Ecobank Transnational Incorporated (ETI), the holding company of Ecobank Group, has signed an agreement with French Development institution, Proparco, for a $50 million loan facility with a 10-year maturity.
The loan will strengthen ETI’s long-term resources and support the development of its local banking network, the bank said in a notification to the Nigerian Stock Exchange (NSE) Monday.
According to the bank, which operates in 35 African countries, the loan would fund regional expansion, including targeting customers on the continent who do not yet have bank accounts.
“This transaction has taken place against a background of fundamental changes in Africa’s banking sector. Pan-African banking groups such as Ecobank are developing alongside traditional players and are entering new market segments, targeting those previously excluded from the banking system. They are opening more branches and are providing innovative and low-cost services tailored to communities who lack access to banking services. These groups are driven by economic growth, which is gathering pace in Africa, and their activity is increasing steadily,” ETI said.
Against this background, the bank said the Proparco’s $50 million loan would allow Ecobank to strengthen its long-term resources.
“Indeed, the ETI has become the first pan-African banking group to have an integrated regional banking network in sub-Saharan Africa. Proparco is an active player in banking consolidation in the region and
will allow Ecobank to strengthen its operational capacities and its role in developing the local economic base, particularly for small and medium-sized enterprises,” it said.
ETI recently reported a profit before tax of $299 million for the nine months ended September 30, 2013, representing a 56 per cent improvement over the comparable period last year. Its revenue grew by 24 per cent to $1.456 billion, while total assets went up by 16 per cent to $21.5 billion. The bank also recorded a 69 per cent increase in net customer loans and five per cent in customers' deposit.
The result, according to the bank, was influenced by increasing non-profit revenue led by trade finance activity as the bank sought to increase its pan-African footprint.