ECO Bank Posts 12 Billion BTX Profit In 2021
Despite a tough economic landscape, coupled with the Covid-19 pandemic, the depreciation of the Malawi kwacha, weather shocks and fiscal slippage, Eco Banks has posted a K12.0 billion profit before tax, representing a 15 percent growth in 2021.
In a published summary statement on its website, co-signed by the bank’s Board Chairman, Symon Msefula and Ecobank Malawi Managing Director, Dr. Raymond Fordwuo, the Pan African Bank has recorded an operating income year-on-year growth of 50 percent, up to K29.8 billion, a feat the bank says arise from both funded and non-funded income sources.
The Bank's Managing Director, Dr. Raymond Fordwu acknowledges that, although its operating costs increased by 25% to K11.3 billion, mainly due to an increase in volume of business in 2021, it maintained a positive jaw between revenue and operating expenses growth resulting in an improved cost to income ratio of 38% down from 45% as of 2020.
“Impairment losses on loans and other assets increased in the year as economic activities slowed down due to the Covid-19 pandemic which impacted some of our key customers’ ability to service their facilities. The Profit Before Tax, PBT for Ecobank in 2021 grew to K12.0 billion representing a 15 percent growth while Profit After Tax increased by 7% to K8.3 billion,” said Fordwu.
The country’s financial regulator, Reserve Bank of Malawi, RBM had in 2021 maintained the liquidity reserve requirement ratio on domestic and foreign deposits for commercial banks at 3.75 percent, the Lombard rate at 20 basis points above the policy rate and the monetary policy rate at 12 percent. However, the average headline inflation rate during the year increased to 9.3 percent.
Eco Bank says its outlook for 2022 remains positive as the Gross Domestic Product GDP is projected to grow by 4.1 percent on account of economic recovery measures being implemented by the Government such as, increased roll out of Covid-19 vaccines, and the normalization of global supply chains.
This, the bank says, will be achieved by providing convenience to its customers by improving on its existing product lines and introducing more innovative banking products.