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Fundamental analysis of Ecobank Transnational Incorporated’s share price

Ecobank Transnational Inc. (ETI) is a leading Pan-African bank, with presence in most parts of West Africa.



Ecobank Nigeria

Ecobank Transnational Inc. (ETI) is a leading pan-African bank, with banking operations in most parts of Africa. As a Pan African bank, ETI mainly operates in the West African region where it serves institutional and retail clients. It also maintains representative offices in China, Western Europe, and the United Arab Emirates.

Ecobank Transnational Inc. is a publicly listed limited liability company. It started operation as a bank holding company around 1985, under a private-sector concept led by the Federation of West African Chambers of Commerce, with the backing of ECOWAS.

Ecobank Transnational’s group stock ownership as of December 2014 include Nedbank Group Limited with 20.7 % holding, Qatar National Bank with 17.4%, Government Employees Pension Fund with 13.8%, IFC Capitalization (Equity) Fund, L.P with 5.4%, International Finance Corporation with 5.2%, Social Security and National Insurance Trust with 4.0%, IFC ALAC Holding Company II with 2.3%, and JP Morgan Bank Luxemburg with 2.0%.

Earlier reports by Nairametrics showed that ETI recorded a 32% growth in profit before tax of NGN146.5 billion for the 2019 financial year. This was up from the N110.8 billion recorded in 2018. Profit after tax stood at NGN 99.5 billion, even as total assets went up by 5% to close at NGN 8.6 trillion.

(READ MORE: COVID-19: Ecobank Launches “StaySafeNigeria” media campaign)

The bank had also reported gross earnings of NGN 842.5 billion, which went up by 9% against the figures for the previous year.

However, the company is trading at its all-time low. It has recorded a loss of 20% on the Nigerian bourse since its 2019 performance results came out. On April 8, ETI had a market capitalization of about N108.8 billion.

In addition to not offering its investors dividends, Ecobank’s shares do not bring any capital gains on the Nigerian Stock Exchange. Its value has declined by over 70% since the 1st of January, 2015.

(READ MORE: COVID-19: Ecobank commits about N100 million to national radio campaign “StaySafeNigeria”)

This bearish trend had been partly due to no dividend distribution planned for the 2019 financial year. This is the fourth year in a row without shareholders getting neither bonus nor dividend.

On the technical side, Ecobank had boosted its profitability with higher gains on assets and shareholders’ equity. A look at its Price to Book Ratio shows a reading of 0.1906 (the smaller the result the better, as a value of less than 1 shows the stock is undervalued).

In addition, a look at the daily chart reveals a bullish candle engulfing the inverted spinning top, trading at a value of N4.40 as of 8th April 2020. On the mid-term and long-term, the pattern confirms a bullish bias forming.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.



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    Tip Jar, Twitter’s new giveaway feature that lets users send money to you

    Twitter has introduced a new feature called Tip Jar that allows you send money to your favourite tweeters.



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    Customs Apapa Command generates revenue of N65.4 billion in April

    This indicates a 64% increase in collection and an unprecedented record that has never been achieved in the history of Apapa Area Command.



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    “This indicates a 64% increase in collection and an unprecedented record that has never been achieved in the history of Apapa Area Command.

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    Recall Nairametrics reported that the Nigeria Customs Service (NCS) Apapa Command stated earlier that it generated a revenue of N159.58 billion in the first quarter of 2021.

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