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(Ecofin Agency) - Ecobank Transnational Incorporated (ETI) issued a warning on its 2015 profits, forecasting lower results than expected. “Our revised growth targets communicated during our third quarter 2015 analysts and investor conference call for deposits and loans will not be achieved,” the group said in a statement published on March 15, 2016.  


The group, Africa’s leading banking group, said two reasons were behind the current situation. Lower than expected growth targets have been impaired by macroeconomic environment (fiscal and monetary challenges, falling commodities prices) in the various countries where the group operates, such as Nigeria, its largest market, and Ghana which is also a significant one.


ETI also reports higher provisions for bad loans despite the implementation of an “appropriate” plan of action for risks management, including training solutions of Moody’s Analytics to boost risk-loan capacity.  


In third quarter 2015, the bank’s accounts revealed a 3% increase in net interest margin to $837.8 million, net banking product decreasing by 3% to $1.59 billion, paired with a 12% slump in fees and commissions, which represent a significant portion in the group’s earnings, to $433.4 million. ETI over the period had its provisions for financial assets rising by 22% to $175.4 million.


As these challenges persist, the group announces a continuing degradation of cost/income ratio and a higher degradation rate for its portfolio than expected. On March 15, 2016, when the profit warning was issued, ETI’s share fell by 2.38% on BRVM, thus totaling a value loss of 14.7%.