Ecobank Market Value Slides by 5% to N278bn
Pan African lender, Ecobank Transnational Incorporation (ETI) market value plunged by 5% to about N278 billion on Friday. Shareholders engaged in selloffs ahead of the group’s third quarter of 2023 earnings season.
According to data from the Nigerian Exchange, the Pan African lender’s share price declined to N15.15 from N16, which was the highest recorded in the just concluded week.
In a regulatory filing, Ecobank told the Nigerian Exchange that it is currently undergoing an external audit of the 2023 third quarter financial results of the Group for the period ended September 30, 2023
According to the statement, the Board and management took the decision to undergo an audit for the period and expect to publish the result on or before December 15, 2023.
In its latest update, Fitch Ratings placed ETI and Ecobank Nigeria Limited’s viability ratings of ‘b-‘ and long-term issuer rating of ‘B-‘ on rating watch negative (RWN) following the sharp devaluation of the Nigerian naira.
According to Fitch, the rating watch negative placed on the lender reflects the risk of the entities breaching their respective minimum capital requirements due to the direct effect of the devaluation.
For Ecobank Nigeria it also reflects increased risks to capital from large foreign-currency problem loans that have been inflated by devaluation, which may necessitate greater prudential provisions and exert further pressure on the bank’s total capital adequacy ratio, in addition to broader loan quality risks stemming from the devaluation.
As a bank holding company, for ETI the RWN also reflects the risk of a material increase in common equity double leverage as a direct effect of the devaluation.
The report stated that the risk of the effects of the devaluation potentially complicates ETI’s ability to refinance large upcoming Bank holding company debt maturities. #Ecobank Market Value Slides by 5% to N278bn FG Sets up Integrated Border Governance Committee