Ecobank targets five per cent NPL ratio by 2020
The Chairman, Ecobank Group, Emmanuel Ikazoboh, while addressing shareholders at the bank’s 31st yearly general meeting in Lome, Togo, yesterday, explained that the resolution vehicle created in 2017 to manage the legacy loan portfolio has helped stem its capital erosion and improved liquidity.
He also said the strategy has repositioned the bank on the path of profitability after two years of recurring losses.
He said the management has strengthened its oversight function, risk management practice and credit portfolio that led to the heavy impairment losses incurred in the last few years.
“Thankfully, we have made significant progress, especially with the credit risk portfolio within corporate and investment bank. We still have a lot of work to do on the portfolio, particularly within commercial bank, and we continue to focus intensively on it.”
Consequently, the bank returned to profitability during the period under review as Ecobank TransNational Incorporated (ETI) – the parent company recorded a profit $322 million, an increase of $140million or 77 per cent compared to $182 million achieved in 2017, while Ecobank Group generated profits attributable to shareholders of ETI of $262 million, an increase of 47 per cent over 2017 performance.
Ikazoboh explained that this translated to earnings of $0.0106 ($1.06 cents) up from 47 per cent to in 2017, and a return on tangible equity of 21.0 per cent compared to 13.6 per cent in the previous year.
“For your company, 2018 was an inflection point. It marked the ‘Execution ‘ phase of our strategy following the initiatives that we took to strengthen the company’s foundation.
“I therefore characterised the company’s performance in 2018 as solid. We have improved our control environment by strengthening the team and investing in systems and processes.”
On the payment of dividend, he said: “I assure you that the bank will reinstate dividend payment when we have the right capital and right buffer. It is not good for us to start something we cannot sustain. By the time we resume dividend payment, it will be on a sustainable manner. We are transferring the profit made in 2018 as retained earnings.”
The Group Chief Executive Officer, Ade Ayeyemi, said the bank will do everything within its powers to boost performance of Ecobank Nigeria.
“We would continue to make sure that we deploy the right technology and products, and increase presence in the commercial banking space to ensure that we can get sufficient liquidity and do sufficient business in Nigeria.”
No comments yet