BRVM: Banking profits up from 12% to 385 million CFA in the 1st half despite the Covid-19

The banking sector at the BRVM has been resilient over the first half of the year, despite the health context that has prevailed in the WAEMU area since March.

WAEMU has been suffering from the effects of Covid-19 since March, and its economy has been slowing down as a result of the measures taken by the various states making up the WAEMU in order to limit the spread of this virus. The banks, as a receptacle for economic activity, have aroused great concern, due to a greater exposure to defaults, said APBEF-CI (professional association of banks of Côte d'Ivoire) through its president Daouda Coulibaly in an interview with SIKA FINANCE published in its issue magazine #2 in August 2020, which expressed it in these terms: “The impact on our customers is direct and perceptible, but for banks it is slower and longer lasting. We are seeing our credit production slow down gradually. ”..

So far, it can be said that there has been more fear than harm at the level of the BRVM banking sector, which has performed well beyond expectations while market participants have been pessimistic. Indeed, the activity of banks has increased in the first half of the year in view of the evolution of the revenue. At the individual level, the best developments have been achieved by Ecobank Transnational Incorporated (ETI) and Coris Bank International.

Revenue evolution from 1st HY 2019 to 1st HY 2020

The most beautiful surprise comes from the net result of the sector. Against all expectations, the cumulative net profit of all the banks in the market showed a double-digit increase, from 11.86%, to $ 385.4 million in this first half of the year, compared to the first half of 2019, despite this unprecedented situation.

At the individual level, the best performance was recorded by BOA Mali, which made its return in the positive after a failed 2019 that even forced the bank to opt for recapitalization through an IPO (Initial Public Offering) of $ 5.9 million.

Profit evolution from 1st HY 2019 to 1st HY 2020

While the sector has shown admirable resilience over the first half of the year, these banks have not escaped unscathed. The vast majority of market-oriented banks have seen their risk costs deteriorate. Indeed, the sector's cost of risk rose from $ 163 million in the first half of 2019 to $ 170 million in the first half of 2020, an evolution of 4.29%. The most poignant increases of this indicator were recorded by BOA Niger (+1,044% to $ 2.9 million) followed by BOA Benin (+759% to $ 5.8 million).

Risk cost evolution from 1st HY 2019 to 1st HY 2020

It should be noted that the majority of these banks have been prudent in significantly reducing the volume of lending to clients in order to minimize their risk exposure in this rather new context. In contrast to claims, deposits had a similar trend as in 2019 (year-on-year in the first half).

Deposit from customers and loan to customers evolutions from 1st HY 2019 to 1st HY 2020

KOUAKOU Christopher

La Rédaction

Publié le 18/11/20 17:55