Banking
S&P Expects Growth in Ecobank’s Profits, 40% Dividend Payout
By Dipo Olowookere
Globally recognised rating agency, Standard and Poors, has said it foresees the stable operating conditions of Togo-based Ecobank Transnational Incorporated to help it achieve its revenue growth prospects.
In a statement issued recently to announce the affirmation of ‘B-/B’ and ‘B/B’ long- and short-term issuer credit ratings the lender and its Nigerian subsidiary, Ecobank Nigeria Ltd, S&P pointed out that the diverse shareholder structure of the pan-African lender, combined with its strong management team, will ensure the group’s adequate positioning and enable it to benefit from the supportive economic conditions in the West African Economic and Monetary Union (WAEMU), its largest market, improving economic conditions in Ghana, and more stable conditions in Nigeria.
According to the agency, the ratings reflects its view that Ecobank’s strong pan-African footprint and strengthened management and governance will support its profitability going forward, adding that this is balanced against the group’s constrained asset quality indicators and capital position.
“We think its unique pan-African franchise has attracted a stable base of institutional investors, including Nedbank, Qatar National Bank and South Africa-based Public Investment Corporation, which have positively affected the group’s corporate governance and risk management. We believe the International Finance Corporation’s sale of its 14.1% stake to Arise Invest B.V. reflects continued interest from global investors in Ecobank group and will further support the group’s broader business stability,” the statement obtained by Business Post said.
Ecobank group benefits from a sizeable customer base (19 million as at June 30, 2019) and a strong competitive position in its core markets, ranking among the top three banks in 14 of the countries in which it operates. This wide franchise will continue to support the group’s stable and diversified funding base and low cost of funds, which compare favorably with regional peers. The group’s subsidiaries are primarily funded with short-term deposits (88% of the funding base), comprised of retail and nonfinancial corporate current and savings accounts, S&P said.
“We expect loan growth to resume within the next 12 months. This, in conjunction with higher nonoperating revenue and reduced cost of risk compared with prior years, will support earnings growth.
“We expect the bottom line figures to improve, in conjunction with the continued retention of 100% of net profits until 2020, after which we expect a dividend payout of approximately 40% of net profit.
“This will help improve capitalization slightly and should lead to an average risk-adjusted capital (RAC) ratio before diversification of 3.5% in 2019-2021, up from 3.1% at year-end 2018.
“The group’s subsidiaries are all compliant with their respective minimum capital adequacy as prescribed by their respective regulators. More specifically, following the $150 million recapitalization of Ecobank Nigeria in 2018/2019, we note that its capital adequacy ratio has increased to 16.2% as of June 30, 2019.
“We understand the bank’s capitalization requirements currently do not incorporate the additional 1% domestic systemically important bank (D-SIB) buffer above its 10% minimum capital adequacy ratio. We estimate the group has sufficient capital to meet the additional requirement if the Central Bank of Nigeria introduces the measure in 2020,” the statement said.
It stressed that, “The need to inject capital at Ecobank Nigeria, stemming from the naira devaluation, the $250 million effect of International Financial Reporting Standards 9 (IFRS 9), and additional outlays for regulatory compliance, resulted in double leverage increasing to 150% at year-end 2018, from 114% in 2017.”
“We consider this ratio very high, however, we believe that this risk is adequately covered by available foreign currency liquidity of approximately $600 million. We forecast double leverage will reduce to 130% by 2019 and below 120% by 2020, in line with management’s targets, on the back of increased dividends and cash flows from its subsidiaries.
“The outlook on Ecobank Nigeria and ETI is stable, reflecting our expectation that the group’s asset quality and financial performance will gradually improve over the next 12 months. The outlook also incorporates our expectation that the group would maintain adequate liquidity at the holding company level in response to its high double leverage.”
“We would lower our ratings on Ecobank Nigeria if we took a similar rating action on Nigeria (B/Stable/B). We would also lower our ratings if we considered the Nigerian subsidiary less core to the group due to prolonged weaker financial performance.
“We would lower the ratings on ETI if liquidity buffers that mitigate its double leverage significantly diminished.
“An upgrade of ETI would require, in addition to double leverage reducing to more manageable levels below 120%, a significant improvement in its asset quality indicators or a strengthening of its RAC above 7%. We consider an upgrade of ETI not very likely within our forecast horizon.
“An upgrade of Ecobank Nigeria would require a significant strengthening of the group’s asset quality or capitalization and a similar action on Nigeria,” the statement noted.
By Aduragbemi Omiyale
The international spending limit on the GTBank Naira card has now been increased to $20,000 per quarter, a notice from the financial institution disclosed.
In an email message to customers sighted by Business Post on Tuesday, the lender said the Dollar limit is applicable to POS and online transactions carried out with the debit card.
The increase in the spending limit on the GTBank Naira card for offshore transactions comes as Nigeria continue to experience stability in the foreign exchange (FX) market.
A few years ago, Nigerians were unable to use their Naira cards to conduct financial transactions online for operations outside the country. This frustrated many consumers, who could not buy things online from other jurisdictions.
However, after some forex reforms by the Central Bank of Nigeria (CBN) under the leadership of Governor Yemi Cardoso, these restrictions were removed.
“The Dollar limit on your GTBank Naira Card is now $20,000 quarterly,” the notice read.
The increase in the spending limit to $20,000 per quarter will give GTBank Naira cardholders an opportunity to make more transactions online with ease, as before now, it was pegged at $15,000.
By Aduragbemi Omiyale
A new product known as Asset Financing Solution, tailored for those in the Nigerian transportation and logistics sector, has been introduced by a technology-enabled financial institution, FairMoney Microfinance Bank.
This initiative marks a significant expansion of FairMoney’s product ecosystem, moving beyond personal and working capital loans into commercial asset financing. By helping entrepreneurs build a verifiable credit history through vehicle repayments, the company is supporting financial inclusion and participation within the formal economy.
Asset Financing Solution forms part of the lender’s broader commitment to responsible lending and structured financing for eligible operators, as it expands access to asset financing for mobility entrepreneurs across the country through an application process subject to credit assessment and eligibility requirements.
The sector continues to record sustained market activity with reported growth rates of approximately 9.87 per cent–10.1 per cent in late 2025.
As road freight and passenger transport remain the nation’s dominant modes of transit, FairMoney’s new initiative aims to improve access to structured asset financing for thousands of transporters and delivery merchants. By providing access to business-use transport assets, the product helps address limited access to structured financing for micro-SMEs and supports activities within Nigeria’s logistics and mobility sector.
Mobility entrepreneurs seeking to acquire vehicles can now access flexible repayment plans through an application process that is subject to credit assessment and eligibility requirements.
Leveraging its technology-enabled onboarding and risk assessment capabilities, applicants can move through a structured onboarding and evaluation process.
Repayment structures are specifically tailored to the daily and weekly cash-flow realities of mobility businesses, supporting operational continuity and business growth within structured repayment arrangements.
The programme is open to eligible applicants via the FairMoney Business platform and through designated partner hubs across major cities.
“Our mission has always been to increase financial inclusion and create income opportunities by supporting individuals and small business operators in growing their businesses.
“With this solution, we are focused on supporting small business operators and mobility entrepreneurs who contribute significantly to transportation and commercial activity. The solution is designed to provide structured asset financing for eligible operators,” the Managing Director of FairMoney MFB, Mr Henry Obiekea, stated.
Speaking further, he said, “The intra-state transportation sector in Nigeria is experiencing sustained demand and market activity, offering opportunities for mobility and transport operators. The Asset Financing Solution ensures that costs are spread into manageable instalments, thereby supporting small business operations and broader economic participation.”
By Modupe Gbadeyanka
Two former employees of Access Bank Plc, identified as Mr Obadofin Daniel Bamise and Ms Hadiza Oyiza Yakubu, have been convicted and sentenced by Justice A.A. Bello of the Kaduna State High Court for theft.
The convicts were found guilty of a separate one-count charge of theft against them by the Kaduna Zonal Directorate of the Economic and Financial Crimes Commission (EFCC).
They carried out unauthorised withdrawals on the accounts of 305 customers of Access Bank, who were beneficiaries of the federal government’s Palliative Scheme, totalling N7.8 million. They posted the unauthorised withdrawals to the Palliative Scheme’s coordinators’ accounts.
After pleading “guilty” to the charges against them, Justice Bello convicted and sentenced both of them to seven years imprisonment each, with an option of a N50,000 fine each.
According to a statement from the EFCC, the charge against Mr Bamise was, “That you, Obadofin Bamise Daniel sometime between the 5th of November, 2024 and 23rd of January, 2025 in Kaduna, within the jurisdiction of this Honourable Court, while being an employee of Access Bank Plc did in your capacity as an employee committed theft in the sum of N433.000 being property in possession of Access Bank Plc and you thereby committed an offence contrary to Section 274 of the Kaduna State Penal Code Law, 2017 and punishable under same Law.”
The charge against Ms Yakubu was, “That you, Hadiza Oyiza Yakubu sometimes between the 5th of November, 2024 and 23rd of January, 2025 in Kaduna, within the jurisdiction of this Honourable Court, while being an employee of Access Bank Plc did in your capacity as an employee committed theft in the sum of N806,000 being property in possession of Access Bank Plc and you thereby committed an offence contrary to Section 274 of the Kaduna State Penal Code Law, 2017 and punishable under same Law.”
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