![](\"http:\/\/www.ghanamma.com\/wp-content\/uploads\/2022\/10\/Ecobank.jpg\")
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Pan African rating agency, GCR Ratings (\u201cGCR\u201d) has affirmed Ecobank Ghana PLC\u2019s national scale long and short-term issuer credit ratings of A+(GH) and A1(GH) respectively, with a Stable Outlook.<\/p>\n
The ratings on Ecobank Ghana PLC (\u201cEcobank Ghana\u201d) reflect a strong business profile supported by leading market shares, stable funding sources and good levels of liquidity.<\/p>\n
The ratings also factor in improving capitalisation and improving asset quality risk.<\/p>\n
The bank\u2019s competitive position is strong, with a cost of funds of less than 2%, benefiting from being part of the broader Ecobank Transnational Incorporated\u2019s (\u201cETI\u201d) group, which owns 68.93% of the bank\u2019s shares.<\/p>\n
ETI is a pan-African conglomerate with banking operations spanning over 33 countries.<\/p>\n
Ecobank Ghana\u2019s approximate market share for deposits in full-year 2021 stood at 13.2% (FY20: 13.1%), while the gross advances market share stood at 11.0% (FY20: 10.4%), supporting its solid domestic footprint. The bank\u2019s revenue is stable, supported by a healthy internal capital generation of 29% in FY21(FY20:35%).<\/p>\n
Total operating revenue grew from 985m in June 2021, to 1.186 billion in June 2022. The growth was mainly driven by net interest income and general banking fees. The cost-to-income ratio stood at 46% in June 2022, in comparison to 39.6% in June 2021.<\/p>\n
Ecobank Ghana is adequately capitalised, with a GCR capital ratio of 20.6% on 31 December 2021 (FY20:18.6%), while also reporting a CAR above the D-SIB minimum regulatory requirement of 15%.<\/p>\n
However, the bank\u2019s CAR ratio dipped to 16% in June 2022, largely due to the single large dividend paid once a year, albeit it only will reflect in the third quarter of 2022.<\/p>\n
The GCR capital ratio is expected to be around 20% by the end of the year.<\/p>\n
Although the bank\u2019s asset quality has come under pressure due to the COVID-19 pandemic, the NPL ratio improved from 8% at June 2021 to 5% in June 2022.<\/p>\n
However, 20% of the NPLs have been restructured as certain sectors were hit hard by the pandemic, namely construction, real estate, and hospitality sectors.<\/p>\n
The bank\u2019s gross loan and advances increased from 5.3billion in 2020 to 6.2billion in 2021 with loan loss reserves of 531.3million.<\/p>\n
\u201cWe expect the cost of risk to remain below 10% within the short to medium-term. Concomitantly, the bank\u2019s credit losses have registered at moderate levels of below 5% historically, and we expect them to remain the same in the next 12-18 months. Foreign currency (FCY) loans accounted for 31.9% of gross loans and advances in 2022 (FY20: 34.6%), with most of the facilities extended to the manufacturing sector, constituting 19.2% of the bank\u2019s loan book\u201d, GCR said.<\/p>\n
\u201cWe also note the rising risk of the Ghanaian sovereign. In the unanticipated event of a sovereign default and haircut of local currency government debt, there could be significant capital erosion across the banking sector. Positively, sovereign debt accounts for 12.3% of total assets for Ecobank Ghana\u201d, it added.<\/p>\n
Funding sources are relatively stable, supported by the bank\u2019s strong retail footprint. The GCR long-term funding ratio and stable funding ratios were 112% (FY21: 108%) and 88% (FY21: 84%) on 30 June 2022 respectively.<\/p>\n
A large portion of the funding consists of customer deposits as the core deposit ratio stood at 91% on 31 December 2021. The bank\u2019s liquidity is adequate as the bank has a high liquid asset coverage of wholesale funding of 541.2% in June 2022.<\/p>\n
The GCR liquid assets over deposits stood at 73% in June 2022. The standalone ratings are effectively capped by the credit profile of the group, as reflected in the negative adjustment to the standalone risk score.<\/p>\n
Outlook statement<\/strong><\/p>\n GCR Rating said the outlook of Ecobank is stable due to decent liquidity and adequate capitalisation.<\/p>\n Despite the turbulent operating environment, it is expected that the entity will remain resilient even if the asset quality deteriorates.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Pan African rating agency, GCR Ratings (\u201cGCR\u201d) has affirmed Ecobank Ghana PLC\u2019s national scale long and short-term issuer credit ratings of A+(GH) and A1(GH) respectively, with a Stable Outlook. The ratings on Ecobank Ghana PLC (\u201cEcobank Ghana\u201d) reflect a strong business profile supported by leading market shares, stable funding sources and good levels of liquidity. […]<\/p>\n","protected":false},"author":1,"featured_media":1215177,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[8804,15780,24921,85,4338,1824,1554],"class_list":{"0":"post-1215176","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-affirms","9":"tag-ecobank","10":"tag-gcr","11":"tag-ghana","12":"tag-outlook","13":"tag-rating","14":"tag-stable"},"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1215176","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1215176"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1215176\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1215176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1215176"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1215176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}