Ecobank, which is in the process of a transition from a merchant to a commercial bank, yesterday announced a loss after tax for the year ending December 2011, attributable to the restructuring exercise.
The pan-African bank’s managing director, Daniel Sackey, said the restructuring was specifically focused on realigning bank operations, structures and processing to suit the commercial banking model of the Ecobank group.
The bank posted an after tax loss of $5,9 million during the 2011 financial year compared to $6,8 million in the same period last year.
Sackey said the bank had succeeded in upgrading its entire technology and communication infrastructure.
“All these developments have established a firm foundation for the bank to provide excellent service to the customer while positioning the bank for major client acquisition drive,” he said.
The bank’s operating income before impairment charges grew by 17% to close the year at $4,9 million, driven by loan book growth and successful implementation of initiatives aimed at reducing the bank’s cost of funds.
Operating expenses decreased by 12% to $8,4 million from $9,5 million in the previous year.
Ecobank staff costs were down 20%, reflecting the impact of the staff optimisation exercise carried out in 2010 and 2011.
Sackey said the bank was properly capitalised despite recording a loss.
He said during last year the shareholders injected a total of $12,4 million into the bank to improve its capital base and to meet both regulatory and business developments requirements.
“Subsequently to the reporting date, shareholders have injected $7,5 million in additional capital to meet the requirements of the new commercial banking mandate, making a total of $20 million injection from the shareholders.
“The bank is well positioned for growth and has properly position itself,” Sackey said.
He said in one month the bank will be launching a commercial branch in Harare.