Ecobank Uganda, this week released their 2019 results, reporting a 60 per cent increment in the bank’s assets from UGX420 billion in 2018 to UGX671.3 billion at the end of 2019.
Assets grew by UGX 251.3 billion, crossing the UGX500 billion asset mark, stamping a place amongst Uganda’s tier 2 commercial banks- a good way to mark its 11th anniversary since its launch in January 2009.
This impressive performance was on the back of a 90.8 per cent growth in customer deposits, from UGX288.3 billion in 2018 to UGX550 billion in 2019. The growth in deposits powered a 22.9 per cent increment in lending, from UGX132.6 billion to UGX163 billion in 2019.
Total income thus grew by 21.3 per cent from UGX47.8 billion in 2018 to UGX58 billion in the same period.
Expenditure however, also went up by 24 per cent from UGX41.7 billion to UGX51.7 billion, largely driven by a 63.8 per cent rise in interest expenses on deposits, from UGX8.3 billion in 2018 to UGX13.6 billion in 2019.
According to Bank of Uganda- weighted average interest rate on deposits went up 38.4 percentage points from 2.85 per cent in 2018 to 3.95 per cent in 2019, thus driving up industry cost of deposits from 2.26 per cent to 2.49 per cent.
Because of the rising costs, profit before tax went slightly up, by 5 per cent from UGX6 billion in 2018 to UGX6.3 billion in 2019. Net profit, declined slightly, by 14per cent from UGX4.8 billion in 2018 to UGX4.1 billion in 2019.
Clement Dodoo, the bank’s Managing Director attributes this solid growth to the bank’s investment in innovative Consumer, SME, and Corporate solutions that have attracted deposits, which were in turn invested prudently in customer lending, placements with other banks as well as government securities.
“In 2019, we upgraded our core banking platform from Oracle Flexcube 7 to a more robust Oracle Flexcube 12.4- a real-time online solution that has enabled us to serve our customers more seamlessly in line with our digitization agenda,” he says.
“The upgrade breathed more life into our existing digital banking solutions such as Ecobank Pay, Ecobank Mobile, Ecobank Online (Ecobank Lite and OMNI) as well as supporting our countrywide network of over 132 and growing, banking agents. Today it is easier than ever for our customers to conveniently transact and make payments locally and internationally at their convenience,” he further explains.
Dodoo, under whose 5 years of leadership, Ecobank has grown by leaps and bounds adds: “These and other customer-centric innovations have rewarded us with new customers while retaining our existing customer base. We are grateful to all our customers; the regulators, staff, board, and management for your contribution to our remarkable growth story.”
During 2019, Ecobank Uganda also received two prestigious International Organization for Standardization (ISO) certificates for its Information Security Management Systems (ISO/IEC 27001) and Business Continuity Management Systems (ISO 22301). The certifications apply to all core banking processes at its head office, branches, disaster recovery and business resumption sites.
Awarded by the British Standards Institution (BSI), the ISO certifications, according to a media statement by the bank, “give Ecobank Uganda a competitive advantage and publicly demonstrate the bank’s legal and regulatory compliance and commitment to the prevention or reduction of large-scale process disruptions in the event of an incident.”
5 years of bold double-digit growth
Netflix Strikes $82.7 Billion Deal to Take Over Warner Bros., Redefining the Global Entertainment LandscapeOver the last 5 years, Ecobank Uganda has undergone a significant year on year growth. The bank’s deposits have more than doubled from the UGX207.5 billion (as at end of 2014) to UGX550 billion in 2019- a growth of 178 per cent and a compounded annual growth rate of 19 per cent.
With strong deposits, assets too, have more than doubled, growing by 140.8% from UGX285.8 billion to UGX671.3 billion, thus enabling a 67.6 per cent growth in total income from UGX34.6 billion in 2015 to UGX58 billion in 2019. As a result, the bank’s loss was reduced from UGX 5.2 billion inherited at the end of 2014, to a UGX 800 million loss in 2015 and thereafter, four years of straight profits- UGX 800 million, UGX1.5 billion; UGX4.8 billion and UGX4.1 billion in 2016, 2017, 2018 and 2019 respectively.
This growth has been spearheaded by a strong executive management team and a hands-on board leadership. Clement Dodoo is a skilled banker who has spent most, if not all of his banking career with the Ecobank Group, one of Africa’s largest banks with operations in 36 African countries. Annette Kihuguru, the bank’s Executive Director, has over 30 years’ banking experience in Uganda.
Mr. Henry Lubwama, the founder and CEO of HL Investments, the bank’s former Board Chairman between 2012 and early 2019, is a hands-on entrepreneur and successful construction magnate. He laid a strong foundation for his successor, Mr Kin Kariisa who took over the chairmanship in March 2019 but was a board member before. Kariisa is a successful media baron and one of Uganda’s influential business persons.
Laying a strong foundation for firmer future growth
Commenting about the results, Mr. Kin Kariisa, Ecobank Uganda’s Board Chairman said that the major growth in customer deposits and the resultant growth in the bank’s balance sheet positions the bank for more sustainable growth going forward.
“We should be in a position to take on bigger transactions going forward. Also the wider base we have created in the digital space allows us to serve our customers quicker and even more importantly providing convenience to the customer going forward. This is also very crucial in the post-Covid-19 since we expect behavioural and procedural changes in the way the world banks,” he said.
Mr. Kariisa also says that the bank expects to “have better asset quality as we continue to scrutinise and better the asset creation process.”
Looking ahead with optimism, Mr. Dodoo, reiterates that this solid performance, now sets a firm ground for 2020 and beyond; especially the bank’s ability to support her clients emerge from the post-Covid-19 crisis.
“Ecobank remains well-capitalized. In 2019, we had a tremendous improvement in our operational efficiency, keeping credit loss ratios within single digits, at 6.5 per cent within the period. This is a good foundation for us to continue our aggressive digital agenda that seeks to drive financial inclusion and support our customers reach their growth ambitions during and post-Covid-19,” he said.
“Already, Ecobank has rolled out our Covid-19 credit relief program, in line with Bank of Uganda guidelines. We are in contact with all borrowing customers and on a case by case basis, we are assessing their need for credit relief- a moratorium of up to 90 days,” he says.
He also says that under the bank’s #StayHome, #StaySafe, #SaveLives initiative, Ecobank has also scrapped user-fees on selected digital banking channels to make it convenient for customers to transact conveniently and safely during the lockdown period.
“Barring the effects of Covid-19, we are in good shape to continue working with our customers, the regulator, to drive post-Covid-19 recovery especially for our customers and together keep Ecobank on a brazen growth path with a digital-first approach,” concludes, Dodoo.
