Ecobank Group Posts $182m Profit, Losses $39m

Group chairman, Emmanuel Ikazoboh

Ecobank Group achieved a profit of $182 million but made $39 million loss in the corresponding period in 2016.
The bank also achieved a total of $20 million recoveries from its resolution vehicle created in 2016 to manage the bank’s legacy loans.
Speaking at the 30th yearly general meeting held in Lome, Togo Group chairman, Emmanuel Ikazoboh 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.
Ikazoboh told shareholders that the non-performing loan ratio which stood at 10.7 % 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.
“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. “
He stated 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 adding that the group also generated a return on total equity of 11.6 %.
“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 disclosed 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.
But he 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 noted 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 in his remark said that the group has returned to profitability which reflects a significant reduction in impairment losses on its loans and advances.
According to him, the bank is focused on strengthening its competitiveness and positioned to create shareholder value on a sustainable basis assuring shareholders that the bank would continue to instil discipline and remain proactive in managing its business.
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