Ecobank Plc Soars by 17% Earnings Fuel Positive Sentiment
Pan-African lender Ecobank Transnational Incorporation Plc (Ticker: ETI) market capitalisation climbed by 17% in the equity market as investors’ sentiment improved sharply.
The financial services company stock is trailing a slew of equity analysts target price range between N45 and N50, according to MarketForces Research, suggesting strong upside potential at the current market price.
Ecobank turned colourful as investors increased bets on the group’s earnings outlook after impressive performance in the first half of the year.
Its share price touched its 52-week high of N37.50 last week, reflecting increased trading activity from the buy side actors in the Nigerian Exchange.
Trading data showed Ecobank share price eventually close at N37.45 as 990,532 units valued at N36.278 million exchanged hands in the local bourse on Friday.
In its unaudited H1’25 results, Ecobank delivered another strong performance, driven by its costs efficiency and asset quality improvements. The group’s profit after tax surge 22.7% year on year to $278.8 million in the first half of 2025.
Ecobank bolstered revenue performance in the first half of the year, reflecting expanded income from its core and non-core banking activities in the period.
Analysts reported that group bottom line growth was underpinned by 6.5% year-on-year growth in interest income while non-interest income climbed 12.9%.
Analysts at CardinalStone Securities Limited said the bank’s deliberate focus on cost efficiency yielded visible outcomes, with interest expense declining by 2.3% and the cost-to-income ratio moderated to 49.1% from 53.6% in H1’2024.
Its financial scorecard revealed that net interest income rose by 11.9% year-on-year, driven by a combination of stronger asset yields and improved funding efficiency. The bank’s non-interest income growth is largely attributable to the improved CardinalStone Securities Limited.
Interest income, which came in at $956.4 million, supported by a 13.7% expansion in gross loans to $11.6 billion, a 26.2% increase in debt investment securities to $7.7 billion, and a significant 68.0% growth in Treasury bill holdings to $2.5 billion.
On the cost side, interest expense declined to $332.1 million despite a 22.8% year on year increase in Interest Bearing Liabilities (IBL), thanks to a favourable shift in the deposit mix.
The faster growth in demand and savings deposits, which resulted from improved relationships and customer account growth, led to a 2.5 percentage points rise in the CASA ratio to 86.6%, helping to lower the bank’s average funding cost and improve net interest margins.
Consequently, Net Interest Margin (NIM) improved by a marginal 1bp to 5.6% (vs 5.5% in H1’24). Elsewhere, Non-Interest Revenue (NIR) rose 12.9% YoY to $492.2 million, supported primarily by a 10.2% increase in net fee and commission income to $277.7 million.
The bank also recorded strong growth in trading income and FX gains, which surged 12.2% year in year to $188.9 million.
In a review, analysts at CardinalStone Securities Limited said owing to the 12.3% rise in operating income and a more moderate 3.0% rise in operating expense, Ecobank’s cost-to-income ratio moderated to sub 50.0% levels for the first time in a decade.
Data from the group financial statement showed that the cost-to-income ratio printed at 49.1% in the first half of 2025 versus 53.6% in H1-2024, showcasing ETI’s improved cost efficiency.
On asset quality, non-performing loans (NPLs) and NPL ratio both recorded improvements. NPLs moderated by 2.4% year on year to $660.0 million, and NPL ratio declined by 0.9ppts to 5.7% on the back of the write-off of fully impaired loans and also the reclassification of some loans from stage 3 to stage 2, particularly in the Corporate and Investment Banking and Consumer credit portfolios.
As a result, impairment charges on loans declined by 3.4% to $175.7 million, enabling a moderation in cost-of-risk to 3.0% from 3.6 % in H1’24, according to CardinalStone Securities Limited.
However, analysts said they noted that there was a 75.2% jump in impairment on other financial assets. The Nigerian subsidiary reported no significant changes in its loan portfolio, nor any disclosure regarding an exit from loan forbearance.
Overall, profitability metrics— return on average asset (ROAA) and return on average equity (ROAE) surged to 1.9% from 1.7%and 29.4% from 27.9% respectively.
Ecobank planned to raise up to $250 million in Additional Tier 1 capital through a private placement of contingent convertible notes. #Ecobank Plc Soars by 17% Earnings Fuel Positive Sentiment#
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