By Audrey Lotechukwu
MON 25 JAN, 2021-theGBJournal- Ecobank Nigeria has secured a N50 billion, 10-Year bilateral subordinated loan.
Ecobank Transnational Incorporated (ETI), the parent company of the Ecobank Group, announced the significant deal at the Nigerian Stock Exchange (NSE) today but gave no details.
ETI said the bilateral funding provides stable medium-term liquidity to the balance sheet of Ecobank Nigeria and positively improved its balance sheet ratios, especially the capital adequacy ratio by circa 300 basis points.
‘’The transaction proceeds would be deployed to support Micro, Small and Medium Scale Enterprises (“MSMEs”) and Small Corporates,’’ ETI said.
Ecobank Nigeria is a major subsidiary of ETI, Africa’s leading independent banking group.
The group’s audited results for the Nine Month Period Ended 30 September 2020, saw its Nigeria operation post a profit before tax of $37 million, compared to $1 million in the prior-year period, primarily driven by an increase in pre-impairment operating income, which was $43 million compared with a loss of $3 million in the prior year period. ROE was 5.9%. Net revenue of $203 million, increased 19%, or in constant currency, increased 26%.
Revenue growth benefited from higher net interest income, the bank noted.
Net interest income of $129 million, increased 82%, or in constant currency, increased 91%. The increase was driven mainly by a decrease in interest expense, reflecting higher margins from a reduction in the rates paid on funds.
The cost-to-income ratio improved significantly to 79.0% from 101.9% in the prior year-period.
Net impairment loss on loans of $1.1 million compared to an impairment benefit of $8 million in the prior-year period. The current periods net impairment loss reflected lower recoveries of non-performing loans compared to the previous year’s period.