Ecobank Laments Hyperinflation In Zimbabwe, Sudan Subsidiaries, Loses 2% Of Asset Value

Ecobank Transnational has lost two per cent of its assets value in six months to N11.4trn ($27bn) in June 2022.

In December 2021, Ecobank Transnational closed the year with a total asset of $27.56bn or an equivalent of N11.69trn.

This was contained in a report for the bank’s operating segments in Nigeria, Francophone West Africa (UEMOA), Anglophone West Africa (AWA), Central, Eastern and Southern, Africa (CESA).

The report revealed that the Nigerian subsidiary was largely responsible for bailing out Ecobank Transnational assets from drastic plunge as asset rose by $1.5bn to $6.4bn in June 2021 from $5.9bn in June 2022.

Assets in UEMOA where it operates dropped from $10.1bn to $9.16bn; CESA subsidiary declined from $6.69bn to $6.46bn, while AWA assets rose from $4.8bn in June 2021 to $4.89bn in June 2022.

Profits before tax in the Nigerian subsidiary also rose from $10.25m in 2021 to $17.8m June 2021.

Ecobank Transnational recorded positive growths in revenue which rose by 13 per cent to N379.34bn in June, up from the N439.49bn recorded in the corresponding period of 2021.

Profit also surged 24 per cent to N77.31bn from the N62.55bn recorded half year 2021.

But the Group is also battling hyperinflation in the South Sudan and Zimbabwe where price have risen 191 per cent as of June, 2022.

Ecobank Transnational said net monetary loss arising from hyperinflationary economies rose by four per cent to $24.12m from N23.1 recorded in June 2021.

It added, “The Zimbabwe economy was designated as hyperinflationary from 1 July 2019. As a result, application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ has been applied to Ecobank Zimbabwe.

“In addition, South Sudan is also hyperinflationary economy. This resulted in a net monetary loss of $24.1m recorded in the income statement.”