LOME: Ecobank management was on Friday put to task by its shareholders to explain rising non-performing loans for the lender’s 2015 financial year results.
Under the year in question, the group, which operates in more than 30 countries in Africa, realised a 73 per cent jump in its non-performing loans (NPL).
The bad debts rose from Sh56.2 billion ($559,920) in 2014 to Sh97.16 billion ($967,129) last year.
The Kenyan subsidiary contributed about Sh2.5 billion (usd24,373) to the groups NPLs.
Majority of the shareholders expressed disappointment at the jump in bad debts, which is turning out to be an issue in the banking sector.
“Clearly there is an issue here; the direction is not impressive,” noted an investor from Nigeria.
Not Impressive
The Group’s Chief Executive Officer Ade Ayeyemi acknowledged the risk but said the bank had developed a risk management strategy, which includes putting up a team to recover loans.
“I would like to also point out that the bad loans originate beyond last year but we are implementing a strategy on how to carefully manage the risks,” he said.
During its 28th Annual General Meeting, Ecobank Transnational Incorporated (ETI), the parent company of Ecobank Group declared a dividend of $48.2 million (Sh4.88 billion) breaking a two year dry spell.
The meeting approved the company’s accounts for the 2015 financial year and the appropriation of its profits, which amounted to $60.77 million (Sh6.15 billion).
The meeting renewed the mandate of Dr Daniel Matjila (representing Public Investment Company/Government Employees Pension Fund) for another three years.
It also ratified the co-option of Abdulla Al Khalifa (representing Qatar National Bank), Ade Ayeyemi (Ecobank Group Chief Executive Officer) and Mfundo Nkuhlu (representing Nedbank Group Limited) as directors.
Mr Ignace Clomegah and Mrs Catherine Ngahu were elected as directors.
The meeting approved the re-appointment of joint auditors Deloitte Nigeria, and Grant Thornton, Co?ted’Ivoire for a term of one-year.
A separate Extraordinary Meeting saw various other resolutions passed.
With regard to the consolidation of shares, a resolution was passed authorising that the nominal value of the ordinary shares of the company be increased from 2.5US cents per share to 50 US cents per share.
This would be done by consolidating every 20 ordinary shares held into one new ordinary share each, and issuing in replacement, new ordinary shares of 50 US cents each.
