Ecobank’s new CEO aims for stabilization and profits, says group chairman

Ecobank, which operates in 33 African countries, has named the outgoing CEO and Managing Director of Absa Bank Kenya as its next Managing Director, it said in a statement on Monday.

Awori will replace Ade Ayeyemi, who will retire after seven years at the age of 60.

Alain Nkontchou, the bank’s group chairman, told Reuters on Monday that Mr Ayeyemi had joined the bank at a “difficult period when the creditor was beset by bad loans, problems at its subsidiary in Nigeria, problems with its balance sheet and an acquisition that was not well digested.”

Nkontchou said the bank was on a stabilizing path, costs had been reduced and profitability had increased, which enabled it to pay a dividend last year for the first time since 2016.

“The mission has not changed, which is to increase the bank’s profitability,” he said. Along with the rebuilding of the balance sheet, it aims to reduce the cost-income ratio to a target of around 50% or less, he added.

The bank’s cost/income ratio was 58.9% for the year 2021, and 62.75% for 2020.

Ecobank reported a 24% increase in pre-tax profit year-on-year in the first half of 2022, to $261 million, while revenue rose 10% to $909.8 million.

STABILIZING NIGERIA

Nkontchou said stabilizing its operations in Nigeria remains a difficult point that is being addressed.

Although Nigeria is its largest single market which contributed 23% of the group’s net revenue in 2021, the business has been hampered over the years by low profitability, high costs and a burden of non-performing loans.

Nigeria alone accounted for around 67% of the bank’s non-performing loans at the end of 2021.

Nkontchou said one of the new CEO’s main objectives would be to reduce Nigeria’s non-performing loan ratio and provide more capital to the entity.

“Ideally, (capital) will be generated internally and focused on areas where we can be really competitive,” he said, adding that the bank would seek to expand its customer base, leveraging the strength of its digital platform. .

Founded in 1985, Ecobank has quickly spread its footprint across West, Central and East Africa.

Mr Nkontchou said the time for big expansion across Africa was probably over.

“It’s not the priority, it’s more about consolidating,” he added.

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