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Ecobank raises $500m to expand African network

By Omoh Gabriel, Business Editor
NAIROBI—ECOBANK Transnational, the parent company of Ecobank, at its 22nd annual general meeting in Nairobi, Kenya, weekend, said it planned to raise additional $500 million to expand its African network of branches to facilitate inter African trade.
Chairman, Ecobank Transnational, Mr. Kolapo Lawson, said at a news conference in Kenya, that the bank had raised $700 million which was part of the $3 billion the board of the bank had approved as new capital for it.

Lawson said that if the bank succeeded in raising the $500 million this year it would have raised $1.2 billion out of the target $3billion.

While noting that Ecobank Transnational was in the forefront of opening up and facilitating trade between African countries, Lawson said that at the moment trade between states was highest in the East African region with a record of about 20 per cent.

He also disclosed that Ecobank currently operated in 32 countries in Africa and that it was the only bank with network and presence on the continent to make instantaneous fund transfer on behalf of its customers.

Lawson said that Ecobank Transnational had a representative office in South Africa and had recently reached an agreement with Nedbank of South Africa where customers could transact business through over 1, 860ATMs.

Ecobank Transnational reported a rise in earnings and proposed a 50 per cent increase in dividends for 2009 which the shareholders approved at the annual meeting. Net revenues of the group grew by six per cent to US$873.3 million, for the period ended December 2009, with strong performances noted across most of its subsidiaries.

Lawson said that profit levels were, however, stunted by a challenging year, characterised by a difficult credit environment. He noted that as a result, Ecobank registered a net income of US$64.6 million compared to US$111.1 million a year earlier.

In its review of the results, the Chairman noted that depreciation in major currencies, start-up costs for newly established subsidiaries and restructuring costs affected the results; including impairment provisions, particularly in Nigeria.

Challenging year for the group

Commenting on the results, Group Chief Executive Arnold Ekpe said: “2009 was a challenging year for the group.

Although we grew the business and our pan-African footprint, revenues and profits were adversely affected by a combination of factors including depreciation of our major operating currencies. The group now has US$9 billion in total assets.

Arnold Ekpe noted that Ecobank’s geographical expansion phase was now coming to an end and that the focus in 2010 would be on consolidating and optimizing operations and leveraging on the diversified platform the group had built over the years.

During 2009, Ecobank added Zambia, Uganda, Gabon, and France to its already diversified platform and grew its distribution network to 746 branches from 610.


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