Ecobank is the leading pan-African bank with a presence in 36 countries across the African continent and in four other countries across the globe. As of June 2014, Ecobank had $23.4bn of assets and had generated $255mn of profit before tax for the six months to June 30, 2014.
QNB has acquired a 12.5% stake in Ecobank Transnational, a leading pan-African lender as part of its strategy to be a financial powerhouse in the Middle East and Africa by 2017.
The stake of 12.5% includes the current outstanding ordinary shares and the conversion of QNB’s convertible preference shares, a QNB spokesman said. However, he was silent on how much QNB was shelling out for the acquisition.
Ecobank, set up in 1985 in Lomé, is the leading pan-African bank with a presence in 36 countries across the African continent and in four other countries across the globe. As at June 2014, Ecobank had $23.4bn of assets and had generated $255mn of profit before tax (for the six months to June 30, 2014) and operates across its unique network of 1,241 branches, 2,500 ATMs and 16,245 POS terminals servicing over 10.8mn customers.
QNB operates in 26 countries and three continents around the world. QNB Group already has a significant trading presence in Africa with branches, subsidiaries and associates operating in Algeria, Egypt, Libya, Mauritania, South Sudan, Sudan and Tunisia.
For the first six months of 2014, the QNB Group recorded net profit of QR5.1bn and has assets to the tune of QR466bn, the highest ever achieved by the lender in which Qatar Investment Authority has a considerable say.
Reuters adds: QNB bought the shares from Nigeria’s state-owned “bad bank” Asset Management Company of Nigeria (AMCON). AMCON acquired the Ecobank stake when the pan-African lender merged its Nigerian operations with Oceanic Bank, a failed lender that AMCON helped recapitalise.
It is QNB’s second African purchase in the past two years. In March 2013, it bought Societe Generale’s Egyptian business for $2bn and the bank is also present in Libya, Mauritania, South Sudan, Sudan and Tunisia.
Ecobank spokesman Richard Uku confirmed the AMCON share sale. He said QNB is now the second-largest shareholder in the pan-African lender after South Africa’s state-owned Public Investment Corp Ltd.
Stockbrokers told Reuters $200mn of Ecobank shares were transferred to QNB yesterday at 20.01 naira each, an 18% premium to Ecobank’s latest price of 17 naira.
A source familiar with the matter said Morgan Stanley had advised QNB on the deal.
“This deal is much much bigger than a Qatar bank taking a stake in Ecobank. We could see a wave of Middle East money coming into African banks,” said Akinbamidele Akintola, Africa equity sales executive at Renaissance Capital.
QNB has said it wants to become the largest bank in the Middle East and Africa by 2017. At the moment, it is second in terms of assets to South Africa’s Standard Bank.
QNB’s chief financial officer, Ramzi Mari, told Reuters in February the lender was looking for acquisitions in Turkey, Morocco and sub-Saharan Africa to help achieve that goal.
Foreign lenders are keen to tap into the growth potential in Africa. Less than a third of sub-Saharan Africans have bank accounts, and an even lower percentage of firms hold a loan or line of credit.
As well as huge untapped markets, margins are attractive, with the spread between borrowing and lending rates more than 10% in many countries, compared to 2% or less in many Western countries.
Lagos-listed Ecobank, which has a presence in 36 African countries, expects its capital adequacy ratio to hit 18.7% of assets by the end of 2014, after debt conversions to equity, up from 17.5% in the first half, CEO Albert Essien said.
The minimum capital adequacy ratio in Nigeria is 16%.
Essien said last month he expected South Africa’s Nedbank to convert a $285mn loan into shares in Ecobank before the end of the year and top up the conversion amount with $206mn to give it a 20% stake in Ecobank.