1Q2026 Earnings Update 
Ecobank Ghana PLC (EGH) released its 1Q2026 results on 30 April 2026, reporting a 33.3% y/y increase in profit after tax to GHS 439.3mn but trailed our forecast by 9.3%. The earnings outturn was supported by a 39.0% y/y rise in profit before tax to GHS 703.9mn. At the top line, net interest income grew a modest 2.4% y/y to GHS 825.7mn, as a declining interest rate environment weighed on margins, compressing net interest margin by 69bps y/y to 3.2%, despite a 19bps reduction in cost of funds to 0.7%. Non-interest revenue provided no relief, declining 20.0% y/y to GHS 309.0mn, likely reflecting reduced transaction volumes and unfavourable foreign exchange dynamics in the quarter, with trading revenue and other operating income both pulling back. As a result, total operating income fell 4.8% y/y to GHS 1.1bn, with neither funded nor non-funded income offering meaningful top-line support. Cost performance was the standout feature of the quarter and the primary driver of earnings growth. Operating expenses declined sharply by 32.9% y/y to GHS 386.4mn likely aided by a more favourable FX environment which compressed FX-denominated operating cost and resulted in a 1,427bps improvement in the cost-to-income ratio to 34.0%. Impairment charges provided a further boost, declining 59.5% y/y to GHS 44.4mn, bringing the cost of risk down by 72bps y/y to 0.34%, and likely reflecting improved portfolio performance on the back of write-offs and loan book restructuring. On the balance sheet, loans and advances expanded 27.3% y/y to GHS 13.2bn, signalling a degree of risk appetite recovery. However, the loan-to-deposit ratio rose only modestly to 35.8% and exposes the bank to cash drag due to the cash reserve ratio rules. Customer deposits grew 10.9% y/y to GHS 36.9bn, maintaining a commanding lead over the loan book and sustaining ample excess liquidity despite the 27.3% y/y expansion in loan book. Investment securities surged 74.2% y/y to GHS 18.2bn, indicating a deliberate reallocation toward lower-risk government instruments and away from private sector credit considering the elevated NPL environment (18.7% industry average). Total assets grew 12.4% y/y to GHS 52.0bn, while shareholders’ funds rose 33.3% y/y to GHS 7.6bn, reinforcing the bank’s capital position. Asset quality concerns persist as the NPL ratio appears downwardly sticky. The NPL ratio, while improving by 351bps y/y, still stands at an elevated 20.5%, constraining the bank’s capacity to meaningfully grow the loan book or rebuild core earnings through fundamental lending activity. On the capital side, the capital adequacy ratio improved by 370bps y/y to 20.5%, and the equity-to-assets ratio rose 230bps y/y to 14.7%, pointing to a strong solvency buffer.

Overall, EGH’s 1Q2026 results reinforce a familiar theme – profitability supported more by cost reduction than revenue growth. Lower operating expenses, reduced impairments, and a larger government securities portfolio cushioned earnings, but both funded and non-funded income remained under pressure. A durable earnings recovery will depend on sustained NPL reduction, margin stabilisation, and a recovery in non-funded income growth.