Togolese-based Ecobank Transnational Incorporated (ETI) has announced plans to revamp its operations in Kenya by injecting fresh capital. The idea is to make Ecobank Kenya, the group’s hub in the East Africa region. This comes at a time when Ecobank Kenya, is gaining its foothold in Kenya after acquiring the former East African Building Society (EABS).
Although Ecobank operations in East Africa managed to reduce its operating loss marginally in 2013, strategic challenges remain. This is according to the Group’s annual report, 2013. “To start addressing these, we have strengthened management and injected $25 million (Sh2.175 Billion) of additional capital into Ecobank Kenya. The group intends to further capitalise the Kenyan business in 2014 so it can act as a strong hub for our operations in the region,” said Ecobank Group Chief Executive Officer Albert Essien. Ecobank Group has set its sights in Middle Africa due to the region’s large demographics and heavily unbanked population. “This region has ten of the fastest growing economies today, with most countries doing more than 5 per cent growth plus in gross domestic product,” said Essien. He made these remarks while addressing the media on the sidelines of the Ecobank Group’s Annual General Meeting (AGM) held in Lome, Togo. In 2013, Ecobank Group generated revenues in excess of $2 Billion, (Sh174 Billion) whilst total assets amounted to $ 22.5 Billion (1.96 trillion).
The Sh2.175 Billion capital injection into the Kenyan subsidiary, which is presently being deployed in tranches, is the second cash support to Ecobank Kenya after a similar one was done in May 2012. After acquisition of EABS, Ecobank Kenya has been cleaning its balance sheet to clear all non-performing loans from its books. While delays within the court system have frustrated its efforts to recover some of the outstanding debts, financial support from the parent firm has kept Ecobank Kenya on the financial radar.
The bank has also had to deal with legacy issues and the reputation risks West African banks face in Kenya’s increasing competitive financial markets. Ecobank Kenya has appointed Mohammed Nyaoga as the new Chairman of the Board of Directors for Ecobank Kenya Limited, effective July 2014. He succeeds Peter Tiras Kanyago, whose six-year tenure as Board Chairman since June 2008 ended on June 30, 2014 in accordance with Ecobank Governance policy.