Bad Ecobank loans still haunt Nedbank
Nigeria-based Ecobank Transnational Incorporated has since turned the corner
The ghost of bad loans past at Ecobank Transnational Incorporated (ETI) is still haunting Nedbank, which has reported headline earnings growth substantially lower because of its holding in the West African bank. Nedbank said on Tuesday it had grown earnings 16.2% to R11.8bn for the year to December. Including ETI, Nedbank’s earnings rose only 5.9% to R11.5bn, due to a R676m loss at ETI in the fourth quarter of 2015. Nedbank accounts for its 21.2% share of ETI’s earnings a quarter in arrears. In 2015, ETI made provision for impairment losses after a strategic overhaul of its processes and portfolios, resulting in bad-debt charges of $357m and a $199m loss in the fourth quarter. Nedbank’s share of these charges was about $40m. ETI has since turned the corner, reporting pretax profit of $281m in the nine months to September 2016, translating into income of R551m for Nedbank. Offset against the previous R676m loss and R249m in funding costs, ETI brought in total headline losses of R374m...
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