Ghana: Ecobank Transnational Incorporated Returns to Profitability

Ecobank Transnational Incorporated (ETI), parent company of Ecobank Ghana returned to profitability in 2017 after recording a loss in 2016.

ETI in 2017 made a profit of $182 million, compared to a loss of $39 million in 2016.

However, group-wide profit before tax stood at $288 million, compared to a loss of $131 million.

Speaking to journalists after ETI's annual general meeting held in Togo, Group Chief Executive, Ade Ayeyemi, said the marked improvement in 2016 was as a result of significant reduction in the impairment losses on loans and advances and greater discipline in managing the operations of the bank.

"Over the past two years, we have also focused on strengthening Ecobank's competitiveness and positioned the group to create shareholder value on the sustainable basis, I am confident that Ecobank's long-term success is assured," he said.

On the Bank of Ghana directive to commercial banks to increase their capital requirement Mr Ayeyemi said Ecobank Ghana had already met the new capital requirement of ¢400 million as well as some regulatory requirements.

Digital drive

He said the Group digital drive was beginning to yield results and would be further expanded adding that "our customer base growing by nearly 40 per cent, bring our medium-term target of 100 million customers within reach."

Ecobank's app processed nine million transactions worth over USD$ 1 billion in less than 18 months ago across 33 African countries.

Dividend payment

On the bank's inability to pay dividend to shareholders, Group Chairman of Ecobank, Emmanuel Ikazoboh explained that parent ETI was working to meet regulatory requirements in some countries that it operates, citing Ghana as example.

"The Bank of Ghana's directive to increase minimum capital requirement meant that Ecobank, one of our subsidiaries most consistent dividend payer by amount had to subsequently reduce its dividend."

Additionally, he said Ecobank Cote d'Ivoire's initial public offering saw ETI's stake in it fall from 94 per cent to 75 per cent, with a proportional impact on ETI's divided income in the near term.

"Finally, earnings growth, overall, was stifled by higher credit losses and weak economic activity in middle Africa. As we address the former and the fragile recovery gains momentum, we expect resumption of earnings growth and, with it, likely dividend reinstatement," he said.

Mr Ikazoboh assured shareholders that the bank would resume dividend payments considering ETI's first quarter earnings.

Shareholders

Shareholders at the AGM lauded the 2017 performance of the bank but expressed concern about the bank's inability to pay dividend.

Speaker after speaker urged ETI to put measures in place to ensure that profitability was sustained.

The shareholders voted unanimously for all the resolutions tabled at the meeting.

See What Everyone is Watching

More From: Ghanaian Times

Don't Miss

AllAfrica publishes around 600 reports a day from more than 150 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.