By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Pan-African lender Ecobank Group has said it will halt its strategy of rapid expansion across Africa and focus on existing businesses, especially in Nigeria, Ghana, Angola and Kenya, Albert Essien, chief executive officer said on Sunday according to a Reuters report.
The report said Essien aimed to expand the existing businesses in the four countries and make them more efficient, and thus more profitable.
According to the pan-African bank CEO, Nigeria, Ghana, Angola and Kenya are very important to the future growth and earnings of the Ecobank group, ‘’the era of expanding the bank’s geographic reach was nearly over,’’ he said.
Ecobank has presence in about 40 countries in sub-Saharan Africa and Nigeria and the West Africa region accounted for 60 percent of revenue in the first half of 2014, and its business was roughly equally split between retail and investment banking, the lender said in a results presentation according to the Reuters report.
The Ecobank CEO said the pan-African lender will review how it pursues its growth strategy in November and decide at that point the amount of capital it needs to raise.
South Africa’s Nedbank last week said it would acquire a 20 percent stake in Ecobank for $493 million in cash, ending months of speculation it could walk away from the deal over governance concerns.
Similarly, Qatar National Bank (QNB) last month became the top shareholder in the bank with over 23 percent; although it is due to pare that back to 20 percent.
The report affirmed that Both Nedbank and QNB see Ecobank as a vehicle for their plans to expand in Africa which has seen rapid economic growth in recent years.
Also, it said QNB is aiming to become the largest bank in the Middle East and Africa by 2017. At the moment it is the second-biggest by assets, behind South Africa’s Standard Bank.
‘’QNB did not want to be a passive investor and had requested a seat on the board of Ecobank, formally known as Ecobank Transnational Incorporated. Nedbank will have a seat on the board as part of its equity stake deal,’’ the CEO at Ecobank said.
According to the report, some analysts question whether the two institutions will have competing visions for Ecobank’s management, or even become rivals.
Essien said the Qatar bank and Nedbank have a compatible vision for Ecobank and could work together.
“I am very, very optimistic that these two institutions, which are strong institutions and also have good corporate governance, will be able to work together with the Ecobank group,” Reuters quoted Essien as saying by telephone from London.
“Nedbank would also be quite a strong player in Africa. So I think there is room (for the banks to work together). I even think that by so doing, one could cement a relationship between Nedbank and QNB, so Nedbank could perhaps also have a conduit to the Gulf through QNB,” he said.