Cleaning Ecobank books sends lender into losses

PHOTO:COURTESY

The tough accounting measures the new management at Ecobank has adopted have driven the lender to a Sh2 billion loss.

The bank has factored in bad loans and written off expectations from revised earnings on Government bonds once, instead of staggering the losses over years.

“Ecobank Kenya has posted a Sh2 billion after tax loss for the financial year ended December 2016 compared to a Sh90.3 million the previous year,” said Samuel Adjei, the Ecobank managing director for Central, Eastern and Southern Africa.

Interest income on Government debt cost the bank Sh1.19 billion in an accounting revaluation of the lender’s assets. The bank also set aside Sh1.2 billion to cover bad loans, which grew from Sh2.4 billion to Sh5.3 billion.

Mr Adjei said the negative performance is attributed to the firm’s restructuring efforts as it seeks to return to profitability.

“In 2017, we are focusing on reducing our non-performing loans by implementing an aggressive recovery programme. We will put more emphasis on reducing our operating expenses,” he said.