Ecobank Gets $250 Million Loan Facility to Boost Liquidity

Ecobank Transnational Incorporated recently announced that it has gotten a $250 million loan facility to boost liquidity.

The Group's Chief Financial Officer, Ayo Adepoju, announced this in a statement filed with the Nigerian Exchange Limited yesterday. According to the bank, the loan facility was a senior bridge-to-bond loan facility that will be led by African Export–Import Bank and Africa Finance Corporation to support trade and general corporate purposes.

He said, 

"We are very excited about this new facility, which provides additional liquidity buffers for the bank. The firm's continued ability to demonstrate market support and, in particular, diversify its funding sources under challenging economic conditions reflects the work done in cementing relationships and building credibility in recent years."

Details about the facility showed that Afreximbank and AFC would collaborate as global coordinators and initially mandated lead arrangers to support trade finance and the group's general corporate purposes, while Mashreqbank psc. would join the transaction as a mandated lead arranger.

According to the pan-African bank, the facility will have a tenor of 12 months, with a six-month extension option at the lenders' discretion.

According to the PUNCH report, the bank added that the bridge-to-bond loan also comprises an accordion feature that increases the total commitments under this facility within a given timeframe.

Last year, it was reported that Ecobank secured a $200 million loan to fund its sustainability and climate strategy and climate action plan, which was reportedly the first for a sub-Saharan African financial institution.

According to the lender, Proparco, the facility's lead arranger, and the German consulting firm, IPC, would offer advisory support to ETI's teams to actualise the targets.

However, in the bank's third-quarter results, which were reported in both naira and US dollars, the financial institution said that while its gross earnings went up in naira value, they were down by 15% in US dollar terms to $2.084bn.

The bank's revenue (operating income) rose by 12% to $1.518 billion and up 55% to N884 billion.

The financial institution stated that the revenue increase was driven by the net impact of higher interest rates, particularly in Anglophone West Africa and Nigeria, growth in the volume of interest-earning assets, significantly higher fees from treasury services and solutions, and higher cash management fees.

Overview Of Ecobank's Profit For Q3 Report

• Net interest income: N359.2 billion, +113% YoY 

• Fee and commission income: N95.8 billion, +80% YoY 

• Fee and commission expense: N10.3 billion, +108% YoY  

• Trading income: N54.2 billion, +119% YoY 

• Non-interest revenue: N147.0 billion, +73% YoY 

• Operating income: N378.6 billion, +98% YoY  

• Operating expenses: N200.5 billion, +84% YoY  

• Staff expenses: N86.4 billion, +87% YoY  

• Profit before tax: N111.9 billion, +87% YoY 

• Profit for the period: N77.7 billion, +94% YoY  

• Total assets: N20.7 trillion, +55% YTD  

• Return on Equity: 16% (9M 2023) 

Ecobank is currently operational in 35 African countries, has a subsidiary in France, and has representative offices in the United Arab Emirates, London, UK, Beijing, China, Johannesburg, South Africa, and Addis Ababa, Ethiopia.

As of today, Ecobank share price is #21.90 per share.