As Ecobank Transnational Incorporated nears its 40th anniversary, the banking group, with the widest reach in West and Central Africa, is traversing a significantly altered landscape compared to its inception in Lomé, Togo, in 1985. The banking sector, now predominantly shaped by technology and catering to a new generation of customers, necessitates a fresh approach from its service providers. This transformation coincides with the global and public upheavals seen over the past decade, which have presented substantial hurdles for financial institutions and other economic players.

Despite these daunting challenges, the recent bond issuance by the bank has been met with success, showcasing robust oversubscription rates that indicate a positive market perception. “We entered the market with a target of $350 million,” states Jeremy Awori regarding the bond issuance, the first for the bank since 2021. Although initial timing concerns were present, Awori remains confident in the bank’s forward momentum. “We articulated our strategy and narrative clearly. We were not in a vulnerable position, so we felt assured in proceeding with the transaction.”

Ultimately, the markets reflected an enthusiastic confidence, offering $900 million, from which the bank accepted $400 million at a rate of 10.125%, with repayment set for October 15, 2029. Awori is satisfied with the rates achieved.

“A couple of years back, we conducted a Eurobond issuance, and the spreads over SOFR [secured overnight financing rate, a key indicator of borrowing costs] for this issuance were nearly 100 basis points lower, which is encouraging as it boils down to your spread over SOFR.”

“The primary insight from the roadshow was their recognition of our strategy. They acknowledged the growth prospects before us, and through evaluating our management team—from myself to the CFO and our governance, risk, and compliance officer—they gained trust in our competence,” he notes.

Growth Opportunities

Given the current unpredictable environment, it is understandable that Awori takes pride in the successful fundraising endeavors. Following the pandemic, coupled with supply chain disruptions and the ongoing conflicts in Ukraine and the Middle East, many investors have redirected their capital from emerging markets to safer options in developed regions. This shift has been particularly pronounced as central banks in these areas have raised rates to tackle soaring inflation. In Africa, challenges such as debt sustainability, currency volatility, and regional instability further compound negative views regarding the continent’s economic viability.

With inflation easing and interest rates stabilizing at levels seen before 2021, investment prospects in frontier markets may once again attract attention. Securing capital will still depend on having a solid strategy that promises growth. Awori insists that Ecobank is strategically positioned for this. He emphasizes that the bank’s focus is optimizing returns through targeted capital allocation, prioritizing growth, returns, and transformation. While resources have traditionally been directed towards stable returns, the market—and Ecobank by extension—now gravitates towards a more flexible and responsive approach, reallocating resources across business sectors to capitalize on attractive opportunities.

“This is reflected in our results. Our return on tangible equity is almost 33%, a remarkable achievement by any standard. We are witnessing growth even amid difficult conditions,” he asserts.

As part of its growth strategy, Awori mentions the bank’s drive to penetrate new segments, particularly within the consumer and SME markets, where it currently maintains a smaller market share and sees substantial growth potential.

“There are significant opportunities within corporate investment banking, whether it be cash management, payments, trade finance, syndications, advisory, or treasury services,” he notes. Nonetheless, with an evolving consumer demographic increasingly composed of young, tech-savvy individuals seeking services that resonate with their lifestyle preferences, Ecobank acknowledges the necessity to adapt to meet these expectations.

“Our younger clients seek the convenience of mobile banking. They require card products, savings options, investment opportunities, and credit solutions such as mortgages and personal loans. A considerable number are also entrepreneurs,” he emphasizes.

A core component of this strategy lies in the bank’s centralized IT system, enabling customers to access consistent service across any of its 1,600 branches spanning 35 African countries.

“We increasingly observe our customers’ mobility. For many banks, transitioning between countries leads to disconnection; they only recognize you as a client at your original branch. In contrast, we can facilitate assistance irrespective of your initial branch location,” he clarifies.

The bank is also optimistic about growth in its payments segment, leveraging its robust IT infrastructure and extensive reach.

“Our network now supports real-time payments from users’ phones. You can transfer money from Kenyan shillings to Zambian kwacha or from kwacha to Ghanaian cedi effortlessly. This unique feature stems from our API,” Awori elaborates.

He highlights that this growth emphasis is already producing results.

“We’re channeling capital into this segment and optimizing our returns. We’re boosting our fee income alongside interest income, and I am pleased to note an increase in customer engagement and transactions. Ultimately, we aim to become the preferred banking partner for our clients.”

In November 2024, ETI, the bank’s parent company, reached an agreement with Nium, a frontrunner in real-time cross-border payment systems, to integrate Nium’s payment infrastructure into its services. This incorporation will deliver faster, more efficient international payment solutions to clients, decreasing processing times and facilitating seamless transactions across over 220 markets, including more than 100 countries. For Nium, teaming up with Ecobank unlocks 35 new markets simultaneously.

Technology Focus

In June 2023, Ecobank emerged as one of the pioneering participants in the Pan African Payment and Settlement Systems, a collaborative effort between the African Export-Import Bank and the African Continental Free Trade Area designed to streamline cross-border payments across the continent and bolster intra-African trade. Awori suggests that these partnerships emphasize the bank’s dedication to digital payment solutions.

“We aim to position ourselves as a key player in payments across the continent,” he asserts.

The bank’s focus on technology mirrors Awori’s vision for the future of banking, where technology plays a crucial role not only in service delivery but also in redefining those services.

“Customer service and experience will be critical differentiators. It’s essential to understand our customers because, while many can offer an app or card, the real question is whether these solutions are effective when needed. Do they cater to specific requirements at that moment?”

This highlights the need for utilizing data and analytics to gain insights into customer behavior and even anticipate service requirements, fostering a more intuitive banking experience. Moreover, Awori underscores that the pace of change is expected to quicken.

“The speed at which businesses are evolving is remarkable. One can witness substantial growth in companies that may suddenly vanish… Changes that previously unfolded over eight years are now occurring within four months. Therefore, leadership in today’s environment necessitates a novel approach to managing and adapting to change.”

Awori also predicts a shift in the competitive landscape, where traditional banks will not only compete with one another but also face challenges from agile fintech startups vying for market share. He suggests this trend will encourage the emergence of specialized providers targeting specific market segments. “You might see firms solely focused on bancassurance or telecom companies dedicating resources to mobile wallets. There will be organizations specializing in credit for SMEs, among various other verticals. This will create a landscape where traditional banks and niche players coexist with distinct roles,” he anticipates.

This evolution serves as a call to action for banks striving to remain relevant and protect their financial health. Awori believes there is a wealth of opportunity for banks to sustain their status. “We must explore partnership avenues,” he proposes, identifying significant deals as a vital area for effective collaboration among banks.

“There are numerous opportunities for syndication, especially for large projects, as no single bank may possess the capacity to finance multi-billion-dollar deals.”

In sectors such as climate finance, sustainability, and agriculture, Awori anticipates collaborative prospects among banks.

Economic Headwinds

Nonetheless, even the most robust strategies can be affected by external challenges, and the current climate introduces its own array of issues. Concerns surrounding fiscal fragility and inconsistent policies persist across various regions of the continent. Awori asserts that Ecobank’s diversified presence allows it to maintain its commitments even amidst these difficulties.

“We are long-term stakeholders and do not retreat when faced with obstacles. Our strategic focus remains on the regions we wish to operate in, and our approach to these markets is clearly defined.”

On a global scale, the potential for a new Trump administration may trigger a fierce trade conflict with China, possibly disrupting global commerce, with African economies likely experiencing some repercussions. Should this, or any other scenario, result in sustained high interest rates, Awori notes that Ecobank will strive to keep its rates competitive.

“We must cultivate appropriate partnerships and share risks to keep our services affordable. Contrary to some perceptions, our goal is not to excessively inflate pricing.”

A pivotal aspect of this strategy is reducing costs, an area where Awori emphasizes the bank’s attention.

“In my view, we must continuously pursue greater efficiency. There are numerous preventable costs that can be eliminated, releasing resources that can be redirected toward fresh business growth opportunities instead of merely reinvesting in profits.”

Technology plays a crucial role in this domain, enabling banks to achieve considerably more with fewer resources.

“We are in an era where technology allows radically different methodologies with respect to analytics, models, and processes, which is expected to dramatically reshape the banking landscape within the next five to ten years. Routine tasks will increasingly be automated while value-added functions will require human input.”

Awori’s confidence in his forecasts is reinforced by tangible progress already observable.

“For instance, when I began, we had 15 or 16 business units where the return on equity surpassed the cost of equity. Today, that figure has increased to 26, possibly 27. This illustrates the reality of a returns-focused enterprise.”

Mission to Transform

Ultimately, the target is to revolutionize the bank, not just via process enhancements but also by fostering continuous improvement in its workplace culture.

“This necessitates rethinking our operations. You can witness transformations in our brand, customer experience, and in the simplification of customer journeys.”

The bank has established transformation offices to monitor progress and ensure effective execution. However, the success of this initiative may ultimately rest on the individuals driving it.

“By 2030, we will have a significantly younger workforce. Adapting to their working styles, motivational factors, and engagement strategies will be crucial. Retaining outdated practices could hinder our ability to attract top talent,” he emphasizes.

In a competitive talent landscape where numerous global firms vie for local expertise, Ecobank’s capacity to attract and retain the best talent may be vital in shaping its future.