Wednesday, December 14, 2016 02.56 AM / News
Ecobank (ETI) , the largest pan-african bank by footprint, won seven (7) “Bank of The Year 2016” country awards in Burkina Faso, Burundi, Guinea, Guinea-Bissau, Mali, Sierra leone and Zimbabwe at the annual Bankers Award in London.
Commenting on Ecobank Transnational Inc.’s feat in the year, the judges gave the following citation:
The Award Citations
Burkina Faso, Ecobank Burkina Faso
Burkina Faso’s economic trajectory took a hit in 2015 as rising political uncertainty, including an attempted coup, was compounded by growing insecurity. Between 2013 and 2015, gross domestic product growth slowed from 6.6% to 4% as local businesses felt the impact of this more difficult political and economic environment. The banking sector has not been immune from these difficulties, with most lenders experiencing declines in some of their key performance indicators in 2015.
Yet the winner of this year’s country award, Ecobank Burkina Faso, has mostly bucked this trend, despite taking a hit to its net profits after a period of solid growth. In local currency terms, total assets increased year on year by 16% in 2015, while Tier 1 capital grew by 4.1%. But as a sign of the bank’s more testing circumstances, both its cost-to-income and non-performing loan ratios increased over the review period.
Nevertheless, the judges were impressed with the rollout of new projects designed to attract new customers and to improve the experience of existing clients. In 2015, Ecobank Burkina Faso completed its branch renovation programme to bring all of its facilities in the country in line with the standards of the wider Ecobank group. The bank also organised training to improve management and leadership skills of unit heads within the organisation.
Ecobank Burkina Faso has been investing in its alternative distribution channels, including ATMs, prepaid cards and mobile money offerings. In 2015, the bank expanded its ATM network to reduce the distance between points of services for customers.
Political instability, rising inflation, a foreign currency liquidity crunch and deteriorating business confidence all negatively impacted Burundi’s banking sector in 2015. With gross domestic product growth contracting by 2.5% for the year, most banks looked to alternative revenue streams and cautious lending strategies to navigate these difficulties.
Ecobank Burundi, which has won this year’s country award, impressed the judges with its commitment to digital innovation, excellent risk management strategies and strong financial performance.
With Tier 1 capital increasing by 18% and net profits surging by 14% in 2015, the bank was also able to boost its return on equity to 23%, up from 22% in 2014. Meanwhile, its cost-to-income ratio fell to 67% from 70% and its non-performing loan ratio fell to 2.7% from 3.1% year on year in 2015.
A focus on digital and technological innovation has ensured the bank remains the market leader in terms of its alternative banking channels. The rollout of internet banking options for its retail customers and its Omni online portal for corporate clients have distinguished Ecobank in the market. It is also boasts the largest number of ATMs in the country, with 34. Ecobank Burundi has also prioritised its position in the market for small and medium-sized enterprises in recent years. To that end, the bank has introduced a wide range of products tailored to medium-sized enterprises and offers complementary service support and a number of fee-based products.
The bank also provides medium-sized enterprises with dedicated relationship managers in each branch, and its recently concluded partnership with the International Finance Corporation is expected to result in further medium-sized enterprise focused initiatives in future.
Guinea, Ecobank Guinea
Guinea is posting a slow recovery from the twin shocks of collapsing commodity prices and the Ebola virus outbreak of 2014 and 2015, respectively. Gross domestic product growth, which effectively stalled in 2015, is expected to begin a quick recovery in the coming years as bauxite and gold production normalises and the agricultural sector continues its positive trajectory.
For the banking sector, this is good news. Tougher regulations and steeper competition have compounded many of these problems in recent years. But this year’s winner of the country award, Ecobank Guinea, has managed to overcome many of them.
With its assets and Tier 1 capital increasing by 7.7% and 7.3%, respectively, in 2015, the bank remains in good shape. But an indication of the tougher environment was the bank’s ratio of non-performing loans, which increased slightly to 5.73% from 5.71% in 2014. To counter this, Ecobank Guinea has looked to deposit mobilisation through the development of electronic products; pushed the recovery of unpaid loans; adopted a more risk-sensitive approach to new business; and provided its existing customer base with new value-added products.
To better serve its customers, the bank has increased its digital and physical footprint in recent years, with a total of 21 branches split between eight in the capital city and 13 across the rest of the country. In addition, 37 ATMs across Guinea are supported by 43 electronic payment terminals used in Ecobank branches and by key merchants. Ecobank Guinea also provides internet banking to retail and corporate customers, as well as mobile banking in partnership with telecommunications companies.
Ecobank Guinea-Bissau’s strong performance in 2015, coupled with investments in innovative electronic banking channels, ensured that it landed the latest country award. This comes despite the demanding climate facing Guinea-Bissau’s banking sector, including political instability and a tougher regulatory regime. In local currency terms, Ecobank’s assets grew by 29% in 2015 while net profits surged by 136% off the back of a disappointing couple of years in 2013 and 2014.
Similarly, the bank’s return on equity increased to 10% in 2015, up from 5% in the previous year. Its cost-to-income ratio fell over the same period, from 89% to 78%, as did its ratio of non-performing loans, which declined to 3.9% from 4%. To develop its physical footprint nationally, Ecobank Guinea-Bissau has increased its branch network from three to six locations, and installed 19 ATMs in the cities in which it is present. In addition, the successful rollout of internet and mobile banking services means customers can now perform important banking functions remotely.
Ecobank Guinea-Bissau plays a notable role in supporting public infrastructure development, including the country’s spending on new road networks. It also supports the payment of government wages and assists the authorities in revenue collection of taxes and fines.
The bank is also playing an important role in developing and supporting Guinea-Bissau’s private sector. This includes financing the booming energy and telecommunication sectors as well as supporting small and medium-sized enterprises. Given that much of the country’s economy remains essentially informal, this work is important. In an effort to drive formalisation, Ecobank Guinea-Bissau periodically identifies unbanked businesses to provide them with structured finance.
Mali, Ecobank Mali
Mali’s economic growth prospects are looking brighter now that the country is slowly overcoming an array of political and security shocks. The World Bank expects gross domestic product growth to average about 5% between 2016 and 2019, which bodes well for the banking sector. The winner of this year’s country award, Ecobank Mali, impressed the judges on several counts, including a revised risk management strategy, its commitment to customer service and notable efforts to promote and support small and medium-sized enterprises.
Ecobank Mali launched a variety of customer-centric programmes to improve their experience. These include an instant card project, whereby customers can receive instant debit cards at bank locations. Moreover, the call centre project has improved service levels by ensuring customers are contacted on a regular basis, while also opening up new avenues for the sale of additional products and services.
The bank has also partnered with insurance firms, including Allianz and Saham, to offer its customers insurance products based on their specific needs. These include residential and car insurance, among others, while travel insurance was launched in 2016.
Ecobank Mali has 40 branches, with 26 in the capital city of Bamako and 14 in the regions of Kayes, Segou, Sikasso, Mopti, Koulikoro and Gao. It also boasts 85 ATMs and 76 points of sale in outlets across Mali. Both mobile and electronic banking options are available. Meanwhile, in 2015 the bank created the SME Club, which provides training and support for this important client segment.
Sierra Leone, Ecobank Sierra Leone
Though times may be hard for Sierra Leone’s banking sector, Ecobank emerged as a clear winner for the country award, based on its strong financial performance and excellent multichannel customer service offerings. Services such as Omniflow, a product that allows corporate customers to execute transactions electronically, caught the eye of the judging panel. Omniflow also allows customers to receive e-alerts, e-statements and perform fund transfers, and there is a similar version for retail clients. Ecobank is the only lender in the country with this capability.
Similarly, Ecobank’s Mobil Platform permits customers to send and receive money using their mobile phones anywhere in the country. The platform can also be used to pay utility bills remotely. The bank has the highest number of point-of-sale locations in the market, so customers can pay for goods and services with their cards, eliminating the burden of carrying excessive quantities of cash.
In terms of physical expansion, plans are afoot to increase Ecobank’s footprint across the country, particularly in mining areas. The further distribution of ATMs across Sierra Leone is also under way. As the bank develops its physical presence, it is hoping to reach out to more small and medium-sized enterprises, which it views as a crucial component of the country’s economic structure. Here, the bank provides general advice in business and financial management to help develop the sector and to promote the formalisation of the economy.
Ecobank Sierra Leone also performs direct customer visits to encourage the use of its products and services and to better serve its larger clients.
Zimbabwe, Ecobank Zimbabwe
Ecobank Zimbabwe enjoyed a strong year in 2015 with sound financial results going hand in hand with the introduction of innovative new services, products and processes. Net profits for the year, in local currency terms, increased by 87%, while total assets and Tier 1 capital grew by 48% and 33%, respectively. Encouragingly, the bank’s return on equity has grown from 6% in 2013 to 15% in 2015, while its cost-to-income ratio decreased from 67% in 2014 to 58% in 2015.
Progress in the digital banking space also caught the attention of this year’s judging panel. The acquisition of touch screens for internet banking use has enabled these devices to be deployed at all branches across the country. Customers are now becoming accustomed to conducting their business and transactions online, and eventually it is hoped this will speed the migration of branch-based visits and business to the online space.
Ecobank Zimbabwe is also aggressively pursuing a point-of-sale (POS) terminal multiplication drive. The Ecobank POS has a unique market advantage as it is the only terminal to accept Visa, MasterCard, PAC and ZimSwitch cards. The launch of a USSD mobile banking product allows customers to check their balances, mini-statements, and to transfer funds internally, pay bills and purchase airtime anywhere in Zimbabwe. This product is available on any of Zimbabwe’s three mobile network operators.
On the small and medium-sized enterprise (SME) front, the bank has established a dedicated SME desk with specialised relationship managers and credit risk analysts, which also benefits from a sub-segment focusing on female entrepreneurs. These efforts have improved access to finance for SMEs across Zimbabwe.
About Ecobank Transnational Inc. Plc - The Pan African Bank
Ecobank Transnational Incorporated (ETI), a public limited liability company listed on the Nigerian Stock Exchange (NSE), was established as a bank holding company in 1985 under a private sector initiative spearheaded by the Federation of West African Chambers of Commerce and Industry with the support of the Economic Community of West African States (ECOWAS). In the early 1980’s foreign and state-owned banks dominated the banking industry in West Africa. Commercial banks in West Africa owned and managed by the African private sector were a rarity. Its founders created ETI with the objective of filling this vacuum.
The Federation of West African Chambers of Commerce promoted and initiated a project to create a private, regional banking institution in West Africa. In 1984, Ecopromotions S.A. was incorporated. Its founding shareholders raised seed capital for feasibility studies and the promotional activities leading to the creation of ETI. In October 1985, ETI was incorporated with authorised capital of US$100 million. The initial paid up capital of US$32 million was raised from over 1,500 individuals and institutions from West African countries. The largest shareholder was the ECOWAS Fund for Cooperation, Compensation and Development (ECOWAS Fund), the development finance arm of ECOWAS.
Ecobank signed a Headquarters’ Agreement with the Government of Togo in 1985, which granted it the status of an international organisation. This status came with the rights and privileges necessary for ETI to operate as a regional institution, including the status of a non-resident financial institution. ETI commenced operations with its first subsidiary in Togo in March 1988.
Today, Ecobank is the leading pan-African bank with operations in 36 countries across the continent. It has a larger African footprint than any other bank in the world. Ecobank currently operates in countries in West, Central, East and Southern Africa, namely Angola, Benin, Burkina Faso, Burundi, Cape Verde, Cameroon, Central African Republic, Chad, Congo Brazzaville, Democratic Republic of Congo, Côte d'Ivoire, Equatorial Guinea, Ethiopia, Gabon, Ghana, The Gambia, Guinea, Guinea Bissau, Kenya, Liberia, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Sao Tome & Principe, Senegal, Sierra Leone, South Africa, South Sudan, Tanzania, Togo, Uganda, Zambia and Zimbabwe. The Group also has a licenced operation in Paris and representative offices in Beijing, Dubai, Johannesburg, London and Luanda.