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Ecobank Reacts “We Did Not Cook Our Books”

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The attention of the ETI Group has been drawn to recent publications in some online media alleging overstatement of ETI’s balance sheet and income statements emanating from incorrect exchange rates in translating the financial statements of our affiliate entities, especially Nigeria.

We want to use this medium to allay the fears of any of our shareholders, creditors, and other stakeholders resulting from the unfounded allegation contained in the said publications.

Ecobank complies with IAS 21 requirements

The deterioration of the Naira in 2016 led to the creation of different windows for various segments of the economy leading to foreign currencies being traded in these markets/windows at different rates and thus leading to a multiple exchange rate system in Nigeria.

The existence of multiple FX markets with different exchange rates as well as the accessibility to such markets necessitates the review of the appropriate exchange rates that entities should use in accounting for and reporting its foreign currency transactions as well as foreign investments into Nigeria under International Financial Reporting Standards (IFRSs). IAS 21 ‘The effects of changes in foreign exchange rates’, requires that a foreign currency transaction should be recorded at initial recognition in the functional currency using the spot exchange rate at the date of transaction (IAS 21, paragraph 21). IAS 21 paragraph 8 defines the spot exchange rate as the exchange rate for immediate delivery. Where a country has multiple exchange rates, an official quoted rate should be used as the spot rate.

Nigeria currently has multiple exchange rates and judgment is required to determine which exchange rate qualifies as a spot rate that can be used for translation under IAS 21. In determining whether a rate is a spot rate, an entity is required to consider whether the currency is available at an official quoted rate and whether the quoted rate is available for immediate delivery. The CBN official rate, Nigeria Inter-bank Foreign Exchange Fixing (NIFEX) rates and the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rates are all quoted and can be used to convert or translate foreign currency transactions. Thus, the CBN official, NIFEX or NAFEX rates all technically comply with the requirements of IAS 21.

As a policy within Ecobank Group, we use the official rate in the respective jurisdictions in which we operate to translate the results and balances of our affiliates into the Group’s reporting currency, the US Dollar. As a result, and in exercising the judgment allowed for within IAS 21, the Group currently uses the CBN official rate which is one of the 3 quoted rates and the official exchange rate according to the CBN. The use of this rate complies with IAS 21 and has been publicly disclosed to the market in all our press releases along with the impact of using the other available rates. This is done so that users of our financial statements can easily quantify and adjust for the use of the other exchange rates if necessary. Most of our peers in Nigeria used the CBN rate in 2017, before switching to NIFEX towards the end of the year. In 2018, they have gradually settled at a blend of both NIFEX and NAFEX.

The use of the CBN rate is in accordance with the group’s policy which is to apply the official rates. This policy and its application are compliant with IFRS and specifically IAS 21. To enable comparison and to ensure that the user of the group’s financial statements is not prejudiced in any way, we have adequately disclosed in our various press releases and investor presentations the fact that we have used the CBN official rate in addition to disclosing the expected impact on our results of using alternative available rates.

At its November board meeting, the Board of ETI approved the adoption of the NAFEX rate as the rate to be used for the translation of our operations in Nigeria. The change has been necessitated and approved in response to developments in the industry especially with the ETI’s peers moving away from the use of the CBN official rate.

Ecobank complies with IFRS 9 requirements

Ecobank Group adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1 January 2018, which resulted in changes in accounting policies and adjustments to the amounts previously recognised in the financial statements. Similarly to our peers in Nigeria, as well as other African and global banks, and, as permitted by the transitional provisions of IFRS 9, the Group has elected not to restate comparative figures. Adjustments to the carrying amounts of financial assets and liabilities at the date of transition were recognised in the opening retained earnings and other reserves of the current period. Overall, the adoption of the standard resulted in the group recording higher impairment allowance than that recognised under IAS 39. This had a negative impact on the group equity by $299m.

The main drivers for the significant increase in IFRS 9 impairment figures when compared to IAS 39 impairment figures are:

• Replacement of the emergency period under IAS 39 with 12 months ECL on all exposures under IFRS 9.

• IFRS 9 introduces the stage 2 bucket where higher impairment (Lifetime losses) is recognised for facilities with significant increase in credit risk. Under IAS 39, same assets were classified as performing with minimal impairment recognised.

• Off balance sheet exposure & undrawn balances: Under IAS 39, impairment was not required to be recognised on these items, however, IFRS 9 requires that impairment provision on these items is calculated.

• Other financial instruments: Historically very little or no impairment has been held on non-customer loans/ instruments such as placements with other banks, government treasury bills and bonds, corporate bonds, items in the course of clearing and other debtors. These are now clearly within the scope of IFRS 9 and impairment has been computed on these.

IFRS 9 2014 does not require restatement of comparative period financial statements except in limited circumstances related to hedge accounting (not applicable to Ecobank Group) or when an entity chooses to restate (the Group has not, nor have most of its peers). The standard requires that where comparative periods are not restated, the difference between the previous carrying amounts and the new carrying amounts be recorded in opening retained earnings or other components of equity, as appropriate. This is the approach that has been followed by the Group and as a result the transition impact of $299m has been recognised in equity.

In conclusion, we can confirm to all stakeholders that there were no misstatements in our financial statements as alleged in our financial statement for the year ended 31 December 2017 nor in our three quarterly reports released during the 2018 year. We also note that this unfounded allegation was made by a former employee of the Group who is currently in court claiming payment of 13 years’ salary for an alleged unlawful termination of his employment contract.

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Adeleke Rejoices with Oluwo of Iwo, Oba Akanbi at 58

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The Executive Governor of Osun State, Senator Ademola Adeleke, has rejoiced with the Paramount ruler of Iwoland, HIM Oba Abdulrasheed Adewale Akanbi, Telu I, on the occasion of his 58th birthday, lauding the foremost traditional ruler’s passionate commitment to uplifting humanity.

A statement by the Governor’s Chief Press Secretary, Mallam Olawale Rasheed rveals tgat the Governor acknowledges Oba Akanbi’s exceptional sense of dedication to the advancement of Iwoland, utilising contacts and his God-given resources to facilitate developments, praising him for leading the charge for the remarkable transformation that Iwoland is experiencing under his reign.

The Governor commends the frontline monarch for the shared vision for growth and impactful governance, hailing him as a model for purposeful leadership given the monumental progress that Iwoland is recording under this rulership.

“I rejoice with His Imperial Majesty, Oba Abdulrasheed Adewale Akanbi, Telu I, on the occasion of his birthday. Oba Akanbi is a visionary leader and his steadfast pursuit of a virile and prosperous Iwoland is truly inspiring,” the Governor was quoted in a congratulatory message.

“On this day, I honour Kabiyesi’s exceptional contributions to the promotion of our tradition and the endearing effort in fostering peace and harmony in Iwoland and Osun state as a whole.

“It is my prayer that Kabiyesi’s new age brings him more joy and abundant blessings. I also beseech God Almighty to give him more grace to continue his life of service and impact.”

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Coalition Group Floats New Party, ADA, Seeks INEC Registration

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The National Opposition Coalition Group, led by former Vice President Atiku Abubakar and ex-Kaduna State Governor, Nasir El-Rufai, has formally applied to the Independent National Electoral Commission for the registration of a new political party—the All Democratic Alliance.

The application, dated June 19, was acknowledged by INEC on Friday, signalling the coalition’s determination to float a new platform instead of aligning with any existing political party.

The formation of ADA, backed by some other key political heavyweights, including former Rivers State Governor, Rotimi Amaechi and Umar Ardo, convener of the League of Northern Democrats and former aide to President Olusegun Obasanjo, seeks to capitalise on mounting public dissatisfaction and political realignments to stop President Bola Tinubu at the next poll.

The application comes just a few days after INEC warned political groups that no amount of pressure or public sentiment would override the need for strict compliance with constitutional and electoral guidelines.

The commission reiterated that party registration remains a rigorous constitutional process—not merely a political declaration.

With Thursday’s application, the national opposition coalition has now put an end to weeks of speculation about whether it would revive a dormant political platform or launch a fresh one altogether.

A copy of the application letter, obtained by our correspondent in Abuja, was jointly signed by the association’s Protem National Chairman, Chief Akin A. Rickets, and Protem National Secretary, Abdullahi Elayo.

The letter partly read, “We respectfully write to the Independent National Electoral Commission, requesting the registration of our association, the All Democratic Alliance, as a political party.

“This is a sequel to the decision taken by the Nigerian National Coalition Group to sponsor our association for full registration.

“The name of the party shall be All Democratic Alliance with ADA as our acronym and ‘Justice for All’ as our slogan.”

The coalition also submitted relevant documents, including the party’s constitution, manifesto, logo, and minutes of its foundational meetings.

The party’s symbol prominently features a maize (corn), which the applicants say represents abundance, resilience, and sustenance—core ideals they hope to promote.

“We have further attached our manifesto encompassing details of our party ideology and our constitution providing the legal framework that defines our identity, structures, and organisation,” the letter continued.

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Atiku Dismisses Tinubu’s Visit to Benue As Political Grandstanding

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Former Vice President Atiku Abubakar has criticised President Bola Tinubu’s recent visit to Benue, calling it a ‘political spectacle’ rather than a sincere effort to address the State’s security issues or sympathise with victims of violence.

Atiku’s media adviser Paul Ibe made the comments during a media interview in Abuja on Thursday. He accused the Tinubu administration of focusing on political drama instead of finding real solutions to the growing insecurity in Nigeria.

Ibe said: “It’s commendable when a leader empathises with the people; offering a shoulder to lean on and sharing in their grief is a mark of true leadership. However, the visit was marred by political theatrics. Children were lined up on the highway, waving at the president in the rain; subjecting them to such conditions was unnecessary.”

He also criticised the government’s failure to tackle the root causes of insecurity, pointing out that despite the deaths of over 200 people in recent attacks, there have been no arrests.

“The same security agencies that failed to prevent or investigate this tragedy were quick to tear gas peaceful protesters demanding accountability for their safety. This is unacceptable,” Ibe said.

He further took aim at the Tinubu administration’s general handling of governance, accusing it of misunderstanding the real nature of Nigeria’s security problems.

“When you misdiagnose a problem, the solution will inevitably be flawed; garbage in, garbage out. Look at the individuals heading the security portfolios: they’re politicians, not experts. They’re focused on political gains rather than the demands of their roles,” he remarked.

He stressed the importance of inclusivity in governance, arguing that the exclusion of certain regions, religions, and ethnic groups by the Tinubu government has worsened instability.

“Inclusiveness is a tool for national unity and stability. When you dismiss or alienate people, they will inevitably create chaos,” Ibe stated.

Ibe also criticised the administration’s early focus on the 2027 elections, saying it has distracted from more urgent national concerns.

“The focus on 2027 is distracting from pressing issues, leaving problems unaddressed and insecurity rampant. There’s nothing new this administration has introduced to tackle these challenges,” he added.

His comments come at a time of growing public frustration with the federal government’s response to insecurity.

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