ETI pays $28m dividend as shareholders okay bank’s $500m capital raising

• Investors’ appetite for consumer, bank stocks lift index by 0.3%

Following sustained progress made in its ‘Roadmap to Leadership’ strategy adopted in 2016, Ecobank Transnational Incorporation (ETI), the parent company of the Ecobank Group, yesterday, paid out a total dividend of $28 million to shareholders for the 2022 financial year.

This is the second dividend declared by the bank after seven years of nonpayment of dividends. The bank resumed payment of dividends in 2021, recommending a total of $40 million to shareholders for the 2021 financial year, making it a cumulative dividend of $68 million in the last two years (2021 and 2022) since 2013.

At the 35th yearly general meeting of the bank held in Lome, Togo, yesterday, the Chairman, Ecobank Group, Alain Nkontchou said the execution of the business model (Execution Momentum Strategy) for 2018 to 2020 extended to 2022 designed to generate long-term sustainable returns for shareholders has led to a cash dividend of $0.0011 per share to shareholders.

Besides, shareholders approved the resolution authorising the bank to raise senior-ranked debt, additional Tier 1, Tier 2-qualifying subordinated debt or a combination of any of these forms of instruments as the board of directors may deem appropriate, alongside dividend payment for the 2022 financial year.

Nkontchou said with the bank’s diversified business model’s resilience to adverse markets, focus on risk and control framework and discipline in cost management, the bank is now well positioned to pay dividends to shareholders in a sustainable manner.

However, he stated that the dividend policy is formulated in a prudent and cautious manner to bring more stability to the bank, make the balance sheet stronger and ensure that the solidity of the bank is not impacted.

According to him, the Group’s profit before tax, net revenue and total assets increased by 13 per cent, sex per cent and five per cent, to $540 million, $1,862 million and $29,004 million, respectively while the holding company’s (ETI) profit for the year was $222 million compared with $295 million in 2021.

In addition, its return on tangible equity of 21.1 per cent in 2022 is the highest Ecobank has achieved in the last decade.

To consolidate on the performance, he said the group has significantly invested in its digital platform, including mobile and internet banking, as well as created a robust payment infrastructure, noting that these achievements would enable the bank to accumulate more market share, reduce cost and improve efficiency.

The Group Chief Executive Officer, Jeremy Awori said the bank achieved an improved performance despite the challenging economic conditions of high interest rates, inflation, and Ghana’s debt restructuring.

According to him, the successes were attributable to the bank’s diversified business model, digital expertise, innovative approaches, growth momentum, and efficiency, noting that these factors enabled the bank to navigate the adverse economic environment and absorb the impact of the debt restructuring.

He said the bank would focus more on growing its large market which includes the transformation of the Nigerian business, consolidation of its leadership position in its key markets and transforming businesses in currently subscale markets.

He added: “For the first quarter of 2023, our Group performance results are showing momentum as we continue to benefit from our pan-African and diversified business model, efficiency, balance sheet stability, deep customer relationships and the hard and smart work of all Ecobankers.”

Meanwhile, the bulls strengthened their hold on the equities sector of the Nigerian Exchange Limited (NGX), yesterday, as investors’ appetite for consumer and banking stocks lifted the All-share index by 0.3 per cent.

At the close of transactions, the all-share index (ASI) rose by 161.53 per cent, representing a gain of 0.31 per cent, to close at 52,580.86 points. Similarly, the overall market capitalisation value gained N88 billion to close at N28.631 trillion.

The market’s negative performance was driven by price depreciation in large and medium-capitalised stocks which are; Nigerian Breweries, MRS Oil Nigeria, Cadbury Nigeria, Vitafoam Nigeria and Guaranty Trust Holding Company (GTCO).

Analysts at GTI Securities Limited said: The Nigerian Stock market continued its positive dominance in the face of a worrisome inflation rate of 22.22 per cent.

“We expect this strain to continue as investors focus on fundamentally sound companies, dividend payments and impressive first-quarter (Q1) 2023 results.”

Analysts at Vetiva Dealings and Brokerage said: “We expect to see moderation in the bullish sentiment, as investors look to take profit on some recent gainers.”

As measured by market breadth, market sentiment was positive, as 29 stocks gained relative to 18 losers. MRS Oil Nigeria recorded the highest price gain of 9.93 per cent to close at N37.10 kobo.

Nigerian Breweries followed with a gain of 9.63 per cent to close at N38.7 and Cornerstone Insurance was up by 9.46 per cent to close at 81 kobo.

FTN Cocoa processors rose by 8.82 per cent to close at 37 kobo, while Royal Exchange gained 8.33 per cent to close at 52 kobo.

On the other hand, Consolidated Hallmark Insurance led the losers’ chart by 7.69 per cent to close at 60 kobo. Sovereign Trust Insurance followed with a decline of 6.52 per cent to close at 43 kobo, while Transnational Corporation (Transcorp) lost 5.23 per cent to close at N2.90 kobo.

Caverton Offshore Support Group declined 4.76 per cent to close at N1 while Wapic Insurance shed 4.44 per cent to close at 43 kobo.

The total volume traded increased by 18 per cent to 680.796 million units, valued at N7.892 billion, and exchanged in 6,666 deals.

Transactions in the shares of Fidelity Bank topped the activity chart with 254.051 million shares valued at N1.418 billion. Access Holdings followed with 112.827 million shares worth N1.131 billion.

Transcorp traded 63.391 million shares valued at N185.592 million. GTCO traded 59.992 million shares valued at N1.568 billion, while Zenith Bank transacted 31.697 million shares worth N794.384 million.