ECOBANK TRANSNATIONAL INCORPORATED. Condensed Unaudited Consolidated Interim Financial Statements

Transcription

1 ECOBANK TRANSNATIONAL INCORPORATED For period ended 30 September 2018

2 For the period ended 30 September 2018 CONTENTS Condensed unaudited consolidated interim financial statements: Press release Condensed unaudited consolidated income statement Condensed unaudited consolidated statement of comprehensive income Condensed unaudited consolidated statement of financial position Condensed unaudited consolidated statement of changes in equity Condensed unaudited consolidated statement of cash flow Notes to the condensed unaudited consolidated interim financial statements Page 1

3 Ecobank Group reports performance for Third Quarter Profit before tax up 39% to $314.5 million (up 39% to NGN 96.3 billion) - Profit for the period up 30% to $247.2 million (up 31% to NGN 75.7 billion) - Gross earnings up 1% to $1,869.8 million (up 1% to NGN billion) - Operating profit before impairment losses up 2% to $531.2 million ( up 3% to NGN billion) - Total assets up 4% to $21.9 billion (up 5% to NGN 6,700.9 billion) - Loans and advances to customers down 7% to $8.6 billion (down 6% to NGN 2,647.3 billion) - Deposits from customers up 10% to $15.5 billion (up 10% to NGN 4,754.7 billion) - Total equity down 1% to $2.0 billion (flat NGN billion) Financial Highlights Income Statement: Period ended 30 September 2018 Period ended 30 September 2017 % Change US$'000 NGN'000 US$'000 NGN'000 US$ NGN Gross Earnings 1,869, ,657,907 1,846, ,724,891 1% 1% Revenue 1,366, ,659,806 1,352, ,714,550 1% 1% Operating profit before impairment losses 531, ,686, , ,640,579 2% 3% Profit before tax 314,495 96,321, ,908 69,407,375 39% 39% Profit for the period 247,223 75,717, ,467 57,954,797 30% 31% Earnings per share from continuing operations attributable to owners of the parent during the period (expressed in United States cents / kobo per share): Basic (cents and kobo) % 22% Diluted (cents and kobo) % 24% Financial Highlights Statement of Financial Position: As at As at % Change 30 September September 2017 US$'000 NGN'000 US$'000 NGN'000 US$ NGN Total assets 21,873,301 6,700,885,761 20,958,572 6,408,083,390 4% 5% Loans and advances to customers 8,641,501 2,647,323,831 9,257,902 2,830,603,537-7% -6% Deposits from customers 15,520,521 4,754,711,608 14,126,294 4,319,114,391 10% 10% Total equity 2,022, ,642,504 2,034, ,953,899-1% 0% Ade Ayeyemi, Group CEO said, Profit before tax for the nine months ended September 2018 increased by 39% or 48% on a constant currency basis to $314 million. Our return on tangible equity was 19.9% compared with 15.6% in the previous year. The initiatives we took in phase-one of our 5-year strategic plan are starting to show results in our financial and business performance. The risk profile of our credit portfolio is improving; we are increasingly becoming leaner and more cost efficient; and thanks to our digitisation strategy, broadening our products and services to include the unbanked. Thus, we are seeing encouraging growth in trade loans, remittances, cards and e- banking, and foreign exchange and fixed income sales in some of our regions. Loan growth, however, has been tepid, despite the fact that we are seeing strong deposit generation in all of our businesses and regions, largely because we are seeing limited credit opportunities that meet our risk appetite. That said, we remain excited about the prospects for our diversified pan-african banking business model and in our operating regions. Economic activity is forecast to grow in Africa and we believe the firm is rightly placed to benefit from this growth. At the same time we are also keenly planning for any contingencies that will arise from any one of the global geo-political uncertainties. The financial statements were approved for issue by the board of directors on 23 October The Group CEO and Group CFO who are both signatories to the financial statements of ETI, were granted a waiver by the Financial Reporting Council (FRC) of Nigeria allowing them to sign the ETI financial statements (without indicating their FRC registration numbers) together with the Chairman on behalf of the board. Emmanuel Ikazoboh Ade Ayeyemi Greg Davis Group Chairman Group Chief Executive Officer Group Chief Financial Officer Page 2

4 Sep Sep dec Closing rate Condensed Unaudited Consolidated Income Statement for the Nine month period ended 30 September US$'000 NGN'000 US$'000 NGN'000 US$ NGN Gross Earnings 1,869, ,657,907 1,846, ,724,891 1% 1% Interest Income 1,156, ,081,637 1,155, ,386,097 0% 0.2% Interest Expense (453,396) (138,862,726) (448,127) (137,074,581) 1% 1% Net Interest Income 702, ,218, , ,311,517-1% -1% Fee and commission income 377, ,657, , ,290,990 12% 12% Fee and commission expense (48,528) (14,862,792) (44,699) (13,672,679) 9% -9% Net trading income 277,627 85,029, , ,106,371-16% -16% Other operating income 57,519 17,616,488 21,833 6,678, % 164% Non-interest revenue 664, ,440, , ,403,033 3% 3% Operating income 1,366, ,659,806 1,352, ,714,550 1% 1% Staff expenses (373,573) (114,415,137) (380,205) (116,298,373) -2% -2% Depreciation and amortisation (74,439) (22,798,619) (70,224) (21,480,351) 6% 6% Other operating expenses (387,759) (118,759,918) (383,464) (117,295,247) 1% 1% Operating expenses (835,771) (255,973,674) (833,893) (255,073,971) 0% 0% Operating profit before impairment losses and taxation 531, ,686, , ,640,579 2% 3% Impairment losses on : - loans and advances (202,444) (62,003,030) (236,587) (72,368,020) -14% -14% - other financial assets (14,469) (4,431,457) (55,356) (16,932,478) -74% -74% Impairment losses on financial assets (216,913) (66,434,487) (291,943) (89,300,498) -26% -26% Operating profit after impairment losses 314,268 96,251, ,688 69,340,081 39% 39% Share of profit of associates , ,294 3% 3% Profit before tax 314,495 96,321, ,908 69,407,375 39% 39% Taxation (67,935) (20,806,622) (38,081) (11,648,343) 78% 79% Profit for the period from continuing operations 246,560 75,514, ,827 57,759,032 31% 31% Profit for the period from discontinued operations , ,765 4% 4% Profit for the period 247,223 75,717, ,467 57,954,797 30% 31% Attributable to: Owners of the parent 197,373 60,449, ,099 49,583,382 22% 22% - Continuing operations 197,015 60,340, ,753 49,477,669 22% 22% - Discontinued operations , ,713 4% 4% Non-controlling interests 49,850 15,267,684 27,368 8,371,415 82% 82% - Continuing operations 49,545 15,174,277 27,074 8,281,363 83% 83% - Discontinued operations , ,052 4% 4% Profit for the period 247,223 75,717, ,467 57,954,797 30% 31% Earnings per share from continuing operations attributable to owners of the parent during the period (expressed in United States cents / kobo per share): Basic (cents and kobo) % 22% Diluted (cents and kobo) % 24% Unaudited Consolidated Statement of Comprehensive Income Nine month period ended 30 September 2018 Nine month period ended 30 September 2017 % Change Profit for the period 247,223 75,717, ,467 57,954,798 30% 31% Other comprehensive income: Items that will be subsequently reclassified to profit or loss: Exchange difference on translation of foreign operations (149,778) (45,872,953) 6,808 2,082, % -2303% Fair value (loss) in investments securities (FVOCI) 68,742 21,053, n/a n/a Fair value gain on available for sale financial asset ,141 31,243,343 n/a n/a Remeasurements of defined benefit obligations ,949 n/a n/a Taxation relating to components of other comprehensive income that will be subsequently reclassed to profit or loss ,644 (5,700) (1,743,670) 104% 104% Items that will not be reclassified to profit or loss: Property and equipment - net revaluation gain ,130 n/a n/a Other comprehensive (loss) / profit for the period, net of taxation (80,822) (24,753,548) 104,966 32,107, % -177% Total comprehensive profit for the period 166,401 50,964, ,433 90,062,148-43% -43% Total comprehensive income attributable to: Owners of the parent 146,359 44,825, ,218 77,149,235-42% -42% - Continuing operations 146,001 44,716, ,872 77,043,522-42% -42% - Discontinued operations , ,713 4% 4% Non-controlling interests 20,042 6,138,364 42,215 12,912,913-53% -52% - Continuing operations 19,737 6,044,957 41,921 12,822,861-53% -53% - Discontinued operations , ,052 4% 4% 166,401 50,964, ,433 90,062,148-43% -43% Page 3

5 Sep Sep dec Closing rate Condensed Unaudited Consolidated Income Statement for the Quarter ended 30 September US$'000 NGN'000 US$'000 NGN'000 US$ NGN Gross Earnings 612, ,069, , ,903,706 5% 6% Interest Income 364, ,866, , ,479,879 0% 0% Interest Expense (140,694) (43,216,863) (123,732) (37,907,029) 14% 14% Net Interest Income 223,515 68,649, ,246 73,572,850-7% -7% Fee and commission income 125,081 38,410, ,065 34,014,487 13% 13% Fee and commission expense (15,405) (4,731,492) (15,334) (4,695,762) 0% -1% Net trading income 85,169 26,162,570 97,946 30,002,676-13% -13% Other operating income 37,703 11,555,387 6,876 2,105, % 449% Non-interest revenue 232,548 71,397, ,553 61,427,380 16% 16% Operating income 456, ,047, , ,000,230 3% 4% Staff expenses (126,130) (38,729,982) (128,319) (39,296,823) -2% -1% Depreciation and amortisation (24,699) (7,584,693) (25,133) (7,695,946) -2% -1% Other operating expenses (121,219) (37,233,582) (127,729) (39,117,057) -5% -5% Operating expenses (272,048) (83,548,257) (281,181) (86,109,826) -3% -3% Operating profit before impairment losses and taxation 184,015 56,498, ,618 48,890,404 15% 16% Impairment losses on : - loans and advances (77,942) (23,921,722) (76,245) (23,351,471) 2% 2% - other financial assets (4,512) (1,385,919) (8,199) (2,516,583) -45% -45% Impairment losses on financial assets (82,454) (25,307,641) (84,444) (25,868,040) -2% -2% Operating profit after impairment losses 101,561 31,191,158 75,174 23,022,364 35% 35% Share of profit of associates , ,425-79% -79% Profit before tax 101,661 31,221,837 75,643 23,165,789 34% 35% Taxation (23,123) (7,100,018) (10,128) (3,103,138) 128% 129% Profit for the period from continuing operations 78,538 24,121,819 65,515 20,062,651 20% 20% Profit for the period from discontinued operations , ,161-73% -72% Profit for the period 78,679 24,165,213 66,029 20,219,812 19% 20% Attributable to: Owners of the parent 62,679 19,251,196 56,949 17,439,028 10% 10% - Continuing operations 62,603 19,227,762 56,671 17,354,117 10% 11% - Discontinued operations 76 23, ,911-73% -72% Non-controlling interests 16,000 4,914,017 9,080 2,780,784 76% 77% - Continuing operations 15,935 4,894,055 8,844 2,708,448 80% 81% - Discontinued operations 65 19, ,336-73% -72% Profit for the period 78,679 24,165,213 66,029 20,219,812 19% 20% Earnings per share from continuing operations attributable to owners of the parent during the period (expressed in United States cents / kobo per share): Basic (cents and kobo) % 13% Diluted (cents and kobo) % 8% Unaudited Consolidated Statement of Comprehensive Income Quarter ended 30 September 2018 Quarter ended 30 September 2017 % Change Profit for the period 78,679 24,165,213 66,029 20,219,813 19% 20% Other comprehensive income: Items that will be subsequently reclassified to profit or loss: Exchange difference on translation of foreign operations (75,327) (22,587,265) (42,237) (12,910,459) -78% -75% Fair value (loss) in investments securities (FVOCI) 100,383 30,731, n/a n/a Fair value gain on available for sale financial asset - - (235) (53,082) n/a n/a Remeasurements of defined benefit obligations n/a n/a Taxation relating to components of other comprehensive income that will be subsequently reclassed to profit or loss (446) (136,396) (3,503) (1,072,047) 87% 87% Items that will not be reclassified to profit or loss: Property and equipment - net revaluation gain n/a n/a Other comprehensive (loss) / profit for the period, net of taxation 24,610 8,008,127 (45,975) (14,035,273) 154% 157% Total comprehensive profit for the period 103,289 32,173,340 20,054 6,184, % 420% Total comprehensive income attributable to: Owners of the parent 98,001 30,474,789 (6,258) (1,866,836) 1666% 1732% - Continuing operations 97,925 30,451,355 (6,536) (1,951,752) 1598% 1660% - Discontinued operations 76 23, ,916-73% -72% Non-controlling interests 5,288 1,698,551 26,312 8,051,376-80% -79% - Continuing operations 5,223 1,678,589 26,076 7,979,040-80% -79% - Discontinued operations 65 19, ,336-73% -72% 103,289 32,173,340 20,054 6,184, % 420% Page 4

6 Condensed Unaudited Consolidated Statement of Financial Position As at 30 September 2018 As at 31 December 2017 US$'000 NGN'000 US$'000 NGN'000 US$ NGN US$'000 NGN'000 Cash and balances with central banks 3,148, ,430,545 2,661, ,493,970 18% 18% 2,317, ,565,841 Trading financial assets 138,084 42,302,033 36,557 11,186, % 278% 24,288 7,426,056 Derivative financial instruments 37,638 11,530,401 39,267 12,015,702-4% -4% 10,000 3,057,500 Loans & advances to banks 1,405, ,530,198 1,685, ,856,636-17% -17% 1,535, ,494,413 Loans & advances to customers 8,641,501 2,647,323,831 9,357,864 2,863,506,384-8% -8% 9,257,902 2,830,603,537 Treasury bills and other eligible bills 1,669, ,328,785 1,718, ,006,962-3% -3% 1,327, ,883,737 Investment securities 4,316,964 1,322,501,921 4,405,240 1,348,003,440-2% -2% 3,764,194 1,150,902,316 Pledged assets 314,335 96,296, ,561 91,359,666 5% 5% 544, ,561,287 Other assets 797, ,194, , ,781,544 5% 5% 754, ,634,257 Investment in associates 9,473 2,902,054 9,964 3,048,984-5% -5% 9,672 2,957,214 Intangible assets 290,826 89,094, ,664 86,801,184 3% 3% 284,051 86,848,593 Property, plant and equipment 896, ,761, , ,793,878-3% -3% 907, ,360,501 Investment properties 20,583 6,305,602 43,514 13,315,284-53% -53% 33,425 10,219,694 Deferred income tax assets 107,583 32,958, ,715 37,244,790-12% -12% 112,402 34,366,912 % Change As at 30 September ,793,574 6,676,461,394 22,347,761 6,838,414, % -2.4% 20,882,688 6,384,881,858 Assets held for sale 79,727 24,424,367 83,843 25,655,958-5% -5% 75,884 23,201,532 Total Assets 21,873,301 6,700,885,761 22,431,604 6,864,070,824-2% -2% 20,958,572 6,408,083,390 Deposits from banks 1,050, ,805,970 1,772, ,358,684-41% -41% 1,517, ,923,342 Deposits from customers 15,520,521 4,754,711,608 15,203,271 4,652,200,926 2% 2% 14,126,294 4,319,114,391 Derivative financial instruments 30,850 9,450,898 32,497 9,944,082-5% -5% 11,969 3,659,522 Borrowed funds 1,908, ,726,262 1,728, ,999,336 10% 11% 1,647, ,835,335 Other liabilities 1,038, ,129,523 1,210, ,537,848-14% -14% 1,321, ,904,617 Provisions 47,124 14,436,378 52,450 16,049,700-10% -10% 54,667 16,714,435 Current tax liabilities 50,592 15,498,859 58,107 17,780,742-13% -13% 45,864 14,022,918 Deferred income tax liabilities 58,662 17,971,104 64,269 19,666,314-9% -9% 60,542 18,510,717 Retirement benefit obligations 37,606 11,520,598 24,064 7,363,584 56% 56% 34,137 10,437,388 19,742,945 6,048,251,200 20,146,736 6,164,901,216-2% -2% 18,819,698 5,754,122,665 Liabilities held for sale 107,694 32,992, ,785 34,512, % -4.4% 104,683 32,006,826 Total Liabilities 19,850,639 6,081,243,257 20,259,521 6,199,413,426-2% -2% 18,924,381 5,786,129,491 Equity Capital and reserves attributable to the equity holders of the parent entity Share capital and premium 2,113, ,511,708 2,113, ,511,708 0% 0% 2,113, ,511,945 Retained earnings and reserves (386,154) 175,800,741 (233,213) 221,995,956 66% -21% (302,839) 200,237,690 Shareholders Equity 1,727, ,312,449 1,880, ,507,664-8% -8% 1,811, ,749,635 Non-controlling interests 294,859 90,330, ,339 89,149, % 1.3% 223,072 68,204,264 Total Equity 2,022, ,642,504 2,172, ,657,398-7% -7% 2,034, ,953,899 Total Liabilities and Equity 21,873,301 6,700,885,761 22,431,604 6,864,070,824-2% -2% 20,958,572 6,408,083, (0) - The financial statements were approved for issue by the board of directors on 23 October The Group CEO and Group CFO who are both signatories to the financial statements of ETI, were granted a waiver by the Financial Reporting Council (FRC) of Nigeria allowing them to sign the ETI financial statements (without indicating their FRC registration numbers) together with the Chairman on behalf of the board. Due to the listing of on the Nigerian Stock Exchange, the Financial Reporting Council (FRC) of Nigeria requires that the signatories to the financial statements should be registered members of the FRCN. However, since ETI is not an incorporated entity in Nigeria, the signatories to the financial statements of our Nigerian entity, Ecobank Nigeria Limited, (whose results are consolidated in the group financial statements) are registered with the FRCN and details shown below: Designation Name FRC registration number MD/CEO AKINWUNTAN Patrick FRC/2013/ICAN/ Acting Chief Financial Officer Abiola Aderinola FRC/2018/ICAN/ Page 5

7 Condensed Unaudited Consolidated Statement of Changes in Equity for the Nine Months ended 30 September Share Capital Other Reserves Retained Earnings Total equity and reserves attributable Non-Controlling Interest Total Equity At 1 January ,114,332 (767,254) 230,847 1,577, ,154 1,764,078 Changes in Equity for 1 Jan to 30 Sept 2017: Foreign currency translation differences - (26,687) - (26,687) 33,495 6,808 Net changes in available for sale investments net of taxes - 96,441-96,441-96,441 Net gains on revaluation of property Remeasurements of post-employment benefit obligations Profit for the period , ,099 27, ,467 Total comprehensive income for the period - 71, , ,570 60, ,433 Dividend paid to NCI by affiliates relating to (23,945) (23,945) Treasury shares (375) - - (375) - (375) Share option exercised (172) Transfer to general banking reserves - 129,601 (129,601) Transfer to statutory reserve - 30,940 (30,940) At 30 September ,113,957 (535,071) 232,233 1,811, ,072 2,034,191 Changes in Equity for 1 October to 31 Dec 2017: Foreign currency translation differences - 113, ,501 (19,137) 94,364 Net changes in available for sale investments net of taxes - (54,276) - (54,276) - (54,276) Net gains on revaluation of property - 2,375-2,375-2,375 Remeasurements of post-employment benefit obligations - (7,045) - (7,045) - (7,045) Profit for the period ,486 16,486 22,581 39,067 Total comprehensive income for the period - 54,555 16,486 71,041 3,444 74,485 Dividend paid to NCI by affiliates relating to Change in minority interest ,256 64,256 Transfer to other group reserve - 130,447 (130,447) - - Transfer to share option reserve (172) 0-0 Transfer to general banking reserves - (112,552) 112, Transfer to statutory reserve - 14,510 (14,510) Convertible loans - equity component - (1,416) - (1,416) - (1,416) At 31 December 2017 / 1 January ,113,957 (449,355) 216,142 1,880, ,339 2,172,083 Changes in Equity for 2018 : IFRS 9 day 1 adjustment - - (299,300) (299,300) - (299,300) Restated opening balance 1 January ,113,957 (449,355) (83,158) 1,581, ,339 1,872,783 Foreign currency translation differences - (119,970) - (119,970) (29,808) (149,778) Net changes in debt investment securities net of taxes - 68,956-68,956-68,956 Profit for the period , ,373 49, ,223 Total comprehensive loss for the period - (51,014) 197, ,359 20, ,401 Dividend paid to NCI by affiliates relating to (16,522) (16,522) At 30 September ,113,957 (500,369) 114,215 1,727, ,859 2,022,662 Page 6

8 Condensed Unaudited Consolidated Statement of Changes in Equity for the Nine Months ended 30 September Share Capital Other Reserves Retained Earnings Total equity and reserves attributable Non-Controlling Interest Total Equity At 1 January ,626, ,676,212 (3,036,043) 481,266,820 56,776, ,043,790 Changes in Equity for 1 Jan to 30 Sept 2017: Foreign currency translation differences - (7,010,613) - (7,010,613) 10,380,314 3,369,701 Net changes in available for sale investments net of taxes - 29,499,673-29,499,673-29,499,673 Net gains on revaluation of property - 225, , ,130 Remeasurements of post-employment benefit obligations - 299, , ,949 Profit for the period ,583,382 49,583,382 8,371,415 57,954,798 Total comprehensive income for the period - 23,014,139 49,583,382 72,597,521 18,751,729 91,349,251 Dividend relating to (7,324,435) (7,324,435) Treasury shares (114,706) - - (114,706) - (114,706) Share option exercised - 52,574 (52,574) Transfer to general banking reserves - 39,619,042 (39,619,042) Transfer to statutory reserve - 9,458,398 (9,458,398) At 30 September ,511, ,820,365 (2,582,675) 553,749,635 68,204, ,953,899 Changes in Equity for 1 October to 31 Dec 2017: Foreign currency translation differences - 35,095,676-35,095,676 (5,825,162) 29,270,514 Net changes in available for sale investments net of taxes - (16,585,927) - (16,585,927) - (16,585,927) Net gains on revaluation of property - 727, , ,673 Remeasurements of post-employment benefit obligations - (2,157,165) - (2,157,165) - (2,157,165) Profit for the year - - 5,111,684 5,111,684 6,926,409 12,038,093 Total comprehensive income for the period - 17,080,257 5,111,684 22,191,942 1,101,246 23,293,188 Dividend relating to , ,477 Change in minority interest ,679,746 19,679,746 Treasury shares (236) (236) - (236) Transfer to other group reserve - 39,951,783 (39,951,783) Transfer to share option reserve - 52,767 (52,767) Transfer to general banking reserves - (34,397,461) 34,397, Transfer to statutory reserve - 4,461,530 (4,461,530) Convertible loans - equity component - (433,677) - (433,677) - (433,677) At 31 December 2017 / 1 January ,511, ,535,565 (7,539,609) 575,507,664 89,149, ,657,398 Changes in Equity for 2018 : IFRS 9 day 1 adjustment - - (91,667,359) (91,667,359) - (91,667,359) Restated opening balance 1 January ,511, ,535,565 (99,206,969) 483,840,304 89,149, ,990,039 Foreign currency translation differences - (36,097,182) - (36,097,182) (9,027,017) (45,124,199) Net changes in debt investment securities net of taxes - 21,119,405-21,119,405-21,119,405 Profit for the period ,449,922 60,449,922 15,267,684 75,717,606 Total comprehensive loss for the period - (14,977,777) 60,449,922 45,472,145 6,240,667 51,712,812 Dividend relating to (5,060,346) (5,060,346) At 30 Sept ,511, ,557,788 (38,757,047) 529,312,449 90,330, ,642,504 Page 7

9 Condensed Unaudited Consolidated Statement of Cash Flows Period ended 30 September 2018 Period ended 30 September 2017 % Change US$'000 NGN'000 US$'000 NGN'000 US$ NGN Cash flows from operating activities Profit before tax 314,495 96,321, ,908 69,407,353 39% 39% Adjusted for: Net trading income - foreign exchange (6,961) (2,131,815) (61,059) (18,677,054) -89% -89% Net gain from investment securities (32) (9,801) 3, , % -101% Impairment losses on loans and advances 202,444 62,003, ,587 72,368,020-14% -14% Impairment losses on other financial assets 14,469 4,431,457 55,356 16,932,478-74% -74% Depreciation of property and equipment 59,284 18,157,059 59,348 18,153,564 0% 0% Net interest income (702,704) (215,218,911) (707,170) (216,311,517) -1% -1% Amortisation of software and other intangibles 15,155 4,641,560 10,876 3,326,787 39% 40% Profit on sale of property and equipment (296) (90,697) (3,102) (948,850) 90% 90% Share of profit of associates (227) (69,524) (220) (67,294) 3% 3% Income taxes paid (80,161) (24,550,987) (61,620) (18,848,531) 30% 30% Changes in operating assets and liabilities Trading assets (101,527) (31,094,928) 53,120 16,248, % -291% Derivative financial assets 1, ,918 58,204 17,803,634-97% -97% Other treasury bills (36,898) (11,300,721) (29,814) (9,119,720) -24% -24% Loans and advances to banks 162,839 49,872,996 (192,566) (58,902,594) 185% 185% Loans and advances to customers 476, ,039,236 (93,112) (28,481,304) 612% 613% Pledged assets (15,774) (4,831,142) (26,558) (8,123,650) 41% 41% Other assets (36,387) (11,144,337) 96,498 29,517, % -138% Mandatory reserve deposits (102,223) (31,307,999) (65,758) (20,114,245) -55% -56% Due to customers 317,250 97,164, , ,576,194-50% -50% Derivative liabilities (1,647) (504,431) (11,133) (3,405,399) 85% 85% Other liabilities (5,326) (1,631,267) (8,675) (2,653,538) 39% 39% Other provisions (172,457) (52,818,777) 25,885 7,917, % -767% Interest received 1,156, ,081,637 1,155, ,386,097 0% 0% Interest paid (453,396) (138,862,726) (448,127) (137,074,581) 1% 1% Net cashflow from operating activities 1,004, ,643, , ,847,002 11% 12% Cash flows from investing activities Purchase of software (24,137) (7,392,636) (11,371) (3,478,160) 112% 113% Purchase of property and equipment (117,021) (35,840,362) (171,307) (52,400,067) -32% -32% Proceeds from sale and redemption of securities 88,276 27,036,511 (491,370) (150,301,894) 118% 118% Net cashflow used in investing activities (52,883) (16,196,487) (674,048) (206,180,121) -92% -92% Cash flows from financing activities Net Proceeds / repayment of borrowed funds (17,038) (5,218,352) 39,303 12,022, % -143% Dividends paid to non-controlling shareholders (16,522) (5,060,346) (23,945) (7,324,435) -31% -31% Net cashflow (used in) / from financing activities (33,561) (10,278,698) 15,358 4,697, % -319% Net increase in cash and cash equivalents 918, ,168, ,114 74,364, % 278% Cash and cash equivalents at beginning of period 1,965, ,477,040 2,020, ,355,567-3% -2% Effects of exchange differences on cash and cash equivalents (139,469) (41,967,248) (363,232) (109,574,646) -62% -62% Cash and cash equivalents at end of the period 2,744, ,678,557 1,900, ,145,500 44% 45% Page 8

10 For period ended 30 September 2018 Notes 1 General information (ETI) and its subsidiaries (together, 'the Group') provide retail, corporate and investment banking services throughout sub Saharan Africa outside South Africa. The Group had operations in 40 countries and employed over 16,310 people as at 30 September 2018 (30 September 2017: 16,286). is a limited liability company and is incorporated and domiciled in the Republic of Togo. The address of its registered office is as follows: 2365 Boulevard du Mono, Lomé, Togo. The company has a primary listing on the Ghana Stock Exchange, the Nigerian Stock Exchange and the Bourse Regionale Des Valeurs Mobilieres (Abidjan) Cote D'Ivoire. The condensed consolidated interim financial statements for the period ended 30 September 2018 have been approved by the Board of Directors on 23 October Summary of significant accounting policies This note provides a list of the significant changes in accounting policies adopted in the preparation of these condensed consolidated interim financial statements to the extent they have not already been disclosed elsewhere. These policies have been consistently applied to all the periods presented, unless otherwise stated. The notes also highlight new standards and interpretations issued at the time of preparation of the condensed consolidated interim financial statements and their potential impact on the Group. For a full list of the accounting policies used to prepare the financial statements, we refer the readers to the Group annual financial statements for the year ended 31 December These have remained unchanged except for as stated below. The financial statements are for the Group consisting of and its subsidiaries. 2.1 Basis of presentation The Group's unaudited condensed consolidated interim financial statements ('Condensed Financial Statements') for the period ended 30 June 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the audited 31 December 2017 Annual Consolidated Financial Statements and the accompanying notes included on pages 120 to 212 in our 2017 Annual Report. The Condensed Financial Statements have been prepared on a going concern basis. Except as indicated below, the Condensed Financial Statements have been prepared using the same accounting policies and methods used in preparation of our audited 2017 Annual Consolidated Financial Statements. Our significant accounting policies and future changes in accounting policies and disclosures that are not yet effective for us are described in Note 2.1 (b) of our audited 2017 Annual Consolidated Financial Statements. (a) New and amended standards adopted by the Group In the current period, the Group has applied a number of amendments to IFRS issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January I) IFRS 9 Financial Instruments In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for the financial instruments project: classification and measurement; impairment; and hedge accounting. IFRS 9 was effective for annual periods beginning on or after 1 January 2018, with early application permitted. The Group has adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1 January 2018, which resulted in changes in accounting policies and adjustments to the amounts previously recognised in the financial statements. The Group did not early adopt any of IFRS 9 in previous periods. As permitted by the transitional provisions of IFRS 9, the Group elected not to restate comparative figures. Any adjustments to the carrying amounts of financial assets and liabilities at the date of transition were recognised in the opening retained earnings and other reserves of the current period. The Group does not currently apply hedge accounting and as such the adoption of IFRS 9 does not have any impact. Based on current assessment, the only significant impact on the Group's balance sheet or equity is as a result of the effect of applying the impairment requirements of IFRS 9. Overall, the Group has recorded a higher impairment allowance of $299 million resulting in a negative impact on equity due to the impact of IFRS 9 adoption. Classification and measurement IFRS 9 replaces the multiple classification and measurement models in IAS 39 with a single model that has only three classification categories: amortised cost, fair value through OCI and fair value through profit or loss. It includes the guidance on accounting for and presentation of financial liabilities and derecognition of financial instruments which was previously in IAS 39. Furthermore for non-derivative financial liabilities designated at fair value through profit or loss, it requires that the credit risk component of fair value gains and losses be separated and included in OCI rather than in the income statement. The Group does not currently have such instruments. Impairment IFRS 9 introduces a revised impairment model which requires entities to recognise expected credit losses ( ECL ) on loans, debt securities and loan commitments not held at fair value through profit based on unbiased forward-looking information. The measurement of expected loss involves increased complexity and judgment including estimation of lifetime probabilities of default, loss given default, a range of unbiased future economic scenarios, estimation of expected lives, estimation of exposures at default and assessing increases in credit risk. This change has led to an increased impairment charge of $299 million compared to that recognised under IAS 39 as at 31 December The increase in impairment charge is driven by: The removal of the emergence period that was necessitated by the incurred loss model of IAS 39. All stage 1 assets carry a 12-month expected credit loss provision. This differs from IAS 39 where unidentified impairments were typically measured with an emergence period of between three to twelve months; The provisioning for lifetime expected credit losses on stage 2 assets; where some of these assets would not have attracted a lifetime expected credit loss measurement under IAS 39; The inclusion of forecasted macroeconomic scenarios e.g. growth rates, unemployment in the determination of the ECL in components such as Probability of Default (PD); and The inclusion of expected credit losses on items that would not have been impaired under IAS 39, such as loan commitments and financial guarantees. II) IFRS 15 Revenue from Contracts with Customers In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, effective for periods beginning on 1 January 2018 with early adoption permitted. IFRS 15 defines principles for recognising revenue and will be applicable to all contracts with customers. However, interest and fee income integral to financial instruments and leases will continue to fall outside the scope of IFRS 15 and will be regulated by the other applicable standards (e.g., IFRS 9, and IFRS 16 Leases). Revenue under IFRS 15 needs to be recognised as goods and services are transferred, to the extent that the transferor anticipates entitlement to goods and services. The standard also specifies a comprehensive set of disclosure requirements regarding the nature, extent and timing as well as any uncertainty of revenue and the corresponding cash flows with customers. Adoption of the new Standard did not have any significant impact on the Group. III) Amendment to IFRS 15 - Revenue from contracts with customers Contracts These amendments comprise clarifications of the guidance on identifying performance obligations, accounting for licenses of intellectual property and the principal versus agent assessment (gross versus net revenue presentation). New and amended illustrative examples have been added for each of those areas of guidance. The IASB has also included additional practical expedients related to transition to the new revenue standard. Adoption of the standard did not have a significant impact on the Group. Page 9

11 For period ended 30 September 2018 Notes Basis of preparation (continued) (a) New and amended standards adopted by the Group (continued) IV) IAS 40 Investment Property The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management s intentions for the use of a property does not provide evidence of a change in use. Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with IAS 8 is only permitted if that is possible without the use of hindsight. Early application of the amendments is permitted and must be disclosed. The amendments will eliminate diversity in practice. Adoption of the standard did not have a significant impact on the Group. V) IFRIC Interpretation 22 - Foreign Currency Transactions and Advance Consideration The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. The amendments are intended to eliminate diversity in practice, when recognising the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or nonmonetary liability relating to advance consideration received or paid in foreign currency. Adoption of the standard did not have a significant impact on the Group. 2.2 Changes in accounting policy on adoption of new standard: Financial assets and liabilities Recognition and measurement All financial assets and liabilities which include derivative financial instruments have to be recognized in the consolidated statement of financial position and measured in accordance with their classification. A financial asset or financial liability is measured initially at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. Financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument Financial assets - Policy applicable from January 1, 2018 a) Classification and measurement From 1 January 2018, the Group has applied IFRS 9 and classifies its financial assets in accordance with this standard. Financial assets are measured at initial recognition at fair value, and are classified and subsequently measured at fair value through profit or loss (FVTPL), fair value through other comprehensive income (FVOCI) or amortized cost based on our business model for managing the financial instruments and the contractual cash flow characteristics of the instrument. A financial asset is measured at amortized cost if it meets both of the following conditions: (i) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The carrying amount of these assets is adjusted by any expected credit loss allowance recognised. Interest income from these financial assets is included in 'Interest and similar income' using the effective interest rate method. A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL: (i) the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial asset; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments are those instruments that meet the definition of a financial liability from the issuer's perspective, such as loans, government and corporate bonds and trade receivables purchased from clients in factoring arrangements without recourse. Movements in the carrying amount of these assets are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses on the instrument's amortised cost which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in Net Investment income'. Interest income from these financial assets is included in 'Interest income' using the effective interest rate method. Equity Instruments On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. On adoption of the standard, the Group did designate some of it equity instruments as FVOCI. All other financial assets not classified as measured at amortized cost or FVOCI as discussed above are measured at FVTPL. In addition, on initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Business model assessment Business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group's objective is solely to collect the contractual cash flows from the assets or is to collect both the contractual cash flows and cash flows arising from the sale of assets. If neither of these is applicable (e.g. financial assets are held for trading purposes), then the financial assets are classified as part of 'other' business model and measured at FVPL. Factors considered by the Group in determining the business model for a Group of assets include past experience on how the cash flows for these assets were collected, how the asset's performance is evaluated and reported to key management personnel, how risks are assessed and managed and how managers are compensated. For example the liquidity portfolio of assets, which is held by Ecobank Ghana (subsidiary of the Group) as part of liquidity management and is generally classified within the hold to collect and sell business model. Securities held for trading are held principally for the purpose of selling in the near term or are part of a portfolio of financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. These securities are classified in the 'other' business model and measured at FVPL. The Group makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. Other factors considered in the determination of the business model include: the stated policies and objectives for the portfolio and the operation of those policies in practice. In particular, whether management s strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities that are funding those assets or realising cash flows through the sale of the assets; how the performance of the portfolio is evaluated and reported to the Group s management; the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; how managers of the business are compensated e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations about future sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Group s stated objective for managing the financial assets is achieved and how cash flows are realised. Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis are measured at FVTPL because they are neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell financial assets. Page 10

12 For period ended 30 September 2018 Notes Basis of preparation (continued) (a) New and amended standards adopted by the Group (continued) 2.2.1Financial assets - Policy applicable from January 1, 2018 (Continued) Assessment whether contractual cash flows are solely payments of principal and interest For the purposes of this assessment, principal is defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making the assessment, the Group considers: contingent events that would change the amount and timing of cash flows; leverage features; prepayment and extension terms; terms that limit the Group s claim to cash flows from specified assets (e.g. nonrecourse asset arrangements); and features that modify consideration of the time value of money e.g. periodical reset of interest rates. b) Reclassification Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets. There were no changes to any of the Group's business models during the current period Financial liabilities The accounting for financial liabilities remains largely the same under IFRS 9 as it was under IAS 39, except for the treatment of gains or losses arising from an entity s own credit risk relating to liabilities designated at FVPL. Such movements are presented in OCI with no subsequent reclassification to the income statement. The Group does not currently have such instruments. Under IFRS 9, embedded derivatives are no longer separated from a host financial asset. Instead, financial assets are classified based on the business model and their contractual terms. The accounting for derivatives embedded in financial liabilities and in non-financial host contracts has not changed. 2.4 Interest income and expense Interest income and expense for all interest-bearing financial instruments are recognized within interest income and interest expense in the consolidated income statement using the effective interest method. The Bank calculates interest income by applying the EIR to the gross carrying amount of financial assets other than creditimpaired assets. When a financial asset becomes credit-impaired (as set out in Note 2.5) and is, therefore, regarded as Stage 3, the Bank calculates interest income by applying the effective interest rate to the net amortised cost of the financial asset. If the financial assets cures and is no longer credit-impaired, the Bank reverts to calculating interest income on a gross basis. Under both IFRS 9 and IAS 39, interest income is recorded using the effective interest rate (EIR) method for all financial instruments measured at amortised cost, financial instruments designated at FVPL. Interest income on interest bearing financial assets measured at FVOCI under IFRS 9, similarly to interest bearing financial assets classified as available-for-sale or held to maturity under IAS 39 are also recorded by using the EIR method. The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Once a financial asset or a Group of similar financial assets has been written down as a result of an impairment loss, interest income is recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. For purchased or originated credit-impaired financial assets, the Group calculates interest income by calculating the credit-adjusted EIR and applying that rate to the amortised cost of the asset. The credit-adjusted EIR is the interest rate that, at original recognition, discounts the estimated future cash flows to the amortised cost of the assets. 2.5 Impairment of financial assets Impairment of financial assets - Policy applicable from January 1, 2018 The adoption of IFRS 9 has fundamentally changed the Bank s accounting for loan loss impairments by replacing IAS 39 s incurred loss approach with a forward-looking expected credit loss (ECL) approach. IFRS 9 requires the Bank to record an allowance for ECLs for all loans and other debt financial assets not held at FVPL, together with lease receivables loan commitments and financial guarantee contracts. No impairment loss is recognized on equity investments. The allowance is based on the ECLs associated with the probability of default in the next twelve months unless there has been a significant increase in credit risk since origination. If the financial asset meets the definition of purchased or originated credit impaired (POCI), the allowance is based on the change in the ECLs over the life of the asset. The Group measures loss allowances at an amount equal to lifetime ECL, except for the following, for which they are measured as 12-month ECL: debt investment securities that are determined to have low credit risk at the reporting date; and other financial instruments (other than lease receivables) on which credit risk has not increased significantly since their initial recognition. Loss allowances for lease receivables are always measured at an amount equal to lifetime. The Group generally considers a debt security to have low credit risk when their credit risk rating is equivalent to the globally understood definition of investment grade. 12-month ECL are the portion of ECL that result from default events on a financial instrument that are possible within the 12 months after the reporting date. Page 11