Pan-African bank, Ecobank has declared N52.6 billion loss for 2016 and a shares lost of 5 percent to N7.79, the lowest since 2009. The bank posted N21.3 billion profit in 2015.
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.
The bank’s Managing Director, Ade Ayeyemi, and Chief Financial Officer, Greg Davis, 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 proposes to use half of a proposed $400 million 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 said.
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. [myad]
