Ecobank Group posts N33.7bn loss after N221.7bn full loan provision

Ecobank Transnational Incorporate (ETI), on Tuesday said it has taken a decision to completely clean its books of non-performing risk assets in its legacy loan portfolio, by making a provision of N221.7 billion in its 2016 audited accounts.

The bank said that its impairment charges, showed a jump of 110.7 per cent compared with N105.2 billion recorded in 2015.

It said that the results released on the floor of the Nigerian Stock Exchange (NSE) on April 18, showed that the bank recorded a growth of 22.3 per cent in gross earnings to N665 billion in 2016, from N542.7 billion in 2015.

The net interest income rose by 25.3 per cent to N284 billion, from N226.6 billion in 2015.

Profit before impairment charges stood at N188 billion, up from N146 billion.

ETI said, however, the N221.7 billion impairment charges led the company to close the year with a loss before tax of N33.7 billion compared with a profit before tax of N40.5 billion in 2015.

The bank added that loss after tax stood at N52 billion, as against a profit after tax of N21.25 billion in 2015.

Commenting on the results, the Group Chief Executive Officer of ETI, Ade Ayeyemi said group revenues remained resilient despite a tough year of macro- economic headwinds .

Ayeyemi said the headwinds included a weaker economic environment, particularly in Nigeria, and the weakening of its reporting currency in terms of dollar with African currency, especially the Nigerian Naira where 40 per cent of the group’s revenues have historically been generated.

“Separately, our end of year 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, with the sole objective of ring-fencing the legacy loans from Nigeria’s core bank. This, among others, would allow management to focus on delivering results.

“Our business philosophy was founded on international best practice in terms of accounting and asset quality.