ETI loses N52.6bn after tax on full impairment charge adoption

By Nkiruka Nnorom

ECOBANK Transnational Incorporated, ETI Plc, yesterday, announced a N52.6 billion loss after tax for the financial year ended December 31, 2016, representing 348 per cent decline over N21.25 billion profit after tax recorded in FY 2015.

The bank’s audited 2016 financial report and accounts released on the Nigerian Stock Exchange, NSE, showed a 29 per cent increase in operating profit to N188.6 billion from N146.04 billion, while its revenue rose by 22 per cent from N416.49 billion to N506.17 billion.

However, the 134 per cent increase in net impairment losses on loans and advances from N84.46 billion in 2015 to N197.68 billion in 2016 resulted in N33.71 billion loss before tax against N40.59 billion profit before tax achieved in comparable period in 2015, indicating 183 per cent decline.

The bank revealed in an accompanying note to the result signed by Ade Ayeyemi, Group CEO and Greg Davis, Group Chief Financial Officer, that the end of year bottom-line was impacted by the voluntary adoption of a full impairment charge regarding the bank’s legacy loan portfolio.

They said that a special resolution vehicle, the first private sector funded resolution vehicle of its kind in Nigeria, was set up for the purpose of ring-fencing the legacy loans from Nigeria’s core bank. “This, among others, would allow management to focus on delivering results. Our 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 a better shape for the future as a result,” the bank said.

 

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