Ecobank Group

FY 2023 Earnings Results

8 May 2024

Macroeconomic landscape

Global Economy: Modest recovery amid sluggish demand and supply chain pressures

Growth, by economy & EMDE credit rating

Commodity prices

Key highlights

  • Global economy ended in better shape than expected in 2023.
  • Commodity prices eased due to rising geopolitical tensions particularly in the Middle East and weak demand.
  • Oil prices dipped to $77 bpd below the $80 bpd average as of year-end 2023.
  • Global financial conditions loosened in mid
    November reversing much of October's tightening and reflecting softer inflationary pressures.
  • Headline inflation slowed notably in November, to 2.4% (y/y), aided by declining energy prices.

Slow business activity, exchange-rate pressures, inflation, & high borrowing costs heavily impact SSA outlook

Francophone West Africa

NIGERIA

Real GDP growth (2024-28): Selected countries

  • YE23 inflation of 3.7% > BCEAO's 3% target
  • BCEAO's policy rate at 5.5%.
  • XOF appreciated vs USD by 4.4% in 2023.
  • Economic uncertainty: Burkina, Mali & Niger impasse with ECOWAS; Senegal

elections.

Anglophone West Africa

  • Easing inflation across the region - Ghana 23.2% from 53.6% peak, Sierra
    Leone (52.2% from 54% in Sept '23) & Gambia (17.3% from 18.4% in Sept'23)
  • Depreciating currencies - GHC cedi & Gambian dollar fell 10% & 17%.
  • Interest rates remained elevated - Ghana (30%), Liberia (20%)
  • Inflation rose to 28.9% as in Dec'23, a 9% growth from 26.7% in Sept'23.
  • YE23 policy rate at 18.75%
  • Naira devalued by c.100% in '23.
  • FX reserves fell to 6-yr low of c.$33B at YE23 as CBN sold USD to improve ailing

naira.

Central, Eastern & Southern Africa

• Mixed inflation signals with Malawi, Congo Brazza, Burundi & DRC recording higher rates of 35%, 45%, 20% and 22%.

  • Hyperinflation currencies - Zim dollar depreciates by 89% and South Sudanese pound devalued by 37% vs the USD.
  • Double-digitinterest rates - Kenya, 12.5%, Malawi 24%, DRC 25%, South Sudan & Burundi at 12%.
  • Geopolitical crises in Gabon & DRC.

12%

10%

8.8%

8%

6.3%

6.4%

6.6%

5.3%

6%

3.1%

4%

2%

0%

Benin

Burkina Faso

Cote d'Ivoire

Senegal

Togo

Nigeria

6%

5.6%

2024

2025

2026

2027

2028

4.4%

4.7%

5%

4.1%

4%

2.7%

3.1%

3.2%

2.6%

3%

2%

1%

0%

Ghana

Guinea Cameroon Gabon

DRC

Malawi Zambia

Zimbabwe

Data as of December 2023

EMDEs = Emerging Market and Developing Economies;

Source, World Bank Global Monthly Report, December 2023 | IMF World Economic Outlook Report, October 2023| S&P Global Market Intelligence, PMI data December 2023

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

2

FY 2023 key takeaways

1

2

3

4

5

6

7

ROE > COE

UEMOA

NIGERIA

AWA

CESA

INTL

GROUP1

28.1%

4.5%

26.3%

32.8%

22.4%

24.9%

Strong business drivers especially CMB2 & CSB3

Positive operating leverage: Positive Jaws

Managed expenses well in an inflationary period Maintained stable credit quality metrics

CAR above regulatory minimum

GTR strategy: solid progress on strategic imperatives

Net revenues

$2.1 billion

Profit before tax

$581 million

Attributable profit to ETI shareholders

$288 million

Return on tangible equity

24.9%

Net interest margin

5.4%

Cost-to-income ratio

53.9%

Capital Adequacy Ratio (CAR)

15.0%

Non-performing loans ratio

5.4%

  1. Group return is on tangible equity, hence it's a ROTE metric
  2. CMB = Commercial Banking
  3. CSB = Consumer Banking

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

3

The strategic choices and core enablers underpinning our GTR strategy

Ambition

Truly Customer-Centric

Win By Our Customers

Growth, Transformation and Returns

Core strategic priorities

Diversify & grow

CIB's revenues

  • Grow from the core & diversify revenue streams
  • Diversify loan book
  • Generate low- cost deposits
  • Expand Trade, Cash Management & IB businesses

Invest to grow

CONSUMER & COMMERCIAL share of industry market

  • Invest in technology, systems, processes & people
  • Build Digital, Analytics & Risk scorecard capabilities
  • CASA deposits
  • Segment vs Product structure

New business

line - Payments, Remittances & Fintech - The Payment Provider of Choice.

  • Aspire to be a leader in Payments on the continent
  • Strategic Partnerships
  • Build Fintech Ecosystem
  • Grow share of Remittances

Entrench

leadership in

LEADING

subsidiaries

  • Cementing our leadership position
  • Grow CSB & CMB faster
  • Enhanced digital offerings

Transform

NIGERIA

  • CASA deposits
  • Focus on Payments and Trade Finance
  • Strengthen team
  • Grow CSB & CMB
  • Legacy vs New Bank

Transform

SUBSCALE subsidiaries

  • Define winning participation model
  • Transformation Team to drive strategic imperatives
  • Address weak CIR & ROE to deliver dividends in the medium term

Revise Operating & Business Model

Transformation Offices

Stable & Reliable Central Technology

Customer Experience

Key

Brand Building

Enablers

Robust Risk Management

Strategic Partnerships

Deepen Communications

People & Culture

Framework

Sustainability

Business lines

Business lines strategies executed at Group level

Pan-African subsidiaries

Subsidiary specific strategies informed by the Group's GTR strategy

Key enablers

Direct oversight of the Group CEO

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

4

The key strategic initiatives under our GTR strategy

GGROW

Corporate and Investment Bank

  • Scale cash management and CASA deposits and reduce cost of funds
  • Balance sheet optimisation
  • A more client focused approach
  • Increase cross-sell
  • Deepen industry knowledge and expertise
  • Smart origination and deal execution
  • Trade and Cross-border solutions

Consumer & Commercial Bank

  • Consumer & Commercial combined to utilise economies of scale and serve customers better
  • New products and propositions e.g. Wealth Management
  • Focus on balance sheet and pricing
  • Drive non-funded income growth
  • Improve digital channels experience
  • Targeted lending strategy
  • Leverage data analytics and credit scoring
  • Establish Direct Sales workforce

Payments, Remittances & Fintech

  • Scale up payments and gain share of pan-African payments
  • Launch Fintech proposition and ecosystem
  • Driving Remittance volumes intra-Africa and from outside Africa
  • We are the core platform for PAPSS

T TRANSFORM

Nigeria & CESA

  • Establish Transformation Office
  • Strengthen senior management team
  • Disciplined capital allocation - focus on businesses with higher risk-adjusted returns
  • Drive for efficiency, productivity and expense management
  • Balance sheet optimisation
  • Drive CASA deposits
  • Significantly reduce foreign currency loans
  • Driven non-funded income
  • Align compensation to shareholder interest
  • Streamline organisational structure and physical distribution network

RRETURNS

Capital, Dividends & ROE>COE

  • Sustain ROE > COE through-the-cycle
  • Focus on dividend upstream from subsidiaries
  • Improve the double leverage of ETI
  • Align compensation to shareholder interest

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

5

2024 is a defining year, in many ways…

  • Grow in top key markets
  • Turnaround subscale & underperforming subsidiaries including Nigeria
  • Review operating model for small subsidiaries
  • Drive new growth opportunities in Consumer, Commercial and Payments
  • Drive margin expansion - Efficiency in Assets & Liability pricing
  • Disciplined capital allocation strategy
  • Build capital levels in line with risk appetite to support growth
  • Accelerate attributable profit generation
  • ROE > CoE, Through-the- Cycle
  • Increase number of dividend-paying subsidiaries
  • Customer-firstculture
  • Adequately resource regional call centers
  • Improve customer journey transformation

Accelerate

Transform

Resolve

Build and

Deepen

Embed

our

Capital

Customer

Culture,

upskill

Growth

business &

and Drive

Experience

Conduct,

Talent

operations

Returns

(CX)

Ethics

•

Scale strategic partnerships

•

Roll-out of enabling

•

Set leadership tone of

& technology agility

structure for strategy

excellence, a culture of

•

Deepen cost efficiency &

execution

integrity, proactivity,

effectiveness

•

Identify, restructure, build,

accountability and

• Refresh our brand to build

upskill and retain talent

enforceability of controls.

loyalty

•

Build a strong succession

•

Promote diversity &

•

Strengthen risk

bench

inclusion

management framework &

•

Our Values - RACEIT

process

(Respect; Accountability;

•

Preferred Trade Bank

Customer-Centricity;

•

Best partner for tech

Excellence; Integrity; Team)

enabled businesses

will be modelled from the

very top by GEC.

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

6

Reinforced Group Executive Committee (GEC) to deliver on GTR strategy

Abena Osei-Poku

MD Ecobank Ghana & Regional Executive AWA

  • Abena has over 25 years of financial industry experience covering corporate & investment banking, business banking and risk management in Africa.
  • CEO and MD after her role as Co-Regional Head, Absa Group
  • Executive Director, Commercial Banking, Barclays Bank Ghana
  • Decade-longtenure at Standard Chartered.
  • M.B.A, Manchester Business School, UK.
  • Bachelor's Degree in
    Economics and Statistics, the University of Ghana.

Anup Suri

Group Executive -

Consumer & Commercial

Banking

  • Anup has over 30 years of experience in senior leadership roles across various industries globally, including Asia, Africa, the Middle East, Europe, and the Americas.
  • Most recently, was the Managing Director, Global Head of Retail Sales & Third-Party Distribution at HSBC Group HQ, London.
  • He has held other senior positions at Standard Chartered in India and Malaysia, ABN Amro in India, and later at Standard Chartered Group HQ in Singapore, focusing on sales, marketing, and distribution.

Michael Larbie

Group Executive -

Corporate & Investment

Banking

  • Michael has over 25 years of experience in financial and investment banking on five continents, with key roles at Bank of America Merrill Lynch, AIG, and Rand Merchant Bank. Brings strong leadership, deal-making skills and non-executive board role skills.
  • Previously CEO of International & Broader Africa at Rand Merchant Bank. Also served as the founding CEO & MD of RMB Nigeria and Regional Head for West Africa.
  • Fellow of the Chartered Institute of Bankers of Nigeria.
  • M.B.A., The Wharton School of the University of Pennsylvania.
  • B.A., University of Ghana.

Thierry Mbimi

Group Executive - Internal

Audit & Management

Services

  • Thierry has 27 years of experience in financial services, with senior leadership roles in various industries and countries, holding Director-level positions for the last 17 years.
  • Previously held roles at Deloitte Australia and KPMG Nigeria, KPMG Afrique Centrale, including CEO & Managing Partner and Lead Partner roles for regional financial sectors and global entities like AfDB.
  • M.B.A., Master of Science in Financial Management from Macquarie Graduate School of Management
  • Engineering degree from ENSSAT in France.

Martin Miruka

Group Executive -

Transformation,

Enablement & Customer

Experience

  • Martin is an experienced C-Suite Executive and Entrepreneur with over 25 years of experience. He is focused on enhancing Pan-African businesses by creating social value and growth through the synergy of people, technology, and processes. He is an expert in the financial services sector and has contributed as a leader, advisor, mentor, and angel investor to various boards and tech startups.
  • At Equity Holdings, he led business transformation and customer experience initiatives and spearheaded innovation.
  • His vision and drive led to the founding of Atom TDF and Kava Africa, where he offered strategic advisory services and launched tech solutions with a significant impact.
  • B.A. with honours from the University of Nairobi.

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

7

Key performance indicators

In millions of US dollars except

2023

2022

2021

2020

2019

2018

2017

2016

per share & ratios

Net revenues (operating income)

2,064

1,862

1,757

1,680

1,622

1,825

1,831

1,972

Pre-provision,pre-tax operating profit

951

811

722

626

549

702

700

735

Non-interest revenues / net revenues (NIR ratio), %

43.4

45.6

46.2

46.1

53.8

49.1

46.6

43.9

Cost-to-income ratio, %

53.9

56.4

58.9

62.7

66.2

61.5

61.8

62.7

Cost-to-average total asset ratio, %

4.0

3.7

3.9

4.3

4.7

5.0

5.3

5.6

Jaws ratio(1), %

4.9

4.5

6.4

5.3

(6.7)

0.4

1.4

3.2

Cost-of-risk, %

1.28

0.09

1.69

1.85

1.12

3.24

3.30

7.09

Profit before tax and impairment charge on goodwill

581

540

478

338

405

357

288

(131)

Profit before tax (PBT)

581

540

478

174

405

357

288

(131)

Profit after tax (PAT)

407

367

357

88

275

249

229

(205)

Profit available to ETI shareholders

288

286

262

4

194

182

179

(250)

ROE(2), (%)

23.5

19.6

17.3

11.3(2)

13.2

13.8

12.6

(9.6)

ROTE(3), (%)

24.9

21.1

19.0

13.3(3)

16.5

14.6

13.7

(15.3)

Diluted EPS (US cents)

1.17

1.17

1.06

0.67(4)

0.78

0.74

0.72

(1.01)

Loans & advances to customers (Gross)

11,062

11,521

10,228

9,798

9,834

9,807

9,913

9,896

Customer deposits

19,974

20,813

19,713

18,297

16,246

15,936

15,203

13,497

Total assets

27,230

29,004

27,562

25,939

23,641

22,503

22,432

20,511

Total capital adequacy ratio (CAR), %(5)

15.0

14.4(5)

14.8

12.3

11.6

12.4

13.2

NC(6)

Tier 1 CAR, %(5)

11.1

10.3(5)

10.7

9.4

8.8

9.1

9.1

NC(6)

  1. Jaws ratio is the difference between the growth rate of net revenue and the growth rate of operating expenses.
  2. ROE is profit attributable to ETI (parent company) shareholders divided by the average end-of-period (EOP) ETI shareholders' equity. ROE for 2020 excludes the impact of the $164m impairment charge on goodwill.
  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. ROTE for 2020 excludes the impact of the $164m goodwill charge.
  4. Diluted EPS of 0.67 cents for 2020 excludes the impact of the $164m goodwill impairment charge.
  5. Our Basel II/III CAR ratios are reported semi-annually to the regulator, the Central Bank of West African States (BCEAO). CAR for 31 December is submitted on 30 April and for 30 June on 31 October. Tier 1 and Total CAR for 31 December 2023 are estimates only and subject to revision until final submission to BCEAO on 30 April 2024.
  6. NC= noncomparable as 2016 capital ratios were based on Basel 1.

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

8

Summary income statement

Summary income statement

FY23

FY22

% YoY

1

(in millions of $ except per share)

% CC

Net interest income

1,169

1,014

15%

36%

Non-interest revenue

895

848

6%

24%

Net revenue (operating income)

2,064

1,862

11%

31%

Operating expenses

(1,113)

(1,050)

6%

22%

Pre-provision,pre-tax operating profit

951

811

17%

43%

Gross impairment charges on loans

(288)

(270)

7%

-

Loan recoveries and impairment releases

143

260

(45)%

-

Net impairment charges on loans

(145)

(10)

n.m

-

Impairment charges on other assets

(159)

(188)

(15)%

-

Modification losses on GoG

2

net of impairment charge release

(26)

-

-

-

Total impairment charges

(330)

(198)

67%

-

Non-conversion premium on bond

-

(40)

-

-

Operating profit after impairment charges

621

573

8%

-

Net monetary loss arising from hyperinflationary economies

3

(40)

(34)

18%

-

Share of post-tax results of associaties

0.1

0.6

Profit before tax

581

540

8%

34%

Taxation

(175)

(173)

1%

-

Profit after tax

407

367

11%

62%

Profit available to ETI shareholders

288

286

0%

-

Diluted EPS (US dollar cent)

1.17

1.17

0%

-

Non-interest revenue to total net revenue

43.4%

45.6%

4

23.5%

19.6%

ROE

4

24.9%

21.1%

ROTE

Cost-to-income ratio (CIR)

53.9%

56.4%

Cost-of-risk (CoR)

1.28%

0.09%

Effective tax rate (ETR)

30.0%

32.1%

Benefits of our diversified business model

In millions of $

Net

PBT4

Contribution to

(% change FY23 vs FY22 at

Revenue4

Group Net Revenue

constant currency)

UEMOA

$666

$318

30%

+13%

+33%

NIGERIA

$234

$27

11%

+40%

+21%

AWA

$572

$224

25%

+29%

+143%

CESA

$483

$220

32%

+48%

+124%

INTERNATIONAL

$80

$44

5%

+42%

+59%

  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. GoG = Government of Ghana
  3. Zimbabwe and South Sudan designated hyperinflationary economies and IAS 29 (Financial Reporting in Hyperinflationary Economies Standard) applied resulting in a $40m net monetary loss for FY 2023.
  4. ROTE is profit available to ETI shareholders divided by the average end-of-period tangible shareholders' equity. Tangible shareholders' equity is ETI shareholders' equity less non-controlling interests, goodwill, and intangible assets.
  5. Net revenue and PBT will not sum up to reported figures because they exclude consolidation adjustments and others. YoY growth are at constant currency. Note: Totals may not sum due to rounding

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

9

Net interest income & net interest margin

Net Interest Income (NII) & Net Interest Margin (NIM)

Key points

350

300

250

200

150

100

50

0

In millions of $

$273

$266

$281

$309

$313

NII

NIM

1,200

8.0%

$1,169

1,000

7.0%

$1,014

800

6.0%

5.4%

600

4.9%

5.0%

400

4.0%

200

3.0%

-

2.0%

• NII increased 15% or 36% at

constant currency (CC) year-on-year

(YoY) to $1,169m for FY23.

• NIM increased by about 54 basis

points (bps) to 5.4% benefiting from

the impact of higher rates particularly

in AWA and CESA, modest earning

assets growth and an increase in

CASA deposits.

• NII excludes $39m of interest income

earned on the GoG Eurobonds due to

ongoing and yet-to-be concluded

restructuring discussions with

commercial bondholders.

• Adverse impact on NII from the lower

4Q22

1Q23

2Q23

3Q23

4Q23

FY22

FY23

coupon yields than market yields on

the new local currency bonds received

under the Domestic Debt Exchange

Program (DDEP) that was concluded

in February 2023.

© Ecobank Group 2024 | FY 2023 Earnings Presentation | 8 May 2024

10

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ETI - Ecobank Transnational Inc. published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 14:04:06 UTC.