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ETI Raises Stake in Ecobank Nigeria

Category: Capital Market


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ETI Raises Stake in Ecobank Nigeria

By Goddy Egene, 07.01.2010 


The parent company of Ecobank Nigeria Plc, Ecobank Transnational Incorporated ( ETI),  has increased its equity holding  in the bank from 71 per cent to  85 per cent. Making the disclosure at the 22nd Annual General Meeting (AGM) held in Lagos yesterday, Chairman of the Ecobank Nigeria,Dr. Sonny Kuku, said that increase arose from Special Placing of 6.662 billion ordinary shares  to the parent company .



According to him, ETI had deposited N46 billion for shares with the bank  since December  2008 and following the  approval of the shareholders at the last AGM authorising the directors to raise capital by any or combination means,  the special placing was made to ETI.“With the special placing, our shareholders’ funds grew to N73.5 billion from N31.8 billion. This improved the bank’s capital adequacy ratio from 10 per cent to 24 per cent while also allowing the bank to do additional business to enhance performance.”However, Kuku explained that the holding of ETI would be reduced  in the next two years in line with the statutory provision that  the general public must hold minimum of 25 per cent equity in a listed company.He said that the Nigerian Stock Exchange (NSE) gave Ecobank Nigeria a waiver allowing ETI to hold 85 per cent and general public 15 per cent upon a special request made by the board of the bank.



Meanwhile, shareholders of Ecobank Nigeria have tasked the Board and management to work hard and improve the fortunes of the company for the payment of dividend.Sir Sunny Nwosu,  Chief Aderemi Oyepeju, Mr. Boniface Okezie,  Mr. Nonah  Awoh and Mr. Godwin Anono among other shareholders who spoke  at the AGM, said while the financial institution passed the stress test of the Central Bank of Nigeria (CBN),it has not paid dividend  since 2008.Ecobank ended both years with losses due to provision for non-performing assets as a  result the stock market crash and  banking reforms by the CBN. However, the bank has begun 2010  a positive note with profit after tax of N1.2 billion for the first quarter ended March 31, 2010.



Although the shareholders commended the Q1 performance, they urged the board and management to put in place strategies that would raise the profit level of the bank and lead to dividend at the end of the current financial year.Specifically, Nwosu said that Ecobank should reduce cost of operations and win back depositors. He said: “We must work hard and return to back to profitability and returns to investors.”Responding, the Managing Director/Chief Executive Officer of the bank, Mr. Jubril Aku, said the strategies needed to return the bank to its leading position in the industry are being put in place.



He assured that in line with its mission statement of providing its retail and wholesale customers with convenient, accessible and reliable banking and financial products and services, Ecobank Nigeria will regain its position in the financial sector.He said significant progress has been made in loans recovery, adding that the bank would continue to focus aggressively in this respect.“To emphasise the importance (of loan recovery), we have set up an initiative called Troubled Risk Assets Committee (TRAC) to solely focus on impaired assets. We are to date, pleased with the efforts made and believe that even much more will be achieved,” he said.


http://www.proshareng.com/investors/company.php?ref=ETI


(Source:ThisDay)



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