Ecobank Plc 2016 Financial Summary

12 Months ECOBANK PLC
	2016 N'000	2015 N'000	change	Year End
Revenue	665,001,896	542,706,397	23%	December
Profit/Loss before taxation	33,707,558	40,589,019	-183%
Profit/Loss for the period	52,600,893	21,252,606	-348%
Issued Shares (Units)	18,349,551,215	18,349,551,215
Basic Earnings Per Shares (Kobo)	259.00	56.00	-563%
Last total dividend paid (Kobo)	0.00	9.00	-100%

Ecobank performance was summarized by #221.7billion impairment loss in 2016.

Captured in the words of the Board of the Bank below: 

“The financial results show the benefits of progress of our strategy but also reflect the frustrating reality of poor financial performance in announcing a loss before tax of $131m and revenue of $2bn for the year ended 31 December 2016. Our Group revenues remained resilient despite a tough year of macroeconomic headwinds including a weaker economic environment, particularly in Nigeria, and the strengthening of our reporting currency - the US dollar – against all African currencies particularly the Nigerian Naira where 40% 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, 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. Loans and advances to customers “The funds from our proposed $400m convertible bond issue will be used sensibly and profitably, of which $200m would be used to repay the short-term financing used in setting up the resolution vehicle. The remaining $200m 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 $300m. The conversion price of the offer is 6 USD cents compared to a current price of 3 USD cents with an interest rate of 6.46% above LIBOR. “Good businesses should always match operational expansion with cost control, and this is a fundamental belief of ours which we practise. We maintain our cautious stance on lending in this challenging period, but will continue to implement a number of exciting new customer initiatives such as our pan-African banking app and leveraging our blue-chip partnerships to benefit our customers across 40 countries. As the gateway to global trade finance in Africa, the role we are playing at the centre of the intra-Africa trade and cash management for governments, corporate clients, suppliers and distributors will benefit the economies in which we operate and consequently the income of Ecobank. “I remain confident in the result of the cost efforts and in our ability to deliver a leading service for our customers which will be reflected in improved key performance indicators in 2017 and beyond. Ecobank’s twin goals are generating sustainable returns above the cost of equity whilst maintaining the highest international standards and we treat both goals equally. Reputations are hard won and easily lost and we will never compromise that. We have a bright future ahead and I look forward to the future with confidence.”

The Market made its decision know by selling down the stock. Where this would lead to yet to be determined. The stock lost 5% today to close at #7.79k and this is expected to continue through the week.