Ecobank May Sell Shares, Bonds to Meet Capoittal NeedsMatthew Hill
Ecobank Transnational Inc., the lender that operates in more African countries than any other, may sell bonds and shares as countries around the continent raise minimum capital requirements, its chief executive officer said.
The company, which is listed in Ghana, Ivory Coast and Nigeria, is also considering trading its shares on an exchange outside Africa, CEO Thierry Tanoh, 49, said yesterday, in his first interview since taking the position on Jan. 1. He replaced Arnold Ekpe, who first took over running the Togo-based company in 1996 and ended his second stint last year.
“We’re starting to see in a lot of countries requirements by central banks to raise minimum capital requirements,” he said in Lusaka, Zambia’s capital. “If this continues quite aggressively we might have to look at raising additional resources.”
In January last year Zambia boosted capital requirements for international banks to $100 million from $2.5 million, while Zimbabwe gave banks a deadline last September to boost reserves 10-fold to $100 million. Kenya, Ghana and Gambia have also boosted requirements in the last two years.
Ecobank may sell shares through a private placement and sell bonds if it decides it needs additional funds, said Tanoh, who has worked for the International Finance Corp. as vice president in charge of Africa, Latin America and Western Europe.
The company is still considering whether it needs more funds and how much it may require, he said.
“It could be a combination of both equity and tier-two capital,” he said.
Ecobank, which has operations in 33 African nations including the Democratic Republic of Congo and Zimbabwe, is co-ordinating the exercise at group level, and may raise money at the parent or subsidiary level, said Tanoh.
Ecobank shares have have gained 8.4 percent in Lagos over the past year, the second-worst performance on an index of the 10 biggest banks traded in Nigeria. The stock rose 1.3 percent to 11.65 naira as of the close in Lagos.
The lender, which was founded in 1985, might consider listing on an exchange outside the continent “where there is liquidity, and there’s a very strong understanding of your market,” said Tanoh
“We have an ambition to be listed in places where our stock is properly priced, and which would provide us with the best alternative to raise capital,” he said, declining to be more specific.
Ecobank has an agreement with Johannesburg-based Nedbank Group Ltd. that allows the two companies to buy 20 percent stakes in each other.