Ecobank Transnational Incorporated (ETI) recorded a sharp increase in impairment charges for the 2025 financial year, rising to $464.6 million from $322.4 million in 2024, and representing a 44 per cent year-on-year increase in a deliberate and conservative provisioning strategy under IFRS 9, even as the Group delivered record profitability.
The rise in total impairment charges as contained in its 2025 audited earnings report was primarily driven by a significant jump in loan-related impairments.
Gross impairment charges on loans and advances climbed to $807 million from $324 million, while net impairment charges surged by over 200 per cent to $582 million. This was partly offset by stronger recoveries and releases, which increased to $225 million from $132 million in the prior year, helping to moderate the overall impact on earnings.
Management attributed the spike in provisions to higher impairments on non-performing loans within its corporate and investment banking portfolio in Nigeria. This followed the exit from the Central Bank of Nigeria’s regulatory forbearance regime, which triggered the reclassification of legacy exposures, particularly in the oil and gas segment. The bank emphasised that the move represents a proactive clean-up of its loan book rather than a systemic deterioration in credit quality.
At a regional level, Nigeria recorded the steepest increase in impairment charges, rising by 298 per cent year-on-year.
However, the Group also disclosed that a substantial portion of its provisioning buffer was held centrally under “ETI & Others”, where impairment charges stood at $258 million. Other regions showed mixed performance, with UEMOA recording a 47 per cent increase due to Stage 2 loan growth, while AWA and CESA posted declines supported by improved recoveries and lower risk costs.
Ecobank also significantly strengthened its Expected Credit Loss reserves, which rose 67 per cent to $1.0 billion. Stage 3 loans, representing non-performing exposures, accounted for nearly 75 per cent of total ECL, underscoring the concentration of risk in already impaired assets. Notably, $576 million of the total ECL was accumulated as a central buffer, with approximately $491 million linked to Nigeria-specific risks.
Asset quality metrics reflected the impact of the reclassification exercise, with the Group’s non-performing loan ratio rising to 9.4 per cent from 6.7 per cent in 2024. Despite this, coverage remained robust, with an NPL coverage ratio of 83.3 per cent and Stage 3 coverage at 62.2 per cent. Management indicated that the elevated NPL ratio is temporary and expects a moderation in the first half of 2026 through targeted recoveries and asset disposals.
Despite the elevated risk charges, Ecobank delivered resilient earnings performance. Profit before tax rose by 21 per cent to a record $801 million, supported by a 29 per cent increase in pre-provision operating profit to $1.27 billion. This underscores the group’s underlying earnings strength, even after absorbing higher credit costs.
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