The Group Chief Executive of Ecobank, Jeremy Awori, has justified the decision of Ecobank Transnational Incorporated's Board to withhold dividend payments to shareholders for 2023.

Speaking to JoyBusiness in Lome, Togo, Mr Awori explained that regulatory requirements as a key factor in the decision despite the bank achieving record revenue of $2 billion for the year.

"We operate under tight regulations which require us to maintain minimum regulatory capital and sometimes additional capital buffers to grow our business and protect our depositors," he explained.

Awori emphasised the need for caution to ensure the bank's safety and compliance with regulatory directives.

He noted, "The Bank needed to find ways to exercise caution to ensure the safety and soundness of the Bank and comply with regulatory directives."

The CEO revealed that ECOBANK is implementing a Growth, Transformation, and Returns strategy to increase revenue growth.

To support this, additional capital is necessary, hence the freeze on dividends.

"To support this growth, we will require additional capital to help achieve the desired outcomes and consistently generate returns above the cost of capital," Awori added.

Drivers of Ecobank's Growth in 2023

Ecobank Group concluded 2023 with a revenue milestone of $2 billion, the first time since 2015, and a Profit Before Tax of $581 million.

However, Awori pointed out that this achievement was not without challenges, citing high inflation and depreciating currencies in various markets.

"But against that backdrop, we had a good year for the banks," Awori stated.

He credited the focus on top-line growth as a major contributor.

"The primary drivers of this growth included an increase in the net interest margin (NIM) from 4.9% in 2022 to 5.4% in 2023, along with revenue growth from foreign currency trading fees and wholesale and consumer payments across all channels," he elaborated.

To sustain this momentum, Ecobank plans to continue investing in its people, systems, and processes to unlock potential and deliver on their strategy.

"Our encouraging results reflect a re-energised commitment to putting our customers first and the work we have started on revenue diversification, growth, and low-cost deposit mobilisation," Awori added.

He also emphasized their proactive approach to disciplined cost management, aimed at eliminating unproductive and wasteful costs and redirecting savings into investments in marketing and branding.

Financial Performance for 2023

The year 2023 can be described as a landmark year for ECOBANK Group based on its published financials.

The bank delivered a consolidated profit before tax of $581 million, up 8% year-on-year, on overall group revenue of $2.1 billion.

This performance translated into a return on tangible equity (ROTE) of 24.9%, reflecting strong performance.

Awori believes management has taken the necessary steps to streamline the organisation and improve revenue generation capabilities.

"Which have not been up to our potential and footprint for a long time, we should ensure we are all aligned to deliver better results," he said.

The bank’s capital ratios were also above regulatory minimums. The Common Equity Tier 1 ratio (CET1), Tier 1 ratio, and Total Capital Adequacy (CAR) ratio were 10.4%, 11.1%, and 15.0%, respectively, improving from the prior year’s figures of 9.6%, 10.2%, and 14.2%, according to ECOBANK Group.