By Modupe Gbadeyanka
Chairman of Ecobank Transnational Incorporated (ETI), parent company of the Ecobank Group, Mr Emmanuel Ikazoboh, has explained why the board of directors of the company did not propose the payment of dividend to shareholders in the 2018 business year.
Speaking at the Annual General Meeting (AGM) of the lender in Togo, the Chairman said noted that the board decided to halt the payment of dividend as a result of the impending regulatory capital requirements of the group and the need to build the holding company’s liquidity buffers.
According to him, the decision was in the best interest of the company, assuring shareholders to expect reward from the bank as a soon as the financial institution has a strong balance sheet and solid capital base.
“We assure you that while this was a hard decision, it was taken in the best interest of the company. We want to make sure we attend to the capital needs of all our subsidiaries before can start paying dividends,” the Chairman said at the meeting.
Mr Ikazoboh further assured shareholders of the company that efforts are being intensified to sustain the positive performance recorded by the financial institution going forward.
After posting a loss in 2016, Ecobank bounced back into profit in 2017 and consolidated on that performance in 2018 by growing its profit after tax by 46 percent to N136 billion.
The Chairman said the results reflected the continued discipline in cost management, commitment to risk management and the ongoing clean-up of the bank’s credit portfolio, saying the efficiency or cost-to-income ratio has steadily improved to 61.5 percent in 2018 despite tepid revenue growth.
He said: “Our capital levels remain adequate. The Group’s Base II/III Capital Adequacy Ratio of 13.6 percent is above the regulatory limit and each of our subsidiaries is meeting its capital commitments as well.
“However, your board believes that in the near-term, to meet our planned growth initiatives, and to ensure that we win in key countries such as Nigeria and Kenya, we will need to boost capital levels through a combination of fresh equity injections and the reinvestments of profits.”
Also speaking, the Group Chief Executive Officer of the bank, Mr Ade Ayeyemi, described the company’s financial results in 2018 as remarkable in many ways, saying it reflects the meaningful and significant progress they made in the execution of “our Roadmap to Leadership strategy”.
“It also demonstrates the commitment, hard work and contribution of Ecobankers towards ensuring our sustainable foundation for growth,” Mr Ayeyemi said.
