Ecobank SEC Probe Shows Pan-African Regulatory Risks, Fitch Says

The Nigerian Securities and Exchange Commission’s investigation this month into Ecobank Transnational Inc. (ETI) highlights the regulatory risks facing pan-African companies, Fitch Ratings said.

“Insufficient cross-border supervision and lower regulatory standards in some frontier markets are constraints on the ratings of pan-African banking groups,” Fitch said in a report today. “Consolidated supervision for pan-African groups would encourage a more cohesive approach to risk management and regulation, and reduce corporate governance risks.”

Nigeria’s SEC investigated Ecobank after Laurence do Rego, group executive director of risk and finance, told the regulator in August that former Chairman Kolapo Lawson and Chief Executive Officer Thierry Tanoh planned to sell assets below market value. Do Rego said she was pressured to write off debts owed by a business headed by Lawson and manipulate the bank’s results. Both Tanoh and Lawson deny any wrongdoing.

The SEC review found “inadequate transparency in the recruitment procedures and mechanisms for board members and executive staff,” the Abuja-based regulator said Jan. 10. It asked Ecobank to appoint a “substantive” chairman and develop a one-year plan to address the governance issues.

Ecobank has commissioned the Lausanne, Switzerland-based International Institute for Management Development to review its corporate governance and expects a report by the end of this month, while the impact of previous lapses in internal control are being examined by EY, the Lome, Togo-based lender said Jan. 13.

Pan-African banks are growing rapidly, but diversification may not benefit their credit ratings, constrained by the lack of collaboration among national regulators, Fitch said.

“Some risks such as operational risk, exposure to low-rated sovereigns and concentration risks are not always adequately captured in prudential reporting and capital requirements,” Fitch said.

Founded in 1985, Ecobank also operates in France and has representative offices in Beijing, Dubai and London. The bank had $21.5 billion in assets at the end of September.

To contact the reporter on this story: Emele Onu in Lagos at

To contact the editor responsible for this story: Vernon Wessels at

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