No Dividend For ETI Shareholders As It Moves To Meet Regulatory Requirements

Shareholders of Ecobank Transnational Incorporated (ETI) would not enjoy divided for this year as its parent company, Ecobank works to meet regulatory requirements in some countries that it operates, like Ghana.

Group Chairman of Ecobank, Emmanuel Ikazoboh said, “the Bank of Ghana’s directive of to increase minimum capital requirement meant that Ecobank, one of our subsidiaries most consistent in dividend payer by amount had to subsequently reduce its dividend."

He further explained that this is to enable the increase capital buffer to funded from retained earnings.

Shareholders of the bank for some time had not received a dividend, due to what not so good earnings by ETI, the parent company of Ecobank Group.

Reason
According to the Board Chair, Ecobank Cote d'Ivoire's Initial Public offering saw ETI’s stake fall from 94 percent 75 percent, with a proportionate impact on Ecobank group’s dividend income in the near team.

The Board Chair also spoke about, how earnings growth was stifled higher credit losses and weak economic activity in the middle of Africa.

This decision did not go down well with some shareholders at the meeting who were pushing for some sought of compensation, considering what has happened over the years.

Mr Ikazoboh was, however, optimistic of the bank resuming dividend payments to shareholders soon looking at the first quarter earnings.

Despite these concerns, shareholders voted unanimously for all the resolutions tabled at the Annual General Meeting.

Back to winning ways
In 2017, ETI, the parent company of Ecobank group made a profit of $182 million, compared to a loss of $39 million in 2016.

However, group-wide profit before tax stood at $288 million, compared to a loss of $131 million. Profit attributable to shareholders amounted to $179 million dollars. Revenue of $1.8 billion fell seven percent from 2016.

Income before impairment losses increased by three percent to $755 million and cost to income ratio improved to 61.8 percent compared to 62.7percent in 2016.

According to the Group Chief Executive, Ade Ayeyemi, this is a marked improvement on 2016, “which reflects a significant reduction in the impairment losses on loans and advances as we continue to instil greater discipline in managing the bank ”.

Ade Ayeyemi
"Over the past two years, we have also focused on strengthening Ecobank’s competitiveness and positioned the group to create shareholder value on the sustainable basis, I am confident that Ecobank’s long-term success is assured,” he added.

He was, however, of the view that legal environment in many of the countries “remains disappointingly slow in adjudicating the cases brought to recover long outstanding client obligations”.

The Group Chief Executive also added their Ghana subsidiary has already met the new capital requirement of ¢400 million as well some regulatory requirements.

On some initiatives, implemented by the Group like its digital drive, Mr Ayeyemi added that it is already yielding results, with “our customer base growing nearly by 40 percent, bring our medium-term target of 100 million customers within reach”.

Story by Ghana|Myjoyonline.com | George Wiafe, Lome| Joy Business