Ecobank: Banking

The Company

Ecobank Transnational Incorporated is a pan-African bank, founded in 1985 in Togo, which operates in 36 African countries via six regional clusters, including Nigeria, francophone West Africa (nine countries including Côte d’Ivoire), the rest of West Africa (five countries), Central Africa (seven countries), East Africa (seven countries) and Southern Africa (five countries).

Ecobank is listed on the Nigeria Stock Exchange, the Ghana Stock Exchange, as well as the West Africa Regional Stock Exchange (Bourse Régionale des Valeurs Mobilières, BRVM). Ecobank began its operations in Côte d’Ivoire in October 1989 and is now the second-largest bank of the country. As of the end of November 2014, Ecobank had an 11.80% market share of loans and 12.6% of deposits.

In terms of total assets, Ecobank ranks first in six of the countries where it operates, in the top 3 in fourteen countries and in the top 10 in twenty seven countries. Its cost-to-income ratio improved in 2013 – from 71.4% to 70.1% – thanks to an increase in net banking income, which was up 6% to $2bn.

From 2009 to 2013, the bank performed well, with net banking income growing by an average of 24% per annum, and loans and advances to customers increasing by an average of 25% per year over the period. Likewise, customer deposits grew by around 27% per annum, while the balance sheet experienced growth of around 27% per year.

However, after witnessing growth of 67% from 2009 to 2012, profits fell by 45% year-on-year (y-oy) in 2013 to $156m due to higher costs from risk, as seen in loan loss provisioning in the Nigerian segment – up 143% y-o-y, to $377m.


The poor performance in 2013 can largely be seen as an exception to the rule, with third quarter results from 2014 showing good growth prospects for the full financial year. Net banking income was up 14% y-o-y to $1.7bn, while net income increased by 15% to reach $324m. Net banking income is set to finish the year up 15% at $2.3bn. In 2015 and 2016, the bank is targeting growth on the order of 11% per year. Net income should strongly increase – by some 161% – to stand at $385m over the period due to the decline in the net cost of risk and the increase in net banking income.

From August 2013 to March 2014, Ecobank faced its greater crisis of governance to date, which ended with the replacement of its CEO, Thierry Tanoh, by the deputy CEO, Albert Essien. However, the bank is unlikely to be impacted by this internal crisis. In the coming years, Ecobank is forecast to see double-digit growth in term of loans, deposits, net banking income and profit.

Ecobank is currently trading below the sector price-to-book ratio average of 2.21x on the BVRM, at 0.96x. This low price-to-book ratio can be explained in large part by the large drop in its profits recorded in 2013. However, the strong financial outlook should allow the company to be fairly valued.

It is also important to note that the bank plans to take advantage its strategic partnerships with both Nedbank, one of South Africa’s largest banks, which holds 20% of Ecobank’s shares; as well as Qatar National Bank, holds a 16.9% capital stake.

Another positive signal came from a recent ratings upgrade. In October 2014, credit ratings agency Fitch upgraded Ecobank’s rating in two separate categories: from “B-” to “B” for its long-term issuer default rating, and from “B-” to “B” for its viability rating, with a stable outlook.

Development Strategy

As a pan-African bank, Ecobank benefits from its established presence in several African countries through its subsidiaries and representative offices. However, Ecobank is planning to gradually slow down its rapid expansion in Africa, which began in earnest in the 2000s, in order to focus on improving both the efficiency and profitability of its existing subsidiaries – particularly its operations in Ghana, Nigeria, Angola and Kenya.

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