The latest data on Ecobank Nigeria Limited’s (ENL) capital adequacy throws the bank’s predicament and its parent’s strategic response into sharp relief. While ENG remains a capital cripple, its parent, Ecobank Transnational Incorporated (ETI), has demonstrably strengthened, a divergence that now defines the investment case.
The bank’s numbers tell a story Fitch Ratings has been circling for two years, that is, the story that Ecobank Nigeria Limited fell hard, but is now climbing back.
The ratios and a rebuild
ENG’s tier 1 capital ratio, which is a core measure of the equity cushion banks hold against losses, collapsed from above 23 per cent to as low as 8.8 per cent, much below under the 10 per cent floor regulators, the Central Bank of Nigeria (CBN), demands. Total risk-based capital, a broader measure that also counts subordinated debt and other loss-absorbing instruments, fell alongside, bottoming near 12.3 per cent following a near 25
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