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Pan African Eco Bank spreads east

NAIROBI, October 2 – On August 25 Ecobank made history in Africa by launching the first and largest cross-border equity worth $2.5 billion. Just two months earlier, on June 16, the Pan African Bank had launched its brand in the Kenyan market.

With 8,700 employees working in 490 branches across 26 countries, Ecobank is the dominant bank in middle Africa, which its local Managing Director Philip Ikeazor describes as South of the Maghreb and North of South Africa.

Capital Business had a sitting with Mr Ikeazor, seeking to know how Kenya fitted into Ecobank’s plans.

“Ecobank has a Pan African vision and naturally anyone looking into East Africa would have to consider Kenya: Kenya is a vibrant market and a natural growth pole for the regional market,” Mr Ikeazor stated.

“The strategy for Ecobank is to be the most dominant bank in middle Africa and with the presence in 26 countries, I think we are dominant. But we won’t stop there.”

They launched their foray into Kenya by acquiring a 75 percent stake in East African Building Society (EABS) bank, the family-run mortgage lender, which had transformed from a building society to a commercial bank by merging with Akiba Bank in 2005.

Mr Ikeazor says the investors have an ambitious strategy of opening more branches across the country to compliment the existing eight. “Currently, we have four branches outside Nairobi – in Mombasa, Eldoret, Kisumu and Thika. We hope to increase them by year-end.”

Established in 1985, Ecobank is the largest African-run bank on the continent. Indeed, the on-going international rights issue has catapulted the institution, re-asserting itself as a financial giant.

“Ecobank has had a very high corporate governance standard as part of the bank’s culture,” said Mr Ikeazor, explaining that proper financial reporting is core to this culture. “We operate under IFRS (International Financial Reporting Standards) and our reports have been highly acclaimed by investment houses in terms of the level of disclosure.”

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Although they bring to Kenya some considerable muscle and experience in the banking industry, the West Africans will face an uphill task as they plot to curve a market from the dominant players  – KCB, Barclays, Standard Chartered, CfC Stanbic and Equity among others.

However, there is room to attract the millions of unbanked Kenyans by any player who offers innovative products.

“One of the main strategy thrusts of Ecobank is retail banking, through which we have managed to reach out to the unbanked in the other countries where we operate,” Mr Ikeazor boasted. “There are several delivery channels for retail banking which will be deployed in Kenya ranging from ATMs; Ecobank Express outlets which are smaller than main branches, Point of Sale (PoS) machines and general electronic banking products.”

He went on to exude confidence that their tried-and-tested strategy would translate to success in the region.

“You will succeed if your business model is simple and focused. Ecobank focuses on retail banking, which we pursue diligently and have a robust risk management system, aided by a diverse revenue base,” he said.

“We operate in 26 countries, giving us a diverse base, so turmoil in any of the markets does not affect the overall performance of the group,” he explained.

Mr Ikeazor summed up by hailing Kenya’s banking regulations, saying they were part of the reason why Nairobi had been picked as the bank’s operating hub as it seeks to conquer the East African market.

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