Ecobank Transnational Incorporated (ETI) says its measures to strengthen its foundations and position the bank to deliver long-term shareholder values is yielding positive results.
“When we implemented our roadmap to leadership strategy which targets the achievement of a sustainable return on equity above the cost of equity over the long-term, it became apparent that the amount of work that it required was onerous. I’m glad to say that we have made tremendous progress. ” Ecobank Group Chairman Emmanuel Ikazoboh told shareholders at its annual general meeting held in Lome, Togo.
He said to drive efficiency and returns in Nigeria, the bank downsized its operations and deleveraged its balance sheet, thereby reducing risks.
“We improved its cost profile by reducing both headcount and branches, while at the same time investing in technology,” he said.
On financial performance for the period under review Mr Ikazoboh said the company performed remarkably well and hope it would be sustained. Mr Ikazoboh ETI delivered $322 million profit in 2018, up $140 million, or 77 per cent, compared to $182 million in 2017. This is the second year of a profitable bounce back by the Group, after it posted a loss in 2016.
The Ecobank Group generated profits attributable to shareholders of ETI of $265 million, an increase of 47 per cent from 2017, which translates into earnings per share of 1.06 US dollar cents, up 47 per cent in 2017.
This indicates an improvement in the return on tangible shareholders equity to 21 per cent from 13.6 per cent a year ago.
“These results reflected the continued discipline in cost management commitment to risk management and our ongoing clean-up of the credit portfolio. The efficiency, or cost-to-income ratio, has steadily improved and was 61.5 per cent in 2018, despite tepid revenue growth,” Mr Ikazoboh said.
He said the health of the credit portfolio measured by the cost-of-risk has improved to 2.4 per cent compared to 3.3 per cent in 2017.
Dividend The Group Chairman assured shareholders that ETI would pay dividends to shareholders as soon as the earnings for the Group improve.“The Board recognises the importance of dividends payouts to our shareholders… However, having considered factors such as the impending regulatory capital requirements of the Group and the need to build the holding company’s liquidity buffers, we are not recommending the payment of a dividend…” he explained.He said, “Over the last few years, we have taken strong measures to […]