Ecobank Transnational plc (ETI) has introduced an innovation to rewarding investors as it offered the biggest reward in the banking industry in terms of bonus issue by offering shareholders five new shares for every one already held by them.
The reward is in addition to the dividend of N2.40 already declared by the bank.
Business Day gathered weekend that the bank would be reducing the nominal value of its shares from 12.5 US cents per share to 2.5 US cents per share by subdividing each ordinary share into five equal parts. This, according to analysts, implies that all existing shareholders will have six times more shares than they had initially because it is like declaring a bonus of one existing share for five new ones.
Before now, banks and other companies issuing bonuses are wont to capitalise their share premium accounts and offer such as fully paid-up shares to their shareholders.
Those who viewed the bonus as the biggest reward so far in the industry noted that the total shares outstanding in the name of the bank would still be about 59 percent of the average shares outstanding of Nigerian banks of 16 billion whereas ETIÃƒÆ’Ã†â€™Ãƒâ€ Ã¢â‚¬â„¢ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã‚Â¡ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã‚Â¾ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¢s outstanding shares would be 6.5 billion.
Therefore, despite this huge bonus, ETI would also be in a position to give more bonuses in the future than any Nigerian bank.
Analysts who commented on the issue said: ÃƒÆ’Ã†â€™Ãƒâ€ Ã¢â‚¬â„¢ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã‚Â¡ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã†â€™ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã¢â‚¬Å“With this split, ETI will be available to more shareholders rather than institutional investors.ÃƒÆ’Ã†â€™Ãƒâ€ Ã¢â‚¬â„¢ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€¦Ã‚Â¡ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã†â€™ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â Despite the share split, the shares still have an upside as the shares are expected to rally in coming weeks.
The bank is reputed as the only bank that has what it takes to be in the entire region in sub-Sahara Africa and could be a target of combination for offshore banks that want a foothold on
Meanwhile, analysts say that the year 2007 marked a milestone for ETI as this was the first year
They are of the view that with
With 2007 equity to asset ratio of 7.8 percent, ETI is considered as an undercapitalised bank compared with other
However, it is believed that as more cash-rich Nigerian banks look to build pan-African footprints, ETI may become the prized assets within the sub-Sahara African banking system. - BusinessDay