As Ecobank Transnational Incorporated nears its 40th anniversary, the banking group—which holds the most extensive presence in West and Central Africa—faces a vastly different landscape than the one it encountered when it first opened its doors to customers in Lomé, Togo, in 1985. Today’s banking industry, transformed by technology and geared toward a new type of consumer, necessitates a fresh approach from financial service providers. This evolution comes in the wake of global and public upheavals over the last decade, which have imposed significant challenges on financial institutions alongside other economic entities.
Despite these substantial challenges, the bank’s recent bond issuance was a success, with robust oversubscription rates indicating a favorable market perception of the bank. “We approached the market with a target of $350m,” says Jeremy Awori regarding the bond issuance, the bank’s first since 2021. Although there were initial worries about the timing, Awori expresses confidence in the bank’s trajectory. “We were clear about our strategy and the narrative we presented. We weren’t in a precarious position, so we felt comfortable proceeding with the transaction.”
Ultimately, the markets showcased an enthusiastic vote of confidence, presenting $900m in offers, from which the bank accepted $400m at a rate of 10.125%, with repayment scheduled for October 15, 2029. Awori is pleased with the rates achieved.
“A few years ago, we issued a Eurobond, and the spreads over SOFR [the secured overnight financing rate, a broad measure of the cost of borrowing cash] for this issuance were nearly 100 basis points lower, which is a positive signal since ultimately, it’s all about your spread over SOFR.”
“The primary takeaway from the roadshow was their appreciation of our strategy. They see the growth opportunities ahead of us and, in assessing our management team—from myself to the CFO and the governance, risk, and compliance officer—they garnered confidence in our capabilities,” he remarks.
Growth Opportunities
Given the current unpredictable landscape, it’s no surprise that Awori takes pride in the successful fundraising initiatives. Following the pandemic and supply chain disruptions, combined with the ongoing conflicts in Ukraine and the Middle East, many investors have shifted capital from emerging markets to safer havens in developed areas. This shift became more pronounced as central banks in these markets raised rates to counteract soaring inflation. In Africa, issues surrounding debt sustainability, currency fluctuations, and regional instability further complicate negative perceptions regarding the continent’s economic viability.
With inflation beginning to recede and interest rates reverting to levels seen prior to 2021, investment prospects in frontier markets may once again capture interest. Acquiring capital will continue to depend on a solid strategy that promises growth. Awori asserts that Ecobank is well-positioned for this. He underlines that the bank’s priority is to optimize returns through strategic capital deployment, focusing on growth, returns, and transformation. While previously resources were allocated for steady yields, the market—and Ecobank, by extension—now leans towards a more agile and adaptable strategy, reallocating capital across sectors to seize lucrative opportunities.
“This is reflected in our results. Our return on tangible equity is nearly 33%, a remarkable performance by any standard. We’re witnessing growth even in challenging circumstances,” he asserts.
As part of its growth strategy, Awori notes the bank’s endeavor to venture into new segments, particularly within the consumer and SME markets, where it currently maintains a smaller market share and sees significant growth potential.
“There are considerable opportunities within the corporate investment banking sector, whether it’s cash management, payments, trade finance, syndications, advisory, or treasury services,” he clarifies. However, with a changing consumer base increasingly composed of young, tech-savvy individuals seeking services that resonate with their lifestyle preferences, Ecobank acknowledges the necessity to adapt in order to meet these demands.
“Our younger clients expect the convenience of banking on the go. They require card products, savings options, investment vehicles, and credit solutions like mortgages and personal loans. Many of them are entrepreneurs,” he emphasizes.
An essential aspect of this strategy lies in the bank’s centralized IT system, which allows customers to access the same level of service at any of its over 1,600 branches across 35 African countries.
“We’re increasingly noticing our customers’ mobility. For many banks, moving from one country to another results in disconnection; they only recognize you as a client at your originating branch. In contrast, we have the ability to assist you regardless of where your initial branch is located,” he explains.
The bank is also optimistic about growth in its payments segment, leveraging its extensive IT infrastructure and wide reach.
“Our network now facilitates real-time payments from users’ phones. You can seamlessly transfer money from [Kenyan] shillings to [Zambian] kwacha or kwacha to [Ghanaian] cedi. This is a distinctive feature of our API,” Awori elaborates.
He notes that this focus on growth is already delivering results.
“We’re investing capital into this segment and optimizing our returns. We’re boosting our fee income alongside interest income, and I’m excited to see an increase in customer engagement and transactions. Ultimately, we aspire to be the preferred banking partner for our clients.”
In November 2024, ETI, the bank’s parent company, reached an agreement with Nium, a leader in real-time cross-border payment systems, to integrate Nium’s payment infrastructure into its operations. This collaboration will enable quicker, more efficient international payment services for customers, reducing processing times and facilitating seamless transactions across more than 220 markets, including over 100 countries. For Nium, partnering with Ecobank opens doors to 35 new markets simultaneously.
Technology Focus
In June 2023, Ecobank became one of the early participants in the Pan African Payment and Settlement Systems, a collaborative initiative among the African Export-Import Bank and the African Continental Free Trade Area, designed to facilitate cross-border payments across the continent and enhance intra-African trade. Awori asserts that these partnerships highlight the bank’s commitment to digital payment solutions.
“We aim to establish ourselves as a leading figure in payments across the continent,” he affirms.
The bank’s focus on technology reflects Awori’s vision for the future of banking, where technology is paramount not only for financial service delivery but also in shaping the nature of those services.
“Customer service and experience will be key differentiators. Understanding our customers is essential because, while many providers can offer an app or card, the real question is whether those solutions operate as needed, when required. Do they cater to your specific needs at that precise moment?”
This requires the use of data and analytics to better understand customer behavior and even anticipate when they might need a service, facilitating a more intuitive banking experience. Furthermore, Awori emphasizes that the rate of change is set to accelerate.
“The pace at which businesses are evolving is astonishing. It’s possible to see rapid growth in companies, which can just as swiftly disappear… The changes that once unfolded over eight years are now occurring in a span of four months. Thus, leadership in today’s environment necessitates a renewed approach to managing and embracing change.”
Awori also predicts a shift in the competitive landscape, where traditional banks will not only contend with each other but also with agile fintech startups vying for market share. He believes this trend will lead to more specialized providers targeting specific segments of the market. “You might see firms dedicated solely to bancassurance or telecom companies focusing entirely on mobile wallets. There will be organizations that specialize in credit for SMEs, among other verticals. This suggests that traditional banks and niche players will coexist with distinct roles,” he predicts.
This evolution is a call to action for banks as they strive to remain relevant and safeguard their financial health. Awori believes there remain abundant opportunities for banks to maintain their standing. “We must explore avenues for partnerships,” he suggests, pointing out that major deals present a vital area where banks can collaborate effectively.
“There are numerous opportunities to syndicate with others, particularly for significant projects, as no single bank may be capable of financing multi-billion dollar deals.”
In sectors like climate finance, sustainability, and agriculture, Awori anticipates various collaborative opportunities among banks.
Economic Headwinds
Nonetheless, even the most effective strategies can be disrupted by external factors, and the current environment presents its own set of challenges. Concerns regarding fiscal fragility and inconsistent policies persist across various regions of the continent. Awori asserts that Ecobank’s diverse presence enables it to remain steadfast in its commitments, even in the face of these challenges.
“We are committed for the long haul and do not withdraw when faced with obstacles. Our strategic focus remains on the regions we aim to operate in, and our approach to these markets is well-defined.”
On the global stage, the impending Trump administration could trigger a severe trade confrontation with China, potentially disrupting global commerce, with African economies likely to be affected. If this, or any similar scenario, results in sustained high interest rates, Awori indicates that Ecobank will strive to maintain competitive rates.
“We must cultivate the right partnerships and share risks to keep our services affordable. Contrary to some beliefs, our goal is not to overly maximize pricing.”
A critical component of this strategy involves minimizing costs, an area where Awori underscores the bank’s focus.
“From my perspective, we must continuously pursue greater efficiency. There are many unnecessary costs that can be eliminated, freeing resources that can be diverted toward new business growth opportunities rather than solely reinvesting in profits.”
Technology is essential in this domain, allowing banks to deliver much more with fewer resources.
“We are in a new era where technology enables radically different approaches in terms of analytics, models, and processes, expected to dramatically reshape the banking landscape over the next five to ten years. Routine tasks will increasingly undergo automation, while value-added functionalities will require human involvement.”
Awori’s confidence in his projections is strengthened by tangible achievements already observed.
“For example, when I joined, we had 15 or 16 business units where the return on equity exceeded the cost of equity. Today, that number has increased to 26, possibly even 27. This signifies the reality of a returns-oriented business.”
Mission to Transform
Ultimately, the goal is to transform the bank, not only through process improvements but also by cultivating a culture of ongoing enhancement within the organization.
“This involves reevaluating how we operate. You can see transformations in our brand, customer experience, and the simplification of customer journeys.”
The bank has established transformation offices to track progress and ensure effective execution of these initiatives. However, the success of this undertaking may ultimately hinge on the individuals driving it.
“By 2030, we will have a significantly younger workforce. Adapting to their work styles, motivations, and engagement strategies will be crucial. Relying on outdated practices could impede our ability to attract top-tier talent,” he points out.
In a competitive talent landscape where many global firms pursue local expertise, Ecobank’s ability to draw in and retain the best talent could be key in defining its future.
