ECOBANK Transnational Inc has recorded a 35 per cent drop in net income to N16.20 billion in the first three months m of 2016 as against N24.48 billion as at March, 2015
The bank’s bottom lines was affected by 5 percent drop in gross earnings while a sky high impairment charges on financial charges also did some damage to profit. Impairment charges on financial assets increased by 55 percent to N13.27 billion, a signal that the lender is writing off more bad and irrecoverable debt.
Investigation by National Daily shows lenders in Africa’s most populous nation are struggling with a slow growing economy that has hindered many bank customers from honoring obligations as at when due.
Growth in Nigeria slowed to 2.8 percent last year, the weakest level since 1999 and down from 6.2 percent recorded in 2014.
Ecobank’s slow start to the year is a signal that other lenders in the country may have earnings crimped by rising loan loss expense while Non-Performing loans may break scale and exceed the 5 percent threshold.
ALSO SEE: Ecobank, 4 others profit decline by 80%
According to the Chief Executive Officer, Ade Adeyemi, the result for the first quarter was a reasonable performance in light of the very difficult and tough operating market conditions.
“Despite the challenges our clients continue to face, our diversified business model, which is a source of competitive strength and stability, allows us to continue to serve them in and across regions in Middle Africa,” he said.
He said with EcoBank revised strategy and a simplified operating model, it aims to be more efficient in running its businesses and serving its customers.
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