Ecobank’s bad loan losses hit N613bn

By Chukwuma Umeorah

Ecobank Transnational Incorporated (ETI) recorded a 28 per cent increase in impairment charges to N613.3 billion in the 2025 financial year, underscoring rising credit risk across its markets despite profit growth during the period.

The pan-African banking group disclosed in its unaudited financial statements for the year ended December 31, 2025, that the higher impairment provisions came even as profit after tax (PAT) rose by 29 per cent to N950.0 billion from N735.9 billion in the preceding year. Profit before tax (PBT) also increased by 30 per cent to N1.28 trillion.

According to the company’s financials filed in the Nigerian Exchange Limited (NGX), the sharp rise in impairment charges reflects growing pressure on borrowers, particularly in an environment marked by high interest rates, currency volatility and weaker macroeconomic conditions in several African economies. Ecobank’s impairment charges on financial assets climbed from N480.6 billion in 2024 to N613.3 billion in 2025, largely driven by higher provisions on loans and advances to customers.

Despite this, the group’s operating profit before impairment charges and taxation grew by 29 per cent to N1.89 trillion, supported by stronger core earnings. Gross earnings rose by 14 per cent to N4.82 trillion, while operating income increased by 18 per cent to N3.67 trillion, reflecting higher interest income and improved fee and commission earnings.

Net interest income rose by 22 per cent to N2.14 trillion, benefiting from the prevailing high interest rate environment across key markets, including Nigeria. Fee and commission income also grew by 17 per cent to N1.03 trillion, indicating sustained transaction volumes and customer activity.

However, rising costs continued to weigh on efficiency. Operating expenses increased by eight per cent to N1.77 trillion, driven mainly by a 16 per cent rise in staff costs. The combination of higher operating expenses and rising impairment charges moderated the full impact of revenue growth on bottom-line performance.

On the balance sheet, Ecobank expanded its asset base by 14 per cent to N49.44 trillion as of December 2025, compared with N43.30 trillion a year earlier. Loans and advances to customers grew by 11 per cent to N17.09 trillion, a development that partly explains the higher impairment charges as the bank increased credit exposure amid economic uncertainty.

Customer deposits rose by 15 per cent to N36.45 trillion, providing stable funding support, while total equity climbed sharply by 50 per cent to N4.17 trillion, largely on the back of retained earnings.

For the fourth quarter of 2025, impairment charges increased slightly by three per cent year-on-year, while profit before tax declined by four per cent, highlighting mounting pressure on asset quality towards the end of the year.