Shareholders criticize board for 600% drop in profits

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June 20, 2016 11:00 AM

ETI profits dropped from 338 million dollars in 2014 to 66 million dollars in 2015, representing close to 600% drop.

Shareholders of Ecobank Transnational Incorporated, parent company of Ecobank subsidiaries across Africa, have heavily criticized the board of the company for the massive dwindle in profits in 2015.

The board blamed the slump on the economic challenges suffered by countries on the African continent in 2015, with commodity prices taking a major plunge.

Inflation in most African economies, for example, increased in 2015 with about 5 countries experiencing their worst inflation rates in history.

Meanwhile the board has withdrawn a proposal to raise 700 million dollars through right issues. It is unclear why the board’s decision to reverted plans to present the proposal at its extra-ordinary general meeting held in Lome during the weekend.

Management attributed the withdrawal to prevailing unfavourable conditions.

It is, however, believed that management and the board suspected that the proposal will be thrown out by shareholders, given the level of displeasure over the bank’s poor performance in 2015.

The money was supposed to be used for recapitalizing Ecobank branches across Africa, as well as to further expand the bank across Africa.

Group Chief Executive of Ecobank Transnational Incorporated, Ade Ayeyemi believes the bank can do without the funds.

“There is no need for investors to worry, there is no cause for alarm. We manage this business in a prudent manner and we will hold appropriate capital. We don’t want to hold capital that will just be sitting in our vaults and not put to proper use”, he said.

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