Investor confidence soars as Ecobank clears $150m Eurobond early

Ecobank Nigeria Limited has repaid 50% of its $300 million 7.125% Senior Eurobond due in February 2026, showcasing strong liquidity and improving financial health.

The early repayment, made on July 8, 2025, was part of the bank’s ongoing tender and exit consent solicitation exercise, aimed at enhancing bond terms and streamlining capital obligations.

As of July 11, the bond traded at $99.00, close to par value, reflecting strong investor confidence in the bank’s capacity to meet its remaining obligations.

According to the bank, the early redemption was made possible by improved liquidity from loan repayments and early promissory note redemptions by its parent company, Ecobank Transnational Incorporated (ETI).

As part of the transaction, Ecobank also sought bondholders’ approval to remove the capital adequacy ratio (CAR) covenant from the bond agreement.

This move follows a dip in its CAR to 7.65% in 2024, below the Central Bank of Nigeria’s 10% regulatory minimum for national banks. The shortfall was attributed to the depreciation of the Naira, which significantly impacted foreign currency-denominated assets.

Despite this, the bank has laid out a roadmap for restoring its CAR through multiple measures, including increased profitability, capital support from its parent, and a leaner loan portfolio.

Ecobank’s broader transformation programme appears to be yielding early results. Preliminary results for the first half of 2025 show a 30% growth in revenue, rising to ₦113.7 billion from ₦87.6 billion in the same period last year.

Gross impairment charges jumped to ₦32.8 billion from ₦10.7 billion, reflecting an aggressive provisioning strategy tied to stronger revenues. Profit before tax surged by 90% year-on-year to ₦13.5 billion.

The bank’s liquidity ratio has also remained above the regulatory benchmark of 30%, reinforcing its ability to navigate short-term financial pressures. A central feature of its ongoing turnaround effort is the “asset quality war room,” which has ramped up loan recovery efforts and enhanced risk management.

In 2025 alone, Ecobank recovered $6 million (over ₦9 billion) from a long-standing delinquent borrower. Moreover, over ₦170 billion in loans previously classified as Stage 2 were upgraded to Stage 1, signifying improved loan performance over a sustained 12-month period.

The bank’s oil and gas portfolio has also benefited from improved production outputs, largely attributed to recent government reforms. This has boosted the repayment ability of oil-sector borrowers and enhanced the bank’s overall asset quality.

To support the recovery effort, ETI injected over $10 million into the Nigerian subsidiary in 2024. This was part of a broader initiative to help Ecobank Nigeria meet the ₦200 billion minimum capital requirement set by the CBN.

Further capital infusions and retention of earnings are being prioritised to restore the bank’s CAR, with management bonuses and dividend payouts currently suspended under the CBN’s forbearance directive.

A market analyst familiar with the development noted that the bond’s near-par trading level is a sign of market confidence.

“If investors doubted Ecobank’s ability to repay, the bond would be trading at a discount,” he said. “This early repayment is a bold statement of intent and financial resilience.”

Ecobank Nigeria says it remains fully committed to regulatory compliance, financial discipline, and its transformation agenda aimed at delivering long-term value for stakeholders.