By Peter Egwuatu
Ecobank Nigeria is set toÂ Â boost its capital base by N45 billion following an injection of capital from its Togo-based parent company, Ecobank Transnational Incorporated (ETI), even as its gross earnings forÂ the financial year 2008 jumped by 68 .62 per cent.
The infusion of capital, at a time of considerable turmoil in the market, demonstrates the strength of the Ecobank Group. It also reflects ETIâ€™s commitment to support its subsidiaries, and its confidence in the Nigerian market.
â€œIn the face of current market conditions, we believe it is appropriate to further capitalize our subsidiary in Nigeria,â€ says Arnold Ekpe, Group Chief Executive Officer of the Ecobank Group.At its last annual general meeting, shareholders of Ecobank Nigeria approved a capital raising exercise to raise up to N120 billion through a combination of equity and equity-related instruments.
The N45 billion infusion from ETI is part of this capital raising. Ecobank Nigeria has continued its growth plan with its recent acquisition of AIB, following earlier acquisitions of Hallmark Bank and Allstates Trust Bank, which together increases its branches and offices in Nigeria to 243.
Ecobank Nigeria is part of the Ecobank Group, which currently operates in 27 countries across Africa. Ecobank Nigeria accounts for approximately 40 percent of the Ecobank Group.Meanwhile, the board of Ecobank NigeriaÂ PlcÂ has announced a jump of 68.62 per centÂ in earnings incomeÂ for the year ended December 31, 2008,Â indicating strong customer confidence during the period.
Analysts also link the strong growth in earnings to its inorganic growth and presence in more business areas across the country.The increased growth did not however translate to better profit following provisions of about N12.496 billion loan loss which would have positively impacted on the net profit position, thereby guaranteeing much more than the 24 kobo dividend paid at the end of the 2007 financial year.
According to the result, the company posted a gross eanings ofÂ N55.155 billion, an improvement of about N22.446 billion or 68.62 per cent from previousyearâ€™sN32.709 billion.Following the provisioning for bad debts , the bankâ€™s figures slipped into the red, with a loss before tax of about N897.642 million, as against a profit before tax of N10.096 billion.The figures for the year ended December 31, 2008, was however lifted into positive territories by an extraordinary item of N2.135 billion, compared with a loss position of about N108.89 million. This resulted in a profit after tax of N2.13 billion, a slide of about N5.319 billion or 71.40 per cent from N7.449 billion. The directors have not offered any dividend or bonus for the period.