LESS than two years after investing in Zimbabwe, Ecobank sees its local unit in the top three banks in the medium to long-term driven by organic growth.
Report by Ndamu Sandu
Ecobank Group outgoing CEO, Arnold Ekpetold Standardbusiness last week that Ecobank Zimbabwe (EZL) had turned around since the pan African group brought a controlling stake in the then Premier Finance Group in 2010.
“What we said to ourselves is that we will grow organically and if acquisition opportunities offered themselves, we consider them if they make strategic sense. It’s a flexible strategy,” Ekpe said.
Ekpe was in the country last week in his first visit since the pan African banking group, with operations in 32 countries, bought a 70% stake and christened EZL.
The Nigerian banker is retiring from the bank in December after a combined 12 years in his two stints as the group’s chief executive officer.
He said Ecobank had seen potential in Zimbabwe and was not discouraged by short-term difficulties besetting the country.
“It (Zimbabwe) has some problems in terms of power but that problem can be fixed. It has got very good people, the education system is very strong. It has the largest number of professionals per capita. Growth has started to come back and the economy has stabilised. Our view is that on the long-term basis the growth potential is attractive,” Ekpe said.
He said Zimbabwe featured prominently in the bank’s strategy of prowling into sub Saharan Africa excluding South Africa and the rand zone where Ecobank has competitive advantage.
Ekpe said Ecobank would play a meaningful role in the development of the Zimbabwean economy.
“Our objective is being an embedded bank, we want to have a branch network, ATM, internet banking, people and the financial capacity to play a meaningful role in the development of the economy of this country,” Ekpe said.
The Ecobank boss said the local unit was here to stay as a positive future beckoned for Zimbabwe.
“When we get into a country, we stay there. We stayed in Liberia throughout the war and continued after the war and we did the same in Côte d’Ivoire. We were the last bank to close and the first bank to open,” he said.
Is Ecobank ready to take on the international banks on the local market?
“I think there is space for all of us. They can do their bit and we do our bit. We work with them already in some areas and when they are not present we handle their payments so we already have that relationship. I think there is space for all of us,” Ekpe told Standardbusiness.
He said Zimbabwe was not overbanked because the market was not saturated and that the financial needs of the country were not being met.
Ekpe said there would not be any change in Ecobank Group’s pan African thrust with the coming on board of a new shareholder, Public Investment Corporation (PIC) of South Africa. In April, PIC bought a 20% stake in the Togo-headquartered banking group.
“PIC liked us because we provide them with a platform for covering Africa, which would have been very difficult but not impossible for them to construct…,” Ekpe said.
Ekpe said Ecobank takes a long term view and would not be put off by short-term delays in a turnaround adding that EZL’s revival was achieved in less than two years.
In the six months to June 30 2012, EZL posted an after-tax profit of US$133 000 spurred by the growth in incomes, from a loss of US $1,4 million recorded during the same period last year.
Ecobank will meet capital requirements
Ecobank has in the past one-and- half years injected US 19,8 million into the bank and said the local unit would meet the revised capital requirements set by the Reserve Bank of Zimbabwe compelling commercial banks to have US 100 million as minimum capital by June 2014.