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Ecobank posts heavy loss, share price crashes to 8 years low

By Felix Oloyede on 20/04/2017

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Pan-African bank, Ecobank’s shares lost -5 percent to N7.79, lowest since 2009, as it declared N52.6 billion loss for 2016. The bank posted N21.3 billion profit in 2015.

The lender recorded a 22.58 percent increase in its gross earnings to N665 billion last year compared to N542.7 billion it made in the preceding year.

Ecobank’s huge loss during the 2016 financial year was caused by its impairment provision which hiked by 110 percent to N 221.7 billion against N105.2 billion in 2015.

Ade Ayeyemi, the bank’s Managing Director, and Greg Davis, Chief Financial Officer, explained: “Bottom line performance has been impacted by our voluntary adoption of a full impairment charge regarding our legacy loan portfolio, for which a resolution vehicle was set up, the first private sector funded resolution vehicle of its kind in Nigeria.”

Ecobank is to use half of a proposed $400m convertible bond to pay back funding needed for resolution vehicle.

“We are delighted to have very high subscription levels to the issue from existing shareholders, in the region of $300m,” Ayeyemi and Davis further stated.

Nedbank Africa owns 20 percent stake in Ecobank, while Qatar National Bank holds 17 percent.

According to Bloomberg report, Nedbank is planning to decrease the carrying value of its investment in Ecobank from N92.24 billion in December 2016 to approximately N66.85 in March 2017

Nedbank is currently not part of the group of existing shareholders who have indicated appetite for the $300m of this funding as the commercial terms of this convertible bond do not meet Nedbank’s required internal rate of return. (http://stocksng.com)

Source News Express

Posted 20/04/2017 09:12:49 AM

 

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