ECOBANK GROUP ANNUAL REPORT 2020 REPORT ANNUAL GROUP ECOBANK RISING TO THE CHALLENGE ECOBANK GROUP ANNUAL REPORT 2020 Ecobank Transnational Incorporated The Pan African Centre 2365, boulevard du Mono B.P. 3261, Lomé – Togo www.ecobank.com 9999_GRP_ANNUAL_REPORT_2020_COVER_190x275mm_23mm-Spine_EN_V4.indd All Pages 2021/05/01 14:26 RISING TO THE CHALLENGE ECOBANK GROUP ANNUAL REPORT 2020 CONTENTS CONTENTS 05 About Us 42 A Letter from Group 157 Financial Statements Executive, Commercial Bank 07 Our Vision and Mission 158 Statement of Directors’ 48 A Letter from Group Responsibilities 08 Ecobank: The leading Pan- Executive, Corporate and African Banking Institution 159 Auditors’ Report Investment Bank 10 Our Performance 167 Consolidated Financial 53 Corporate Governance Statements 12 Our Diversified Business 54 Board of Directors Model 172 Notes to Consolidated 56 Directors’ Biographies Financial Statements 13 Our Digital Offering 62 Directors’ Report 282 Statement of Value Added 14 Ecobank Values and Pledge 66 Group Executive Committee 282 Five-year Summary Financials 17 Group Chairman and Management 68 Corporate Governance 283 Parent Company’s Financial Statements 18 A Letter from the Group 82 Sustainability Report 289 Corporate Information Chairman 92 People Report 24 A Letter from the Group CEO 101 Risk Management 38 A Letter from Head, 131 Business and Financial Consumer Bank Review 3 ECOBANK GROUP ANNUAL REPORT 2020 SUPPORTING WOMEN IN BUSINESS Our ‘Ellevate’ programme supports The female economy is a critical one. Women constitute roughly half of the population in Africa. women-led/owned/focused One-in-four female adults in Africa starts or businesses with collateral-lite funding manages a business, making the continent one options, smart cash management, of the highest in terms of women entrepreneurs across the world. mentoring, networking and other support. Targeting this largely The financing gap in women-led businesses in untapped sector offers us huge Africa is about $42 billion and this represents a massive and attractive opportunity. We cannot truly growth opportunities. say that we are a pan-African bank if we ignore this significant business segment. In 2021, we will support our women-owned and women-focused SMEs with 10 per cent of our loan book. 4 ABOUT US 01 ABOUT US 5 ECOBANK GROUP ANNUAL REPORT 2020 6 ABOUTABOUT US US OUR VISION AND MISSION DRIVE US OUR VISION To build a world-class pan-African bank and contribute to the economic development and financial integration of Africa OUR MISSION To provide all of our customers with convenient and reliable financial products and services 77 ECOBANK GROUP ECOBANKANNUAL REPORTGROUP 2020 ANNUAL REPORT 2020 ECOBANK IS THE LEADING PAN-AFRICAN BANKING INSTITUTION UEMOA NIGERIA CESA Total assets* $9,969m Total assets $5,630m Total assets $5,961m Customer deposits $6,849m Customer deposits $3,538m Customer deposits $4,510m Total equity $822m Total equity $796m Total equity $595m No. of countries 9 No. of countries 1 No. of countries 18 TUNISIA MOROCCO ALGERIA LIBYA WESTERN EGYPT SAHARA MAURITANIA CAPE VERDE MALI NIGER SUDAN E R I T R E A SENEGAL CHAD THE GAMBIA BURKINA GUINEA-BISSAU D J I B O U T I FASO GUINEA BENIN Addis Ababa NIGERIA (Representative Office) TOGO CÔTE SIERRA LEONE LIBERIA D’IVOIRE GHANA SOUTH E T H I O P I A CENTRAL AFRICAN SUDAN REPUBLIC Lomé (Headquarters) CAMEROON S O M A L I A EQUATORIAL GUINEA UGANDA K E N Y A SÃO TOMÉ & PRÍNCIPE CONGO AWA GABON RWANDA DR CONGO Total assets $4,304m BURUNDI Customer deposits $3,180m TANZANIA Total equity $585m No. of countries 5 ANGOLA ZAMBIA M A L AW I Ecobank geographic regions ZIMBABWE MOZAMBIQUE M A D A G A S C A R BOTSWANA Francophone West Africa (UEMOA) NAMIBIA Johannesburg Nigeria (Representative Office) Eswatini LESOTHO SOUTH Anglophone West Africa (AWA) AFRICA International Central, Eastern and Total assets $1,164m Southern Africa (CESA) Customer deposits $221m Non-Ecobank region Total equity $121m Ecobank representative offices No. of countries 4 *Totals for assets, deposits, and equity may not sum up to reported totals because of unadjustments for ‘others and consolidation8 adjustments’. ABOUTABOUT US US More than 28 million Customers 14,023 Employees Present in 35 African Countries from Nationalities 43 (33 Banking Subsidiaries and Male:Female Ratio 9 Non-Banking Subsidiaries) 54:46 1985 $2.0 billion $25.9 billion Total Equity Total Assets Founded in 1985 Headquartered in Lomé, Togo International offices in Paris, London, 690 Branches Dubai, Beijing 66,408 Xpress Point Agents 3 2,659 Listed on 3 Stock Exchanges - NSE, GSE and BRVM ATMs 11 million Mobile App Users 40 million Digital transactions All figures as at 31 December 2020 9 ECOBANK GROUP ECOBANKANNUAL REPORTGROUP 2020 ANNUAL REPORT 2020 OUR PERFORMANCE For the year ended 31 December (in millions of US dollars, except per share and ratio data) 2020 2019 Selected income statement data Operating income (net revenue) 1,680 1,622 Operating expenses 1,054 1,073 Pre-tax pre-provision operating profit 626 549 Impairment charges on financial assets 227 134 Operating profit after impairment charges and before taxation 399 415 Profit before tax (excluding goodwill)1 338 405 Profit before tax 174 405 Profit for the year 88 276 Profit available to ETI shareholders 4 194 Profit available per share (US cents): Basic 0.010 0.778 Diluted 0.010 0.778 Selected statement of financial position data Net loans and advances to customers 9,240 9,277 Total assets 25,939 23,641 Risk-weighted assets 15,628 15,503 Deposits from customers 18,297 16,246 ETI's shareholders' equity 1,503 1,477 Total equity 2,028 1,886 Ordinary shares outstanding (millions) 24,730 24,730 Book value per ordinary share (US cents)2 6.08 5.97 Tangible book value per ordinary share, TBVPS (US cents) 5.47 4.72 ETI share price (US cent)3 High 2.21 4.14 Low 1.01 1.66 Period end 1.58 1.79 Selected ratios Profit for the year to average total assets (ROA) 0.4% 1.2% ROA (excluding goodwill) 1.0% 1.2% Profit for the year to total equity (ROE)4 0.3% 13.2% ROE (excluding goodwill) 11.3% 13.2% Profit for the year to tangible total equity (ROTE) 0.3% 16.5% ROTE (excluding goodwill) 13.3% 16.5% Tier 1 capital ratio 9.4% 8.8% Total capital adequacy ratio (CAR) 12.3% 11.6% Net interest margin 5.5% 4.7% Cost-to-income ratio 62.7% 66.2% Non-performing loans ratio 7.6% 9.7% Non-performing loans coverage ratio 74.5% 58.3% 1. In 2020, we recorded a non-cash, non-recurring goodwill charge of $164 million ($159 million related to our acquisition of former Oceanic Bank in 2011). 2. Book value per ordinary share (BVPS) is computed by dividing the Group’s shareholders’ equity at period-end with the number of ordinary shares outstanding at period-end. 3. ETI share price on the Nigerian Stock Exchange at period-end converted into US dollars using Bloomberg applicable rate at period-end. 4. ROE is computed using profit available to ETI (parent company) shareholders divided by the average end-of-period ETI shareholders’ equity. ROTE is computed using profit available to ETI shareholders divided by the average end-of-period tangible shareholders’ equity. Tangible shareholders’ equity is ETI shareholders’ equity less non-controlling interests, goodwill and intangible assets. 10 ABOUTABOUT US US Operating income (net revenue) rofit efore ta rofit aaae to ($bn) ($m) ETI shareholders ($m) 405 383 1.97 1.83 1.83 208 194 288 179 1.62 1.68 1741 42 (131) (250) 2016 20172018 2019 2020 2016 20172018 2019 2020 2016 20172018 2019 2020 Return on tangible shareholders’ Diluted earnings per share Tangible book value per share equity (%) (US cent) (US cent) 16.5 12.4 13.1 0.72 0.74 0.78 6.46 5.47 5.22 4 4.77 4.72 0.33 0.01 (14.6) (1.01) 2016 20172018 2019 2020 2016 20172018 2019 2020 2016 20172018 2019 2020 Net loans & advances to customers Deposits from customers Total assets ($bn) ($bn) ($bn) 9.26 9.36 9.17 9.26 9.24 18.30 25.65 15.94 16.32 24.13 15.20 22.43 22.58 13.50 20.51 2016 20172018 2019 2020 2016 20172018 2019 2020 2016 20172018 2019 2020 1. Profit before tax is $338 million if the $164 million one-off, non-recurring goodwill charge is excluded. 2. Profit available negatively impacted by the goodwill charge of $164 million 3. Excluding the impact of the $164 million goodwill charge, ROTE is 13.3 per cent. 4. Diluted EPS for 2020 negatively impacted by the goodwill charge 11 ECOBANK GROUP ECOBANKANNUAL REPORTGROUP 2020 ANNUAL REPORT 2020 OUR DIVERSIFIED BUSINESS MODEL anufacture financa roducts and serces centra and dstrute te oca Central Manufacture Corporate and Commercial Consumer Investment Bank Bank Bank Products Products Products ed ncoe currences and orn cata financn • Liability product commodities (FICC) sset financn • Loans • Cash management ender financn • Payments rade finance and serces • Business prepaid cards • Remittances • Loans and liquidity • Digital products and collections • Cards (pre-paid, debit, credit) • Securities, Wealth and Asset rade finance • Bancassurance Management (SWAM) • Wealth solutions • Investment banking Customers Customers Customers • Governments • SMEs fuent • Regional & global corporations • Local corporates ern fuent • Financial institutions • Local NGOs • Mass Market • International organisations • Local government agencies crofinance • Faith-based organisations • Educational institutions • Healthcare institutions Distribution Francophone West Anglophone Central, Eastern and Nigeria Africa (UEMOA) West Africa (AWA) Southern Africa (CESA) Corporate and Investment Bank ($m) Commercial Bank ($m) Consumer Bank ($m) Net revenue 949 Net revenue 372 Net revenue 400 Pre-provision operating profit 522 Pre-provision operating profit 92 Pre-provision operating profit 74 Profit before tax 364 Profit before tax 23 Profit before tax 42 Customer deposits 7,560 Customer deposits 4,285 Customer deposits 6,452 Lines of business net revenue, pre-provision operating profit and profit before tax will not add up to total reported numbers because they exlude figures from ‘Others’ and are unadjusted for consolidation.