The Nation Newspaper

Tag: ETI

  • ETI announces $200m syndicated loan closure

    Eco-bank Transnational Incorporated, ETI, the Lomé-based parent company of the Ecobank Group, announces the successful close of a $200 million syndicated loan facility.

    The facility  was oversubscribed at 268.5 million, with Ecobank Transnational Incorporated (ETI) increasing Deutsche Bank’s mandate as arranger from $150 million to $200 million

    The facility was oversubscribed at $268.5 million, with ETI increasing Deutsche Bank’s mandate as arranger from $150 million to 200 million. The facility supports ETI’s goal of maintaining a diversified funding base with strong market access.

    The loan will be due for repayment in November 2019.

  • ETI appoints new director

    Ecobank Transnational Incorporated (ETI), parent company of the Ecobank Group, has announced the co-option to its Board of Directors of Mrs. Aichatou Agne Pouye.

    A native of Senegal, Mrs.  Pouye is a professional with more than 30 years of experience in the private sector, public administration and international organisations.

    She has held leadership positions in many organisations both in private and public sectors where she demonstrated strong skills in areas such as people’s management, auditing and enterprise management, marketing of banking services, access to finance for SMEs, international trade negotiations and trade related technical assistance (TRTA).

    She started her career at Ernst and Young International, Dakar, Senegal in 1984, where she worked as an external auditor.  In October 1990, she joined Citibank, where she spent 10 years as Resident Vice President, Group Vice-President and member of the Bank’s Management Committee. In July 2000, she went into public sector as the General Administrator of the Economic Promotion Fund (FPE), a refinancing fund established by the African Development Bank (AfDB) and the Senegalese Government to fund SMEs and micro projects.

  • Impairment charge throws ETI into N52.6b loss

    •Assures shareholders on future earnings

    Ecobank Transna-tional Incorporate (ETI) Plc, Ecobank Group’s holding company, recorded a net loss of N52.6 billion in 2016 following a voluntary decision of the financial group to adopt full impairment charge for its legacy loan portfolio.

    ETI made a provision of N221.7 billion in the 2016 audited accounts, an increase of 110.7 per cent on N105.2 billion recorded in 2015.

    Key extracts of the audited report and accounts of the ETI Group release yesterday at the Nigerian Stock Exchange (NSE) showed 29 per cent increase in operating profit before impairment losses to N188.65 billion in 2016 as against N146.04 billion in 2015. However, with the decision for the full impairment of the legacy loan, the group recorded loss before tax of N33.71 billion in 2016 as against pre-tax profit of N40.59 billion in 2015. After taxes, net loss stood at N52.6 billion in 2016 compared with net profit of N21.25 billion in 2015. Earnings per share thus reversed from 56 kobo in 2015 to a loss of N2.58 in 2016.

    The report showed that gross earnings rose by 23 per cent to N665 billion in 2016 as against N542.7 billion in 2015. Net interest income similarly rose by 25.3 per cent to N284 billion compared with N226.6 billion in 2015.

    The balance sheet of the group meanwhile emerged stronger as total assets rose by 33 per cent from N4.69 trillion in 2015 to N6.26 trillion in 2016. Loans and advances also grew by 27 per cent from N2.23 trillion to N2.82 trillion. Customers’ deposit increased by 26 per cent to N4.12 trillion in 2016 as against N3.27 trillion in 2015. Total equity improved by seven per cent from N502.88 billion in 2015 to N538.04 billion in 2016.

    Group Chief Executive Officer, Ecobank Transnational Incorporated (ETI) Plc, Ade Ayeyemi said the group’s year-end bottom line performance was impacted by the group’s voluntary adoption of a full impairment charge regarding its legacy loan portfolio, for which a resolution vehicle was set up, the first private sector funded resolution vehicle of its kind in Nigeria, with the sole objective of ring-fencing the legacy loans from Nigeria’s core bank.

    He said the resolution of the legacy loan portfolio would allow management to focus on delivering results adding that this business philosophy was founded on international best practice in terms of accounting and asset quality.

    “So whilst the impairment charge has impacted our earnings, our accounting treatment has been for the right reasons and we are in better shape for the future as a result,” Ayeyemi said.

    According to him, the group revenues remained resilient despite a tough year of macro- economic headwinds including a weaker economic environment, particularly in Nigeria, and the strengthening of the reporting currency – the United States dollar – against all African currencies particularly the Nigerian Naira where 40 per cent  of the group’s revenues have historically been generated.

    Ayeyemi said that the funds from the proposed $400 million convertible bond issue by the group will be used sensibly and profitably, of which $200 million would be used to repay the short-term financing used in setting up the resolution vehicle while the remaining $200 million will be used for a conscious debt restructure of the maturity profile of the ETI Holdco balance sheet.

    “Our ability to deliver a leading service for our customers which will be reflected in improved key performance indicators in 2017 and beyond. Ecobank’s twin goals are generating sustainable returns above the cost of equity whilst maintaining the highest international standards and we treat both goals equally. Reputations are hard won and easily lost and we will never compromise that. We have a bright future ahead and I look forward to the future with confidence,” Ayeyemi said.

  • ETI to issue 630m shares to preference shareholders

    Ecobank Transnatio-nal Incorporated (ETI), the financial holding company for the Ecobank Group, will issue about 630.33 million ordinary shares in exchange for 819.42 million preference shares as the group moved to settle one of the outstanding terms of its acquisition of the Nigerian bank, Oceanic Bank International Plc.

    In a regulatory notice filed yesterday at the Nigerian Stock Exchange (NSE), ETI, which is also listed on the Ghana Stock Exchange in Accra and the West Africa Stock Exchange (BRVM) in Abidjan, stated that holders of 819.42 million preference shares had indicated their intention to convert their preference shares into ordinary shares.

    Upon receipt of requisite approvals, the 819.42 million preferences shares will be converted to 630.33 million ordinary shares at an implied conversion price of N21.32 per new ordinary share. Qatar National Bank (QNB), one of ETI’s major shareholders, with 732.28 million preference shares, was among the holders that exercised their conversion option.

    Under the terms on conversion of preference shares approved by all parties to the acquisition of Oceanic Bank, which resolution was passed on September 14, 2011, preference shareholders had the right, exercisable at any time between the third anniversary of the issue date and the fifth anniversary of this date, to convert their preference shares into ordinary shares in the company at the rate of one preference share to 0.76923 ordinary share.

    Preference shareholders, therefore, had the right to convert their preference shares up to Monday October 31, 2016. Out of outstanding of 1.03 billion preference shares as at the end of December 2015, the holders of 819.42 million preference shares exercised their right to convert their preference shares into ordinary shares in the company within the stipulated timeline.

    After the issuance of the new ordinary shares, ETI’s total outstanding shares will increase to 24.73 billion ordinary shares upon conversion.

    Group chief executive officer, Ecobank Transnational Incorporated (ETI) Plc, Ade Ayeyemi said the decision to convert the preference shares to ordinary shares underscored the trust by the preference holders in the Ecobank Group.

    “We appreciate the trust and confidence that the preference shareholders, particularly QNB, have in Ecobank. With the support of all our shareholders, we shall continue to provide the best quality banking services to our numerous clients across the largest banking network in Africa,” Ayeyemi said.

    He said ETI is taking all necessary steps to get the shares converted, issued and listed on the three stock exchanges where it is listed.

  • We ‘ill drive growth with corporate governance, says ETI

    Ecobank Transnational Incorporated (ETI) Plc will continue to lay emphasis on best practices and good corporate governance as it seeks to consolidate its growth and deliver better returns to shareholders.

    Chairman, Ecobank Transnational Incorporated (ETI), Mr. Emmanuel Ikazoboh, who gave this assurance at a reception for shareholders of the holding company, said the company has continued to implement the 51-point corporate governance action plan approved by shareholders last year.

    He said the company has implemented substantial part of the corporate governance while efforts are ongoing at resolving outstanding areas.

    He added that the governance structure at the board level was also being reviewed to produce an oversight architecture that would enable the board to be most effective in executing its oversight and reform agenda for ETI.

    He noted that the good corporate governance at the company has started to impact on its overall fundamentals and share price.

    According to him, between June 30, 2014 when the present board of directors was inaugurated and May 11, 2015, the company’s share price increased from N16.89 to N23.27 within the period, representing a 37.8 per cent increase.

    “Cost efficiency with cost income ratio has gone down from over 70 per cent a year ago to about 62.7 percent as at the first quarter of 2015 and is still going down. Our return on equity has improved markedly from 15 per cent in 2014 to 19 per cent in this first quarter and still increasing,” Ikazoboh said.

    He pointed out that the group’s non-performing loan ratio had dropped to less than four per cent, assuring that the company would build on this solid balance-sheet foundation to ensure strong performance in a sustainable manner.

    Ikazoboh reiterated that the Ecobank Group would continue to be an independent pan- African institution owned by Africans and other investors who subscribe to the pan African ideals of the company.

    “The ETI board of directors is strongly determined that your bank be the star performer you have always envisioned it to be. We shall take some difficult decisions in the short-term but we are confident that these decisions will reap benefits in the immediate future,” Ikazoboh said.

    He assured that the pan-African company has a bright future that will guarantee higher benefits for all stakeholders.

    The board of ETI Plc recommended a bonus issue of one share for every 15 shares already held by shareholders as return for the immediate past business year ended December 31, 2014.

    The bonus recommendation came as the financial services group announced that its net profit rose by 179 per cent in 2014. Key extracts of the audited report and accounts showed that net profit after tax jumped to N65.68 billion in 2014 as against N23.57 billion recorded in 2013. Pre-tax profit rose by 144 per cent from N35.37 billion to N86.44 billion. Gross earnings had grown by 19 per cent from N319.56 billion in 2013 to N379.32 billion in 2014.

     

     

     

     

     

  • SEC Nigeria intervenes in ETI’s alleged breach

    SEC Nigeria intervenes in ETI’s alleged breach

    In its avowed commitment to ensuring sound corporate governance in the nation’s capital market, the Securities and Exchange Commission, SEC Nigeria, recently waded into issues relating to corporate governance breaches in Ecobank Transnational Incorporated (ETI). Both the intervention and its outcomes affirmed Nigeria’s pole position in market regulation in Africa. It constituted a pathfinder on regulatory imperatives for multi market jurisdiction players in the robustly evolving African business landscape.

    ETI, a celebrated indigenous African multinational success story, is the holding company of the Ecobank Group, with footprints in 34 countries across West, Central and East Africa. As a backdrop to the pacesetting intervention, the SEC Nigeria had highlighted the consumer protection motivation by quickly assuring investing publics that it would take all necessary steps to speedily conclude the investigation and that the outcomes would enhance the ETI franchise rather than diminish its brand equity as well as project the alertness of the African regulatory environment to governance breaches by enterprises.

    The commission insisted that the intervention would be thorough and rigorous in a manner which would secure adequate protection of investors in ETI.

    This proactive and even bullish posture of the Nigerian regulator was not out of character. Indeed, it had coherence with recent trends in which the apex regulator of the Nigerian markets had spiked the market enforcement regime by taking decisive actions against any companies and market participants whose activities were at variance with laid down procedures. The string of actions gave teeth and bite to the commission’s unrelenting sloganeering around “zero tolerance for market malpractices and their practitioners.”

    The steps taken by the SEC Nigeria have proved commendable and reassuring especially given the challenges with regulatory response to multinational firms particularly on a continent like Africa with a weak institutional development, poor legal frameworks and rule of law inadequacy. In this kind of context, it is so easy for violations of rules to happen unremarked and without being apprehended, particularly when perpetrated by multinational enterprises who take advantage of the overall parlous picture of weak institutions and the regulatory lapses.

    It is against this background that the SEC’s intervention in isolating, apprehending and arresting governance breaches in ETI must be recognised as an inspiring show of leadership which points the way forward for Africa and the Emerging Markets.

    How it all started

    What triggered this landmark regulatory undertaking was a somewhat innocuous whistle blowing by an employee, Executive Director of Risk and Finance at ETI, Laurence do Rego, who had written a letter to the regulator alleging insider dealings, alterations in the compensation element of the CEO’s contract which by-passed governance structures, and a planned sale of the group’s non-core assets.

    She wrote to express reservation and concern for a number of actions that the MD and Board Chairman had taken. These actions promoted personal interests of the people involved and their conduct ran counter to laid-down operational structures and procedures.

    Specifically, in the letter written in August 2013 to the SEC Nigeria and ETI”s board of directors, Laurence do Rego, alleged that the Chairman, Kolapo Lawson, and Group CEO, Thierry Tanoh, were attempting to sell non-core assets at values below prevailing market rates; that the two attempted to manipulate the 2012 results to enable the group show much better 2013 performance results; while raising questions around the propriety of an approval process through which a substantial increase in Tanoh’s 2012 bonus (which he subsequently opted not to receive) was arrived at. She also alleged that she was asked to write off debts owed by a real estate company in which Lawson was Board Chairman.

    With a less proactive regulator, this correspondence may well have elicited an unenthusiastic response in the manner of a mere call or warning letter to the people involved, but not so for the Nigerian regulator which over time has garnered a reputation for steely determination in rule enforcement and for incessantly hankering after entrenchment of an order of sound corporate governance in Nigeria’s market. By universal consensus, the Nigerian regulator had done an assiduous work in recent times to sanitise the Nigerian market which, prior to 2010, had garnered a reputation for constituting a cesspool of sorts for improper conduct by market participants.

     SEC’s intervention 

    A closer look on the basis of the petition, the Nigerian regulator went to work; it engaged the board and management of ETI on the observed lapses and instituted wide reaching investigations to ascertain both the veracity and enormity of the breaches.

    The regulator did not stop there; it engaged the services of KPMG, a leading international audit and management consulting firm, to support the work of an extensive governance audit of ETI.

    The diligent work spanned months and the results, expressed in an initial report, were confirmatory that indeed significant breaches had occurred at ETI.

    Sequel to the findings of the rigorous audit, SEC held a meeting with members of the Board of ETI on Monday, 16th December, 2013 during which the results of the exercise were presented in order to elicit feedback from them. It was agreed at the meeting that such feedback be made available to the regulator on or before Friday, 3rd January, 2014 ahead of the audit results being forwarded to ETI for dissemination to the bank’s shareholders.

    The SEC is certain that the implementation of the recommended remedial plan would eliminate the governance lapses in addition to strengthening the ETI franchise. The commission also reiterated its commitment to ensuring the integrity of the market and the protection of the investing public.

    “It is important to emphasise that the Corporate Governance Audit is being done at the  level of the ETI Holding Company and does not reflect governance at any of ETI’s banking subsidiaries that are responsible to the banking and market regulators in the countries in which they operate,” the commission said.

    The SEC urged ETI to develop a one-year remedial plan with specific measures to address the  remarked governance gaps.  In the public interest, the regulator demanded a quarterly reporting schedule from ETI to keep abreast with the progress being made.

    The commission was persuaded that ETI needed to appoint a substantive Board Chairman in place of Lawson who had exceeded in the course of the governance audit. The new chairman would lead the effort to attain an improved governance climate. “It will be important that such an appointment is the result of a credible selection process,” the SEC Nigeria stresses.  “Such a chairman also needs to have the relevant experience and skills to guide this remedial plan. The chairman should have integrity, independence and should not have the potential for conflict of interest in the discharge of the role.

    “Steps should also commence to ensure that ETI has board members and a management team that have the requisite skills and experience to oversee or manage the affairs of ETI at this time,” the regulator emphasised.

    The breaches examined

    The initial point of contention involved the former chairman, Kolapo Lawson, and his outstanding loans. Two separate loans were at issue: the first, a real estate loan given by Ecobank’s Nigerian subsidiary to a property company owned by the former chairman, known as the Agbara Estates loan; the second related to other loans to Lawson from a number of other Nigerian banks.

    The Agbara Estates loan had previously been disclosed in Ecobank Nigeria’s annual report at a value of $8.6m. According to management, this loan was restructured in July 2012, with the chairman agreeing to make a bullet payment for the outstanding capital and incurred interest on 31 July 2013.

    The more contentious issue was around the sundry loans sourced from third-party banks. According to investigations, these loans were transferred to the Asset Management Corporation of Nigeria (AMCON) as NPLs, which transfer sired concerns over Lawson’s fitness as Board Chairman which became the subject of a Central Bank of Nigeria (CBN) correspondence. Lawson allegedly failed to disclose this issue to ETI’s board of directors.

    There were also alleged laxities in the conduct of the board, and there was remarked deficiency even in the capacity of the board to self-regulate. The board’s interaction with other cadres of the ETI structure and community similarly evinced limitations.

    There were 16 board members, but the board room dynamics were flawed because there appeared to be a schism in which the erstwhile Group Managing Director and Board Chairman had formed a distinct alliance which tended to operate on the blind side of the rest of the board.

    There were also issues appertaining to the ETI Chairman’s virtual unilateral rework of the contract terms of the CEO to the detriment of shareholders: the CEO’s fat, unearned and undeserved performance bonus; the planned sale of the group’s shareholding in telecommunication giant – Airtel, among others.

    As a consequence of the findings, the Chief Executive Officer (CEO) of ETI, Thierry Tanoh, agreed to pass up his bonus award of $1.14 million bonus for 2012 and reverted to the original terms of his contract as the bank reviews its corporate governance structure following De Rego’s allegations.

    These were some of the confirmatory startling revelations of the initial report of the governance audit and it formed sufficient basis for the Nigerian regulator to recommend that remedial measures be taken to negate these deficiencies.

    Principal among the remedial measures was the convening of an AGM to put the  recommended remedial measures to vote and give them the force of legitimacy. The SEC therefore advised ETI that the findings constituted an important basis for convening an

    Extra – Ordinary General Meeting (EGM) of shareholders to deliberate and pass resolutions on the critical findings and recommendations of the corporate governance audit.  The SEC further advised that the EGM should be held before the end of February 2014.

    The AGM has since held and shareholders voted overwhelmingly for adoption of the remedial measures which are now being implemented. It is history that the Chairman and MD have quit. An inspiration for other regulators SEC Nigeria’s show of leadership has elicited commendation from local and global investor publics. The financial media which followed the evolution of the SEC intervention in ETI with an eagle eye have similarly applauded the effort as an exemplar of alert regulatory watch and response.

    There is unanimity that the SEC Nigeria showed great reflex, was prompt and decisive in taking actions against the allegations to protect investor funds as well as the institutional health of ETI. There is persuasion that the SEC Nigeria / ETI saga has supplied a classic instance of qualitative regulatory response to enterprises when they manifest governance weaknesses. There is certainty that business practice and theory have been enriched by the SEC Nigeria’s inspiration intervention in ETI.

    Already, sister regulators in Africa have been flocking to the Nigerian regulator not only to obtain report of the audit but to also share information and knowledge and the modus provender of the Nigerian regulator.

  • Forte Oil, ETI make MSCI Frontier Markets 100 Index

    Forte Oil, ETI make MSCI Frontier Markets 100 Index

    Forte Oil Plc and EcoBank Transnational Incorporated (ETI) have been included in the MSCI Frontier Market Index 100, a global index for the 100 of the largest and most liquid stocks in some 26 countries generally classified as frontier markets.

    The changes were effected following inclusion of 13 securities into the MSCI Frontier Markets Index, while 30 were deleted from the index. MSCI Frontier Markets 100 Index were dominated by Kuwait, 30 per cent from 20 per cent, and Nigeria, 20 per cent from 13 per cent while Pakistan, Oman, Argentina, Kenya and Morocco are now in the range of five to seven per cent, from three to four per cent.

    Analysts said the Forte Oil and ETI in the index would lead to greater inflow of investments, with potential for more than $200 million investments in the Nigerian market.

    The MSCI Frontier Markets 100 Index is designed as the representative and more easily replicable alternative to its broader parent index, the MSCI Frontier Markets Index. With the May 2014 semi-annual review, frontier markets countries now include Argentina, Bahrain, Bangladesh, Bulgaria, Croatia, Estonia, Jordan, Kenya, Kuwait, Lebanon, Lithuania, Kazakhstan, Mauritius, Morocco, Nigeria, Oman, Pakistan, Romania, Serbia, Slovenia, Sri Lanka, Tunisia, Ukraine, and Vietnam.

    The MSCI Frontier Markets 100 Index was launched on Apr 11, 2012 and placed strong emphasis on tradability through three main features of a minimum liquidity level and proportion of shares still available to foreign investors relative to maximum allowed. The 100 largest securities are selected from the eligible universe and ranked by float adjusted market capitalization. About $8 trillion is benchmarked to MSCI indexes. The emerging markets index MSCIEF is up 2.9 percent so far this year, while the all world index has risen 2.1 percent.

    Forte Oil had achieved strong fundamental and technical performances in 2013, a trend it has sustained in the new business year. Its share price had risen by 1164.55 per cent to emerge the best-performing stock, by share price appreciation, at the Nigerian Stock Exchange (NSE) in 2013. It has recorded a year-to-date growth of more than 70 per cent so far this year.

    Forte Oil was also the first quoted company to submit its audited report for the 2013 business year and distributed N4.32 billion as cash dividends to shareholders. Breakdown of the dividend indicated that shareholders received a dividend per share of N4. Key extracts of the audited report and accounts for the year ended December 31, 2013 showed that turnover rose from N90.98 billion in 2012 to N128.03 billion in 2013. Profit after tax also leapt from N1.01 billion in 2012 to N5.0 billion in 2013.

    In the frits quarter of this year, Forte Oil continued in its strides with significant growths in sales and profitability. Key extracts of the unaudited report and accounts of Forte Oil for the three-month period ended March 31, 2014 showed that turnover grew by 30.74 per cent while pre and post tax profits rose by 100.6 per cent and 107.8 per cent respectively.

    The report showed that turnover rose to N34.78 billion in the first quarter of 2014 as against N26.6 billion recorded in comparable period of 2013. Gross profit rose by 72.4 per cent from N2.68 billion to N4.63 billion. Profit before tax doubled from N633.07 million to N1.27 billion. After taxes, net profit stood at N1.10 billion by March 2014 as against N530.60 million recorded in corresponding period of 2013. Basic earnings per share rose from 49 kobo to 75 kobo.