposits, borrowed funds and other interest bearing funding instruments
3. NIM – Net Interest Margin
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 42
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Affiliates’ Local Provisional Capital Adequacy Ratios for December 2020
December 2020 provisional Total CAR Regulatory requirement
86%
54%
43%
39% 39%
38%
34% 33%
28% 28%
26% 26%
24% 23% 24%
21% 22%
18% 16% 18%
15% 16% 16% 16% 16%
13% 11% 12% 12% 14% 13%
11% 11%
Tanzania
Benin
Gambia
South Sudan
France
Guinea Bissau
Togo
Ghana
Burundi
Rwanda
Niger
Senegal
Chad
Liberia
Eq. Guinea*
CAR
Malawi
Cape Verde
Mali
Guinea
Sao Tome
Zambia
Nigeria
Uganda
Sierra Leone
Congo Brazza
Cameroon
Kenya
Zimbabwe
DRC
Gabon
Mozambique
Burkina Faso
Cote d'Ivoire
-30%
* Equatorial Guinea Total CAR is 35% excluding the impact of government-related provisions
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 43
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Hyperinflation
Zimbabwe economy was designated hyperinflation in July 2019 Impact of Hyperinflation in Zimbabwe & South Sudan
CPI ZW/USD Linear (CPI)
120
100 26.7
Amounts in $’million
100 3,000
83 81 81 82 82
77 80 52.5
80 2,500
64 60
2,475
2,000 40 8
60
1,500 20
40
25 25 25
0
1,000
17 18 -20 (33.8)
20 17
500 -40 Income Net Monetary Net Monetary Net impact on
552 statement Loss (ZW) Loss (SS) PBT
- - Indexing
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cumulative inflation for S Sudan over the past three year neared 100% in 2020 Key Points
CPI SSP/USD Linear (CPI) • IAS 29 “Financial Reporting in Hyperinflationary Economies” requires
the financial statements (and corresponding figures for previous periods)
1.6X of an entity with a functional currency that is hyperinflationary to be
restated for the changes in the general pricing power of the functional
190 20,000 currency
16,841 18,000
185
16,000 • As part of the conditions for determining an economy as hyperinflationary,
177 177 the cumulative inflation rate over three years must approach, or exceed,
180 175 14,000
10,657 12,000 100%.
175
168 10,000
170
164 164 165 8,000 • For hyperinflation accounting, the income statement is translated at the
162 162 163
165 160 161 162 6,000 period end foreign exchange rate instead of an average rate (Income
160
4,000 statement indexing)
2,000
155 - • IAS 29 also requires non-monetary assets and liabilities, shareholders’
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec equity and comprehensive income to be restated in terms of a measuring
unit current at the period end. This results in a net monetary loss or gain
1. Exchange rate are EOP = End-of-period rates
© Ecobank Group 2021| FY 2020 Earnings Presentation | 23 March 2021 44
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