SSNIT cashes in on Ecobank’s acquisition of TTB

The Social Security and National Insurance Trust (SSNIT) has lauded Ecobank for its consistent growth in dividend payment since the bank’s acquisition of The Trust Bank (TTB) from the former in 2012.

“From a transaction price of GHC190million, we are more than half way through the repayment. The deal has been very beneficial to us,” Noel Addo, SSNIT’s General Manager in charge of Investment and Development Division, told the B&FT.

SSNIT in 2012 transferred its 61 percent stake in TTB to Ecobank Transnational Incorporated (ETI) - the parent company of Ecobank Ghana - through a share swap deal with ETI which subsequently offloaded the acquired shares to its local subsidiary, Ecobank Ghana.

The deal gave SSNIT a 16.19% stake in Ecobank Ghana, for which it has since received more than GHC100million as dividend.

For three years beginning in 2012, publicly traded Ecobank paid SSNIT GHC13.8million, GHC20.5million, and GHC37.5million as dividend.

Ecobank has just presented the nation’s premier pension fund with an amount of GHC39.8million as dividend for 2015. This represents 189 percent increment over the first dividend payment of GHC13.8million, in 2012.

An elated Noel Addo said of Ecobank: “We want to urge it to keep up its good works. We hope other companies will emulate the good works of Ecobank”.

With the aim of building the largest local bank, capable of underwriting big-ticket transactions in all sectors of the Ghanaian economy, Ecobank has now become a leader in the industry.

Ecobank Ghana saw a marginal 3 percent growth in profit in 2015, which management believes could have been better but for the troubling times the economy went through in the year under review.

The challenges notwithstanding, the bank made a revenue of GH¢1.02billion in 2015, a 19 percent increment over the 2014 earnings which stood at GH¢857.7million.

It posted a profit before tax of GH¢458.6 million for 2015 compared with the GH¢446.9million in 2014. The gains were driven mostly by a 15 percent and 14 percent improvement in net loans and deposits respectively, with total assets standing at GH¢6.6billion.

At a short presentation ceremony in Accra, acting Managing Director Morgan Asiedu touched on the growing relationship between the two institutions.

“The step that SSNIT took by handing over TTB to us has been worthwhile, and we will continue to grow. SSNIT as you know takes care of pensioners’ funds, and I think that Ecobank cannot do anything better than helping our pensioners to have a comfortable retirement.

“So that is why we really cherish our relationship with SSNIT. Ecobank will always be close to SSNIT, its shareholders and customers,” he said.

SME growth

The acquisition of TTB brought a lot of SME clients to Ecobank, and the bank has been touting its role in transforming those SMEs to become better institutions.

“We believe that to bank the SMEs effectively you need to get close to them; understand the business they are doing; and support the businesses in a meaningful manner, whereby the facilities given are being put to the use for which they were requested.

“I think this is what we have done. We have made sure that we support the SMEs; we have given them facilities, but we also keep an eye on them to make sure the money comes back,” he said.

Mr. Asiedu added that as a bank that sets itself apart in the provision of first-class financial services and contribution to the economic development of Africa, “We will continue to support the SME sector to grow because that is the engine of growth for the country, and we will not shirk our responsibility in that regard,” he added.