Ecobank Transnational Incorporated : FY23 Earnings Release

New Release

Lomé 30 April, 2024

ECOBANK REPORTS AUDITED FULL YEAR 2023 PROFIT BEFORE TAX OF

$581M, DILUTED EPS OF 1.17 US CENTS ON NET REVENUE OF $2.1BN.

Net revenue exceeds $2.0B for the first time since 2015; early proof of GTR success.

ROTE: 24.9%, Cost-to-income: 53.9%, Loans-to-deposits: 55.4%, and Total CAR: 15.0%

Stable credit quality with NPL ratio at 5.4% and cost-of-risk at 128 basis points.

Results reflect the resilience of Ecobank's diversified business model, efficiency, and stability.

Group-wideFinancial Summary ( in millions of $ except ratios and per-share metrics)		2023 Regions & Business Unit Segments Highlights ($m)
Income Statement		2023	2022	YoY %	1	Regions	Net revenues	PBT	ROE
	CC %
Net revenues (operating income)		2,064	1,862	11%	31%	UEMOA	666	318	28.1%
Pre-provision,pre-tax operating profit		951	811	17%	43%	NIGERIA	234	27	4.5%
Profit before tax		581	540	8%	34%	AWA	572	224	26.3%
Profit available to ETI shareholders		288	286	0.5%	-	CESA	660	287	32.8%
Diluted EPS ($ cents)		1.17	1.17	0.4%	-	INTERNATIONAL	80	44	22.1%
Balance Sheet						Business Units	Net revenues	PBT	CIR
Gross loans and advances to customers (EOP)		11,062	11,521	(4)%	15%	CORP & INVT. BANKING	1,034	309	39.6%
Deposits from customers (EOP)		19,974	20,813	(4)%	18%	COMMERCIAL BANKING	573	212	50.9%
Basel II/III Total CAR		15.0%	14.2%	6%	-	CONSUMER BANKING	523	178	59.9%
Tangible book value per share ($ cents) TBVPS	4.04	5.30	(24)%	-
Profitability Metrics
Return on shareholders' equity (ROE)		23.5%	19.6%	-	-
Return on tangible shareholders' equity (ROTE)	2	24.9%	21.1%	-	-
For notes refer to page 10
CEO COMMENTARY

Jeremy Awori, CEO of Ecobank Group, said: "2023 was a challenging year for many households, businesses, and governments across Africa due to higher inflation, higher interest rates, weakening currencies, and uncertainty in the economic outlook.

"We have worked closely with our customers and stakeholders through this period, and managed to make progress in our new strategic agenda and grew our business. Ecobank generated a return on tangible shareholders' equity of 24.9% despite the challenging operating environment in 2023. Profit before tax increased by 8% or 34%, at constant currency, to $581m. Net revenue exceeded the $2.0bn mark for the first time since 2015, increasing by 11% or 31% at constant currency to reach $2.1bn. This performance demonstrates proof of the early successes of the bank's 5-year Growth, Transformation and Returns (GTR) strategy.

"Our encouraging results reflect a re-energised commitment to putting our customers first and the work we have started on revenue diversification, growth, and low-cost deposit mobilisation. For instance, our Consumer and Commercial banking businesses increased their share of group-wide revenues and profits. In addition, we continued our proactive approach to disciplined cost management, aimed at eliminating unproductive and wasteful costs and redirecting savings into investments in marketing and branding, sales capabilities, and technology that should drive returns in the future," Awori added.

"Since finalising our GTR strategy, we have moved quickly to take the necessary steps toward winning with our customers. In January, we unveiled our new brand campaign, 'A BETTER WAY ⎢ A BETTER AFRICA,' at the TotalEnergies CAF Africa Cup of Nations in Côte d'Ivoire 2023, in which Ecobank was a key sponsor. The campaign underscored our commitment to empowering our customers and showcased our digital network and continent-wide connectivity to help them meet their financial goals.

"Further, to set us up for success, we have made changes to our structure and executive management team to make us more effective. Martin Miruka joined us as Group Executive Transformation, Enablement and Customer Experience, a newly created role to help deliver the strategic imperatives of GTR. Anup Suri joined us as Group Executive for our newly combined Consumer & Commercial Banking businesses. Abena Osei-Poku joined us as Managing Director of Ecobank Ghana and Regional Executive of Anglophone West Africa, replacing Daniel Sackey upon retirement. Michael Larbie joined us as Group Executive Corporate and Investment Banking, replacing Eric Odhiambo, retiring at the end of April. Thierry Mbimi joined us as Group Executive Internal Audit and Management Services, replacing Moustapha Fall, who left in late 2022. These hires are critical to our future and will complement the talent here at Ecobank. They all bring a wealth of global and Africa experience in the financial services sector. As Group Executives, they sit on the ETI Group's Executive Committee and report directly to me.

Investor Contact: Ato Arku([e-mail])

Media Contact: Christiane Bossom([e-mail])

Awori concluded: "I want to thank the Board for its guidance and support and all Ecobankers for their dedication to our customers and our pan-African purpose. We are confident in the steps we take under our GTR strategy to win with our customers and deliver the returns our shareholders expect of us."

SUMMARY FINANCIAL REVIEW OF THE ECOBANK GROUP

Selected Income Statement Highlights
For the year ended:	31 Dec	31 Dec			1
(in millions of US dollars except per share data)	2023	2022	YoY %	CC	%
Net interest income	1,169	1,014	15%	36%
Non-interest revenue	895	848	6%	24%
Net revenues (operating income)	2,064	1,862	11%	31%
Operating expenses	(1,113)	(1,050)	6%	22%
Pre-provision,pre-tax operating profit	951	811	17%	43%
Gross impairment charges on loans	(288)	(270)	7%	12%
Less loan recoveries and impairment charge releases	143	260	(45)%	(45)%
Net impairment charges on loans	(145)	(10)	n.m.	n.m.
Impairment charges on other assets	(159)	(188)	(15)%	(2)%
Modification loss	(26)	-	-	-
Net impairment charges and modification losses on financial assets	(330)	(198)	67%	108%
Non-conversion premium on bond	-	(40)	-	-
Net monetary loss arising from hyperinflationary economies	(40)	(34)	18%	-
Profit before tax	581	540	8%	34%
Profit for the period	407	367	11%	62%
Profit available to ETI shareholders	288	286	0.5%			-
Ratios
NIM	5.4%	4.9%	-	-
NIR ratio	43.4%	45.6%	-	-
Cost-to-income	53.9%	56.4%	-	-
Effective tax rate	30.0%	32.1%	-	-
Per Share Data (US cents)
Basic EPS	1.170	1.165	0.4%	-
Diluted EPS	1.170	1.165	0.4%	-
Note: Selected income statement lines only and totals may not sum up.
(1) CC = year-on-year percentage change at onstant currency
n.m. = not meaningful

Discussion of results:

Group profit available (attributable) to shareholders of ETI in 2023 was $288 million, slightly higher than $286 million in 2022. The increase was due to solid underlying growth in both funded (net interest income) and non-funded (non-interestrevenue) revenues, disciplined cost management, and stable credit costs across all business lines. However, higher profits available to non-controllingshareholders partially offset this increase.

Group profit before tax increased by 8% in 2023, or 34% when adjusted for foreign currency translation effects, to $581 million. This growth was primarily due to revenue growth outpacing expense growth, which resulted in positive operating leverage. As a result, the pre-provision,pre-tax operating profit (PPOP) reached $951 million in 2023, representing a 17% increase from 2022 or a 43% increase at constant currency. Other factors had an impact on profit before tax, including lower loan recoveries and the release to the income statement of impairments previously charged compared to 2022, the non-recurrence of the $40 million non-conversion premium associated with

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the repayment of the $400 million convertible debt in 2022, $26 million of net modification losses related to Ghana's Domestic Debt Exchange Programme (DDEP), and $40 million in net monetary losses primarily due to hyperinflation in Zimbabwe.

Group net revenue (net interest income plus non-interest revenue) in 2023 was $2,064 million, increasing by 11% or 31% at constant currency. For the first time since 2015, net revenues exceeded the $2.0 billion mark, demonstrating proof of early successes in some of the strategic choices we are taking to diversify and grow our revenues under our GTR strategy. For example, Consumer and Commercial Banking businesses increased their share of group-widerevenues and profits. The higher interest rate environment benefited net revenue growth, particularly in Anglophone West Africa (AWA) and Nigeria, where net interest margins increased and significantly higher fees from treasury services, solutions, and cash management. Across business segments, Commercial Banking (CMB) led the growth in net revenue, increasing by $102 million to $573 million, which was helped by significant growth in Fixed-Income,Currencies and Commodities (FICC) and cash management. Consumer Banking's (CSB) net revenue grew by $53 million to $523 million, driven by deposit margins and payments. While net revenues in Corporate and Investment banking (CIB) rose by $48 million to $1,034 million, driven by higher rates and modest growth in earning assets.

Net interest income for 2023 was $1,169 million, increasing by 15% or 36% at constant currency, and the net interest margin (NIM) was 5.4% compared with a net interest income of $1,014 million and a NIM of 4.9% in 2022. Interest income earned on interest-earning assets rose by 15% to $1,866 million, primarily driven by the net impact of higher interest rates, especially in AWA and Nigeria, and an increase in investment securities balances in Francophone West Africa (UEMOA). Interest income of approximately $39 million earned on the Government of Ghana's (GoG) Eurobonds was excluded in 2023 because of the ongoing and yet-to-be-concluded restructuring discussions with commercial bondholders. Furthermore, the new local currency bonds received under the GoG's DDEP in February 2023 had lower coupon yields than market yields. They, hence, had a net adverse impact on NII. Interest expense, rose 16% to $679 million from $604 million in 2022, driven by the higher rate environment, which drove competition within deposit markets. As a result, the cost of funding, or the average interest yields paid on funds, increased by 29 basis points to 2.9% in 2023.

Non-interestrevenues increased 6% or 24% at constant currency to $895 million for 2023. Net fees and commission income of $476 million increased by 1%. Excluding foreign currency (FC) translation impacts, the increase in net fees and commission income was mainly due to commissions earned on fund transfers and fees generated on card transactions, partially offset by decreased revenue from the online merchant acquiring business. Net trading income (NTI) of $366 million rose 18%, reflecting intense client activity in the client-driven foreign FC market and a modest upsurge in sales activity within fixed-income securities. Also helping to drive the increase were episodic revaluation gains in Zimbabwe resulting from volatility in the rates and currency markets. It's also important to note that NIR for 2023 included $20 million resulting from a one-offnon-cash adjustment on loans that Ecobank Nigeria previously sold to Nigeria's Asset Management Corporation of Nigeria (AMCON). Non-interest revenues accounted for 43.4% of group-wide net revenues of $2,064 million, compared to 45.6% in the prior year. This ratio reflects a well- diversified, stable, and capital-light revenue stream.

Group pre-provision,pre-tax profit (net revenue minus total operating expenses), a key metric for assessing the bank's earnings power, increased 17% or 43% at constant currency to $951 million.

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Group operating expenses for 2023 were $1,113 million, increasing by 6% or 22% at constant currency. This increase was primarily driven by a mix of inflationary-driven costs, staff-related costs, and costs associated with business growth, distribution, and technology. The primary drivers of this increase were communications and technology, other administrative, insurance, and professional and legal costs. However, some offsetting factors included decreases in AMCON costs, tax, depreciation and amortisation expenses. The cost-to-income ratio, which measures efficiency, improved to 53.9% in 2023 from 56.4% in 2022. This improvement was due to growing positive jaws, which refers to the differential of the year-on-year percentage changes in net revenues and operating expenses. The positive jaw ratio was 4.9% in 2023 compared to 4.5% in 2022.

Group income taxes for 2023 were $175 million compared with $173 million in the prior-year period. The associated effective income tax rate (ETR) was 30.0% versus 32.1% a year ago.

Group-wide impairments charges
For the year ended (in millions of US dollars)	31 Dec	31 Dec
2023	2022
Gross impairment charges on loans and advances	(288)	(270)
Less: recoveries and impairment charge releases	143	260
Net impairment charges on loans and advances	(145)	(10)
Impairment charges on other assets	(159)	(188)
Modification losses on GoG net of impairment charge releases	(26)	-
Net impairment charges and modification losses on financial assets	(330)	(198)
Cost-of-risk	1.28%	0.09%

Group gross impairment charges on loans and advances for 2023 were $288 million, an increase of 7% or 12% in constant currency if compared with $270 million of gross impairment charges in

2022. The increase in impairment charges is due to a gradual reserve increase for expected credit losses in an uncertain macroeconomic environment. Loan recoveries and the release of previously booked reserves for expected credit losses amounted to $143 million, compared with $260 million in 2022. As a result, the net impairment charge for 2023 was $145 million, which is higher than the $10 million in 2022. The higher net impairment charges on loans and advances for 2023 resulted in a higher cost-of-risk of 1.28% compared to 0.09% for 2022.

The impairment charges on financial assets other than loans and advances were $159 million for the current year, a decrease from $188 million in the prior year. As of yearend 2023, the total impairment charges on the GoG Eurobonds are estimated to be around $183 million, a significant rise from $75 million in yearend 2022. Additionally, $26 million of modification losses were incurred on the GoG debt net of impairment charge releases due to the final settlement of the old bonds for the new bonds in February under the DDEP.

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BALANCE SHEET SUMMARY

Selected Balance Sheet Information
As at: (in millions of US dollars, except per share amounts)
Gross loans and advances to customers (EOP)
Less allowance for impairments (expected credit losses)
Net loans and advances to customers (EOP)
Net loans and advances to customers (AVERAGE)	1
Deposits from customers (EOP)
Deposits from customers (AVERAGE)	1
Total assets
Equity attributable to owners of ETI
Total equity to all owners
Loan-to-deposit ratio
CET1 ratio	2
Tier 1 capital adequacy ratio	2
Total capital adequacy ratio (CAR)	2
Risk-weighted assets (RWA)
End-of-period ordinary shares outstanding (millions of shares)
Per Share Data (in US Cents)
Book value per ordinary share, BVPS	3
Tangible book value per ordinary share, TBVPS	4
Share price (EOP)
Share price (EOP) - Nigerian Naira, NGN

31 Dec	31 Dec		YoY
2023	2022	YoY %	CC* %
11,062	11,521	(4)%	15%
(519)	(518)	0.2%	19%
10,543	11,003	(4)%	15%
10,566	9,718	9%	-
19,974	20,813	(4)%	18%
19,719	19,668	0.3%	-
27,230	29,004	(6)%	15%
1,054	1,395	(24)%	-
1,734	2,027	(14)%	15%
55.4%	55.4%	-	-
10.4%	9.6%	-	-
11.1%	10.2%	-	-
15.0%	14.2%	-	-
13,933	15,356	(9)%	-
24,730	24,730	-	-
4.26	5.64	(24)%	-
4.04	5.30	(24)%	-
2.29	2.37	(3)%	-
20.90	10.60	97%	-

1. The year-on-year growth of the sum of the average last four quarters (EOP) of loans and customer deposits for the period. Showing averages help to smooth out any one-off spikes within the year.
2. We report regulatory capital ratios semi-annually (submission deadline of 30 April for CAR for 31 December and submission deadline of 31 October for CAR for 30 June) to the regulator, the Central Bank of West African States (BCEAO).
3. ETI shareholders' equity divided by end-of-period ordinary shares outstanding
4. Tangible ETI shareholders' equity divided by end-of-period ordinary shares outstanding. Tangible ETI shareholders' equity is ETI shareholders' equity less goodwill and intangible assets EOP = End-of-period
   *CC = year-on-year percentage change on at constant currency Average deposits and loans is on a quarterly basis

Group gross loans and advances (EOP) were $11.1 billion on 31 December 2023, compared to $11.5 billion on 31 December 2022. The year-on-year (YoY) decrease of 4% was primarily driven by foreign currency translation effects resulting from significant weaknesses in the local currencies of some of our subsidiaries versus the US dollar, such as the Nigerian naira, Ghana cedi and Zimbabwe dollar. However, gross loans and advances increased by 15% at constant currency, reflecting underlying loan growth across business lines and regions, particularly in trade loans within Corporate Banking within UEMOA and CESA.

The Group's customer deposit base (EOP) remained stable and diversified, with approximately 83% (82% in 2022) of customer deposits in 'sticky' and less volatile current and savings accounts (CASA). For the year ended 31 December 2023, group-wide customer deposits were $20.0 billion compared to $20.8 billion as of 31 December 2022. The 4% decrease was predominantly due to currency translation effects. Excluding its impact, deposits increased by 18%, primarily driven by Consumer Banking, helping to increase CASA deposits and reduce the rise in the rates paid on funds in a competitive deposit market. Helping drive overall growth in the mix and growth in CASA deposits were deposit mobilisation campaigns conducted across our markets as part of the core activities to improve deposit pricing and mix.

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The average rate paid on customer deposits and other borrowings was 2.9% compared with 2.6% a year ago, increasing despite the increasing share of CASA deposits within the deposit mix. This reflects the competitive dynamics for deposits in the current rate environment.

Equity available (attributable) to ETI shareholders was $1.05 billion as of 31 December 2023, decreasing by 24% year-on-year,driven predominantly by an increase of $227 million in the reserves for foreign currency translation differences to $550 million, due mainly to the Nigeria naira's nearly 50% devaluation and other material currency depreciations versus the US dollar in our operating markets, such as Zimbabwean dollar (-89%)and Ghana cedi (-29%),partially offset by a 3.6% appreciation in the Euro-linkedCFA franc. Also, a decrease of $19 million in unrealised revaluation losses on debt securities to $54 million partially offset the decline in equity.

The Group's CET1 ratio, Tier 1 ratio, and Total Capital Adequacy Ratio (CAR) for the period ended 31 December 2023 were 10.4%, 11.1% and 15.0% compared with 9.7%, 10.3% and 14.8% respectively as of 31 December 2022. The primary factor influencing the Group's capital position was the final IFRS 9 Day 1 amortisation of $75 million in January 2023. Additionally, the capital adequacy ratios reflected the negative impacts of foreign currency translation reserves (FCTR) on the capital supply (numerator), which is primarily denominated in local currencies and partially counterbalanced by local currency assets included in the risk-weightedassets (RWA). Despite declining capital supply, the CAR position has mainly remained unchanged due to ongoing RWA optimisation initiatives that have decreased the RWA density.

Asset Quality
	31 Dec	31 Dec
As at: (in millions of US dollars)	2023	2022
Gross loans and advances to customers	11,062	11,521
Of which Stage 1	9,032	9,748
Of which Stage 2	1,429	1,174
Of which Stage 3 (Non-Performing Loans)	600	599
Less allowance for impairments (accumulated expected credit losses)	(519)	(518)
Of which Stage 1: 12-month ECL(1)	(59)	(62)
Of which Stage 2: Life-time ECL	(140)	(140)
Of which Stage 3: Life-time ECL	(320)	(317)
Net loans and advances to customers	10,543	11,003
NPL ratio	5.4%	5.2%
Accumulated ECL as a % of gross loans and advances	4.7%	4.5%
NPL coverage ratio	86.5%	86.5%
Stage 3 coverage ratio	53.3%	53.0%

(1) Expected Credit Losses

Non-performing loans (impaired or stage 3 loans) were $600 million as of 31 December 2023, increasing 0.3% or 23% at constant currency. The ratio of non-performingloans to total loans (NPL ratio) was 5.4%, a slight deterioration from 5.2% in the prior year. Group-widegross impairment reserves for expected credit losses of $519 million increased by 0.2% from $518 million in 2022. Compared to the preceding year, the slight increase is partly due to proactive impairment reserve builds in line with episodic stresses in the credit risk environment.

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REGIONAL PERFORMANCE

We categorise the Group's pan-African operations into four geographical regions. These reportable regions are Francophone West Africa (UEMOA), Nigeria, Anglophone West Africa (AWA), and Central, Eastern and Southern Africa (CESA). Accordingly, the financial results of the constituent affiliates of Ecobank Development Corporation (EDC), the Group's Investment Banking (IB) and Securities, Wealth, and Asset Management (SWAM) businesses across our geographic footprint are reported within their country of domicile and therefore in the applicable regions of UEMOA, Nigeria, AWA, and CESA. In addition, the Group categorises its Paris banking subsidiary and representative offices in Beijing, London, and Dubai as International.

Comparisons noted in the commentary on our Regions are calculated for the year ended 31 December 2023 versus 31 December 2022, unless otherwise specified.

Francophone West Africa (UEMOA)
	31 Dec	31 Dec
Year ended: (in millions of US dollars)	2023	2022	YoY %	*CC %
Net interest income	388	330	17%	14%
Non-interest revenue	278	242	15%	11%
Net revenue	666	572	17%	13%
Operating expenses	(313)	(290)	8%	5%
Pre-provision,pre-tax operating profit	353	282	25%	21%
Gross impairment charges on loans	(86)	(128)	(32)%	(35)%
Less loan recoveries and impairment releases	53	85	(38)%	(40)%
Net impairment charges on loans	(33)	(43)	(22)%	(25)%
Impairment charges on other assets	(1)	(1)	110%	n.m
Impairment charges on financial assets	(35)	(44)	(20)%	-
Profit before tax	318	239	33%	29%
Ratios:
Net interest margin (NIM)	4.2%	4.0%	-	-
Cost-to-income ratio (CIR)	47.0%	50.7%	-	-
Return on equity (ROE)	28.1%	21.6%	-	-

Selected income statement line items only * CC = year-on-year percentage change

and thus may not sum up at constant currency

Francophone West Africa (UEMOA)

UEMOA's profit before tax of $318 million for 2023 increased by 33% or 29% at constant currency from the prior year, benefiting from revenue growth exceeding operating expenses growth. ROE improved to 28.1% from 21.6% from 2022.

Net revenues increased by 17% or 13% at constant currency to $666 million, with growth benefiting from net interest income and non-interest revenue increases. The net interest income of $388 million increased by 17% or 14% in constant currency, primarily driven by the net impact of higher rates on interest income from modest loan growth and investment securities balances within Corporate Banking, partially offset by an increase in interest expense. On the other hand, non-interestrevenues of $278 million increased by 15% or 11% at constant currency, driven by higher fee income generation from FC sales and digital wholesale payments from intense underlying customer activity across all business lines.

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Operating expenses for 2023 were $313 million compared with $290 million in 2022, up 8% or 5% at constant currency, driven by staff compensation increases, card costs, investments in technology and inflationary-driven costs.

Net impairment charges on loans of $33 million for 2023 were lower than the $43 million in the prior year as reserves for expected credit losses (ECL) were more than adequate.

NIGERIA
	31 Dec	31 Dec
Year ended: (in millions of US dollars)	2023	2022	YoY %	*CC %
Net interest income	138	107	28%	72%
Non-interest revenue	97	132	(27)%	11%
Net revenue	234	239	(2)%	40%
Operating expenses	(176)	(191)	(8)%	31%
Pre-provision,pre-tax operating profit	59	48	22%	74%
Gross impairment charges on loans	(37)	(20)	85%	163%
Less loan recoveries and impairment releases	6	3	96%	148%
Net impairment charges on loans	(32)	(17)	83%	166%
Impairment charges on other assets	(1)	(0.0)	n.m	n.m
Impairment charges on financial assets	(32)	(17)	87%	172%
Profit before tax	27	31	(15)%	21%
Ratios:
Net interest margin (NIM)	4.6%	3.3%	-	-
Cost-to-income ratio (CIR)	74.9%	79.8%	-	-
Return on equity (ROE)	4.5%	3.8%	-	-

Selected income statement line items only * CC = year-on-year percentage change

and thus may not sum up at constant currency

Nigeria

Nigeria's profit before tax was $27 million in 2023 compared with $31 million in 2022, representing a decrease of 15% or an increase of 22% at constant currency. ROE was 4.5%, an improvement from 3.8% in the prior year. The operating environment in Nigeria in 2023 was very challenging. Inflation remained high and the Naira weakened by about 52% in 2023, following the removal of fuel subsidies and foreign-currency reforms in June by the Federal Government to boost US dollar liquidity, pricing, and investor confidence.

Net revenues decreased by 2% or increased 40% at constant currency to $234 million, benefiting primarily from the net impact of higher interest rates and income from client-driven treasury services and solutions. Net interest income of $138 million increased by 28% or 72% at constant currency, benefiting from higher market rates, partially offset by an increase in funding costs partly due to the impact on the price of funds from high deposit cash reserve requirements (CRR) and competitive deposit markets. Non-interestrevenues of $97 million decreased by 27% or increased by 11% at constant currency, with increased market liquidity and volatility driving client-driven FC and fixed-income sales within CIB, partially offset by a decrease in merchant acquiring fees, particularly within Consumer Banking. In addition, non-interest revenue benefited from an approximately $20 million in one-offnon-cash adjustment on loans that Ecobank Nigeria previously sold to Nigeria's Asset Management Corporation of Nigeria (AMCON).

Operating expenses were $176 million in 2023, decreasing by 8% or increasing by 31% at constant currency, predominantly driven by continued increases in the general prices of goods and services. Other cost drivers included technology-related costs, operations and processes, and higher Nigeria

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Deposit Insurance Corp. (NDIC) premiums. The cost-to-income ratio improved to 74.9% from 79.8% a year ago.

The period's net impairment charge on loans was $32 million compared with $17 million a year ago, reflecting additional impairment charges on specific loans.

Anglophone West Africa (AWA)
	31 Dec	31 Dec
Year ended: (in millions of US dollars)	2023	2022	YoY %	*CC %
Net interest income	426	389	10%	38%
Non-interest revenue	146	165	(12)%	8%
Net revenue	572	554	3%	29%
Operating expenses	(251)	(246)	2%	28%
Pre-provision,pre-tax operating profit	321	307	4%	31%
Gross impairment charges on loans	(55)	(28)	98%	183%
Less loan recoveries and impairment releases	15	13	19%	51%
Net impairment charges on loans	(40)	(15)	164%	323%
Impairment charges on other assets	(31)	(167)	(81)%	(78)%
Modification losses on GoG net of impairment charge releases	(26)	-		-
Impairment charges on financial assets	(97)	(183)	(47)%	(37)%
Profit before tax	224	124	80%	143%
Ratios:
Net interest margin (NIM)	11.8%	10.9%	-	-
Cost-to-income ratio (CIR)	43.9%	44.5%	-	-
Return on equity (ROE)	26.3%	14.2%	-	-

Selected income statement line items only * CC = year-on-year percentage change

and thus may not sum up at constant currency

Anglophone West Africa (AWA)

AWA's profit before tax in 2023 was $224 million compared with $124 million in 2022, reflecting an 80% increase or 143% at constant currency. ROE was 26.3% versus 14.2% in 2022. The significant profit increase was driven by the net impact of higher interest rates on net interest income and comparatively lower impairment charges on other financial assets in 2023 compared to the impairment charges in 2022 that were driven by Ghana's debt restructuring exercise. Also negatively impacting profits were the effect of the net debt modification losses of $26 million, including the recycling of losses in other comprehensive income into profit and loss that Ecobank Ghana incurred on the settlement date in February 2023 when the GoG offered the new bonds for the old eligible local currency bonds under the DDEP. The net modification loss is the net change in the present value of the cash flows of the new debt and the old debt after adjusting for previous impairments booked.

AWA's net revenue in 2023 increased by 3% or 29% at constant currency to $572 million, mainly driven by net interest income. Net interest income was $426 million, up 10% or 38% at constant currency, predominantly driven by an expansion in NIM from higher market rates and loan growth. The period's net interest income excludes approximately $39 million of earned interest income on the GoG Eurobonds due to ongoing and yet-to-be-concluded restructuring discussions with bondholders. Non-interestrevenue of $146 million decreased by 12% or increased by 8% at constant currency due to increases in income from Cards, Trade and Cash Management across all business lines, partially offset by a significant decrease in FICC-related fees and commissions within CIB.

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Operating expenses increased 2% or 28% at constant currency to $251 million, mainly driven by other operating expenses such as technology costs and inflation. Despite higher inflation, AWA improved its cost-to-income ratio to 43.9% from 44.5% in 2022 from stringent cost discipline.

Net impairment charges on loans of $40 million were higher than $15 million in the prior year, driven by higher impairment charges in CMB. Impairment charges on other financial assets of $31 million were primarily due to proactive measures to build additional impairment reserves on the GoG Eurobond exposure. The modification losses on the Government of Ghana (GoG) net of impairment charge releases of $26 million are due to the final settlement of the old bonds for the new bonds in February under the GoG DDEP.

Central, Eastern and Southern African Region (CESA)

CESA's profit before tax for 2023 was $287 million compared with $194 million in the prior year. The 48% increase or 85% at constant currency in profit before tax was driven by significantly higher revenues and lower impairment charges. ROE for 2023 improved substantially to 32.8% from 22.3% in 2022.

Net revenues of $660 million increased 18% or 51% at constant currency, primarily driven by an expansion in net interest margin and FICC-related fees and commissions. Net interest

income increased 12% or 38% at constant currency to $334 million, driven mainly by repricing actions in line with higher regional market rates, increased balances in the investment portfolio, and strong loan growth within Corporate and Commercial Banking.

Non-interestrevenues increased by 25% or 69% at constant currency to $327 million, significantly driven by FC and fixed-income sales within Corporate and Commercial Banking, and Cash Management and Cards with Consumer and Commercial Banking, partially offset by fees related to credit, corporate finance, and brokerage.

Operating expenses for 2023 were $305 million, increasing by 6% or 25% at constant currency due to inflation and currency weaknesses. The cost-to-income ratio for 2023 improved to 46.2% from- 51.4% a year ago, driven by substantial positive jaws (revenue growth exceeding cost growth).

Net impairment charges on loans for 2023 were $15 million versus $27 million in the prior year, primarily due to a significant increase in loan recoveries and impairment charge releases back to the income statement.

Notes:

1. Constant currency reporting eliminates fluctuations in the functional currencies of our operating subsidiaries against the US dollar, our reporting currency. It is a clearer and meaningful indicator of the firm's underlying performance, assuming the US dollar exchange rate to the various functional currencies did not change within the period
2. Basel II/III Total CAR are estimates as at 31 December 2023 and subject to revision.
3. ROTE is profit available (attributable) to ETI shareholders divided by the average end-of-period tangible shareholders' equity

EOP = end-of-period

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