Ecobank has announced a strong financial performance for 2025, surpassing the N1 trillion profit mark. This achievement was bolstered by a significant rise in treasury income, which is increasingly contributing to the bank's overall earnings and closing the gap with income traditionally generated from lending activities.
The bank's strategy to deploy excess liquidity into high-yield government instruments, driven by deposits growing faster than loans, has effectively boosted margins and overall profitability.
Gross earnings for the year reached approximately N4.88 trillion, marking a 16% increase compared to the previous year. Profit after tax saw a substantial climb of 23%, reaching N904.7 billion.
Treasury income gains ground as liquidity rises
A notable shift in income composition is evident, with treasury income playing a more prominent role. While loans to customers remain the largest contributor to gross earnings, accounting for roughly a third of total income, income from treasury bills and investment securities has expanded rapidly.
These instruments collectively generated over N1.4 trillion in interest income, contributing approximately 29% to gross earnings. This is a significant contribution, narrowing the gap with the 33% generated from loans.
This strategic shift is closely tied to the bank's balance sheet dynamics. Customer deposits experienced a growth of about 15%, reaching N36.4 trillion, which outpaced the loan growth of approximately 10%.
With substantial liquidity, Ecobank opted to channel these excess funds into treasury instruments and securities rather than aggressively expanding credit in the prevailing uncertain economic climate. The bank increased its holdings in treasury bills by about 28% to N3.3 trillion, and investment securities by 19% to N12.7 trillion, both significantly exceeding the pace of loan growth.
This approach, combined with a low cost of funds and a current and savings account ratio exceeding 87%, supported the bank's margins, leading to an improvement in net interest margin to 6.2%.
Diversified income and efficiency gains support margins
Non-interest revenue also demonstrated strength, driven by increased fees from cash management services, credit-related activities, and a rise in card transactions. Additionally, higher trading income and foreign exchange gains, resulting from treasury management actions and robust client demand, further bolstered these revenues.
