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Oliver Kazunga, Senior Business Reporter
ECOBANK has recovered $4 million in non-performing loans that the bank had previously written off in the half year period to June 30, 2017.

The Pan-African commercial bank revealed this in its abridged reviewed financial statement for the period where it noted that Non-Performing Loans (NPLs) were recovered due to aggressive loan recovery efforts.

An analysis of the bank’s financials during the period shows that its operational efficiency continued on a positive trend reflected by a continued improvement in the cost-to-income ratio to 41 percent from 51 percent in the comparable period in 2016.

During the period, Ecobank recorded a profit before tax amounting to $16 million, which was 215 percent higher than the same period last year.

Ecobank’s current ratio was at 1.2 meaning the bank was financially sound as it was able to meet its short-term financial obligations.

The bank also grew its net operating revenue during the period under review by 104 percent year-on-year.

This was achieved through increased trade finance activities, reduced cost of funds and an increased customer base driven largely by alternative and attractive digital channels in a cash-starved environment.

Total assets amounted to $397 million representing a neutral growth of under one percent on the December 2016 position. The bank’s operating costs jumped by 28 percent year-on-year to $9.5 million due to increased investment in human capital and alternative distribution channels.

Ecobank core capital of $69 million shows a half year growth of 20 percent and was above the prescribed minimum levels. Managing director Mr Moses Kurenjekwa attributed the positive performance to a number of key drivers among them increased interest earning assets that saw net interest income growing by 70 percent year-on-year.

This was despite a reduction in the overall lending rates in line with the Reserve Bank of Zimbabwe directive.

“Growth in net interest earned has been attributed to the increase in non-interest bearing deposits and reduction of fixed term deposits. These efforts have eased the bank’s cost of funds, which alleviated the impact of falling lending margins due to regulatory and market forces,” said Mr Kurenjekwa.

He said growth in net interest income was in line with the higher quality of the earning assets portfolio, which has improved through recoveries of NPLs resulting in a drop in the NPL ratio from three percent in June 2016 to one percent since the last quarter of last year. This trend was sustained throughout the half year period.

On the outlook, Ecobank is positive about the prospects for further growth in its chosen niche markets and looks forward to the remainder of the year as more customers are on-boarded to its digital platforms.

@okazunga