Shareholders of Ecobank Transnational Incorporated (ETI) are expected to meet in its Lome, Togo home base on June 16, 2017 for the Annual General Meeting (AGM) to review the financials for the year ended December 31, 2016. But unlike previous year, the directors, in the audited result released simultaneously to the Nigerian Stock Exchange (NSE), Ghana Stock Exchange and Bourse Régionale des Valeurs Mobilières (BRVM), did not recommended a dividend, as the figures came in crimson red colours, the height of which was the 348% drop in bottom-line, despite a 23% rise in earnings for the period. At the end of the 2015 financial year, the board of ETI, which operates under the Ecobank Group trade name, paid a dividend of 2Cents on August 2, 2016.
The group’s external auditors, KPMG noted the total loan impairment provisions of $610m (about N221.7bn) recorded for the period, from the gross loans and advances of $9.869bn, which represents about 48% of the total assets as at year end, as a key audit matter.
According to the result, gross earnings for the period rose to N665.001bn ($2.591bn, from N542.706bn ($2.744bn); out of which interest income stood at N429.324bn ($1.672bn), up by 24% from N345.753bn ($1.748bn) in 2015; while interest expense increased 22% from N119.202bn ($602.746m), to N145.363bn ($566.406m), resulting in net interest income of N283.961bn ($1.106bn), from N226.551bn ($1.145bn).
Fee and commission income rose 8% to N124.759bn ($486.121m)from N115.1bn ($582.004m); fee and commission expenses rose 92% to N13.471bn ($52.492m) from N7.016bn or $35.477m; bringing net trading income to N103.569bn ($403.555m) from N81.668bn ($412.958m).
Net gains from investment securities stood at N6.77bn, about $26.381m, as against loss of N188.075m or $951,000 in the 2015 full year. Other operating income rose 55% to N577.95m or $2.252m; from N372.015m or $1.881m.
Staff expenses for the period rose N137.319bn or $535.061m, up from N116.986bn or $591.543m; depreciation and amortization rose 14% from N22.252bn ($112.52m) to N25.458bn or $99.197m; other operating expenses jumped to N154.743bn or $602.953m, compared with N131.208m or $663.455m. Total operating expenses rose to N317.52bn or $1.237bn from N270.447bn or $1.367bn.
Ecobank Group reported an operating profit before impairment losses and taxation for the period increased by 29% to N188.645bn ($735.052m) from N146.04bn ($738.457m).
Impairment losses on loans and advances jumped by 134% from N84.461bn to N197.683bn; while in US$ terms, its grew 80% to $770.268m from $427.081m; while investment losses on other financial assets rose 16% from N20.758bn ($104.963m), to N24.017bn ($93.583m); resulting in impairment losses on financial assets rose by 111% to N221.7bn ($863.851m); as against N105.219bn in the corresponding period of 2015. Operating loss after impairment losses stood at N33.055bn, $128.799m, as against a profit of N40.821bn ($206.413m) in 2015.
Loss before tax stood at N33.707bn or $131.341m, a decline of 183% compared with the profit before tax of N40.589bn or $205.239m; just as loss for the year stood at N52.6bn, compared with a profit of N21.252bn, representing Loss Per Share (LPS) of 259 kobo during the period from Earnings Per Share of 56 kobo in 2015; while in Dollar terms, the net loss stood at $204.958m or 1.01 Cents from a profit of $107.464m, or $0.28.
Meanwhile, total comprehensive loss for the year stood at N222.475bn, rising by 1,020% from N19.871bn; while in Dollar terms, it stood at $866.868m, 763% rise over the $100.481m; the bulk of this was the N160.349bn exchange difference on translation of foreign operations, from N58.247bn. In Dollar terms, the loss was $624.797m, as against the $294.529m reported in the 2015 full year.
Total assets for the period rose 33% in Naira terms to N6.255tr from the previous N4.694tr and in US$ terms, it stood at $20.51bn, down by 13% from $23.553bn; with customer loans and advances of N2.824tr, or $9.259bn; from N2.232tr or $11.2bn. Total liabilities rose by 36% from N4.191tr or $21.03bn to N5.717tr or $18.746bn; boosted by the N4.116tr or $13.496bn customer deposits, compared to previous year’s N3.274tr or $16.427bn.
Contrary to expectation and practice as gleaned other results so far released to the Nigerian Stock Exchange (NSE), ETI’s directors did not give a breakdown of its performance across its key regional markets, in terms of earnings, profit, tax, assets, liabilities and the loan loss provisions, among others.
The management would expectedly provide some of these information when its chief executive hosts a conference call to review the results at 14:00 GMT (15:00 Lagos time) on April 18 to offer investors an opportunity to ask questions on the financials.
“The conference call dial-in details will be contained in the earnings press release that will accompany the publication,” the group said in its statement last Thursday.