By Amaka Ifeakandu Lagos
Ecobank Transnational Incorporate (ETI) has taken a decision to completely clean its books of nonperforming risk assets in its legacy loan portfolio, and has made a provision of N221.7 billion in its 2016 audited accounts.
Th e impairment charges, showed a jump of 110.7 per cent compared with N105.2 billion recorded in 2015. According to the results released on the fl oor of the Nigerian Stock Exchange (NSE) on Tuesday, ETI recorded a growth of 22.3 per cent in gross earnings to N665 billion in 2016, from N542.7 billion in 2015. Net interest income similarly rose by 25.3 per cent to N284 billion, from N226.6 billion in 2015.
Profi t before impairment charges stood at N188 billion, up from N146 billion. However, the N221.7 billion impairment charges led to company to close the year with loss before tax of N33.7 billion compared with a profi t before tax of N40.5 billion, while loss after tax stood at N52 billion, as against a profi t after tax of N21.25 billion in 2015. Commenting on the results, the Group Chief Executive Offi cer of ETI, Ade Ayeyemi said Group revenues remained resilient despite a tough year of macro- economic headwinds including a weaker economic environment, particularly in Nigeria, and the strengthening of our reporting currency – the United States dollar – against all African currencies particularly 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 fi rst 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.
Th is, 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, so whilst the impairment charge has impacted our earnings, our accounting treatment has been for the right reasons and we are in better shape for the future as a result,” he said.
