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Nigerian Merger May Spawn Strong Continent Wide Bank


A Togo-based bank sees Africa’s economic growth as a means for expanding its own financial services. Ecobank Transnational Incorporated is a well-known name in central and west Africa. Now the bank wants to expand into other regions. But as Voice of America English to Africa reporter Paul Okolo in Lagos, Nigeria, reports, some people think it will not be easy.

Evidence of the bank’s intentions came with the recent announcement that it plans to merge with a rival – Unity Bank of Nigeria. The new entity would have nearly three billion dollars in assets, including 700 million dollars in stockholder funds. It would also have more than 350 branches and a staff of over 55 hundred people – with room for further expansion.

Ecobank has its headquarters in the Togolese capital, Lome. Nigerian Chief Executive Officer, Arnold Ekpe, says it’s now ready to branch out into other parts of the continent, “We’re now in 18 countries. We’re going to be increasing that number this year. We would like to strengthen our business in Nigeria, where we think we’re still relatively weak. We’d like to strengthen our business in other markets.’’

Late last year, Ecobank – a leader in electronic banking -- listed its shares simultaneously on the stock exchanges in Nigeria, Ghana and Ivory Coast.

Ekpe says it gave many investors an opportunity to buy shares in an African bank with an international outlook. In the next few months, Ecobank plans to sell new shares on the three stock exchanges to raise three hundred million dollars.

Ekpe says some of the money will be used for its expansion, ”We’ve gone beyond West and Central Africa. We’re looking at eastern and southern Africa as well. Our coverage is really sub sub-Saharan Africa.’’

That’s easier said than done, says Lagos-based financial analyst Mike Uzor. While Ecobank might have found it easy to dominate relatively smaller countries in West and Central Africa, Uzor says it may be hard to become an established player in countries like Kenya, Nigeria and South Africa. There are already big operators there, and competition is tough, ”If you’re to do business in Africa, you must be playing big in South Africa,which is the biggest economy in the continent, and you must be playing in Nigeria, which has the largest population in Africa, with a rapid economic growth that is expected to overtake South Africa in the next ten years … you must be there.’’

But for Ekpe, it is not an impossible mission. To achieve this objective, he says Ecobank’s strategy is to acquire existing banks in any country it enters. He says their goal is to become one of the top three banks.

Ecobank Transnational Incorporated was started in 1988 by a group of West African business people. They wanted to create a bank that would help promote trade among the countries of the Economic Community of West African States (ECOWAS.) Now, almost twenty years later, the bank is well established in west Africa.

If the merger with Unity Bank of Nigeria succeeds, Uzor says, Ecobank will be taken seriously not only in Nigeria, but in all of Africa.