Ecobank Sheds 10% over Unusual Trade Volume
The market value of Ecobank Transnational Inc. Plc. (ETI) fell by about 10% to N397 billion on Friday due to large volume selloffs on the floor of the Nigerian Exchange. In the first three months of 2024, earnings results revealed that the Pan African lenders earned $0.28 per share outstanding, as opposed to $0.26 on shares deployed for operation in the corresponding period in 2023.
Ecobank is one of the lenders in Nigeria not under recapitalisation pressure due to its rock solid capital position. By transaction volume, Ticker: ETI was the most traded stock on the Nigerian Exchange on Friday in the local bourse.
Shares of the pan-African lender traded accounted for 72.17% of all transaction volume registered on the local exchange. In terms of valuation, ETI was also the most traded stock, per the market report. 76.33% of the total value of trades on the exchange was made up of the transaction value displayed on the ticker.
In its unaudited financial statement for the first quarter of 2024, Ecobank Transnational Incorporated reported that the company grew profit by 19.9% year on year to $105 million.
But its gross earnings went down, albeit, marginally from $666.6 million in Q1-2023 to $659.9 million 12 months later. Interest income grew by less than 1% as group was able to reduce payments to fund providers, down by 10.6% year on year.
Details from the results showed that Ecobank’s net interest income revenue expanded by 8.9% to $289.4 million despite a meagre growth of 0.9% in interest income, as the 10.6% decline in interest expenses to $163.9 million proved more material to income support.
Non-interest revenue (NIR) contracted by 5.0% to $206.5 million, largely due to a 2.1% decline in net fees and commission income. However, analysts said they observed a slight uptick in trading income and FX gains, which was driven by the higher FX translation gain of $96.5 million versus $87.8 in Q1-2023.
ETI impairment charged rose by 12.0% increase to $79.0 million amidst tough operating conditions in its key African markets. In particular, gross impairment charges on loans and advances rose 218.2% to $105.3 million.
Analysts noted that the surge drove the cost of risk higher by 2 points to 2.6%. The bank recorded an increase in loan loss recoveries to $35.3 million from $15.6 million in Q1-2023.
Elsewhere, operating expenses declined by 3.6% as a result of lower staff expenses and depreciation & amortisation costs. Then, the cost-to-income ratio moderated to 53.8% from 57.3% in Q1-2023. #Ecobank Sheds 10% over Unusual Trade Volume Naira Suffers Big, CBN Goes Ballistic Against FX Whales
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