Ecobank Transnational Seeks $400m Convertible Bond Issue In Q2

By Nse Anthony-Uko,

ABUJA, (Sundiata Finance) – The management of Ecobank Transnational Incorporated has proposed a $400 million convertible bond issue in second quarter of 2017, a move that will help it repay and restructure debt of short-term financing and maturity profile.

Group chief executive officer, Ecobank, Mr. Ade Ayeyemi in a statement said, “The funds from our proposed $400million convertible bond issue will be used sensibly and profitably, of which $200million would be used to repay the short-term financing used in setting up the resolution vehicle.

“The remaining $200million is for a conscious debt restructure of the maturity profile of the ETI Holdco balance sheet. We are delighted to have very high subscription levels to the issue from existing shareholders, in the region of $300million. The conversion price of the offer is six USD cents compared to a current price of three USD cents with an interest rate of 6.46 per cent above LIBOR.”

The financial institution had already issued $300million supported by existing shareholders. Ecobank for 2016 financial year had reported a loss Before Tax of N33.7 billion from N40.6 billion profit before tax in 2015, mainly attributable to higher loan impairment charges taken in fourth quarter 2016 full impairment losses on financial assets of $864million absorbed, predominantly from specific client names related to a legacy portfolio experiencing deterioration in quality Pre-impairment income flat in at $735million as against $738million despite strengthening of the US dollar.

The share price of Ecobank has slumped by 0.4 per cent or N0.03 per share to N7.76 per share yesterday from N7.79 per share it closed on Tuesday when the 2016 financial year results was announced.


Access Bank CAR Hit 21%


Following its implementation of risk management framework, Capital Adequacy Ratio (CAR) of Access Bank Plc currently stands at 21 per cent and liquidity ratio at 43 per cent. The CAR for banks in Nigeria stands at 10 per cent and 15 per cent for national or regional banks with international banking licence respectively.

According to the stress test conducted by the Central Bank of Nigeria (CBN), three big banks have fallen below regulatory capital requirements. Analysis of the bank’s result for the financial year ended December 31, 2016 showed stable assets quality with non-performing loans and cost of risk ratios at 2.1 per cent and 1.2 per cent respectively.

This low ratio demonstrates the effectiveness of the bank’s risk management culture and prudent approach to lending. Besides, the group delivered resilient performance in the year under review with overall results reflecting growth. It recorded a total revenue of 381.3billion and profit before tax of N90billion, an increase of 13 per cent and 20 per cent respectively.

Supporting this growth was a 32 per cent year on year increase in net interest income of N131. 1 billion, compared to N105. 4 billion recorded in the corresponding period of 2015, demonstrating the sustainability of its core business.

The bank’s reported a non-interest growth of three per cent to N133 billion in 2016 financial year, compared to N129billion recorded in the same period of 2015, which was driven by strong increase in fees and commissions.

Speaking on the results, the managing director of the bank, Mr Herbert Wigwe, explained that the revenue rose across all operating sections with significant support from the retail business, posting N12 billion in profit before tax and contributing 11 per cent to the group result.


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