26 April 2018

Nigeria: Ecobank Group Records U.S.$20 Million Loan Recovery, Posts U.S.$182 Million Profit

Ecobank Group has announced that it has achieved a total of $20 million recoveries from its resolution vehicle created in 2016 to manage the bank's legacy loans.Besides, the bank assured shareholders of enhanced returns through dividend payment in a near future.

The bank also explained that it has proactively resolved its legacy issues with the amount recovered so far from the implementation of the resolution vehicle.Addressing shareholders during the 30th yearly general meeting held in Lome, Togo on Tuesday, the Group chairman, Emmanuel Ikazoboh explained that the non-performing loan ratio which stood at 10.7 per cent at the end of 2017 has been diligently addressed, resulting in a specific provisions of approximately $1.6 billion over the past two years.He noted that the positive development has impacted positively on the bank's 2017 performance.

According to him, the bank achieved a profit of $182 million compared to $39 million loss recorded in the corresponding period in 2016."Additionally, ETI adopted equity accounting methods in 2017 which allows it to record un-distributable profits of its subsidiaries and affiliates according to its percentage controlling interest. "

Furthermore, ikazoboh pointed out that the group generated a profit attributable to shareholders to the tune of $179 million and diluted earnings per share of $0.01, compared to loss of $250 million and a diluted loss per share of $0.01 in 2016. He added that the group also generated a return on total equity of 11.6 per cent.

"We have, and are working through our challenged loans while the impact of economic recovery is gradually feeding through to heightened activity in our major markets. We are making encouraging progress but still expect credit losses and non performing loan levels to remain relatively high."

Ikazaboh explained that lapses in internal credit control across the group, coupled with the effect of Nigeria' recession had a negative impact on the bank's credit quality.He however assured shareholders that the bank has addressed its credit issues with appointment of a new group chief risk officer and the complete overhaul of its credit origination and approval process.

He added that the bank has established a corporate finance unit to structure regional term loans and other transaction related lending.

On the non payment of dividend, Ikazoboh explained that the bank decision to pay dividend was challenged by some factors which include the bank of Ghana' s directive to increase minimum capital requirements from GHS 120 million to GHS 400 million.

"Although we previously signalled that the near term resumption of cash dividend payment would be challenging, that does little to alleviate the board's disappointment and sadness that we cannot reward our shareholders loyalty this year.

"Rest assured that we regard this as a matter of major importance and we are working tirelessly to turnaround the group's financial fortunes to enable uninterrupted and growing future dividend payments".

The Group Chief Executive Officer, Ade Ayeyemi explained that the group has returned to profitability which reflects a significant reduction in impairment losses on its loans and advances. He pointed out that the bank has focused on strengthening the bank's competitiveness and has positioned the group to create shareholder value on a sustainable basis.He assured shareholders that the bank would continue to instil discipline and remain proactive in managing its business.

Nigeria

Most African Children Without Birth Certificates Are Nigerians

For every 10 Nigerian children that are at least five years old, there are no records about the birth of seven. Even… Read more »

See What Everyone is Watching

Copyright © 2018 The Guardian. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.