CityPress - - Business -

The re­ces­sion in Nige­ria and other fac­tors saw Ecobank suf­fer­ing a loss last year, but Ned­bank will keep its stake in the Pan-African bank, de­spite hav­ing to take a R3.8 bil­lion write-down on the as­set.

Ned­bank said that the per­for­mance of Ecobank – in which Ned­bank has a 20% stake – was hurt by weaker con­di­tions in west Africa and cur­rency volatil­i­ties, par­tic­u­larly in Nige­ria where the econ­omy went into re­ces­sion for the first time in 25 years.

Foreign cur­rency liq­uid­ity con­straints, es­pe­cially in Nige­ria, were also an is­sue that hit Ecobank, which is present in 36 African coun­tries and has its head­quar­ters in Togo.

Ned­bank has a 20% stake in Ecobank, which was bought for $493 mil­lion (R6.5 bil­lion) in 2014.

The write-down re­duced the hold­ing value of Ned­bank’s Ecobank 1996, partly due to a R10.5 bil­lion Nige­rian fine. In 2015, MTN gen­er­ated profit of R23.6 bil­lion.

Chris Maroleng, MTN spokesper­son, said that 2016 had been “an in­cred­i­bly chal­leng­ing year for MTN”.

In Oc­to­ber 2015, the Nige­rian gov­ern­ment fined MTN $5.2 bil­lion (R68 bil­lion) for fail­ing to dis­con­nect up to 5 mil­lion un­reg­is­tered stake to R4 bil­lion. How­ever, Ned­bank said at the end of De­cem­ber the Ecobank stake’s mar­ket value was R2.4 bil­lion.

Ned­bank CEO Mike Brown said that the bank re­mained op­ti­mistic about the long-term prospects for Ecobank, which makes up about 3% of Ned­bank’s mar­ket value.

“Con­di­tions in the key mar­kets in which Ecobank op­er­ates are cur­rently ex­pected to re­main dif­fi­cult in 2017, be­fore im­prov­ing in 2018 and be­yond,” Brown said.

In another de­vel­op­ment, Ned­bank this week launched a new brand iden­tity for the first time since 2010. A Ned­bank “brand repo­si­tion­ing” doc­u­ment said that the new brand iden­tity was be­ing launched ow­ing to a “fast-chang­ing con­sumer and com­pet­i­tive land­scape” and fol­lowed an 18-month process. The new tagline is “see money dif­fer­ently”. SIM cards in that coun­try, be­fore set­tling the fine in June last year.

To re­store con­fi­dence, MTN is bring­ing in a new CEO and a new chief fi­nan­cial of­fi­cer (CFO).

On March 13, Rob Shuter will be join­ing MTN from Vo­da­com as its new CEO while Ralph Mupita will be join­ing MTN from Old Mu­tual on April 3 as CFO.

MTN is also look­ing to in­spire con­fi­dence with new board ap­point­ments.

Nh­leko said that the group was still look­ing to list MTN Nige­ria and close a “lo­cal­i­sa­tion deal” in Ghana that will see 35% of MTN Ghana sold to Ghana­ian share­hold­ers.

For the list­ing of MTN Nige­ria to pro­ceed, Nh­leko said spec­trum and other is­sues in the coun­try needed to be re­solved.

In Iran, MTN has a stake in Snapp, which is a smart­phone taxi ap­pli­ca­tion and ri­val to Uber.

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