Ecobank Transnational Incorporated (ETI), a Pan African bank based in Togo, acquired a 75 percent stake in Kenya’s East African Building Society (EABS) Bank. The transnational changed the bank’s name to Ecobank Kenya Limited and appointed businessman Peter Kanyago as the new chairman. The Pandit family, founders and the single largest shareholders of EABS, will retain 25 percent representation in Ecobank Kenya Limited. Although the value of the deal was not disclosed, it was estimated to total USD 18,6 million (KES 1.3 billion).
Ecobank offers wholesale, retail, commercial and investment banking services to individual and corporate customers both public and private. Ecobank plans to expand its services to the East African region with the acquisition of EABS. The Bank’s Kenya representative, Michael Monari, explained their preference over a Kenyan bank by calling the country as the ‘financial hub‘ of the region. According to a 2006 working paper by the Namibian Economic Policy Research Unit (NEPRU), in 2005, the banking sector in Kenya comprised of 46 financial institutions. The asset portfolio of the banking sector expanded by USD 1,5 billion to USD 9,9 billion in 2005 from USD 8,4 billion in 2004. EABS, with group assets totaling USD 155,1 million (KES 10 billion), is one of the smaller banks in Kenya.
In its first year Ecobank plans to double EABS branch network, which currently has 8 branches. The banks also seeks to utilize its Accra based Ecobank International Technology & Shared Services Centre. Opened in 2008, the center is worth USD 40 million and provides web based, electronic banking services. Ecobank Kenya Limited’s objective is to become one of the top three banks in Kenya and also to list on the Nairobi Stock Exchange, enabling Kenyans to own a share the bank.
Established in 1985, Ecobank has offices in 22 countries, around West and Central Africa. At the end of 2007, Ecobank’s assets totalled USD 6,5 million and the bank had a shareholder’s equity of USD 513 million. MicroCapital featured Ecobank in an August 2007 Who’s Who in Microfinance article. In 2007, Ecobank, in collaboration with ACCION, a private nonprofit microfinance organization, launched one of the largest microfinance banks in Nigeria, ACCION Microfinance Bank (AMfB) Ltd. The partnership plans to launch microfinance operations in 20 African countries, including Kenya, in the next 5 years.
By Ipek Kuran, Research Assistant
Ecobank Transnational Incorporated
East African Building Society Bank
Microcapital News Wire – June 23, 2008
Microcapital Story – June 3, 2008
Microcapital Who’s Who – Ecobank
The Standard Article – May 24, 2008
ACCION Microfinance Bank (AMfB) Ltd
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