Banking

S&P Expects Growth in Ecobank’s Profits, 40% Dividend Payout

Published

7 years ago

03/10/2019

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.

Banking

Shareholders Authorise Abbey Mortgage Bank to Raise Fresh Funds

Published

46 minutes ago

26/05/2026

Aduragbemi Omiyale

By Aduragbemi Omiyale

The board of Abbey Mortgage Bank Plc has been given the approval to raise additional capital aimed at helping the company achieve its next phase, which is centred on delivering seamless and digitally driven banking experiences that eliminate the traditional barriers to premier financial services.

At the 34th Annual General Meeting (AGM) of the lender on Monday, investors authorised the raising of up to N100 billion through an offer by way of issuance of shares (whether by rights issue and/or public offer), global depository receipts, commercial papers, loans, convertibles or non-convertibles, medium term notes, bonds, and/or any other instruments either as a stand-alone or by way of programmes, in such tranches, series or proportions, at such coupon or interest rates, within such maturity periods, and on such terms and conditions; including through book building process or such other processes all of which shall be as determined by the directors, subject to obtaining the approvals of relevant regulatory authorities.

The directors were also allowed to raise fresh equity capital of up to N65.547 billion by way of private placement of 26,562,647,265 ordinary shares of 50 Kobo each at N2.43 per share, subject to regulatory approvals.

In addition, shareholders approved the increase in the company’s issued share capital from N5,076,923,077 divided into 10,153,846,154 of 50 Kobo each to N18,358,246,709.50 by the creation of up to 26,562,647,265 ordinary shares of 50 Kobo each, such new shares to rank pari passu in all respects with the existing ordinary shares in the capital of the bank.

Addressing investors at the meeting, the chief executive of Abbey Mortgage Bank, Mr Mobolaji Adewumi, said, “Shaping the future means building a resilient institution that is as agile as it is reliable, while ensuring that every stakeholder benefits meaningfully from our growth and expansion.”

The company’s leadership also highlighted its strategic progress and strong corporate governance culture that positions the institution to deliver broader financial services and enhanced customer experiences.

The meeting also provided an opportunity to appreciate shareholders for their continued confidence, loyalty, and support, which have remained instrumental to its growth journey over the years.

Banking

Spending Limit on GTBank Naira Card Now $20,000

Published

6 hours ago

26/05/2026

Aduragbemi Omiyale

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.

Banking

FairMoney Unveils Asset Financing Solution for Mobility Entrepreneurs

Published

2 days ago

24/05/2026

Aduragbemi Omiyale

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.”