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Ecobank Nigeria Receives N50 Billion Subordinated Loan
Ecobank Nigeria has secured a N50 billion loan, 10-year bilateral subordinated loan, in order to support Micro, Small and Medium Scale Enterprises (“MSMEs”) and Smal businesses.
Brandnewsday reports that this was made known in a statement sent to the Nigerian Stock Exchange (NSE), by Ecobank Nigeria’s Group Head, Adenike Laoye, a subsidiary of Ecobank Transnational Incorporated (‘’ETI’’).
The secured N50 billion is a 10-year bilateral subordinated loan.
According to a report, the bilateral funding will give an opportunity to the bank to maintain stable liquidity and improve its balance sheet, especially the capital adequacy ratio by an estimated circa 300 basis points.
READ: Ecobank Mobile USSD Transfer Code To All Banks In Nigeria
In the released statement to the NSE, the Nigerian Bank disclosed that the funding will provide stable medium-term liquidity to the balance sheet of the bank.
Ecobank Nigeria
“Ecobank Transnational Incorporated (“ETI”), the parent of the Ecobank Group, announces that one of its significant subsidiaries, Ecobank Nigeria, secured N50 billion, 10-Year bilateral subordinated loan.
“The bilateral funding provides stable medium-term liquidity to the balance sheet of Ecobank Nigeria and positively improved its balance sheet ratios, especially the capital adequacy ratio by circa 300 basis points. The transaction proceeds would be deployed to support Micro, Small and Medium Scale Enterprises (“MSMEs”) and Small Corporates,” the statement said.
Ecobank Transnational Incorporated Nigeria
Recall that the Ecobank Transnational Incorporated Nigeria had earlier recorded an 11% increase in its interest income to N139.6 billion for Q3 2020 as reported.
What is a subordinated loan?
Subordinated loans have lower priority than other debt instruments in case of liquidation. They are only repayable after other debts have been paid.
This debt can either be secured or unsecured and it typically has a lower credit rating and higher yield than other senior debt.
