Ecobank to boost EA operations

Despite the harsh economic environment in East Africa, the Togo-based Ecobank Group has vowed to boost its regional operations.

Arnold Ekpe, the bank’s outgoing group chief executive officer, termed the ill fortunes of the bank, which saw its East African subsidiaries return a pre-tax loss of Sh298 million last year compared to Sh256 million the previous period as a common occurrence for any upstart company.

Ecobank head offices in Lome, Togo

“We entered the East African market three years ago and we shouldn’t expect much. But I’m confident the future is bright and we can ill afford to walk out,” explained Ekipe.

He was addressing journalists during the Group’s 24th Annual General Meeting in Lome, Togo, last week.

But even as it strengthens its presence in East Africa, the group already enjoys a wide operation network within Africa and other parts of the world.

It operates in 32 African countries besides having an affiliate office in Paris and in Dubai, United Arab Emirates, and London, UK. It also plans to have a presence in Beijing and New York.

Ecobank is also enjoying a dominant position in West Africa, a position the group chairman, Kolapo Lawson, seeks to replicate in other regions.

In Francophone West Africa, the Group posted the highest profits followed by English-speaking nations such as Nigeria and Central Africa.

The South African region, which consists of the Democratic Republic of Congo, Malawi and new markets of Zimbabwe and Zambia, recorded the highest loss.

“The costs that we incurred are mostly entry costs. We expect that as we settle down we will start recording profits,” said Ekpe.

Higher margins

According to the bank’s annual accounts for 2012, the combined revenues for East Africa grew by 14 per cent to Sh4.86 billion, with Burundi, Uganda and Tanzania providing higher margins and loan growth.

The results from Rwanda and Kenya remained flat due to difficult business environments.

Ecobank Kenya’s total assets stand at Sh27.2 billion as at December 31, last year. Profitability rose to Sh202 million from Sh125 million made over the previous financial year.

Last year, Ecobank opened four new branches and added one more in Karen at the start of this year, bringing the bank’s total network to 24 across the country.

 “Although we are still faced with a number of legacy issues arising from our acquisition deal, Ecobank Kenya has made significant progress in cleaning up the balance sheet,” explained Tony Okpanachi, Managing Director, Ecobank Kenya Ltd.

Addressing a news conference during the Group’s annual general meeting (AGM), Lawson is convinced that given the strong geographical platform that Ecobank enjoys, the bank can now focus on integration and optimisation of business to maximise shareholder value.

Top position

“Our vision as Ecobank is not to be below number three position in all the countries we operate,” explained Lawson, a position that is unfortunately reflected by the group’s operations in East and Southern Africa markets.

The aim, he said, is to break into top three financial institutions.

Lawson said he was hopeful the best years for the bank lie ahead, as the benefits of expansion, growth and its unique operating model are fully realised.

Going forward, Ekipe pointed out that the group would consider new acquisitions and aggressive expansion of branch networks in Kenya and other Southern African states.

This approach, he reckons, would be part of a raft of measures designed to improve Ecobank’s market share in these markets.

“We will continue with our strategy of increasing market share and revenues, whilst plugging any gaps in our pan-African footprint,” he said during the media briefing.