Ecobank shareholders approve dividend payout and plan to raise $500mln

Friday, 19 May 2023 12:48
Ecobank shareholders approve dividend payout and plan to raise $500mln

(Togo First) - Shareholders of Ecobank Transnational Incorporated (ETI) approved a dividend payout of $28 million, equivalent to 0.11 cents per share. This decision took place at their annual general meeting held on May 17, in Lomé, Togo. 

The challenging economic environment, characterized by escalating inflation and high-interest rates, has led to a 32.25% reduction in dividends compared to the previous year. At first, the Board’s proposal to reduce the dividends was met with discontent among some minor shareholders. They viewed the move as too prudent and not generous enough. Compared to 2021 when ETI paid 0.16 cents per share, the amount recently approved by the shareholders is 32.5% lower.

To justify the reduction, Alain Nkountchou, who heads ETI’s board of directors, referenced the recommendations of the West African Union’s Banking Commission. The latter, indeed, urged financial and lending institutions that operate in the Union to exercise caution with dividend distribution for 2022. "It's not a matter of you against us. We are on the same side. We should be proud that we have picked up and maintained the distribution policy for the second year in a row," Nkountchou said.

Despite the reduction in dividends, the financial performance of ETI in 2022 remained strong. “In 2022,  Ecobank posted robust financial results, navigating high-interest rates, inflation, and the restructuring of Ghana's debt,” indicated Jeremy Awori, Managing Director of Ecobank. 

Last year, ETI posted a net income of $222 million, down from $295 million in 2021. However, “pre-tax income rose by 13% to $540 million, and net banking income rose by 6% to $1.9 billion. The total balance sheet, for its part, grew by 5% to stand at $29.004 billion,” Nkountchou detailed. 

"The financial strength of the group is also satisfactory, with an adequate level of equity and sufficient capital. As of December 31, 2022, our projected Tier 1 capital ratio stood at 10.2%, down slightly from 10.7% in December 2021," The Cameroonian added. Return on tangible equity stood at 21.1% in 2022, the highest that Ecobank has recorded in the last decade.

Awori, who became MD on 1 March 2023, attributed Ecobank's performance in 2022 to the bank's diverse business model, its expertise in the digital domain, its innovative strategies, and its operational effectiveness. 

After the ordinary general meeting, an extraordinary meeting was held, during which shareholders approved a plan for raising $500 million in 2023, to boost ETI's sustainable resources.

Fiacre E. Kakpo

Translated in English by Schadrac Akinocho

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