The group operating expenses of Ecobank Transnational Incorporated rose to $563m in the first half of 2023, representing an 11 percent increase when compared to figures recorded during the same period in 2022.

The bank disclosed this in its half-year financial report released on Thursday.

Ecobank said its “group operating expenses for the first half of 2023 was $563m, increasing by 11 percent or 27 percent at constant currency. The higher operating expenses in the half year were driven by a mix of inflationary-driven costs and increased staff compensation in some of our markets in line with inflationary trends.

“Key drivers of the expense increase were costs associated with the card business, insurance, IT licenses and related technical fees, and other administrative expenses. However, the rise in operating expenses was offset by higher revenues helping drive an improvement in the cost-to-income ratio to 54.3 percent compared with 56 percent in the prior year.”

In terms of revenue, the group reported net revenue of $1,037m, increasing by 14 percent or 38 percent at constant currency.

The net revenue increase was driven by the net impact of higher interest rates on net interest incomes across markets, particularly in the Anglophone West Africa and Central, East, and Southern Africa regions, modest growth in interest-earnings assets, higher fees on cash management and card transactions and episodic income from volatile currency movements in some of our markets.

Its net interest income generated in the first six months of 2023 was $547m, increasing by 11 percent or 34 percent at constant currency, and the net interest margin was 4.9 percent, compared with a net interest income of $493m and a net interest margin of 4.7 percent in the prior-year period.

The increase in net interest income was primarily driven by the net impact of higher market rates on interest earned on loans and investment securities, particularly in the AWA and CESA regions, partially offset by an increase in interest paid on deposits and borrowed funds, especially in Nigeria.

Regarding its responsibility to investors, the group profits available to shareholders rose to $161m for the first six months of 2023 compared with $130m during the same period in 2022. The 23 percent increase in attributable profits was driven by solid revenue performance across both net interest income and non-interest revenue, positive operating leverage, and stable credit quality.

Speaking on its results, the Chief Executive Officer, Ecobank Group, Jeremy Awori, said, “Our results for the first six months of 2023 demonstrate the benefits of our diversified business model, resilient balance sheet, and our commitment to serving our customers. Profit before tax increased by 18 percent to $308m and by 67 percent if you exclude foreign currency translation effects.

“Net revenues were up 14 percent to $1,037m, or 38 percent in constant currency, and we delivered a return on tangible equity of 27 percent. We achieved these results despite continued challenging macroeconomic conditions in the second quarter, with significant weaknesses in African currencies, high consumer prices, and tepid economic growth.”

Awori added that the group saw opportunities to build stronger and better customer relationships in its operations.