Ecobank Market Valuation Spikes 45% After Earnings Beat
Ecobank Transnational Incorporation (Ticker: ETI) sees a 45 per cent increase in market value as investors position strongly in the Pan-Africa lender’s stock last week after it turned up better than expected earnings figures for 2021.
On 18.349 billion outstanding shares, the Nigerian equity investors rerate Ecobank market valuation to N240.379 billion as share price inched up to N13.1 from N9.05 at the beginning of the previous week.
The company stellar performance in the year 2021 earnings season beat market expectation or analysts consensus, with relatively healthy top and bottom line after balance sheet clean up in the financial year 2020.
The Pan African lender’s earnings per share jumped significantly, according to an unaudited statement review by MarketForces Africa amidst expectation for a better dividend pay.
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In its regulatory filing signed by Group Chief Executive Ade Ayeyemi, Ecobank said its gross earnings for the financial year 2021 increased 6 per cent to $2.327 billion. However, when converted to Nigerian local currency, naira, the Pan African lender’s earnings inched upward 13 per cent to N953 billion in 12-month.
The earnings conversion rate was stronger than in the period, the group unaudited financial report shows, though operating expenses edged forward –moderately following an increase in average inflation rate in Africa.
According to its unaudited financial statement, the Pan-African lender bolstered earnings performance strongly on the back of cleaner assets quality that follows the group balance sheet restructuring efforts.
The group deposit collections inched up, while the lender recorded increased loans and advances following macroeconomic improvements across Africa markets; resulting in nice (9) per cent growth recorded in net interest income in the period.
Participants at the equity market spotted value in the group recently as Ecobank shares have been trading heavily below its peer group despite strong potential in the African region.
Detail from the unaudited result showed that group revenue increased by 4 per cent to $1,741.1 million in dollar terms, but up 11 per cent to N712.9 billion when converted to Nigerian naira. Profit before tax and goodwill impairment edged higher significantly in the period, up 41 per cent to $478.0 million (up 52 per cent to N195.7 billion).
However, the Pan-African lender’s profit before tax sees a meteoric jump of 174 per cent to $478.0 million or 194 per cent to N195.7 billion equivalent. For the year ended in 2021, profit after tax spiked 296per cent to $349.5 million (up 324 per cent to N143.1 billion)
Ecobank total assets inched up 5 per cent to $27.3 billion, converting to naira, the group total assets expanded 11 per cent to N11.56 trillion. The report noted that the group pan Africa lending increased, albeit, moderately as asset quality improves.
Ecobank loans and advances to customers expanded 10 per cent to N4.066 trillion. Meanwhile, deposits from customers expanded by 13 per cent to N8. 83 trillion.
