(Ecofin Agency) - In the first nine months of 2020, Ecobank's net income was down 197% compared to the same period in 2019. This underperformance is linked to the way financial results are presented in the IFRS format, the bank said. However, over the same period, cash position grew by 41.5% YoY reaching $3.34 billion.
The improvement in cash flow is attributable to an increase of just over $1 billion in outstanding customer deposits. Over the same period in 2019, there was a decrease in this indicator by $379.8 million. Another positive side of this cash flow is that on the segment of financing flows, there were more debts repaid than new ones contracted.
Ecobank also made an exceptional provision to protect itself against an impairment loss of nearly $159.4 million. Its cash position is therefore strong, but remains fragile, as more than a third of its cash holdings are based on factors that may vary. It is therefore important to achieve solid financial performance. On this side, things are gloomier.
Taken in dollars, net interest income is up 24% YoY, driven by lower interest expenses, but service revenues declined by 14%. It should be noted that service revenues are at the heart of the bank's transformation strategy, with gradual digitalization and greater use of digital platforms. In this context, banking operating income grew by 4% to $1.2 billion over the period.
With provisions on financial assets of $161.8 million, up 80% YoY, and the establishment of provisions for potential impairment losses on assets sold, Ecobnk’s net accounting income resulted in a net margin of $27 million. It is down 88% compared to $218 million for the same period in 2019.
However, when taking into account potential losses related to foreign exchange transactions, the first nine months of 2020 resulted in a consolidated loss of $29.5 million, down 197%.