PanAfrican bank, Ecobank, has disclosed it could pull out of some African countries as part of reviewing its expansion strategy, with decisions expected to be taken in months.
Chairman of Ecobank, Emmanuel Ikazoboh, says the bank wants to focus on its most promising markets, following a decline in profits.
Speaking after the bank’s annual shareholder meeting at its headquarters in Lome, Emmanuel Ikazoboh said its business model whereby they just expand and post flags (in different countries) has to be reconsidered.
Ikazoboh further disclosed that Ecobank was dividing its operations into three “pockets” according to their potential, Ecobank Transnational Incorporated (ETI) had $22.5 billion of assets in 2013 and employs over 20,000 people.
Spokesman Richard Uku said Ecobank’s biggest operation is in Nigeria where the bank wants to increase market share. It also sees Kenya as its pivotal market in East Africa and hopes to take advantage of Rwanda’s rapid economic growth.
The PanAfrican bank which is based in Togo and operates in 36 other African countries has however been affected by the falling global commodity prices that have hit economies in especially Nigeria and Ghana, causing revenue to slow, profits to fall and triggering a shift in approach.
The downturn in oil and mineral prices has battered African currencies, slowed some economies, and forced change in the banking sector.
Ecobank’s pretax profit was $205 million in 2015, down from $520 million the previous year, a result that the Group Chief Executive Officer, Ade Ayeyemi said was “unquestionably disappointing.”
In April, the bank said it expected flat loan growth and revenue this year. It said on Friday it would pay a dividend of $48.2 million. With the commencement of trading under the new foreign exchange guidelines on Monday, Mr. Ade Ayeyemi has said there will be short-term pain and a need for adjustments.
Ayeyemi said the naira may come under pressure in the coming days amid accumulated backlog of foreign exchange demand.