Three and a half years after the arrival of Nigerian Ade Ayeyemi, Ecobank Transnational Incorporated (ETI) has continued to recover. Lomé-based bank completes fiscal year 2018 with a net profit of $ 328.6 million, up 44%, reflecting management’s efforts in both the commercial offensive and the control of operating expenses .
But given the total balance sheet of more than 25 billion dollars, this sharp increase in earnings is still insufficient to reflect on the profitability of assets. Clearly, the bank founded in 1985 must resize its portfolio by closing unnecessary agencies and separating itself from the dead wood that has swelled the workforce over periods of reckless African expansion. Failing the saving blow, Ecobank will still need going into debt (provided that gearing allows it) or initiating new and significant capital increases. It remains to be seen whether shareholders will still be tempted to put marbles in an asset that has yielded no return or profitability since 2011.
In 2018, the pan-African bank does not intend to distribute dividends. Last year, shareholders had to settle for issuing new shares. All these decisions, added to the continuous decreases in share prices in Lagos, Accra and Abidjan, show that the banking value will have a hard time convincing small investors and institutional investors.
