Ecobank CEO: Interest margins to improve as central banks raise rates
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By Rachel Savage
LONDON (Reuters) – Rising rates of interest and excessive oil costs are a constructive for enterprise even whereas inflation is taking a toll on African international locations, the chief government of pan-African lender Ecobank stated in an interview on Wednesday.
The financial institution’s web curiosity margin will enhance as central banks proceed to tighten financial coverage to combat inflation, Ade Ayeyemi stated in an interview on the sidelines of The Africa Debate convention in London, however wouldn’t say by how a lot forward of the discharge of half-year outcomes.
The Togo-headquartered lender’s non-performing loans fell to six.3% within the first quarter of 2022 from 7.7% a 12 months earlier and can proceed dropping as oil and gasoline firms in Nigeria profit from excessive costs, Ayeyemi stated.
“The affect of inflation on our outcomes goes to be minimal this 12 months, nevertheless it’s not one thing we wish to proceed,” he stated. “If it persists in the long term it is going to have an effect on the power of our clients to pay.”
Ecobank’s revenue earlier than tax rose 25% year-on-year to $125 million within the first quarter of 2022, whereas web income elevated 8.9% to 436 million.
Ayeyemi stated the weakening of West Africa’s CFA Franc towards the greenback, attributable to its Euro peg, in addition to Ghana’s Cedi, had been a difficulty, however “it isn’t one thing we anticipate to be persistent for a very long time.”
He added that he noticed alternatives for Ecobank to spend money on native forex debt in Kenya and Ghana, the latter of which he described as “oversold.”
Mali paid a debt on Monday that was due that day after regional grouping ECOWAS lifted sanctions and is engaged on fulfilling missed funds, Ayeyemi stated.
He stated he would really like Ecobank to function in Ethiopia, however was in any other case proud of its geographic footprint in 33 international locations on the continent.
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(Reporting by Rachel Savage; Enhancing by David Gregorio)
