Ecobank Rwanda has announced an increase in pre-tax profits for the year 2008 to Rwf739 million compared to the loss of Rwf2.6 billion in 2007.
According to the bank’s financial statement for the year ended December 31, 2008, all the key sectors of the bank recorded significant growth during the period under review.
Total assets went up by 25 percent to a tune of Rwf55 billion in 2008 from Rwf44 billion in year 2007.
The increase is largely due to the growth of the bank’s loan book from Rwf8.5biilion to Rwf20 billion in extending credit to large corporate, small and medium scale enterprises, microfinance institutions and individuals.
The increase was also attributed to the growth of the Rwandan economy as borrowers expand their businesses and product range, in addition to increased employment opportunities and improved purchasing power.
“There is also a direct linkage between higher earnings and fulfilment of tax obligations to the state. The bank has also introduced new controls and reinforced existing ones to ensure that the above gains are protected,” the financial statement indicates.
In addition to the recapitalisation of the bank to meet the minimum capital requirement of the Central bank, Ecobank has significantly reduced its non performing loan portfolio by 69 percent from 47 percent in December 2007 to 15 percent in December 2008.
However the bank has also toughened against its borrowers to reduce losses on loans and advances in the next financial year.
In the statement, the bank indicates that it will continue with ongoing initiatives to further reduce the Non Performing Loan (NPL) to internationally acceptable levels including taking legal action.
The bank also plans to open eight new branches this year within Kigali and upcountry towns namely; Rwamagana, Bugarama and Nyanza.
In a related development following its recent Public Offer, the capital of the Ecobank Group has been increased to $1.2 billion.
“This increase in our capital at a time of uncertainty in the financial markets is a reflection of our shareholder’s confidence in our strategy,” Arnold Ekpe Ecobank’s Group Chief Executive Officer said in the press release.
According to the press release, the additional capital will be used to recapitalise existing Ecobank Group subsidiaries in order to position them adequately for the increasing competitive banking environment.
“In the next stage of its capital increase program, the Ecobank Group proposes to raise additional capital to further strengthen its capital base and to consolidate its position.”
The bank, which is a subsidiary of the Ecobank Transnational Incorporated (ETI) in Togo, currently operates in 27 countries across Africa.